Extra Crunch Roundup: RapidSOS, M&A Prep & Genki Forest

The Scale of Emergency Calls in the United States

It is estimated that residents of the United States place approximately 240 million calls to 911 annually.

While directing emergency responders to the correct location appears simple, each 911 call is managed through a network of thousands of facilities known as public safety answering points (PSAPs).

The Diversity of PSAPs

“Each 911 center operates distinctly, reflecting the unique characteristics of the communities they serve,” explains Karin Marquez, senior director of public safety at RapidSOS.

PSAPs vary significantly in size and resources. For instance, one facility serving New York City is a fortified, 450,000-square-foot structure situated on nine acres.

Conversely, some rural agencies function with a single operator on duty around the clock, handling as few as three calls daily, Marquez points out.

RapidSOS and Emergency Response Technology

Established eight years ago, RapidSOS currently handles over 150 million emergency situations annually, supporting approximately 5,000 PSAPs.

The company’s technology facilitates the integration of emergency requests originating from mobile phones, traditional landlines, and IoT devices.

“Their technology is likely already integrated into the smartphone you use and many of the devices within your home,” notes Managing Editor Danny Crichton in a detailed four-part series examining the company’s history and achievements.

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Exploring the RapidSOS Story

• Part 1: Details the company’s formative years and its transition from a consumer application developer to a provider of government technology and integrated services for technology and device companies.
• Part 2: Analyzes RapidSOS’s strategic shift and the factors contributing to the success of its current business model.
• Part 3: Highlights how RapidSOS fostered transformation within 911 services through the establishment of numerous corporate and individual partnerships.
• Part 4: Considers the future of 911 and RapidSOS, particularly in the context of constrained infrastructure investment.

“I have rarely encountered a company with as many established partnerships as RapidSOS,” states Danny, who first reported on the company six years ago.

“They have secured dozens of partnerships and business development agreements, including collaborations with some of the most prominent names in the technology sector. The key to their success lies in their robust business development engine.”

Thank you for reading Extra Crunch this week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Preparing for M&A: A Common Exit Strategy for Startups

Despite frequent news coverage of large Initial Public Offerings (IPOs) and Special Purpose Acquisition Companies (SPACs), most startups are ultimately sold through a merger or acquisition. This is according to Ben Boissevain, who shares his insights in a recent guest post.

According to Ascento Capital founder Boissevain, M&A activity significantly outweighs public offerings. Currently, 5,203 deals have occurred this year, contrasted with 503 IPOs.

While aiming for a substantial sale, a successful IPO, or a SPAC transaction is commendable, it’s prudent to focus on preparing for a more modest transaction. A realistic approach to exit strategy is vital.

Understanding the M&A Landscape

Preparing for a potential acquisition should be a continuous process, not a last-minute scramble. Proactive preparation increases the likelihood of a favorable outcome.

Focusing on building a strong, sustainable business is the most important step. This includes solid financials, a clear market position, and a talented team.

Key Areas of Preparation

• Financials: Maintain meticulously organized and audited financial records. Transparency is crucial during due diligence.
• Legal: Ensure all legal documentation is current and readily available. This encompasses contracts, intellectual property filings, and compliance records.
• Operations: Streamline operational processes for efficiency and scalability. A well-oiled machine is more attractive to potential buyers.
• Team: A strong and motivated team adds significant value. Retention plans can be important during the sale process.

Due diligence will be extensive, so anticipate a thorough review of all aspects of your business. Being prepared minimizes delays and potential roadblocks.

Ultimately, positioning your startup as an attractive acquisition target requires consistent effort and a focus on building a valuable, well-run company. This approach maximizes your chances of a successful exit.

Duolingo Increases IPO Price Target, Signaling Positive Outlook for Edtech Ventures

The U.S.-based educational technology firm, Duolingo, revised its initial public offering (IPO) price expectations upward on Monday.

The company now anticipates a share price between $95 and $100, a rise from the earlier projected range of $85 to $95.

This adjustment suggests a heightened investor demand and a potentially successful IPO launch.

According to Alex Wilhelm, this price increase is a strong indicator of a robust offering, rather than a struggling one.

Implications for the Edtech Sector

Duolingo’s revised IPO target is viewed as a favorable development for other companies operating within the edtech space.

A successful IPO for Duolingo could bolster confidence in the market and potentially pave the way for further investment in the sector.

Edtech startups may find it easier to secure funding and achieve favorable valuations following Duolingo’s public debut.

• The increased price range reflects positive market sentiment.
• Investor interest appears to be strong.
• This could unlock further opportunities for growth in the edtech industry.

The company’s performance will be closely watched as a benchmark for other edtech firms considering going public.

Genki Forest's Rapid Ascent: A $6 Billion Beverage Success Story in 5 Years

Genki Forest, a rapidly expanding bottled beverage company originating in China, has achieved remarkable growth. This direct-to-consumer startup launched its range of sodas, milk teas, and other beverages only five years ago.

Currently, the company’s products are distributed across 40 nations. Genki Forest projected revenue of $1.2 billion for the year 2021.

Following the completion of its most recent funding round, the company’s valuation reached $6 billion. This positions Genki Forest as a significant player in the beverage industry.

Comparisons are often drawn between Genki Forest and established industry leaders such as PepsiCo and Coca-Cola. However, the company’s founder, Binsen Tang, possesses a background in technology.

Tang previously provided funding for ELEX Technology, a social gaming company that experienced international success. He recognized a market opportunity distinct from platform development.

In 2015, Tang articulated a clear vision to his team: “China doesn’t need any more good platforms,” he stated, “but it does need good products.”

Genki Forest effectively utilizes China’s extensive distribution infrastructure, swift manufacturing processes, and comprehensive data analysis for complete digitization.

Over 30% of the company’s sales are conducted through online channels. This demonstrates a strong digital presence.

VC investor Anna Fang expressed strong confidence in the company, stating, “Everything feels right about the company.”

Fang highlighted the strengths of Genki Forest, including its market position, founder, product offerings, and operational infrastructure. She believes it represents a new breed of Chinese consumer brand.

Mike Vernal of Sequoia Details Designing Feedback Loops for Product-Market Fit

A discussion featuring Mike Vernal from Sequoia, centered on achieving product-market fit, was recently held on TechCrunch Early Stage: Marketing and Fundraising. The conversation specifically addressed the importance of pacing and speed in this process.

Vernal emphasized the necessity of establishing effective feedback loops. These loops are crucial for founders seeking to validate their ideas and refine their offerings.

The Importance of Tempo

The speed at which a startup iterates through these feedback loops – the tempo – is a key determinant of success. A faster tempo allows for quicker learning and adaptation.

Founders should prioritize rapid experimentation and data collection. This enables them to efficiently identify what resonates with their target audience.

Designing Effective Feedback Loops

Here are key components of a robust feedback loop:

• Hypothesis Formulation: Clearly define what you are trying to learn.
• Rapid Experimentation: Quickly test your assumptions with minimal viable products (MVPs).
• Data Collection: Gather both quantitative and qualitative data from users.
• Analysis & Iteration: Analyze the data and use the insights to refine your product.

Vernal highlighted that the goal isn’t simply to build a product, but to build the right product. This requires a continuous cycle of learning and improvement.

Successfully navigating the search for product-market fit demands a disciplined approach to feedback and a commitment to iterative development.

Regulatory Shifts in China Impact Tech Sector

Recent adjustments to regulations within China are creating challenges for numerous technology companies. Alex Wilhelm analyzed these changes, particularly those focused on the edtech industry, to determine the scope of the impact.

His investigation centered on deciphering the specifics of these evolving regulatory policies. The analysis aimed to provide clarity on the implications for businesses operating within the Chinese market.

While these regulatory modifications don't represent a fatal outcome for all startups, many Chinese tech companies will experience some degree of impact. Wilhelm notes that the overall perception of risk associated with conducting business in China has demonstrably increased.

Impact on Startups

The changes aren't universally detrimental to startups. A significant number of Chinese tech startups may remain unaffected by the regulations as they currently stand.

However, the heightened regulatory scrutiny introduces a new layer of complexity. This necessitates a reassessment of risk factors for companies involved in the Chinese market.

Increased Risk Profile

The evolving regulatory landscape suggests a more challenging environment for tech companies in China. The risk associated with operations has been elevated.

This shift requires businesses to adapt their strategies and carefully consider the potential implications of these changes. Risk management is now more critical than ever.

Automakers Address Battery Supply Concerns Through Increased Control

A growing apprehension regarding battery availability is prompting automotive manufacturers to actively pursue greater control over the battery supply chain.

Joint ventures are becoming an increasingly popular strategy for automakers aiming to secure a consistent flow of batteries.

Gene Berdichevsky, CEO of Sila Nano, recently explained the high stakes involved. He stated that failure to secure battery supplies could lead to financial ruin for companies like Volkswagen, particularly given ambitious electrification goals.

The sheer volume of batteries required by these manufacturers creates a significant risk. Even with commitments from cell suppliers, automakers harbor concerns about potential shortfalls in delivery.

Automakers are understandably anxious about relying solely on external suppliers. A disruption in battery supply could severely impede their transition to electric vehicles.

The Importance of a Secure Supply

The need for a reliable battery supply is paramount to the success of the automotive industry’s shift towards electric mobility.

Without guaranteed access to these critical components, ambitious production targets become unattainable. This could have devastating consequences for automakers.

• Automakers are prioritizing direct involvement in battery production.
• Joint ventures are a key component of this strategy.
• Concerns about supplier capacity are driving this trend.

The proactive approach taken by automakers demonstrates the critical importance they place on securing their future in the evolving automotive landscape.

Insights from the Creators of Kickstarter’s Top-Funded Application

Alex Ruzh, CEO of memoryOS, details the extensive research undertaken by his team prior to launching their highly successful Kickstarter campaign, which ultimately became the platform’s most funded app.

In a guest post, Ruzh explains that the team dedicated a significant amount of time to exploring various crowdfunding strategies and techniques.

Their goal in sharing their methodology and insights is to assist other entrepreneurs facing the challenges of launching a new product.

Preparation is Key

Ruzh emphasizes the importance of thorough preparation before initiating a crowdfunding campaign.

He notes that understanding the nuances of the platform and its audience is crucial for maximizing success.

Secrets to a Successful Launch

The memoryOS team discovered several key elements that contributed to their campaign’s triumph.

These included a compelling narrative, engaging visuals, and a well-defined marketing strategy.

Building a Community

A strong community was also vital to the campaign’s momentum.

The team actively engaged with potential backers, responding to questions and fostering a sense of excitement around the product.

Leveraging Kickstarter’s Features

Understanding and utilizing Kickstarter’s built-in features, such as updates and comments, proved invaluable.

These tools allowed for direct communication with the backer base and facilitated the building of trust.

The Importance of Transparency

Maintaining transparency throughout the campaign was another critical factor.

The team openly shared their progress, challenges, and future plans with their supporters.

Strategies for Successful Fundraising in Deep Tech, According to SOSV Partners

Deep tech startups frequently encounter obstacles when seeking funding due to a number of inherent complexities.

During the TechCrunch Early Stage: Marketing and Fundraising event, Pae Wu and Garrett Winther, both partners at SOSV, shared their expertise. They offered guidance to startups navigating difficult fundraising circumstances.

Understanding the Hurdles

Raising capital can prove particularly difficult for companies focused on groundbreaking, scientifically intensive innovations.

These challenges were addressed by the SOSV investors, who provided actionable insights for startups aiming to secure necessary investment.

Key Advice from SOSV

The discussion centered around practical strategies for deep tech founders. These strategies aim to improve their chances of attracting investors.

Wu and Winther emphasized the importance of clearly articulating the value proposition and potential impact of the technology.

Focus on Demonstrable Progress

Investors in deep tech require evidence of tangible advancements.

Showing demonstrable progress, even in early stages, is crucial for building confidence and securing funding.

Cultivate Investor Relationships

Building strong relationships with potential investors is also vital.

This involves proactive communication and a willingness to address investor concerns transparently.

Streamlined Checkout Processes are Crucial for B2B E-commerce Success

While B2B transactions are increasingly conducted electronically, including payment processing, credit verification, and authorizations, this doesn't automatically guarantee a smooth experience.

Larger volume purchasers often favor utilizing established accounts payable workflows over incurring the transaction fees that smaller businesses typically accommodate.

The integration of robust fraud prevention, identity safeguards, credit management, and digital payment solutions “establishes a robust infrastructure capable of fostering trust and facilitating scalable, one-click purchasing,” according to Andrew Steele, a partner at Activant Capital.

This infrastructure is vital for modern B2B operations.

Cowboy Ventures’ Ted Wang: The Value of a CEO Coaching Perspective

During the TechCrunch Early Stage: Marketing and Fundraising event, Ted Wang of Cowboy Ventures discussed his advocacy for founders utilizing executive coaching services.

He explained the core benefit lies in gaining an additional, objective viewpoint.

The Role of Executive Coaching

According to Wang, CEO coaching isn’t about fixing problems. It’s fundamentally about providing a “second set of eyes” on the challenges and opportunities a founder faces.

This external perspective can be invaluable for navigating the complexities of building and scaling a company.

• A coach offers a confidential space for founders to discuss sensitive issues.
• They can help identify blind spots and biases that might otherwise go unnoticed.
• Coaching facilitates more effective decision-making.

The aim is to empower founders with greater self-awareness and strategic clarity.

Wang emphasizes that this support system is particularly crucial for first-time founders who may lack extensive leadership experience.

Why Wang Advocates for Coaching

He believes that the benefits of coaching extend beyond individual development.

A more self-aware and effective CEO ultimately leads to a stronger, more resilient organization.