Extra Crunch Roundup: TC Mobility, Nubank, & Cookie Updates

What Qualities Do Investors Prioritize?

Founders in the early stages, particularly those new to the process, frequently struggle to anticipate the characteristics investors value most. The truth is, few possess the ability to convincingly portray traits like patience, dedication, or diligence.

Johan Brenner, a general partner at Creandum, provided early funding for companies such as Klarna and Spotify, alongside numerous other European startups. Through his experience over the past twenty years, he has pinpointed five essential qualities commonly found in individuals who build companies valued at over a billion dollars.

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Brenner emphasizes that a founder capable of creating a “unicorn” company doesn’t necessarily need to exhibit all these traits from the outset. However, they should demonstrate an ambition for significant growth while simultaneously focusing on practical execution and understanding the principles of scaling a business.

His insights are based on direct experience working with leaders like Daniel Ek of Spotify, Sebastian Siemiatkowski of Klarna, and Jacob de Geer and Magnus Nilsson of iZettle. He clarifies the origins of “VC FOMO” (fear of missing out) and its influence on investment decisions.

Recent TechCrunch Coverage

We are publishing a series of articles summarizing discussions from last week’s TC Mobility conference. This includes an interview with Matthew Johnson from Refraction AI, an analysis of the challenges faced by autonomous delivery startups regarding regulations and competition, and additional content. More recaps are forthcoming; you can find them all here.

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Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

The Rise of Nubank: From Contrarian Hiring to a $30 Billion Valuation

Established in 2013 and headquartered in São Paulo, Brazil, Nubank has grown to serve over 34 million customers. This positions the company as the leading neobank within Latin America.

Journalist Marcella McCarthy engaged with CEO David Velez to explore his strategies for engaging customers and navigating resistance from established financial institutions with close ties to regulatory bodies.

As part of a series focusing on Nubank’s EC-1, McCarthy conducted an interview with Velez regarding the company’s initial fundraising journey. To provide a comprehensive view, she also consulted with early investors from Sequoia and Kaszek Ventures, the largest venture fund in Latin America, to understand their rationale for investing before the product even existed.

Doug Leone, a global managing partner at Sequoia, remarked on Velez’s immediate impact. “Some individuals make a strong impression quickly, and it becomes clear you want to collaborate with them,” he stated, recalling his decision to recruit Velez following his graduation from Stanford.

McCarthy’s research extended to interviews with members of Nubank’s original team. This was done to gain insight into their motivations for joining a venture with significant challenges to overcome.

Vitor Olivier, Nubank’s VP of operations and platforms, described a substantial personal sacrifice. “I transitioned from a traditional banking role to one offering a fifth of my previous salary, coupled with approximately $5,000 in equity,” he explained.

“The financial aspect was questionable, therefore a strong conviction in the company’s potential for success and substantial growth was essential.”

Early Investment and Team Belief

The decision by Sequoia and Kaszek Ventures to invest pre-product highlights their confidence in Velez’s vision and the potential disruption Nubank represented. This early backing was crucial for the company’s development.

The willingness of the founding team to accept lower salaries and equity-based compensation demonstrates a shared belief in Nubank’s mission. This commitment was a key factor in overcoming initial obstacles.

• Key Factors in Nubank’s Success:
• Contrarian hiring practices, attracting talent willing to take risks.
• Strong early investment from leading venture capital firms.
• A dedicated founding team with a shared vision.

Nubank’s story illustrates the power of identifying exceptional leadership and fostering a culture of belief in a disruptive idea. The company’s growth trajectory underscores the potential for innovation within the Latin American fintech landscape.

Didi’s Potential $70B US IPO Despite Modest Growth

Alex Wilhelm recently analyzed Didi’s SEC filing prior to taking a week’s leave. His assessment focused on key financial figures and emerging trends.

Growth and Financial Performance

Although Didi demonstrated a notable recovery in Gross Transaction Volume (GTV) within China, overall growth figures have remained relatively stable. Recent quarterly performance indicators haven't shown substantial improvement.

Despite this, Didi’s profitability appears better than initially projected. This represents a positive development for the company.

Profitability Concerns

It’s important to note that Didi’s core business operations have historically not generated a profit. Furthermore, current losses are exceeding previous levels, presenting a challenge.

Didi’s fundamental business model continues to struggle with consistent profitability, even with its substantial market presence.

The company’s financial situation reveals a complex picture, balancing recovery in key markets with ongoing profitability concerns.

The Growing Momentum of Robotaxis in China: A Look at AutoX, Momenta, and WeRide

At TC Sessions: Mobility 2021, representatives from AutoX, Momenta, and WeRide participated in discussions concerning the current status of robotaxi companies within China.

The conversation extended to their collaborative efforts with Chinese municipal governments. These partnerships are crucial for navigating the regulatory landscape and deploying autonomous vehicle technology.

Expansion Strategies and Market Dynamics

The companies also addressed their plans for international growth. Expanding beyond China is a typical progression for leading autonomous vehicle startups originating in the region.

Furthermore, they provided insights into the obstacles and potential benefits that international autonomous vehicle (AV) firms face when attempting to enter the substantial Chinese market.

• AutoX is focused on developing a full-stack autonomous driving solution.
• Momenta emphasizes data-driven approaches to autonomous driving.
• WeRide is actively deploying robotaxi services in multiple Chinese cities.

These three companies represent a significant portion of the innovation occurring in China’s autonomous vehicle sector. Their success is closely tied to supportive government policies and a rapidly evolving technological infrastructure.

The Chinese market presents a unique opportunity for AV companies due to its scale and the government’s willingness to embrace new technologies. However, competition is fierce, and navigating local regulations remains a key challenge.

The Emerging Air Taxi Industry: A Forecast for Growth

Predicting success in any groundbreaking sector is inherently challenging, often proving more complex than optimistic projections from entrepreneurs and investors suggest. Industry discussions, particularly on platforms like LinkedIn, demonstrate disagreements among experts regarding the timeline for widespread adoption and the eventual leaders in this space.

Current Market Dynamics

Despite the fact that many companies developing electric vertical take-off and landing (eVTOL) aircraft currently generate minimal or no revenue – a situation that may persist for some time – their valuations are experiencing substantial increases.

The field of electric air mobility is demonstrably advancing. However, significant challenges and potential instability are anticipated in the near future.

Industry Perspectives

• Aria Alamalhodaei notes the inherent uncertainties in disruptive technologies.
• Discussions reveal differing opinions on the timing of market maturity.
• Valuations are rising despite limited current revenue streams for many eVTOL companies.

The development of eVTOL technology represents a significant shift in transportation. It is expected to encounter obstacles before achieving widespread commercial viability.

While the potential of electric air mobility is considerable, a period of adjustment and refinement is likely to precede its full realization.

A Potential Renaissance for Digital Marketing Following the Decline of Browser Cookies

Despite concerns about a potential crisis in digital marketing, the changes brought about by Apple’s iOS 14.5 update and Google’s planned removal of third-party cookies do not represent a fatal blow to digital advertising.

These shifts, which limit automatic data collection, are instead creating opportunities for a new approach.

A New Paradigm for Advertiser-Consumer Relationships

According to Hunter Jensen, CTO of Permission.io, advertisers can establish a different kind of connection with consumers.

This new relationship can be founded on mutual trust and a clear exchange of benefits, as detailed in a recent guest column.

The key lies in recognizing the increasing awareness among individuals regarding the worth of their personal online data.

The Power of Incentives

Jensen suggests that if presented with appropriate rewards, consumers will willingly provide consent for data collection.

Advertisers will need to offer something of genuine value in return for this consent.

• This could include exclusive content.
• It might involve personalized offers.
• Or it could be access to premium services.

By providing tangible benefits, advertisers can encourage participation and build stronger relationships with their audience.

Ultimately, these changes could usher in a “Golden Age” for digital marketing, characterized by transparency and mutually beneficial interactions.

Navigating the Landscape: Autonomous Delivery Startups, Policy, and the Post-Pandemic Era

This year’s TC Sessions: Mobility began with a discussion involving key innovators in autonomous delivery. Apeksha Kumavat, co-founder and chief engineer at Gatik, Amy Jones Satrom, head of operations at Nuro, and Ahti Heinla, co-founder and CTO of Starship Technologies, participated in the conversation.

Regulatory Hurdles and Governmental Approaches

The panel addressed the complexities surrounding governmental regulation of autonomous vehicles. Different jurisdictions are adopting varied approaches to permitting and overseeing the deployment of self-driving technology.

Strategic Partnerships for Scalability

Collaboration with established businesses is proving crucial for these startups. Partnerships with major corporations, such as Walmart and Domino’s, are facilitating wider operational reach and real-world testing.

The Pandemic’s Influence on Demand

The ongoing effects of the pandemic were also a central topic. The panelists explored how the increased demand for contactless delivery services has impacted the growth and acceptance of autonomous delivery solutions.

Unique Approaches to Autonomous Delivery

Each company presented its distinct methodology within the autonomous delivery sector. Gatik, Nuro, and Starship Technologies are each pursuing unique strategies to overcome challenges and capitalize on opportunities.

Key takeaways from the discussion centered on the need for adaptable strategies in a rapidly evolving regulatory environment, the power of strategic alliances, and the lasting impact of recent global events on consumer behavior.

The conversation highlighted that successful navigation of this emerging market requires a multifaceted approach, encompassing technological innovation, proactive engagement with policymakers, and a keen understanding of shifting market dynamics.

Waabi Founder Raquel Urtasun on the Optimal Timing for Launching an Autonomous Vehicle Technology Company

Raquel Urtasun, previously the chief scientist at Uber ATG, now serves as the founder and CEO of Waabi. This autonomous vehicle startup recently emerged from stealth mode. The company is headquartered in Toronto and is concentrating its efforts on the development of autonomous trucking solutions.

Waabi secured $83.5 million in Series A funding, spearheaded by Khosla Ventures, a substantial investment reflecting confidence in its potential.

Urtasun participated in Mobility 2021 to discuss her new company. She addressed the obstacles currently confronting the autonomous vehicle sector and detailed how her unique AI methodology can accelerate the practical application of AV technology.

Addressing Industry Challenges

The self-driving vehicle industry faces significant hurdles in achieving widespread deployment. Urtasun highlighted the need for more robust and reliable AI systems.

Her approach centers on a novel AI framework designed to overcome limitations of existing technologies. This framework aims to improve the safety and efficiency of autonomous vehicles.

Waabi’s Focus on Trucking

Waabi’s strategic decision to initially focus on trucking is based on several factors. The trucking industry presents a more controlled environment for initial deployment compared to passenger vehicles.

Trucking also offers a clear economic incentive for adopting autonomous technology, due to potential cost savings and increased efficiency.

The Role of AI in AV Commercialization

Urtasun believes that advancements in AI are crucial for the successful commercialization of autonomous vehicles. She emphasized the importance of simulation and virtual testing.

Waabi utilizes advanced simulation tools to rigorously test and validate its AI systems. This allows for rapid iteration and improvement without the risks associated with real-world testing.

Why Now?

The timing for launching Waabi was carefully considered. Urtasun explained that recent advancements in AI, coupled with growing industry demand, created a favorable environment.

Furthermore, the increasing availability of high-quality data and computing power has made it possible to develop and deploy more sophisticated autonomous systems.