Moving deeper into enterprise cloud, Intel picks up Barefoot Networks

When it launched out of stealth just three years ago, Barefoot Networks was hailed as a company that would transform the way a generation of computing giants like Facebook, Alphabet, Amazon and Microsoft would function while making chip manufacturers like Intel and networking companies like Cisco take notice

Now, Intel has not only taken notice, it’s acquired Barefoot Networks for an undisclosed amount.

It’s a sign of just how important cloud computing has become, and an opportunity for Intel to stake more of a claim in the networking space after losing ground to the GPU manufacturers whose chipsets have been in demand since the rise of gaming, graphics, and artificial intelligence made them ascendant.

Essentially, Barefoot Networks chips allow its customers to program whatever functionality they need on to the networking chips that Barefoot sells them. 

Previously, companies could customize network architecture down to everything BUT the chipset. The lack of programmable chips meant that network architectures couldn’t be quite as responsive as a company like Facebook, Microsoft, or Google would want, because they were always working around chipsets that had been designed for specific functions.

Based in Santa Clara, Calif., Barefoot Networks was launched from stealth in late 2016 by Dr. Craig Barratt, a former Stanford University professor whose work was critical to the development of the networking architectures that allowed Alphabet, Facebook and others to operate at the massive scale they now have.

As these companies demanded more customized hardware ranging from chipsets to enable their various machine learning algorithms to manage and monitor content (and win Go games), to the servers and routers that they’ve put up in their own internal networks Barratt realized they’d need chipsets that they could modify.

With the acquisition, Intel adds a core knowledge set around p4-programmable high speed data paths, switch silicon development, P4 compilers, drivers oftware, network telemetry and computational networking.

It also provides another bulwark against rival chip manufacturer, Broadcom .

No word from some of Barefoot Networks investors on the result for them in this acquisition. The company raised $155.4 million from investors including Tencent Holdings, DHVC, Alibaba Group, Dell Technologies Capital, Hewlett Packard Enterprise, and Lightspeed Ventures.

The Crunchbase Unicorn Leaderboard is back, now with a record herd of 452 unicorns

We are very pleased to announce that the new and improved Crunchbase Unicorn Leaderboard re-launched today after nearly a year’s absence from TechCrunch.

Venture investors did a lot of handwringing in the past year over rising valuations, but that did not slow the unicorn juggernaut, as 2018 outstripped all previous years in terms of the number of unicorns created and venture dollars invested. Indeed, 151 new unicorns joined the list in 2018 (compared to 96 in 2017), and investors poured more than $135 billion into those companies, a 52% increase year over year and the biggest sum invested in unicorns in any one year since unicorns became a thing.

Back in 2013, Cowboy Ventures’ Aileen Lee coined the term “unicorn” in a piece on TechCrunch with her report stating “39 companies belong to what we call the ‘Unicorn Club’ with four unicorns born per year in the past decade, … with Facebook being the breakout ‘super-unicorn’ (worth >$100 billion).” A lot has changed in six years.

From 19 new unicorns in 2013, roughly two each month, we now see a new unicorn coming into being every two working days. In 2019 so far, 42 new unicorns have joined the unicorn leaderboard, and by next week that number will have jumped again.

The Unicorn Leaderboard now lists 452 companies, which have collectively raised $345 billion and represent a cumulative valuation of $1.6 trillion. Go back to February 2018 and there were just 279 companies, with $206 billion raised and valued at $1 trillion. In just 15 months 170+ companies reached unicorn status, raised $140 billion more and added $600 billion in company valuations.

View by investor, sector and country

On the new leaderboard, it’s possible to filter by investor, lead investor, market sector and country. The unicorn leaders are the U.S. with 196 companies, China with 165, India with 19 and the U.K. with 12.

Leading investors

Three well-known venture firms, Sequoia Capital, Accel and Andreessen Horowitz, have invested in the most unicorn rounds. The investors that actually led the most rounds are corporate investor Tencent Holdings, venture firm Sequoia Capital and private equity firm Tiger Global Management. The rise of Tencent Holdings and Tiger Global Management reflect the prominence of China-based unicorns, as well as the increase in investment from corporate and alternative investors.

Emerging unicorns

The leaderboard also hosts a list of companies that have disclosed valuations between $500 million and > $1 billion and may well reach unicorn status with their next capital raise, unless, of course, they exit before then.

Unicorn exits

The majority of these 452 companies are in the U.S. or China, and most will plan to exit (go public or get acquired) within the next five to eight years.

2018 was also the best year ever for unicorn exits, as 39 unicorns went public while 14 were acquired. This year so far, six U.S.-based unicorns have gone public, namely, Uber, Lyft, Pinterest, Zoom, PagerDuty and Beyond Meat, representing $131.5 billion in public valuations, with Uber at  $82.5 billion and Lyft at $24 billion. The first Africa-based unicorn to go public is Jumia Group, an e-commerce company that operates in 14 African countries. Four China-based unicorn companies went public so far this year: Maoyan, an online movie ticketing service; mobile stock investing service Tiger Brokers; Lakala, a fintech platform; and, most recently, Luckin Coffee, a retail coffee brand. Hong Kong-based Futu Holdings, an online stock platform, also went public this year.

More than a one-third of all unicorn exits took place in 2018. The exited unicorns section of the Crunchbase Leaderboard lists 144 companies; roughly two-thirds of these companies (98) went public and the balance (46) were acquired.

Is 2018 the peak?

2018 might well be the peak, but 2019 is still strong, with 42 new unicorns announced this year so far, and $33.6 billion invested in this cohort of private companies. With the record of 452 unicorns, $345 billion currently invested, $1.6 trillion in captured value and an average age of 8.2 years since being founded, 2019 will be the year we watch the IPO market closely.

Credit: Steven Rossi who manages the board, Santosh Ankola on the TechCrunch product team and Human Made Design for their work on recreating the board.

The misunderstandings of 18-month-old Luckin’s $500m IPO

Luckin Coffee is the most energizing IPO in recent memory, and not just because it sells caffeine.

Most venture-backed startups can take a decade to reach the public markets. Luckin cut that time down to about 18 months. Founder Jenny Qian Zhiya opened a trial coffee shop in Beijing, with a focus on rapid coffee delivery and mobile app ordering. Fast forward to today, and the company’s 2,370 stores conducted nearly 17 million transactions in the most recent quarter ending March 31.

Now Luckin — which can barely offer year-over-year comparables — intends to list its American depository shares (ADSs) on Nasdaq in the coming weeks, hoping to raise over $500 million through the IPO.

Understanding and going long or short on this company requires that we drop the facile analogies (aka it’s Starbucks!), understand the context of startup growth in China, and take a (rare) bet on a high-flying growth company in the public markets.

The incredibly useless Starbucks analogy

Lonely Planet via Getty Images

There is nothing in the United States that compares to Luckin. But that hasn’t stopped journalists, financial analysts, and what I suspect is Luckin’s own PR folks from making the obvious coffee chain comparison.

Tencent left out as China approves the release of 80 new video games

Chinese internet giant Tencent has been excluded from the first batch of video game license approvals issued by the state-run government since March.

China regulators approved Saturday the released of 80 online video games after a months-long freeze, Reuters first reported. None of the approved titles listed on the approval list were from Tencent Holdings, the world’s largest gaming company.

Tencent is best known as a the company behind WeChat, a popular messaging platform in China. But much of its revenue comes from gaming. Even with a recent decline in gaming revenue, the company has a thriving business that is majority owner of several companies including Activision, Grinding Gears Games, Riot and Supercell. In 2012, the company took a 40 percent stake in Epic Games, maker of Fortnite. Tencent also has alliances or publishing deals with other video gaming companies such as Square Enix, makers of Tomb Raider. 

The ban on new video game titles in China has affected Tencent’s bottom line. The company reported revenue from gaming fell 4 percent in the third quarter due to the prolonged freeze on  licenses. At the time, Tencent claimed it had 15 games with monetization approval in its pipeline.

China, the world’s largest gaming market, tightened restrictions in 2018 to combat myopia and addiction. Tencent placed its own restrictions on gaming in what appeared to be an attempt to assuage regulators. The company has expanded its age verification system, an effort aimed at curbing use of young players, and placed limits on daily play.