TechCrunch+ Roundup: Credit Karma, Developer Recruiting, and AWS re:Invent

Credit Karma's Acquisition Amidst Pandemic Uncertainty

In February 2020, Credit Karma had scheduled an announcement regarding its acquisition by Intuit for a sum exceeding $7 billion. Simultaneously, the stock market experienced a significant downturn, triggered by emerging reports concerning a new virus and its pandemic potential.

According to Credit Karma CEO Ken Lin, the timing was unsettling. He described waking up at 5 a.m. to find the Dow Jones Industrial Average sharply declining, prompting internal questioning about proceeding with the announcement.

Despite the initial market volatility, the acquisition was finalized in December 2020. However, the U.S. Department of Justice mandated the divestiture of Credit Karma’s tax division as a condition of the deal. Furthermore, credit markets faced substantial constriction during this period.

Navigating Challenges: COVID-19 and Divestment

A comprehensive interview conducted by fintech reporter Ryan Lawler included insights from Lin, Intuit CEO Sasan Goodarzi, Credit Karma’s chief people officer Colleen McCreary, and other key executives.

The discussion centered on the strategies employed to navigate the challenges posed by COVID-19 and the required divestment, all while establishing a revised organizational structure.

Lin explained that a historically profitable business quickly became unprofitable due to the inability to rapidly adapt to the changing circumstances. This necessitated a series of critical decisions.

Key challenges included adapting to a rapidly shifting economic landscape and restructuring the business to meet regulatory requirements.

The company faced the need to make difficult choices in response to unforeseen economic pressures.

Thanks for reading,

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Samsara's Potential Decacorn Status in Forthcoming IoT IPO

Samsara, originally established to develop wireless sensor technology, achieved a $3.6 billion valuation back in 2018. Recent filings, specifically the S-1/A document, suggest a potential increase in valuation.

According to Alex Wilhelm’s analysis in The Exchange, this valuation could rise “from $10.1 billion to $11.6 billion.”

A prior examination of the company’s operations was conducted two weeks ago. However, the current focus is on the financial outcomes rather than the processes that generated them.

Key Highlights from the S-1/A Filing

The S-1/A filing provides updated financial data for Samsara. This data is driving speculation about the company’s potential to reach a $10 billion+ valuation, earning it “decacorn” status.

Wilhelm’s report emphasizes the significance of these numbers. The analysis centers on the resulting financial figures, rather than a detailed review of the company’s internal mechanisms.

AWS re:Invent 2021: An Evolutionary Rather Than Revolutionary Event

Amazon is typically a source of significant announcements, given its position as the world’s third-largest corporation and the ambitious space exploration plans of its founder.

However, the recent re:Invent conference, the yearly gathering for AWS users, appeared to prioritize completion of existing plans and addressing gaps in the product roadmap, according to enterprise reporter Ron Miller.

The event marked a return to an in-person format in Las Vegas following the virtual conference of 2020.

Presentations were delivered by Adam Selipsky, the incoming CEO, Werner Vogels, the CTO, and other key figures.

Despite these presentations, “no truly groundbreaking innovations were revealed at re:Invent 2021,” Miller observes.

Several updates were presented, including the unveiling of the Gravitron 3, Amazon’s newest processor based on the Arm architecture.

re:Post, a managed question and answer platform designed to succeed the AWS forums, was also introduced.

Additionally, Amplify Study, a service enabling developers to create cloud-connected applications with minimal coding, was showcased.

Interestingly, “this re:Invent was unique in recent history as AWS did not introduce a new database offering,” noted Holger Mueller, an analyst from Constellation Research.

Ron Miller’s summary of the week’s announcements – and omissions – suggests a company undergoing a shift in strategy.

“Amazon may be evolving towards a model more akin to that of Apple,” he proposes.

Strategies for Successful Fundraising and Startup Survival

Securing initial seed funding often presents the most significant challenge for a startup founder. The timeframe for completion can extend to numerous weeks, varying based on the industry.

However, employing a methodology grounded in data analysis can empower founders to navigate the fundraising process with greater efficiency and reduced complications, according to Russ Heddleston, CEO of DocSend.

Understanding precisely where venture capitalists (VCs) direct their attention within pitch decks and during meetings is crucial.

This insight allows founders to refine their presentations and target the most receptive investors.

The Importance of Data-Driven Fundraising

A data-focused strategy isn’t merely about tracking metrics; it’s about gaining actionable intelligence.

By analyzing VC engagement, founders can identify which sections of their pitch deck resonate most effectively.

This knowledge enables them to prioritize key information and tailor their message for maximum impact.

Optimizing Your Pitch

The ability to deliver a precisely calibrated pitch to the appropriate investor is paramount.

Data reveals patterns in VC behavior, indicating what captures their interest and what falls flat.

Consequently, founders can adjust their narrative and presentation style to align with investor preferences.

Minimizing Fundraising Headaches

Fundraising can be a stressful and time-consuming endeavor.

A systematic, data-driven approach streamlines the process, reducing uncertainty and minimizing wasted effort.

This allows founders to concentrate on building their business rather than endlessly chasing leads.

Key Takeaways

• Seed funding acquisition is often the most difficult initial hurdle.
• A data-driven approach enhances fundraising efficiency.
• Understanding VC focus areas is vital for pitch optimization.
• Targeted pitches yield better results.

Ultimately, leveraging data empowers founders to take control of the fundraising process and increase their chances of success.

Strategies for Sourcing Engineers Beyond LinkedIn

LinkedIn’s recent expansion into Hindi language services underscores a challenge for startups seeking to hire software developers: a significant portion of talent isn't actively present on the platform.

Developers in developing nations often exhibit lower rates of LinkedIn usage. Furthermore, many skilled engineers simply don’t prioritize cultivating a professional presence on social networking sites.

To position your company as a desirable employer, proactively engaging with developers in their preferred environments is crucial, according to Sergiu Matei, founder of Index.

He outlines three actionable strategies in a TechCrunch+ article to help attract engineers within a highly competitive job market:

• Embrace transparency through open content, communication, and code.
• Prioritize emotional intelligence (EQ) over solely focusing on intelligence quotient (IQ) during the hiring process.
• Adopt a more inclusive approach by extending offers to a wider range of applicants.

These tactics aim to broaden the reach of recruitment efforts beyond the limitations of traditional platforms.

Expanding Your Search

Relying exclusively on LinkedIn can restrict access to a substantial pool of qualified candidates. Actively seeking developers where they already congregate is a more effective approach.

Open source contributions and participation in online developer communities are strong indicators of skill and passion.

Reframing Hiring Priorities

While technical proficiency remains essential, emotional intelligence is increasingly recognized as a critical attribute for successful engineers.

The ability to collaborate effectively, communicate clearly, and demonstrate empathy can significantly contribute to team dynamics and project outcomes.

Adopting an Inclusive Approach

A willingness to consider candidates with diverse backgrounds and experience levels can unlock hidden potential.

Expanding the candidate pool beyond conventional profiles may reveal exceptional talent that might otherwise be overlooked. This strategy can also foster a more diverse and innovative workforce.

SenseTime's Initial Public Offering to Gauge Investor Appetite for Rapidly Expanding, Yet Unprofitable, Stocks in Hong Kong

Currently, the conditions appear favorable for artificial intelligence firms seeking to become publicly traded. However, the Hong Kong IPO of SenseTime may encounter lower demand compared to broader market expectations, as noted by Alex Wilhelm.

The company’s revised IPO goal, reaching as high as HK$5.99 billion (equivalent to US$768 million), represents a significant reduction from its earlier valuation of $2 billion. This adjustment potentially indicates investor reservations regarding its consistently growing financial losses, according to Wilhelm’s analysis.

A key consideration for potential investors is the balance between growth potential and current profitability.

Factors Influencing Investor Sentiment

Several elements are likely shaping investor attitudes toward SenseTime’s IPO. These include prevailing economic conditions and the overall risk appetite within the financial markets.

The company’s financial performance, specifically its trajectory of increasing losses, is also under scrutiny. Investors are evaluating whether the potential for future profits justifies the current level of risk.

• Market Conditions: The broader economic climate impacts IPO success.
• Financial Performance: Consistent losses raise concerns among investors.
• Growth Prospects: Future profitability is a critical factor in valuation.

The IPO’s pricing will be crucial in attracting sufficient investor interest. A lower valuation may be necessary to secure the desired level of funding.

Ultimately, the success of SenseTime’s IPO will serve as a bellwether for the market’s willingness to invest in high-growth companies that are not yet profitable. It will be a test of investor confidence in the long-term potential of the AI sector.