Connect with us

Tech News

Companies raising supergiant VC aren’t getting any younger – TechCrunch

Published

on

This week, point-to-point “microtransit” service company Lime announced it raised $310 million in a Series D round, which valued the company at $2.4 billion, post-money. That is pretty impressive for a startup founded just a couple of years ago. Since 2017, Lime has raised more than $765 million in venture funding, which is due in part to the pretty daunting economics of the bike and scooter business. It takes a lot of capital to acquire and deploy that hardware.

Lime isn’t the only company to raise supergiant ($100 million or more) VC rounds right out of the gate. Despite the fact that supergiant venture capital rounds have recently become an almost everyday occurrence, the age at which companies close their first nine-figure funding deal hasn’t really changed over the past several years.

In the chart below, we plot the distribution of startups’ age at the time of their first supergiant venture round of $100 million or more. (The age of a company at any subsequent supergiant round was excluded.) In prior reporting, we found that supergiant deal volume began accelerating in 2013, which is why we chose that year to start. For reasons we’ll explain after the chart, it’s best to think of the numbers presented here as a very good estimation rather than a highly precise measurement. There are still lessons to learn though.

Note from the get-go that company ages were calculated by finding the number of days elapsed between their founded date listed in Crunchbase and the date on which the company’s first supergiant VC round was announced. It sometimes takes several weeks between when a deal is finalized and when it’s publicly announced (even in the case of these really big deals). We excluded companies with no listed founding date. Also note that the founding dates listed in Crunchbase are often not precise, so that introduces some fuzziness as well.

However, these caveats aside, there are some general trends to be found here. The mix of companies raising their first really big rounds hasn’t changed all that much over time. On average, a little less than half of supergiant rounds are raised by companies roughly five years old or younger. Some years, like 2016, had above-average representation of younger companies raising their first nine-figure deals. Perhaps coincidentally, 2016 was also a year where supergiant VC (and, indeed, venture activity in general) slowed slightly.

If a company is going to raise their first supergiant VC round (which, recall, are still exceedingly rare), a majority of companies do so within the first five or six years in business. Of nearly 888 first supergiant rounds (raised since 2013) we analyzed, the largest number were struck between years three and five. There is a long tail of companies that raise their first nine-figure deals more than a decade after being founded.

Generally, this isn’t too surprising. Most VC funds operate on a 10-year cycle, as do many startups. Many companies raise their first big rounds of funding within the first few years after launch. Some of these rounds are bigger than others, and that’s what’s reflected above.

In entrepreneurial finance, up-front costs matter. Founded in December 2016, Elon Musk’s tunnel-digging endeavor The Boring Company was a little less than 15 months old when it raised $113 million in venture funding in April of 2018. Tunnel boring machines aren’t cheap. The company aims to dig tunnels for the low, low price of $10 million per mile.

It’s not just Mr. Musk who can raise supergiant sums so speedily. Some sectors are more capital-intense than others, requiring some companies to seek large funding deals early, to bring a product or service to market. For example, a number of companies cropped up in the residential real estate space with the goal of streamlining the home-buying process. In practice, it means that the company acquires the home itself, before ultimately signing it over to the homeowner. Ribbon is one such venture. The fintech company was founded in September 2017 and raised $225 million in Series A funding a little over one year later, in late October 2018.

Most companies aren’t a good fit for VC funding. Of those that try to raise VC funding, most fail. Of those that do raise VC money, the surpassing majority of those deals are less than $100 million. To be clear: We’re talking about very rarified air here. But it helps to confirm another side of a trend we found earlier, through some trial and error. Startups aren’t really raising money any faster than they used to. There’s just more of them. And the rounds are bigger.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Tech News

Elon Musk Doubles Down On Twitter Bots, Says ‘Deal Cannot Move Forward’ Without Proof

Published

on

The Tesla chief claims that his offer to purchase Twitter was based on the company’s SEC filing, which allegedly mentioned that the percentage of spam accounts is five percent or lower, but the company hasn’t shown tangible proof of that being the case. If Musk’s latest words are to be taken at face value, he might pull out of the deal citing misleading disclosures by Twitter.

Experts claim that this is one of Musk’s tactics to strong-arm his way into lowering the deal’s final value of roughly $44 billion. Musk himself has expressed similar intentions. As per a Bloomberg report, he recently remarked at an event that lowering the price “won’t be out of the question.” “You can’t pay the same price for something that is much worse than they claimed,” Musk was quoted as saying by the Economic Times.

Musk’s latest bombshell comes merely days after he claimed that the Twitter deal was on hold owing to the uncertainty around the spam account disclosure, but he quickly replied that he was still committed to the acquisition. A few days ago, Twitter CEO Parag Agrawal tried to offer some clarity on the bot situation, and how the company tries to tackle the menace. Musk, on the other hand, replied with a poop emoji on the last tweet of the thread.

Continue Reading

Tech News

Apple Just Figured Out A Killer Use-Case For AR

Published

on

Live Captions were revealed by Apple for iPhone, iPad, and Mac computers. Deaf and hard-of-hearing users can use Live Captions on audio-only phone calls, FaceTime calls, video meetings, social media, and streaming media. The size of the font with Apple’s Live Captions feature will be adjustable for easy reading, and it’ll all also work in reverse — so to speak. Users will also be able to type responses in real-time and have their text spoken aloud to a recipient — that’s effectively text-to-speech (TTS), a feature that’s always been a fan favorite on every platform on which it’s been made available in the past. Apple suggested that the Live Captions feature will always maintain users’ privacy and that when the feature is deployed, no other users will know. Additionally, VoiceOver — Apple´s screen reader — will add 20 new locales and languages.

Continue Reading

Tech News

The Real Life Inspiration Behind Maserati’s Famous Logo

Published

on

Since the company got its start in Bologna, Italy, Mario was inspired by a statue erected in the city’s Piazza Maggiore in the 16th century (via Mermaids of Earth). The Fountain of Neptune (aka “The Giant”) is a looming statue of the Roman god of the sea. He holds a trident in his right hand, while his left extends outward to calm the waters. Below him are four cherubs, each representing the rivers Nile, Amazon, Danube, and the Ganges. The masterpiece was created by Flemish sculptor Jean de Boulogne (aka Giambologna) between 1563 and 1567.

The statue of bronze and stone comes with an intriguing and controversial legend. Commissioned by Pius IV to symbolize his power and reign, the Pope became worried by the size of the statue’s genitals and ordered Giambologna to make them smaller. The sculptor begrudgingly complied, or so everyone thought. If you stand behind and to the statue’s right, Neptune’s thumb protrudes out past his leg in a peculiar way that makes the god’s manliness appear bigger. 

All that aside, Mario saw the Trident as a mythological symbol of strength and vigor. The red and blue colors that adorned the original logo derived from Bologna’s city banner, and the rest, as they say … is history.

Continue Reading

Trending