Author: Natasha Mascarenhas

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Citing concern over COVID-19, Y Combinator moves demo day online

Startup accelerator Y Combinator has moved its famed demo day online, citing a “growing concern over COVID-19,” or coronavirus. The demo day has historically drawn crowds of Silicon Valley elite, journalists, and both national and international venture capitalists to watch more than 100 startups come out to the world. 

“While we won’t be able to recreate every aspect of Demo Day, we’ll try our best to create an amazing experience for our founders and investors,” Y Combinator said in a memo. Y Combinator’s 30th annual demo day will be pre-recorded and released to investors on Monday March 23, per the memo.  

Thanks to a mix of history and glamour, for Y Combinator startups, demo day is the culminating day of their accelerator experience. It’s a big audience full of check writers and fast typers, and at the least, they’ll get a tweet or a couple of sign ups. The move to remote, in some way, dims that excitement. 

Beyond digital presentations, YC has said it will “provide additional written background information on each company and access to their decks.” It also will provide software to help investors and founders arrange one-on-one meetings. 

Seth Bannon, a founding investor at Fifty VC and previous YC graduation (S12), said “the face to face human element is incredibly important, as founders try to gauge if they want to partner with an investor for the next tens years and vice versa.”

“At Demo Day you can have hundreds of those quick face to face interactions in hours. That said, I think this is the right decision for YC,” Bannon told TechCrunch. “The safety of founders and the broader community is most important. Good on them for making a really tough decision.”

The blog post ends with this: “For 15 years, startup investors have supported every new batch of YC companies, and we know the same will be true for this batch.”

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Spindrift, maker of fizzy drinks, has raised $29.8 million

Spindrift, maker of fizzy soda and sparkling water, has raised $29.8 million in a funding round, per an SEC filing. The Charlestown, Mass. company was founded by Bill Creelman and has raised $70 million in known venture capital funding to date, per Crunchbase data.

The company did not immediately respond to request for comment. 

Previous investors in the fizzy drink company include Almanac Insights, KarpReilly, Prolong Ventures, VMG Partners and more. Spindrift, founded in 2010, is up against big players, like the beloved and decades-old LaCroix, another sparkling water brand. Spindrift differentiates itself by emphasizing “real fruit” in its drinks. Think cucumbers from Michigan, strawberries from California and Alfonso mangoes from India. A day prior to the filing, Spindrift launched its pineapple flavor. 

(In a quick aside looped up with a word we haven’t heard in a while: The company also offered a Golden Pineapple sweepstakes, where 13 winners will get a year’s-supply of free Spindrift and a custom mini-fridge). 

Now, it’s worth mentioning that in San Francisco’s Marina district is another fruit-infused direct to consumer brand, sans the bubbles. Hint, founded in 2005 by Kara Goldin, has raised $26.5 million to date from The Perkins Fund and Verlinvest to produce naturally flavored fruit-essence water. 

Kara Goldin of Hint talks about the future of water

Today, Spindrift raised more than Hint’s total funding in one fell swoop, and both brands, alongside the age-old LaCroix, are synonymous with startup culture and recycling bins. And that tells us that at least according to investors, the future of water is far from, ahem, drying up. 

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Lyft is the latest tech company to send employees home over coronavirus

Ridesharing company Lyft has advised its San Francisco employees to go home after learning one staff member was in contact with someone exposed to coronavirus, or COVID-19. The team member has not exhibited any symptoms and is in touch with medical professionals, Lyft spokesperson Alexandra LaManna told TechCrunch.

“We are basing every step of our response process on CDC guidance, and out of an abundance of caution are encouraging our San Francisco headquarters employees to work from home for the remainder of this week,” Lyft shared in a statement. 

LaManna also said that Lyft HQ will be having an “enhanced cleaning process overnight.” 

The response is another in a slew of tech companies sending employees home to limit the chance of coronavirus spreading among staff. Earlier this week, Twitter encouraged all staff members to work from home. Amazon, LinkedIn, Microsoft, and Google also have advised some staff to work remotely based on fears of exposure. 

The ripple effect of COVID-19 on tech doesn’t stop at employees. A number of high-profile conferences have been canceled, including Facebook’s F8 conference  and Google’s physical part of Cloud Next. SXSW and Y Combinator Demo Day have not yet disclosed whether or not their independent conferences, which garner thousands of people, will stay on.

Coronavirus has also started to impact the market, with Microsoft citing the outbreak as the reason for having supply-chain issues and impact earnings.

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Female-founded startups landed more deals globally in 2019 than ever before

We all know the disruptive stories of female-founded startups like Glossier and ezCater. And we also know how those success stories belie the much harder time thousands of other women entrepreneurs have when it comes to raising capital.

That’s why it’s so important to have historical data and a window into how these things may be changing, so that the industry can consistently benchmark its successes and failures in an attempt to correct historical inequities in the ways venture firms distributed capital. 

Looking at the latest numbers from All Raise and Pitchbook, it’s clear that for every step forward, the industry still has a long way to go. 

In 2019, female-founded startups across the world landed a record 4,399 investments, according to data from All Raise, a nonprofit organization that wants to increase the diversity in the venture capital industry, and Pitchbook data.

While deal count has increased, dollars raised declined in 2019 sliding to $37.7 billion from $49.9 billion in 2018. It’s worth noting that 2018 included an outsized round from Ant Financial, which may have skewed dollar totals. It’s also worth pointing out that over the same period venture capital firms in the U.S. alone invested more than $130 billion into startup companies. 

For what it’s worth, 2019 broke all kinds of records. All Raise and Pitchbook’s data shows that 2019, compared to a decade ago, had a 1408% increase in deal value. Additionally, according to Crunchbase data, female-founded unicorns, companies valued at over $1 billion, were being born at an unprecedented rate in 2019. While a female-founded unicorn is still rare, the proliferation is notable, and goes well with one of All Raise’s goals: to increase investment in female-founded companies.

However, All Raise’s latest data doesn’t touch on one of its goals, which is to double the percentage of female investment partners at tech VC firms over the next 10 years. Last month, Pam Kostka, the CEO of All Raise, wrote a Medium blog on how more women became VC partners than ever before in 2019. All Raise claimed major US firms added 52 women partners in 2019. Last month, Recode said those numbers might be “overstating the progress” due to the different definitions of partner. For example, some female partners may have the title of partner, but not the decision-making capabilities. 

Bottom line: the numbers are important, but the nuance within them is more telling, especially when it comes to diversity. For proof, look as far as Kostka’s headline: “More Women Became VC Partners Than Ever Before In 2019 But 65% of Venture Firms Still Have Zero Female Partners.” 

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Citing Star Wars, Kleiner Perkins closes a $700M fund for early-stage companies

After going “back to the future” with a $600 million fund last year, VC firm Kleiner Perkins is aiming for some “returns of the Jedi” with its freshest (and refocused) fund. 

With Star Wars references on the forefront in its announcement, the firm today announced that it has closed its largest fund to date: KP 19, a $700 million venture fund to invest in early-stage startups. Per the firm, it will invest in startups tackling issues like security, digital identity and the future of work. 

KP 19 is the second season of KP in a post-Mary Meeker world. When the legendary investor departed KP in September 2018, the firm refocused from late stage to early stage and brought on a crop of new talent. 

In 14 months, it spent KP 18, a $600 million fund, across 34 investments (sans follow-up money reserved), according to general partner Ilya Fushman. Of those 34 investments, 30 were Series A and seed-stage companies.

“One fun fact — we did about 18 competitive Series A’s in 2018,” Fushman told TechCrunch. “And we wrote 18 term sheets for that, so we have a 100 percent win rate.”

Despite the overcrowding of the early-stage market, Fushman pointed to KP’s legacy, reputation and focus on technical talent as key reasons startups choose the firm. Since KP pivoted to early stage, it has brought on at least three team members to bolster how it can help companies from business development to communications.

With more early-stage investment comes more board seats than Kleiner Perkins’ traditional past is used to. For example, Monica Desai, who joined Kleiner from Blockchain, is currently on the board of Bison Trails, Loom, Pillar, Propel and Nova Credit.

“Taking on a board role is what we like to do,” Fushman said. “And obviously as companies raise follow-on funding, you get to partner with other great investors who join and help you share the load. Overall we feel pretty good about load across the partnership.” 

It’s too soon to gauge how KP 18’s portfolio is performing or whether KP’s return to early stage will pay off, but the close of KP 19 gives us some hints. 

KP 19 will focus on consumer, healthcare, enterprise, hardware, fintech infrastructure and consumer. The fund looks to follow a two- to three-year investment cycle, and Fushman said the firm plans to invest across 34 to 35 companies. Perhaps most notably, Fushman and Desai both said the same thing: not much is changing. 

“We’re heading into interesting times so it’ll be interesting to see where macro environment trends, and what that means for pace, check size, and for the kinds of businesses that will be built for the next phase,” Fushman said. “But overall, as boring as it sounds, it’s really just the same old.”