Startups Weekly: Upfront Ventures bets on a bus service

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital. Before I jump into today’s topic, let’s catch up a bit. Last week, I profiled an e-commerce startup Part & Parcel. Before that, I wrote about Stripe’s grand plans.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Startup Spotlight: Landline

Some startups build space ships that will one day send us all to Mars, others put their time and energy into improving 350 year old infrastructure.

Landline, the operator of a bus network in the Midwest, is one of the latest companies to raise venture capital. The business has closed a $3.85 million round led by Los Angeles firm Upfront Ventures, with participation from Mucker Capital and Matchstick Ventures. The company is actually based out of LA, too, but has completed its initial launch in Minnesota, where there’s greater demand for short-term bus travel.

Landline isn’t just a few buses with startup branding. Founder and chief executive officer David Sunde tells TechCrunch a ride on Landline is booked through its partner airline Sun Country Airlines. A traveler pays Sun Country one fixed price to get them from the bus pick-up point to their final destination. The goal is to help those who live far distances from airports save money and to make the experience of busing more enjoyable.

“It’s all meant to be at the level of reliability that you would expect from an air carrier,” Sunde tells TechCrunch. “We don’t want people who get on the bus to be surprised or upset — we want it to be a seamless experience … The perception of bus travel in the U.S. is negative. A big part of our mission is to get people comfortable on buses again as a viable alternative to air travel in certain markets.”

For those of you wondering, have these people ever heard of Greyhound? Landline says they wont compete with Greyhound because of the more than 100-year-old transportation business’s focus on long-haul trips. Landline will specifically focus on connecting those in rural communities to airports, particularly regions where there aren’t already bus routes that conveniently access the airport. Can’t say I’m particularly bullish on this one but the startup is very early and transportation is a massive market ripe for disruption.

“Our vision is completely integrated multi-modal travel,” Sunde added.

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IPO Update

WeWork has delayed its IPO following questions surrounding its corporate governance and the ultimate value of the company. The co-working business says it expects to go public by the end of the year. Airbnb, for its part, filed a press release this week confirming its plans to go public in 2020. We don’t know much about the company’s plans, but we wouldn’t be too surprised to see the home-sharing decacorn pursue a direct listing.

Postmates, the popular food delivery service, raised another $225 million at a valuation of $2.4 billion in a round led by the private equity firm GPI Capital this week. The financing brings Postmates’ total funding to nearly $1 billion. The company filed privately with the SEC for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us onstage at TechCrunch Disrupt on Friday October 4th. Don’t miss it.

VC Deals

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Learn from top VCs at TechCrunch Disrupt

A whole lot of VCs will be joining us at TechCrunch Disrupt.

We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen for insight into the firm’s latest activity. Seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy will show up to give founders tips on how to raise VC. Y Combinator’s Michael Seibel and Ali Rowghani will join us with advice on how to get accepted to their respected accelerator.

Plus, GV’s David Krane, Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko, Aspect Ventures’ Theresia Gouw, Bessemer Venture Partners’  Tess Hatch, Forerunner Ventures’ Eurie Kim, Mithril Capital’s Ajay Royan and SOSV’s Arvind Gupta will be on deck to comment on the respective fields.

Disrupt SF runs October 2-4 at the Moscone Center in the heart of San Francisco. Passes are available here.

#EquityPod

This week, the lovely Alex Wilhelm and I welcomed Kleiner Perkins’ Mamoon Hamid, known for his investments in Slack, Figma, Cameo and more, to riff on upcoming IPOs and debate the scalability of D2C brands. Listen to the episode here or watch us on YouTube.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify, and all the casts.

At TechCrunch Disrupt, insights into key trends in venture capital

At TechCrunch Disrupt, the original tech startup conference, venture capitalists remain amongst the premier guests.

VCs are responsible for helping startups — the focus of the three-day event — get off the ground and as such, they are often the most familiar with trends in the startup ecosystem, ready to deliver insights, anecdotes and advice to our audience of entrepreneurs, investors, operators, managers and more.

In the first half of 2019, VCs spent $66 billion purchasing equity in promising upstarts, according to the latest data from PitchBook. At that pace, VC spending could surpass $100 billion for the second year in a row. We plan to welcome a slew of investors to TechCrunch Disrupt to discuss this major feat and the investing trends that have paved the way for recording funding.

Mega-funds and the promise of unicorn initial public offerings continue to drive investment. SoftBank, of course, began raising its second Vision Fund this year, a vehicle expected to exceed $100 billion. Meanwhile, more traditional VC outfits revisited limited partners to stay competitive with the Japanese telecom giant. Andreessen Horowitz, for example, collected $2.75 billion for two new funds earlier this year. We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen at Disrupt for insight into the firm’s latest activity.

At the early-stage, the fight for seed deals continued, with larger funds moving downstream to muscle their way into seed and Series A financings. Pre-seed has risen to prominence, with new funds from Afore Capital and Bee Partners helping to legitimize the stage. Bolstering the early-stage further, Y Combinator admitted more than 400 companies across its two most recent batches,

We’ll welcome pre-seed and seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy to give founders tips on how to raise VC. Plus, Y Combinator CEO Michael Seibel and Ali Rowghani, the CEO of YC’s Continuity Fund, which invests in and advises growth-stage startups, will join us on the Disrupt Extra Crunch stage ready with tips on how to get accepted to the respected accelerator.

Moreover, activity in high-growth sectors, particularly enterprise SaaS, has permitted a series of outsized rounds across all stages of financing. Speaking on this trend, we’ll have AppDynamics founder and Unusual Ventures co-founder Jyoti Bansal and Battery Ventures general partner Neeraj Agrawal in conversation with TechCrunch’s enterprise reporter Ron Miller.

We would be remiss not to analyze activity on Wall Street in 2019, too. As top venture funds refueled with new capital, Silicon Valley’s favorite unicorns completed highly-anticipated IPOs, a critical step towards bringing a much needed bout of liquidity to their investors. Uber, Lyft, Pinterest, Zoom, PagerDuty, Slack and several others went public this year and other well-financed companies, including Peloton, Postmates and WeWork have completed paperwork for upcoming public listings. To detail this year’s venture activity and IPO extravaganza, David Krane, CEO and managing partner of Uber and Slack investor GV will be on deck, as will Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko and Aspect Ventures’ Theresia Gouw.

There’s more where that came from. In addition to the VCs already named, Disrupt attendees can expect to hear from Bessemer Venture Partners’ Tess Hatch, who will provide her expertise on the growing “space economy.” Forerunner Ventures’ Eurie Kim will give the Extra Crunch Stage audience tips on building a subscription product, Mithril Capital’s Ajay Royan will explore opportunities in the medical robotics field, SOSV’s Arvind Gupta will dive deep into the cutting edge world of health tech and more.

Disrupt SF runs October 2 – 4 at the Moscone Center in the heart of San Francisco. Passes are available here.

Space is the next economic frontier… hear more about it at Disrupt SF

For decades space has been the playplace for world powers, but the advent of (relatively) cheap and frequent rocket launches has opened it up for new business opportunities. But it’s still hard as hell, as early adopters of this orbital economy Tess Hatch of Bessemer Ventures, Swarm’s Sara Spangelo, and OneWeb’s Adrian Steckel can attest. They’ll be on the Extra Crunch stage at Disrupt SF 2019 on October 3rd at 1:40 PM.

Spangelo and Steckel are in the midst of launching what have been termed “mega-constellations,” collections of hundreds or thousands of satellites offering a coordinated service, in their cases global connectivity. These efforts are only possible with the new launch economy, and came hot on its heels, showing there’s no reason to wait to put new plans in action.

But such constellations bring their own challenges. Just from an orbital logistics point of view, launching a single satellite so that it enters a unique and predictable trajectory is hard enough; launching a dozen or a hundred at once is more difficult by far. And after launch, how will those satellites be tracked? How will they communicate to the surface and each other? What about the growing risk of collisions?

On top of that are more terrestrial, but no less crucial, questions: What services can be made available from orbit? What’s a reasonable amount to spend on them? How will they compete with and accommodate one another? Whose regulations will they follow?

These latter questions are among those that must also be answered by investors like Hatch, who is familiar with both the technical and capital side of the burgeoning space industry (and of course the technical side of the capital side). Space ventures can be extremely expensive and high-risk, but to get your foot in the door at this stage could be the start of a billion-dollar advantage a couple years down the line.

If you’re planning on getting involved with the new space economy, or are just curious about it, join us for an extended discussion and Q&A on the 3rd.

Disrupt SF runs October 2 to October 4 at the Moscone Center in San Francisco. Tickets are available here, and they just happen to be available at a discount today only.