Tag: The Extra Crunch Daily

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Bird’s SPAC filing shows scooter-nomics just doesn’t fly

Scooter unicorn Bird is going public, per an agreement to merge with a special purpose acquisition company, or SPAC. After rumors and reports circulated for months about an imminent deal, it has finally arrived.

First, a quick overview of the agreement and the players involved: Bird is merging with Switchback II at an implied valuation of $2.3 billion. Fidelity Management & Research Company will lead the deal’s $106 million in private investment in public equity, or PIPE. Apollo Investment Corp. and MidCap Financial Trust provided an additional $40 million in asset financing. (Disclosure: Apollo is buying TechCrunch’s parent company.)

Historically — and based on what we’re seeing in this fantastical filing — Bird proved to be a simply awful business. Its results from 2019 and 2020 describe a company with a huge cost structure and unprofitable revenue, per filings. After posting negative gross profit in both of the most recent full-year periods, Bird’s initial model appears to have been defeated by the market.

What drove the company’s hugely unprofitable revenues and resulting net losses? Unit economics that were nearly comically destructive.

Some of the numbers Bird shared in its investor deck show a business that is growing, in terms of users and geographic footprint. Bird is in 200 cities globally and reports more than 95 million rides to date, and 3 million new riders added during the pandemic. The investor deck also touts year-round positive economics during the COVID-19 era. That all looks positive. But looking into the line-item financials, a different story emerges.

The scooter shop managed to convert a $135.7 million gross loss in 2019 to a smaller gross deficit of $23.5 million in 2020, but it did not manage to shake up its upside-down economics during its full fiscal 2020.

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5 questions every IT team should to be able to answer

Christy Wyatt Contributor
Christy Wyatt is Chief Executive Officer and a member of the board of directors at Absolute, a leader in endpoint resilience solutions and the industry’s only undeletable defense platform embedded in over a half-billion devices.

Now more than ever, IT teams play a vital role in keeping their businesses running smoothly and securely. With all of the assets and data that are now broadly distributed, a CEO depends on their IT team to ensure employees remain connected and productive and that sensitive data remains protected.

CEOs often visualize and measure things in terms of dollars and cents, and in the face of continuing uncertainty, IT — along with most other parts of the business — is facing intense scrutiny and tightening of budgets. So, it is more important than ever to be able to demonstrate that they’ve made sound technology investments and have the agility needed to operate successfully in the face of continued uncertainty.

For a CEO to properly understand risk exposure and make the right investments, IT departments have to be able to confidently communicate what types of data are on any given device at any given time.

Here are five questions that IT teams should be ready to answer when their CEO comes calling:

What have we spent our money on?

Or, more specifically, exactly how many assets do we have? And, do we know where they are? While these seem like basic questions, they can be shockingly difficult to answer … much more difficult than people realize. The last several months in the wake of the COVID-19 outbreak have been the proof point.

With the mass exodus of machines leaving the building and disconnecting from the corporate network, many IT leaders found themselves guessing just how many devices had been released into the wild and gone home with employees.

One CIO we spoke to estimated they had “somewhere between 30,000 and 50,000 devices” that went home with employees, meaning there could have been up to 20,000 that were completely unaccounted for. The complexity was further compounded as old devices were pulled out of desk drawers and storage closets to get something into the hands of employees who were not equipped to work remotely. Companies had endpoints connecting to corporate network and systems that they hadn’t seen for years — meaning they were out-of-date from a security perspective as well.

This level of uncertainty is obviously unsustainable and introduces a tremendous amount of security risk. Every endpoint that goes unaccounted for not only means wasted spend but also increased vulnerability, greater potential for breach or compliance violation, and more. In order to mitigate these risks, there needs to be a permanent connection to every device that can tell you exactly how many assets you have deployed at any given time — whether they are in the building or out in the wild.

Are our devices and data protected?

Device and data security go hand in hand; without the ability to see every device that is deployed across an organization, it becomes next to impossible to know what data is living on those devices. When employees know they are leaving the building and going to be off network, they tend to engage in “data hoarding.”

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Tech at Work: DE&I at Facebook, Prop 22 and gig worker earnings

Hey, ya’ll. I’m experimenting with a bi-weekly roundup that looks at the state of labor in tech.

We’ll use this space to explore topics related to diversity, equity and inclusion, the future of work, issues relating to pay equality, notable personnel changes and much more.

This week, we’re looking at Facebook’s civil rights audit, a new gig worker earnings study, the latest on California ballot measure Proposition 22 and layoffs amid COVID-19. 

Stay woke

The artist Celos paints a mural in downtown Los Angeles on May 30, 2020 in protest against the death of George Floyd, an unarmed black man who died while being arrested and pinned to the ground by the knee of a Minneapolis police officer. (Photo by APU GOMES/AFP via Getty Images)

It’s been less than two months since the police killing of George Floyd. While the tech industry has continued on with its funding rounds, mergers and acquisitions, there is still work to be done on the racial justice front. Here’s a look at some developments over the last couple of weeks. 

Facebook’s civil rights audit highlights gaps in DE&I work

As seen in Facebook’s final civil rights audit report conducted by former ACLU attorney Laura Murphy, the social networking giant still must do more to increase diversity in its senior leadership roles and C-suite. These roles for Black, indigenous and people of color must also not be “limited to diversity officer positions as is often the case in corporate America,” the report states. 

According to the audit, there must also be company-wide recognition that diversity, equity and inclusion efforts are not to fall solely on those in underrepresented groups, but rather on all members of the senior leadership team and managers. The audit also highlighted employee concerns around “a lack of recognition for the time URM employees spend mentoring and recruiting other minorities to work at Facebook.”

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Tech at Work: DE&I at Facebook, Prop 22 and gig worker earnings

Hey, ya’ll. I’m experimenting with a bi-weekly roundup that looks at the state of labor in tech.

We’ll use this space to explore topics related to diversity, equity and inclusion, the future of work, issues relating to pay equality, notable personnel changes and much more.

This week, we’re looking at Facebook’s civil rights audit, a new gig worker earnings study, the latest on California ballot measure Proposition 22 and layoffs amid COVID-19. 

Stay woke

The artist Celos paints a mural in downtown Los Angeles on May 30, 2020 in protest against the death of George Floyd, an unarmed black man who died while being arrested and pinned to the ground by the knee of a Minneapolis police officer. (Photo by APU GOMES/AFP via Getty Images)

It’s been less than two months since the police killing of George Floyd. While the tech industry has continued on with its funding rounds, mergers and acquisitions, there is still work to be done on the racial justice front. Here’s a look at some developments over the last couple of weeks. 

Facebook’s civil rights audit highlights gaps in DE&I work

As seen in Facebook’s final civil rights audit report conducted by former ACLU attorney Laura Murphy, the social networking giant still must do more to increase diversity in its senior leadership roles and C-suite. These roles for Black, indigenous and people of color must also not be “limited to diversity officer positions as is often the case in corporate America,” the report states. 

According to the audit, there must also be company-wide recognition that diversity, equity and inclusion efforts are not to fall solely on those in underrepresented groups, but rather on all members of the senior leadership team and managers. The audit also highlighted employee concerns around “a lack of recognition for the time URM employees spend mentoring and recruiting other minorities to work at Facebook.”

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You’ve heard of CRISPR, now meet its newer, savvier cousin CRISPR Prime

CRISPR, the revolutionary ability to snip out and alter genes with scissor-like precision, has exploded in popularity over the last few years and is generally seen as the lone wizard of modern gene-editing. However, it’s not a perfect system, sometimes cutting at the wrong place, not working as intended and leaving scientists scratching their heads. Well, now there’s a new, more exacting upgrade to CRISPR called Prime, with the ability to, in theory, snip out more than 90 percent of all genetic diseases.

Just what is this new method and how does it work? We turned to IEEE fellow,  biomedical researcher and dean of graduate education at Tuft University’s school of engineering Karen Panetta for an explanation.

How does CRISPR Prime editing work?

CRISPR is a powerful genome editor. It utilizes an enzyme called Cas9 that uses an RNA molecule as a guide to navigate to its target DNA. It then edits or modifies the DNA, which can deactivate genes or insert a desired sequence to achieve a behavior. Currently, we are most familiar with the application of genetically modified crops that are resistant to disease.

However, its most promising application is to genetically modify cells to overcome genetic defects or its potential to conquer diseases like cancer.

Some applications of genome editing technology include:

  • Genetically modified mosquitos that can’t carry malaria.
  • In humans, “turning on” a gene that can create fetal type behaving cells that can overcome sickle-cell anemia.

Of course, as with every technology, CRISPR isn’t perfect. It works by cutting the double-stranded DNA at precise locations in the genome. When the cell’s natural repair process takes over, it can cause damage or, in the case where the modified DNA is inserted at the cut site, it can create unwanted off-target mutations.

Some genetic disorders are known to mutate specific DNA bases, so having the ability to edit these bases would be enormously beneficial in terms of overcoming many genetic disorders. However, CRISPR is not well suited for intentionally introducing specific DNA bases, the As, Cs, Ts, and Gs that make up the double helix.

Prime editing was intended to overcome this disadvantage, as well as other limitations of CRISPR.

Prime editing can do multi-letter base-editing, which could tackle fatal genetic disorders such as Tay-Sachs, which is caused by a mutation of four DNA letters.

It’s also more precise. I view this as analogous to the precision lasers brought to surgery versus using a hand-held scalpel. It minimized damage, so the healing process was more efficient.

Prime editing can insert, modify or delete individual DNA letters; it can also insert a sequence of multiple letters into a genome with minimal damage to DNA strands.

How effective might Prime editing be?

Imagine being able to prevent cancer and/or hereditary diseases, like breast cancer, from ever occurring by editing out the genes that are makers for cancer. Cancer treatments are usually long, debilitating processes that physically and emotionally drain patients. It also devastates patients’ loved ones who must endure watching helpless on the sidelines as the patient battles to survive.

“Editing out” genetic disorders and/or hereditary diseases to prevent them from ever coming to fruition could also have an enormous impact on reducing the costs of healthcare, effectively helping redefine methods of medical treatment.

It could change lives so that long-term disability care for diseases like Alzheimer’s and special needs education costs could be significantly reduced or never needed.

How did the scientific community get to this point – where did CRISPR/prime editing “come from?”

Scientists recognized CRISPR’s ability to prevent bacteria from infecting more cells and the natural repair mechanism that it initiates after damage occurs, thus having the capacity to halt bacterial infections via genome editing. Essentially, it showed adaptive immunity capabilities.

When might we see CRISPR Prime editing “out in the wild?”

It’s already out there! It has been used for treating sickle-cell anemia and in human embryos to prevent HIV infections from being transmitted to offspring of HIV parents.

So, what’s next?

IEEE Engineers, like myself, are always seeking to take the fundamental science and expand it beyond the petri dish to benefit humanity.

In the short term, I think that Prime editing will help generate the type of fetal like cells that are needed to help patients recover and heal as well as developing new vaccines against deadly diseases. It will also allow researchers new lower cost alternatives and access to Alzheimer’s like cells without obtaining them post-mortem.

Also, AI and deep learning is modeled after human neural networks, so the process of genome editing could potentially help inform and influence new computer algorithms for self-diagnosis and repair, which will become an important aspect of future autonomous systems.

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Africa: more gazelles at home than unicorn IPOs abroad

At the recent TechCrunch Disrupt SF, Senegalese VC investor Marieme Diop suggested that Silicon Valley’s unicorn IPO model might not be right for African startups.

The is largely because the continent’s startups face a vastly different macro business environment, Diop explained during a discussion of investing in Africa with 500 Startups’ Sheel Mohnot and IFC’s Wale Ayeni. In a subsequent conversation, she clarified an alternative approach for African startups to raise capital from public listings.

“It might be a better option to set lower revenue expectations and have startups list on local exchanges to raise capital from IPOs when they’re ready,” said Diop. “We may be able to create more gazelles at home than unicorns abroad,”

Disrupt SF 2019 Africa Investing Session Diop Mohnot Ayeni

A gazelle at home could be a company valued at a $100 million or more and generating revenues of $15 to $50 million, according to Diop.

“We should have a discussion of setting a right valuation, a valuation that is more appropriate to African startups,” she said.

A VC investor at Orange Digital Ventures and co-founder of Dakar Angels Network, Diop’s perspective comes in the wake of Jumia’s going public on the New York Stock Exchange this April.

The e-commerce venture became the first VC-funded digital company operating in Africa to list on a major global exchange, a fact that may have raised expectations for additional $100 million revenue tech firms creating unicorns and IPOs in Africa.

The $100 million revenue point has served as the unofficial IPO benchmark for startups and investors; after reaching unicorn status in 2014, Jumia achieved it last year (with big losses in tow).

But as I mentioned in a previous Extra Crunch piece, it will be difficult for startups operating in Africa to hit that revenue mark, even with all the leaps and bounds occurring in the continent’s economies and tech sector. The overall operating environment is still fairly costly and challenging, compared to other regions.

Diving deep into Africa’s blossoming tech scene

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Top VCs in Edtech, Dropbox, first mover advantage, India’s Netflix, scooters, and more

Editor’s Note

This week, we hosted 23 panels on all aspects of building startups on the Extra Crunch stage at TechCrunch Disrupt SF. Thanks to the thousands of attendees who attended those talks, as well as the workshops we held on the Breakout Stage — your enthusiasm was palpable.

We also had hundreds of new EC members join during the conference — to all of you: welcome!

This newsletter covers all of last week, and is a bit abbreviated thanks to Disrupt. Back to normal next week.

Where top VCs are investing in edtech

Extra Crunch media columnist Eric Peckham interviewed almost a dozen leading venture capitalists about the state of edtech, including Jennifer Carolan of Reach Capital, Aydin Senkut of Felicis Ventures, and Charles Birnbaum of Bessemer. There is still a lot of enthusiasm for the space, but the theses for these investors have diverged quite significantly.

Marlon Nichols , Managing Partner at MaC Venture Capital (a new LA-based seed fund with investments in Catalyte, Codeverse, and Wonderschool):

“Many education technology companies target individual teachers, which presents a long path to sizable revenue (requires too many customers) while others usually attempt to navigate the lengthy and bureaucratic sales cycle of selling to school districts. VCs prefer companies that have short sales cycles that can scale revenue quickly so in general, edtech companies are difficult investments for venture capital.

That said, education is a giant opportunity in the US because high quality education is not evenly distributed across communities or social classes. It’s a crisis. Companies that address this at scale are attractive if the revenue model makes sense. That’s why I led the first round into Wonderschool, which delivers high quality education and child care at costs relative to one’s zip code. The schools double as the educator’s home so there isn’t a need for real estate investment.”

Why is Dropbox reinventing itself? A chat with Dropbox VP of Product Adam Nash and CTO Quentin Clark

Dropbox may be known for its singular file storage product, but the company is adapting and changing as it seeks new customers and also learns more about what “file storage” really means to users.

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How to become a VC, Amazon’s voice play, Peloton stock, Facebook’s new VR environment and more

EC Editorial Announcements

TechCrunch Disrupt SF is this week: join us on the Extra Crunch stage

TechCrunch’s biggest event of the year is happening this coming week at the brand-new Moscone North convention center in SF. We have wall-to-wall programming on our inaugural Extra Crunch stage, where audience members can ask questions to our panelists on topics as diverse as growth marketing, recruiting, fundraising, legal quandaries, and more.

If you want to join but haven’t bought your ticket, remember that all Extra Crunch annual subscribers get 20% off our tickets by emailing extracrunch@techcrunch.com. And if you can’t join, we will have synopses of some of the EC panels coming out in the following weeks.

Transfer your Extra Crunch Brex Reward points to JetBlue

A while back, we added an Extra Crunch member benefit where all EC members can receive 100,000 Brex Rewards points if they sign up for a new Brex account. Now, those points can also be transferred to JetBlue, perhaps for those fancy Mint seats between New York and SF. We are going to continue to add new member benefits, so do let us know if you have any interesting ideas or want to partner with us.

Follow our new @extracrunch Twitter handle

Finally, we now have a new Twitter handle for Extra Crunch: @extracrunch. We will be retweeting all EC articles on the handle, and later on, will be exploring other ways to engage with members through Twitter. Follow us!

Inside the venture capital recruiting process

Top venture capital partner recruiter (among other verticals) Dan Miller of True Search describes what it takes to become an investor these days at a VC firm:

If you are interviewing for operating roles in companies in parallel to interviewing with VC firms, you will get multiple offers (probably quite good ones) in the former category before you’ve made it far in the latter. It is exceedingly common in the VC Partner searches I run to find out that an excellent candidate has multiple strong offers in Product roles from big tech companies and hot startups, for example, before they’ve made it halfway through a VC interview process.

This Week in Apps: AltStore, acquisitions and Google Play Pass

TechCrunch’s apps maven Sarah Perez is starting a new, occasional series on the most important developments in the app world along with her analysis of what’s taking place. This week, she explores AltStore, a new type of app store, iOS 13 adoption trends, an App Annie acquisition, and five or so other stories:

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How to sell a startup for a $1B, Automattic, WeWork craziness, Kobalt, Netflix, Blackstone, and ClimateTech

Editor’s Note

Apologies for not getting this roundup newsletter out on Saturday — I was on vacation this weekend. So this newsletter covers the back half of last week and the first half of this week, and some of the articles are summarized more aggressively to keep this email at least somewhat reasonable in length.

How founder and CTO Dries Buytaert sold Acquia for $1B

Earlier this week, Acquia (the company behind content management system Drupal) announced that it had been acquired by Vista Equity for $1 billion. It’s a big exit for co-founder Dries Buytaert, who built out the original version of Drupal almost twenty years ago as an open-source approach to CMSes.

Our enterprise reporter Ron Miller talked with Buytaert about why he sold, what it feels like to exit a startup after building it for so long, and what’s next for Acquia and Drupal.

“We were born out of open source. All of our customers use open source. We give back to open source. It’s part of our DNA. It’s what we do. And so making sure that any new investor understood that and was aligned with was critically important, and Vista is very excited about the open source community around Drupal and Mautic (two open source projects Acquia is the steward of), and has even agreed to invest more in them,” he said.

It was more than aligned values around open source though. He says that Acquia is competing with some big companies like Adobe and it needs more capital, especially for larger M&A projects, and Vista provides that financial backbone that they have been lacking. While they have been able to make a couple of smaller acquisitions, being part of Vista should open the door for far more substantial ones.

How Automattic wants to build the operating system of the web

Speaking of content management systems, Automattic, which owns WordPress.com and recently bought the remnants of Tumblr from TechCrunch parent company Verizon Media, has a major vision for the future of content (and of course, how it fits into that world).

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Startup growth hacks, high-frequency trading, startup security, privacy, and Adobe

Full Disrupt SF agenda posted

We have an amazing slate of speakers stopping by TechCrunch Disrupt SF this year, including two full days scheduled for the debut of our Extra Crunch stage, which will focus on how founders can overcome the challenges they face through discussions of tactics with some of the most successful founders and leaders in our industry.

Want to learn how to raise your first dollars with Russ Heddleston at DocSend? How to get into Y Combinator with YC CEO Michael Siebel? How to iterate your product with the chief product officers of Uber, Tinder, Okta, and Instagram? How to evaluate talent with Ray Dalio? These and almost two dozen more panels are waiting for attendees on the EC stage.

Be sure to grab your tickets soon. And if you are an annual EC subscriber, be sure to use your 20% membership discount by emailing extracrunch@techcrunch.com.

How to get your ads working, and whether PR is worth it

Growth expert Julian Shapiro of BellCurve.com launched a new series of articles for Extra Crunch members on how to grow your startup using battle-tested growth hacks and techniques from heads of growth across Silicon Valley. His first piece came out on Friday on how to work with influencers, and now in this second edition, he investigates advertising and how to evaluate the value of PR firms.

How to make Snapchat ads profitable

Based on insights from Tim Chard.

  • Snap has niche audiences you’ll want to take advantage of. Examples include “people with digestive issues.” Facebook doesn’t have that. Plus, ad clicks on Snap can be cheap ($0.30 USD isn’t uncommon).
  • However, Snap traffic typically converts poorly once it arrives on your site or app.
  • Here’s a technique to mitigate that: cross-target your Snap traffic. Meaning, use unique UTM tags on your Snap ad links. Then, in Facebook/Instagram, detect that unique UTM to create a custom audience of Snap visitors. Finally, retarget those visitors with FB/IG ads, which tend to convert much better than Snap.

How to get people to open your emails

In Julian’s third edition of the Growth Report, he offers even more tips on how to increase open rates, whether you should use Bing Ads(!), and whether and how to handle multi-touch attribution.