Welcome to The TechCrunch Exchange, a Saturday newsletter stemming from the popular column of the same title. Subscribe to receive the email edition here.

The technology sector experienced a vibrant week, featuring significant announcements from Facebook, Twitter, and Apple. Beyond the widely publicized events, however, a consistent flow of positive developments emerged concerning unicorns – privately held companies valued at $1 billion or higher.

A positive week for highly valued companies

The Exchange team dedicated a significant portion of the week to examining various reports concerning unicorns – companies nearing or achieving a $1 billion valuation – and it was notable how much favorable financial information emerged, even beyond what was initially covered.

Databricks, for instance, shared a substantial amount of financial details with TechCrunch in advance of official release, revealing that its yearly revenue run rate (distinct from ARR) reached $350 million by the close of Q3 2020, an increase from $200 million in Q2 2019. The company is effectively prepared for an initial public offering, but isn’t prioritizing a move to the public markets at this time.

Continuing with this trend, Calm is seeking additional investment to support a substantial increase in its valuation, potentially reaching as high as $2.2 billion, which aligns with expectations. This represents further positive news regarding unicorns. Similarly, reports indicated that “India’s Razorpay achieved unicorn status following a recent $100 million funding round” announced this week.

Razorpay is just one example of several Indian startups that have attained unicorn status during the COVID-19 pandemic. (And a further compilation released this week highlighted six startups that became unicorns “during the pandemic.”)

The volume of positive news surrounding unicorns has been so substantial recently that some details have been overlooked. For example, Seismic secured $92 million in funding, elevating its valuation to $1.6 billion from a few weeks prior. How did this development go unnoticed?

This is significant because while the IPO market has received considerable attention in recent months, the unicorn sector has remained highly active. In fact, it appears that venture capital investment in unicorns is at its highest level since 2019.

Furthermore, as we will explore shortly, the pipeline for future unicorns is being replenished continuously. Therefore, we can anticipate a continuation of this trend until a significant shift occurs in current investment and exit strategies.

Market Notes

Successful companies are attracting significant investment, as evidenced by the substantial capital raised by numerous venture capital firms in the past week.

The following is a selection of recent fundraises. It’s possible that investors are aiming to finalize new funding rounds prior to the upcoming election and any resulting uncertainty. Listed below, in no specific order, are firms that have recently secured new capital:

• OpenView received $450 million, Canaan obtained $800 million, True Ventures secured $840 million, and Lead Edge Capital raised $950 million.
• Benson Capital Partners has assembled a $50 million fund. The firm is named after Gayle Benson, who, according to Forbes, owns multiple sports franchises in New Orleans.
• Plus Venture Capital, founded by two former investors from 500 Startups Mena as reported by fundsglobalMENA, has raised $60 million.
• First Round is seeking $220 million, Sinovation Ventures, led by former Google executive Kai-Fu Lee, is targeting a billion dollars, and Khosla Ventures is aiming for a slightly higher amount.

This influx of capital will require investment, leading to further funding rounds for a wide range of startups. The Exchange also connected with Race Capital this week, a relatively new firm. Led by Alfred Chuang, previously of BEA and now an angel investor, the firm has $50 million available for investment.

Focusing on private investments in startups, several noteworthy developments occurred this week that warrant further investigation. For example, Argyle, a company powered by APIs, secured $20 million from Bain Capital Ventures to facilitate “unlocking and democratizing access to employment records,” as described by FinLedger. TechCrunch is currently monitoring the progress of startups utilizing API technology.

Within the financial technology sector, M1 Finance raised $45 million for its consumer fintech platform in a Series C round, and Wealthsimple, another roboadvisor, secured $87 million, simultaneously achieving unicorn status. Furthermore, Stripe invested $200 million this week in Nigerian startup Paystack. Increased attention should be directed towards the African startup ecosystem. On a smaller scale within fintech, Alpaca raised an additional $10 million to enable other companies to replicate the functionality of Robinhood.

Before shifting focus, it’s worth noting that Kahoot raised $215 million, driven by the surge in remote education, a trend that has become increasingly prominent in 2020 as part of the broader edtech expansion (Natasha Mascarenhas has provided additional insights).

Moving from the private market to the public market, it’s necessary to briefly address SPACs. The Exchange spoke with Toby Russell from Shift this week, a company that is now publicly traded after merging with a SPAC, specifically Insurance Acquisition Corp. Initial trading performance has been moderate, but the CEO explained the rationale behind pursuing a SPAC, which proved to be insightful:

• Russell stated that Shift could have pursued a traditional IPO, but prioritized a SPAC-led debut to maximize capital raising and support continued growth.
• The PIPE (private investment in public equity) associated with the SPAC option guaranteed Shift access to hundreds of millions of dollars in cash.
• Shift also aimed to mitigate what the CEO characterized as market risk. A SPAC deal could be completed regardless of broader market conditions. Given the timing of the deal in April, a degree of caution was likely prudent.

Shift is now a public company with increased capital. The performance of its shares will be closely watched as it adapts to quarterly reporting requirements. (Naturally, a poor performance would reflect negatively on SPACs, while successful trading could generate further momentum.)

Finally, several other developments occurred. Unicorn exits experienced a positive week. Datto’s IPO is progressing, with an initial price set that could value the company at over $4 billion. Roblox also announced its intention to go public, although through a private offering, and is currently valued in the billions. Additionally, DoubleVerify is planning a public offering potentially valued at up to $5 billion early next year.

Liquidity isn’t solely derived from public markets, as demonstrated by Twilio’s acquisition of Segment, a transaction that The Exchange analyzed to assess its pricing.

Various and Sundry

As we have a substantial amount of information to share, here are a few noteworthy items for your weekend reading and consideration!

• This collaboration between Operator Collective, @BLCKVC, and @SalesforceVC is particularly interesting.
• Accel offers insights into the European startup ecosystem, with a focus on its more mature companies.
• We contributed to a recent TechCrunch article examining the present landscape of media startups – it’s an engaging read!
• Here are charts detailing Bytedance’s performance for your review.
• You can monitor the expansion of DuckDuckGo as it competes with Google and Bing through this resource.
• This week’s episode of Equity was especially enjoyable, so be sure to listen if you have half an hour to spare.

In the coming week, we will be conducting a more thorough analysis of Q3 venture capital statistics, a preview of which is available here, specifically concerning female founders, a subject we revisited in greater detail on Friday.

Alex