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. Required fields are marked *

Tech News

Samsung foldable screens might soon be available to Chinese OEMs

Published

on

The core feature of a foldable phone is, of course, its foldable screen and it is also the biggest hurdle for smartphone makers who want to get into this market. There are extremely few companies producing flexible screens and those often have exclusivity arrangements with certain smartphone makers. Samsung Display, for example, supplies Samsung Electronics’ with the foldable screens for the Galaxy Z Fold and Galaxy Z Flip but it might soon start selling these components to Chinese smartphone manufacturers.

The exclusivity may sound good for Samsung’s mobile business but it definitely isn’t for Samsung Display. The latter is already starting to feel the heat of the competition as more display makers start eating into its share of the OLED market. It needs another advantage to make it the preferred supplier of device makers and that may happen by opening up orders for its foldable screens to other manufacturers.

According to ETNews, Samsung Display will be supplying foldable displays to Chinese phone makers this year. This will include both kinds of screens that have been seen on the Galaxy Z Fold, which folds left and right, as well as the Galaxy Z Flip that folds up and down. Samsung Display will still of course reserve most of its panels for Samsung Electronics, giving it the upper hand when it comes to quantity.

This wouldn’t be the first time that Samsung Display tried to sell its foldable screens to another manufacturer. Huawei, which uses BOE’s foldable screen, was testing Samsung’s panels but that was put on hold after the Chinese OEM was hit with US export sanctions. Potential customers for Samsung’s foldable screens reportedly include OPPO and Vivo.

At the moment, Samsung Display has the upper hand as it is the only one so far using Ultra-Thin Glass or UTG, though that could change soon as BOE catches up. This shift in the display market could mean that we will soon find even more foldable phones this year, which will hopefully also include more affordable options.

Continue Reading

Tech News

Facebook accuses Apple of self-serving new privacy policy

Published

on

There is really no love lost between Apple and Facebook even as the latter has to begrudgingly yield to Apple’s rules if it wants any place on iPhones and iPads. That won’t keep Facebook from airing its grievances any opportunity it can and the latest comes from founder and CEO Mark Zuckerberg himself during the company’s quarterly earnings call. In no unclear words, Zuckerberg paints Apple’s controversial new anti-tracking policy not as something just to protect users but also to protect its own vested interests.

It might boggle the mind that Zuckerberg would paint Apple as one of Facebook’s biggest competitors given that their businesses don’t exactly intersect. That, however, isn’t exactly true anymore in one very specific sense. Facebook’s top exec pretty much pits iMessage and FaceTime as direct and fierce rivals to Facebook’s own Messenger and WhatsApp.

He goes on to say that Apple’s new privacy policies are really meant to drive out the competition as it puts Apple’s first-party apps at an advantage with private APIs and special permissions that third-party apps will never have access to. Apple’s apps are also pre-installed on iPhones and iPads, of course, and Facebook is seemingly losing Android partners willing to risk their customers’ ire in preloading Facebook apps.

Facebook’s rhetoric about Apple’s anti-competitive privacy policy ingeniously plays into the antitrust complaints that have been hurled against it by the US Department of Justice, among others. By playing the victim card, it is trying to show that it isn’t quite the monopoly it is presented to be and is an even smaller player compared to Apple.

Naturally, Zuckerberg also reiterated Facebook’s repeated warnings to advertisers how the upcoming privacy changes in iOS will affect ad revenues, including its own. Apple, however, shows no signs of backing down and will implement those changes in full this year.

Continue Reading

Tech News

iPhone, iPad, Mac, Services net sales all rocket up in Apple Q1 2021

Published

on

Today’s earnings call for apple showed blockbuster success in basically every respect. If we’re looking at net sales by category, Apple’s shown growth in iPhone net sales, net sales of iPad, Mac, “Wearables, Home, and Accessories,” and Services, both year-over-year and compared to the three months ending just before this quarter, ending in December of 2020.

This quarter’s financial results showed iPhone bringing in $65,597 million USD. The same quarter had Mac net sales at $8,675 million and iPad had net sales of $8,435. Net sales for the quarter for Wearables, Home, and Accessories were $12,971 million, while Services rang up to $15,761 million.

This same quarter last year showed Apple with $55,957 million in net sales for iPhone, $7,160 million for Mac, and $5,977 million for iPad. Wearables, Home, and Accessories had a net sales of $10,101 million for the quarter, and Services racked up $12,715 million.

While Apple brought in a $91,819 million in net sales for this quarter last year, this year’s net sales ramped up to $111,439 million. Almost impossibly, Apple had the same net sales in this quarter last year as it did for their quarter that ended in September of 2020. Both net sales came in at $91,819 million USD.

The rise VS this quarter last year might’ve been expected, given the rise of COVID-19, but remember: This quarter’s results end in December of 2020. As such, this same quarter last year is Apple’s three months that end in December of 2019. That’s right up to but not including the point at which COVID-19 forced the world into quarantine. Once we see Apple’s next earnings report (in another three months), we’ll REALLY start to see some bang-up growth year-over-year.

Continue Reading

Trending