Block’s Cash App will now let users pay online beyond the Square network

Block’s (formerly known as Square) Cash App is now letting users make payments on e-commerce sites outside the Square network. Until now, users could only make payments using Cash App Pay on Square terminals or online Square merchant partners.

The company has partnered with American Eagle, Aerie, Tommy Hilfiger, Finish Line, and JD Sports for the launch with more merchants like Romwe, Savage x Fenty, SHEIN, thredUP, and Wish coming to follow in the coming months.

Users can either explore discounts and promotions offered by these brands from the Cash App’s Discover tab or go to their website and select the Cash App Pay option at checkout. They can use a mix of Cash App credit and debit cards to pay for items they purchase.

Image Credits: Block

The company said it’s automatically offering a 10% discount to users when they make their first purchases with these merchants using Cash App Pay.

Block first introduced Cash App Pay last year to let customers easily make payments to Square merchant partners in-person or online by scanning a QR code or pressing the button on their app.

This new move of letting users make payments outside the Square network might help Block compete better with rivals like Apple Pay, which has a long list of online partners. The firm announced in June that it’s working with Apple to support the tap-to-pay on iPhone feature — which was announced back in Februaryon the Square app later this year.

In April, Block confirmed a massive data breach where a former employee download unauthorized reports from the Cash App that included information like full customer names, brokerage account numbers, and some cases full information about their investment portfolio.

Cash App, which has more than 80 million users on its platform, is a major revenue feature driver for Block and offers services like investment in stocks and Bitcoin. The company posted $1.47 billion in profit for Q2 2022 with 29% year-on-year growth, but its Bitcoin business revenue was down due to the volatile crypto market.

Another huge funding round gives Veho room to deliver

Two months after taking on a monster $125 million Series A that propelled the company into unicorn territory, package delivery company Veho is back with another huge round — this time $170 million in Series B.

Leading the round this time was Tiger Global, with SoftBank Vision Fund 2 participating. This latest round gives the company $300 million in total funding raised in the past two years and a $1.5 billion valuation.

Existing investors, including General Catalyst, Bling Capital, Construct Capital, Industry Ventures and Origin Ventures, joined the round. Other notable investors in the company include The Chainsmokers’ Mantis VC Fund and the founders and CEOs of Allbirds, Everlane, FIGS, Harry’s, Flexport and Warby Parker.

Two months isn’t that long ago, but let’s bring you up to speed on Veho. The logistic technology company is going after the last-mile section of delivery — how packages get from fulfillment centers to the customer’s door. The global last-mile delivery market is already valued at over $100 billion and is poised to grow to $146.96 billion by 2025.

Veho is not alone in trying to solve this problem. For example, we saw companies like Zoomo, Cargamos, Coco, Deliverr and Bringg announce new rounds last year. However, Veho is standing out from the crowd by offering transparency into deliveries that starts with the option of when, where and how customers want their packages delivered, even with a doorstop returns program so people can easily return items they don’t want, and then real-time communication throughout the whole process.

Given the company has been able to secure customers, like HelloFresh, Misfits Market and thredUP, and that amount of funding in quick succession, there is no doubt that approach is working.

“As e-commerce sales continue to soar, last-mile delivery capacity has not kept pace, nor have logistics companies made the technological investment necessary to support a level of customer service that is expected by a new generation of consumers,” said Lydia Jett, managing partner at SoftBank Investment Advisers, in a written statement. “We believe that Veho has built a leading position in this market with an integrated technology platform that facilitates flexible and reliable delivery services, which drives conversion and customer loyalty. We are thrilled to be partnering with Itamar Zur and the team to support their mission to reinvent delivery.”

Zur, Veho’s co-founder and CEO, told TechCrunch that the Series A round put the company on some e-commerce companies’ radar, some that they are in talks with. And having gone through a holiday season with people not getting their purchases on time, the company realized it was in a position of getting in on a rapidly-changing industry. Given the tailwinds, Zur took the opportunity to work with top venture capital firms, like Tiger and SoftBank, even though it had taken the Series A a mere six weeks prior.

In January, the company grew 40% in revenue and another 20% in its customer base. Taking the additional capital means the company can invest in areas of the business earlier than Zur originally planned. Those include making big investments in technology and infrastructure, including warehouse automation.

The company also plans to jump from 500 employees today to 2,000 by the end of the year through hiring of all positions, particularly software engineers, as Veho coordinates a massive tech play. In addition to the hiring, the extra capital will enable the company to provide better benefits for its employees and to go after potential strategic acquisitions.

Veho just began operating in Orlando, its 15th location, and Zur has plans to open eight additional locations by the end of the first quarter.

“The new round has accelerated all of those things,” he added. “And while we are growing fast, we continue to have metrics of 99.9% on-time delivery rate. For e-commerce companies, the cost of manufacturing or a slick website used to be the differentiator, but now logistics is at the forefront of innovation and is the new differentiator.”

Veho getting another large round of funding was not much of a surprise for F-Prime Capital principals Benjamin Gorman and John Lin, who have invested in similar companies, including Logixboard.

Their firm is not an investor in Veho, but Gorman said the logistics ecosystem is so big — $700 billion he estimates just for the trucking market in the U.S. — that it doesn’t take much market share for a company to have a significant business. He cites Flexport’s recent $935 million Series E round as an example.

Many logistics companies are grouped into the fintech universe, where Lin said his firm’s research showed median valuation jumped two times in one year as the average round size increased from $50 million to $80 million.

Over the long-term, Gorman believes that the acceleration of the industry between 2019 and 2020, driven in part by the global pandemic shifting purchases online, isn’t likely to be replicated, but also won’t go back to the old way of doing things, either.

“There are very long-term trends driving logistics, including adoption of technology that has already existed for a while,” Gorman added. “E-commerce is growing, and the drivers of that will continue to be new brands and a shift into penetration of verticals. There will also be new approaches in terms of consumer messaging. Like in the food and clothing space, how something is made and flows through the supply chain and logistics in an environmental way will be part of the brand message.”

Archive aims to put clothing brands in control of their secondhand sales

It turns out the fashion industry is quite a wasteful industry, contributing an estimated 13 million tons of textile to landfills per year.

One of the ways some startups have helped is making the resale of clothing easier by moving it online. However, Emily Gittins and Ryan Rowe, co-founders of Archive, saw some clothing brands being left out of the action. They launched their company in February 2021 to not only decrease the amount of clothing that finds its way into landfills, but also to power the next generation of resale that puts the brands themselves in charge.

Buoyed by $8 million in new funding, the company’s resale technology builds customized marketplaces for brands to incorporate a secondhand component into their businesses. Via a favorite brand’s marketplaces, consumers can buy and sell secondhand merchandise alongside the existing retail experience.

“It feels like there is a huge opportunity for brands to improve how they plan buying to reduce the waste in the supply chain,” CEO Gittins told TechCrunch. “In my mind is an even bigger opportunity to unlock all of the inventory that is sitting in people’s closets in their houses.”

One of the drivers for Gittins and Rowe to start Archive was seeing the shift of resale from the early days of consignment stores to moving online with companies like Poshmark, ThredUp and The RealReal. Gittins explained that as all of these generations of resale moved online, buyers and sellers could be matched by common interests; now the third generation will be brands taking back ownership of that and actually driving it themselves.

They designed Archive to be a kind of a peer-to-peer, white-labeled product that brands could release that had the same look and feel of their existing retail channels, Rowe, CTO, said. Items are sold directly from a seller to a buyer, so there isn’t much to deal with in terms of inventory or logistics.

“It also builds community and gives an outlet for these fanatics of the brand,” he added. “We realized that retail strategies are much bigger than this, so we’ve started to build out capabilities to help our brands do things like list their additional inventory that was maybe returned or damaged.”

Over the past year, brands were accelerating the conversations around resale, but weren’t taking steps to do it. However while preparing for 2022, Gittins says brands began coming to them with resale as one of their top priorities for the year. It was then that she and Rowe discussed taking additional venture capital to scale their team and operations to service the number of inbound requests.

Archive went live with five brands: Dagne Dover (Almost Vintage), Filippa K. (Preowned), M.M. LaFleur (Second Act), The North Face (Renewed Marketplace) and Oscar de la Renta (Encore). The company now has a pipeline of 100 brands looking to work with them, Gittins said.

The round brings Archive’s total funding to nearly $10 million. It was co-led by Lightspeed Venture Partners and Bain Capital Ventures, with participation from Firstmark and a group of angel investors, including Oscar de la Renta CEO Alex Bolen, Zola co-founder Shan Lyn-Ma, former Credo Beauty CEO Dawn Dobras, designer Steven Alan and former Saks Fifth Avenue president Marigay McKee.

The bulk of the funding is earmarked for scaling the company, but also in technology and product development, as Archive aims to build out customized and unique experiences for each brand and their customers.

The company did not disclose growth metrics, but Gittins did say that after launching with the first few brands in 2021, the company has seen “incredible traction and is making a dent in taking care of the resale market.”

Alex Taussig, partner at Lightspeed, said secondhand retail is estimated to be a $100 billion category and will be driven by the brands adopting resale through companies like Archive. He has been watching market play out over the last decade and thinks Archive is the first company to build resale tools tailored toward the brand’s experience.

“We were very impressed with the quality of brands and the breadth,” Taussig said. “It was not just one type of brand, but all the brands they got on board in such an early timeframe. If you’re the kind of person who really likes Oscar de la Renta, and you just want to be an Oscar de la Renta seller or buyer, you get really deep in that community, but this is the site.”

VC Mark Suster: “The bet we’re making now is on founder skills,” not customers or products

We recently caught up with longtime VC Mark Suster of L.A.-based Upfront Ventures, which last raised both an early-stage fund and a growth stage fund several years ago and, according to regulatory filings, is in the market right now, though Suster couldn’t discuss either owing to SEC regulations.

We did talk about a wide range of things, from his firm’s big bet on the micromobility business Bird (which could be publicly traded soon), to his views on decentralized finance, to his fitness regime (we had to ask, as Suster has shed 60 pounds since early last year). If you’re curious to hear that conversation, you can listen here. In the meantime, what follows are outtakes of his reflections on broader industry trends, including the feverish pace of deal-making.

On changing seed-stage check sizes, and how much time VCs have to write them right now:

It used to be 10 years ago that I could write a $3 million or $4 million or $5 million [check] and that was called an A round, and that company probably had raised a few hundred thousand dollars from angels and maybe some seed funds, and I could get a lot of data on how companies were doing. I could talk to customers. I could look at customer retention. I could look at a startup’s marginal cost structure. I could talk to references of the founders. I could take my time and be thoughtful.

Fast-forward a decade, and $5 million is a seed round, and now there are pre seed rounds and “day zero” companies and seed extensions and A rounds and “A prime,” there’s B … I’m not actually doing anything differently than I did 10 years ago, in terms of deploying capital, getting involved with founders very early, helping you build your executive team, set your strategy, work on pricing, [figure out] which market are you in, [figure out] the sequence of how you launch products and how to raise downstream capital. But the pressure on me is, I now need to make faster decisions. I need to be involved with your company earlier. So I’m taking a little more risk in terms of not being able to look at customers. You may not even have customers.

On why his firm is averse to today’s A and B rounds and leaning more heavily into growth rounds. (It just brought aboard a former Twitter exec to lead the charge here and has meanwhile plugged more than $50 million in to several of its portfolio companies, including Bird; Rally, an investing platform for buying shares in collectibles; and Apeel Sciences, which makes edible coatings for fruit.)

I would never rule out any round. But what I will tell you is that the new A round that I maybe have an aversion to is call it $20 million to $30 million. What does that imply? It implies that you’re paying a $50 million, $60 million, $70 million valuation. It implies that to really drive fund-level returns, you have to have $5 billion, $10 billion, or $15 billion outcomes or greater.

The world is producing more of those. There are maybe 11 companies in the United States that are pure startups that are worth more than $10 billion. I get it. But if you want to be writing $20 million A rounds where you’re taking that level of risk, you have to have a $700 million to an $800 million to a $1 billion fund. And I don’t want to be in that business, not because I think it’s bad, but it’s a different business that implies different skills.

We want to be super early, like the earliest capital; we’ll even take a risk on you want to leave your company and we’ve known you. Let’s say we knew you at Riot Games, we knew you at Snapchat, we knew you at Facebook, we knew you when you were working at Stripe or PayPal. We will back you at formation — at day zero. We want to [then] skip the expensive rounds and come in later.

On whether Upfront invests in priced rounds as well as convertible notes, wherein an investor is entitled to invest at a discount to the next round:

I think there’s a lot of misnomers that rounds themselves aren’t priced. Almost every round is priced. People just think they’re not priced. So [maybe the question is]: Are we willing to do convertible notes, are we willing to do SAFE notes, are we willing to do all this stuff, and the answer is yes. Now, most convertible notes, most SAFE notes, they don’t fix a price, but they have a cap. And the cap is the price. What I always try to tell founders is, what you have is a maximum price with no minimum price. If you were willing to just raise capital and set the price, you’d have a maximum and it’s better for you. But for whatever reason, a generation of founders has been convinced that it’s better not to set a price, which really what they’re doing is setting a max, not a [minimum], and I’m not going to have that argument again. People don’t understand it. [The short version is] we will do convertible notes; we would not fund something that had no maximum price.

Regarding how Upfront competes in a world where deals are happening within shorter time windows than ever before:

If you’re looking for [a firm that will invest after one call] you’re calling the wrong firm. We don’t have as much time to know if customers love your product. You may not even have customers. But please don’t mistake that. We spend as much time as we can getting to know the founders. We might know the founders for five years before they create a company. We might be the people egging them on to quit Disney and go create a company. So we really want to know the founder. The bet that we’re making is now more on the founder skills and vision than on customer adoption of a product. That’s really what’s changed for us.

I always tell founders: If someone is willing to fund you after a 30-minute meeting, that’s a really bad trade for you. If a fund is doing 35 investments or 50 investments or even 20 investments and they get it wrong because they didn’t do due diligence, OK, well, they have 19 or 30 other investments. If you get it wrong and you chose an investor who’s not helpful, not ethical, not leaning in, not supportive, not adding value, you live with that. There’s no divorce clause.

Etsy asks, ‘how do you do, fellow kids?’ with $1.6B Depop purchase

The news this morning that e-commerce marketplace Etsy will buy Depop, a startup that provides a second-hand e-commerce marketplace, for more than $1.6 billion may not have made a large impact on the acquiring company’s share price thus far, but it provides a fascinating look into what brands may be willing to pay for access to the Gen Z market.

First, a few details: Per Etsy, the Depop deal is worth “$1.625 billion consisting primarily of cash, subject to certain adjustments for Depop’s working capital, transaction expenses, cash and indebtedness, and certain deferred and unvested equity for Depop management and employees.” So, $1.625 billion, plus or minus. We’ll use that number this morning.

Because Etsy is a public company and the transaction is material, it provided a good deal of information on the acquisition. The key facts that relate to the scale of Depop’s business are as follows:

  • 2020 gross platform spend, revenue: “Depop’s 2020 gross merchandise sales (GMS) and revenue were approximately $650 million and $70 million, respectively, each increasing over 100% year-over-year.”
  • Historical gross platform spend trend: “Depop’s GMS grew at a compounded annual growth rate of nearly 80% from 2017-2020.”

At $70 million in 2020 revenue, Depop is being valued at a multiple of 23.2x of the previous year’s top line. That’s rich, but not impossibly high for a company that just had a huge pandemic year. (Though it is somewhat notable that Etsy is valuing Depop as if it was a high-growth SaaS business and not a consumer marketplace.)

The category of e-commerce performed well during the pandemic, implying that Depop’s non-pandemic growth rate would have been lower than what it ultimately recorded. How can we tell? The company’s historical GMS spend figure of “nearly 80%” from 2017 to 2020 is inclusive of the 100%+ GMS growth it recorded last year. We can infer, then, that in 2017, 2018 and 2019, GMS at Depop grew at a slower pace, namely one that is under the 80% mark.

FloorFound is bringing online return and resale to direct to consumer furniture businesses

Over the next five years consumers will return an estimated 40 million to 50 million pieces of furniture that more than likely will end up in landfills, creating tons of unnecessary waste, according to Chris Richter, the founder of a new Austin-based furniture startup, FloorFound.

To reduce that waste, and give retailers another option for their used goods, Richter has launched FloorFound. The company is designed to manage furniture returns and resale for online merchants. So far, companies like Floyd Home, Inside Weather, Outer and Feather (the furniture rental company) are using FloorFound’s services.

“We have a very large pipeline and we’ve been operating since April first,” said Richter. “We can pick up in any major metro locally and inspect it locally. We have a platform layer where we can run inspections against those items.”

As consumers look to reduce their environmental footprint, an easy place to start is by buying used items, Richter said, and he expects that most brands will start to incorporate used and new products in their virtual and real showrooms. “Every brand will commingle new items with resale items,” he said. “We are trying to put retailers in the resale business with their own return inventory.” To prove his point, Richter pointed to companies like REI and The Gap, which have partnered with ThredUp to sell used clothes.

To compliment its returns business and give online sellers a way to work more seamlessly with local vendors the company has logistics partnerships with providers including Pilot Freight Services, Metropolitan Warehouse and Delivery and J.B. Hunt Transport.

Working with co-founder Ryan Matthews, the former director of technology for the Austin-based high end retailer Kendra Scott, Richter has set up a business that can tap into both the demand for better customer service for the return of large items and the growing call for greater sustainability in the furniture industry.

It was an attractive enough proposition to attract a pre-seed investment from Schematic Ventures, a venture fund focused exclusively on technological innovations for supply chain management.

“The broken experience of oversized e-commerce has kept a multi-billion dollar category offline. It’s not a simple problem: oversized items require coordination of a hyper-fragmented micro carrier network, complex physical processing, and then re-injection into an e-commerce channel that aligns with the brand,” said Julian Counihan, a general partner at Schematic Ventures. “UPS and FedEx just aren’t going to cut it. FloorFound is tackling this challenge with a team tailor-made for the task: Chris Richter, Ryan Matthews and Shannon Hardt have backgrounds spanning supply chain, delivery, e-commerce and enterprise software. FloorFound will be the final push that moves the remaining offline categories, online.” 

Unicorn rodeo: 6 high-flying startups that are set to go public

This week Airbnb announced that it has privately filed to go public, putting the famous unicorn on a path to a quick IPO if it wants. The recent move matches reporting indicating that the home-sharing upstart could yet go public in 2020 despite the collapse of the travel industry.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

But Airbnb is not the only venture-backed company of note that is looking to go public at the moment, or that has privately filed to go public. Indeed, so many unicorns are looking to get out the door in the next quarter or two, I’ve started to lose track of their status.

So, this morning, let’s gather a digest of each unicorn that has filed privately, is expected to debut shortly, or may go public in the next year or two. We’re talking Airbnb, Asana, ThredUp, Qualtrics, Palantir and Ant first, and then more loosely about the huge cadre of companies that could go public before the end of 2022, like UIPath, Intercom, and, sure, Robinhood as well.

Today is Friday, which means we can afford to take a minute, center ourselves and make sure that we’re ready for the news that next week will inevitably bring. So let’s repine and have a little fun.

Upcoming unicorn IPOs

In order to keep this digestible, we’ll proceed in bulleted-list format. Starting with the biggest news, let’s remind ourselves of Airbnb’s decline and recovery, starting with revenue numbers:

  • Airbnb has filed to go public and is expected to raise capital in its debut. While its filing is currently private, the company likely wouldn’t kickstart the process this early in its recovery from COVID-19-related issues if it didn’t mean to follow through. So, we can anticipate a somewhat-speedy offering provided that things don’t change again. Airbnb’s Q2 revenue fell by at least 67% from $1 billion or more to $335 million in the period, per Bloomberg. So, the late-Q2 and Q3 rebound story are likely the strength that Airbnb intends to lean on when it does debut.

What the partnership at Trinity Ventures sees for the road ahead in 2020

Over the years, Trinity Ventures has racked up many exits for its limited partners.

Through deals in consumer brands like Starbucks and Zulily and enterprise companies like TubeMogul and New Relic, the Menlo Park-based fund has found repeated success, but as it retrenches with a pared-down investment team and a much smaller new fund, Trinity’s investors have some thoughts about what lies ahead for the venture capital community.

As the firm’s partners consider what’s in store for 2020, they emphasize that entrepreneurs will have to focus on public policy; blockchain will experience a renaissance; a recession is coming and the accessibility of data and an aging global population will continue to reshape healthcare markets.

The firm is currently in the process of closing what would be its smallest fund in years, a $250 million investment vehicle, first disclosed in a filing with the Securities and Exchange Commission in July. That fund, as first reported by Crunchbase News, is the firm’s most modest vehicle in nearly 20 years; the last time Trinity raised less than $300 million was in 1998.

Even as it invests from a smaller vehicle, the team is still putting capital to work in deals like the human resources-focused technology startup, Cultivate; the interbank payment company, BatonSquire, a payment and booking management platform for barbershops and salons, and Valtix, an enterprise security company.

For Patricia Nakache, an investor in companies like Turo,, and ThredUp, understanding regulation and public policy will have to become part of the job for budding entrepreneurs and big companies alike.