Join JAAGNet and Group

SIgn up for JAAGNet & the Investment Group its FREE!!

 

Member Benefits:
_____________________

 

Again signing up for JAAGNet & Group Membership is FREE and will only take a few moments!

Here are some of the benefits of Signing Up:

  • Ability to join and comment on all the JAAGNet Domain communities.
  • Ability to Blog on all the Domain communities 
  • Visibility to more pages and content at a group community level, such as Community, Internet, Social and Team Domain Community Feeds.
  • Make this your only content hub and distribute your blogs to LinkedIn, Reddit, Facebook, Twitter, WhatsApp, Messenger, Xing, Skype, WordPress Blogs, Pinterest, Email Apps and many, many more (100+) social network and feed sites. 
  • Opportunity to collaborate (soon to be  released) with various JAAGNet Business communities and other JAAGNet Network members.
  • Connect (become friends), Follow (and be Followed) and Network with JAAGNet members with similar interests.
  • Your Content will automatically be distributed on Domain and JAAGNet Community Feeds. Which are widely distributed by the JAAGNet team.

Join Us!

All Posts (262)

Silver Level Contributor

Halloween, or ‘All Hallows eve’, goes all the way back to a pagan festival called ‘Samhain’. Although it traditionally marked a changing of the seasons, some observers also believed it was a time when the boundary between worlds became especially traversable.

Many European citizens will be confined indoors this year for Halloween, taking festivities like door-to-door ‘trick or treating’ or activities like apple bobbing off the table. Instead, scaled-down indoor entertainment could be the only option, as it was during the hard lockdown. This could act as a further boost for the gaming sector, which has recently gained renewed attention from their regular players, as well as new fans hoping to pass the time spent indoors.

With this in mind, we thought it was apt to bring you some little known and spooky games created by European startups.

Darkside Detective – Founded in 2015, the Irish startup Spooky Doorway created Darkside Detective, an old school micro gaming experience with cute pixelated graphics and a charming story. Darkside Detective is a classic ‘point and click’ adventure game, where Detective McQueen and Officer Dooley investigate 6 bizarre cases. The game has a unique sense of humour and has already built up a solid following of 10K social media followers who are eagerly awaiting the upcoming Season 2 of Darkside Detective.

LIMBO – Copenhagen-based Playdead is an independent game developer, whose eerie game LIMBO won the 2018 Apple Design Award. LIMBO is a puzzle-platform game, and is set all in grey shades. It involves exploration and puzzle solving, as your character moves through the lonely world. The company was founded in 2006 by game designer Arnt Jensen, and has since grown to a team of 50. Having put out LIMBO, they are working on a third-person science fiction adventure set in a remote corner of the universe. 

Phasmophobia– UK startup Kinetic Games has developed ghost hunting horror game Phasmophobia. Allowing up to 4 players, you and your team have to walk through dark and creepy scenes with your ghost hunting equipment to gather as much evidence as possible. With such a recent release, it’s already gathered 37k+ followers on social, showing it’s popularity potential.

Zombie Catchers – Zombie Catchers is currently in the top 10 games across 90 countries in the iTunes app store. The action adventure game follows A.J. and Bud, two intergalactic businessmen, as they clean up Planet Earth which is infested with the undead. With its brightly coloured graphics, it’s sure to cheer you up if you’re stuck indoors. Zombie Catchers was created by Helsinki-based startup Two Men and a Dog, and was acquired by Berlin-based Deca Games in 2018. 

Ghost Ship Games – Ghost Ship Games was founded in 2016 as a Danish game development studio, by a group of veteran game developers who had already spent years working together. Their flagship game is Deep Rock Galactic, which takes players into the single most dangerous planet in the galaxy. Users have to collect valuable minerals, whilst avoiding endless hordes of alien monsters.

Originally published by
Charlotte Tucker | October 28, 2020
eu-startups

Read more…
Silver Level Contributor

Illustration: Dom Guzman

Every batch of entrepreneurs that goes through prestigious startup accelerator Y Combinator nowadays hears founders from the same company speak: Airbnb.

The co-founders of the company, which is set to go public this year, return to the accelerator where they got their start to speak to founders going through the process they did back in 2009, often staying for as long as four hours. 

“They’ll answer question after question. Because if you think about it, you’re in their position in 2009 where you’re just a few founders with an idea and you look at these folks who created this epic company,” Y Combinator President Geoff Ralston said in an interview with Crunchbase News.

Airbnb’s upcoming IPO, which is expected to happen by the end of the year, is a milestone for the company. It’s also one for Y Combinator. That’s because Airbnb is one of the most high-profile companies to come out of the startup accelerator and will be one of only a handful of YC companies to go public. While around 300 YC companies have had exits, only three have gone public so far, with a fourth in the works via a SPAC.

This year, YC will likely have three of its companies go public. Momentus, a space transportation company, is set to go public via a SPAC, Airbnb plans to go public through an IPO, and DoorDash will also reportedly go public this year. Airbnb’s upcoming IPO is arguably the most anticipated public debut of 2020, and the company is poised to be YC’s biggest alumnus IPO to date.

“It benefits founders everywhere when you see a company that started with nothing more than an inspiration and at the end they’re ringing the bell at a stock exchange. That shows that belief in possibility matters,” Ralston said. “One of the things we like to tell founders is to be prepared for the hardest journey in your professional career.”

Airbnb has raised at least $6.4 billion from investors including Andreessen HorowitzSequoia Capital and General Atlantic. It was last valued at around $18 billion after a $1 billion private equity round in April. That’s down from the some $26 billion Airbnb was valued at in early March, according to Reuters, before the COVID-19 pandemic took hold. The company has grown to include over 7 million listings across more than 220 countries and regions around the world.

Airbnb did not make an executive available for an interview for this story, despite repeated requests.

8091908476?profile=RESIZE_710x

The COVID-19 pandemic hit travel and hospitality hard, and Airbnb wasn’t immune to its effects. The company laid off 1,900 employees, or 25 percent of its workforce, in May, cut out nearly $1 billion in in marketing costs and slashed executive salaries by half. Co-founders Brian CheskyJoe Gebbia, and Nathan Blecharczyk also went without salaries, according to The Wall Street Journal. But the company shifted its focus to local travel and, on July 8, users booked stays at Airbnbs at the same rate they did before the pandemic happened, the Journal reported.

The company aims to raise around $3 billion through its IPO, according to Reuters, citing people familiar with the matter, and will list on the Nasdaq. Its IPO could give it a valuation upwards of $30 billion, depending on market conditions, Reuters reported.

“Airbnb’s really transformed the lodging space pretty dramatically,” Wedbush Securities Chief Technology Strategist Brad Gastwirth told Crunchbase News. “When they came to market, you really didn’t have the amount and the availability of all types of different lodging for anybody really. And they went through trials and tribulations with landlords etc., but in terms of the playing field, it’s quite remarkable what it’s done. It’s revolutionized, it’s put pressure on the hotel brands.”

Back in 2009

Airbnb’s origin story has been told many times before: Co-founders Gebbia and Chesky needed a way to pay rent, so they set up air mattresses in their apartment to host attendees of a design conference that was being held in San Francisco. Hotel rooms were booked up, and attendees needed places to stay. They deployed the same idea for the Democratic National Convention in 2012, and later made and sold custom cereal boxes (Obama O’s and Cap’n McCain’s)for $40 apiece to pay off their credit card debt while they worked on building Airbnb, according to Leigh Gallagher’s book “The Airbnb Story” and Wired.

The co-founders, who reportedly made around $30,000 selling the cereal boxes, were living off cereal when they were referred to Y Combinator by its now-CEO Michael Seibel. They pitched the idea that would become Airbnb to Paul Graham, but it was the box of cereal that sealed the deal. Graham was impressed by the co-founders’ resilience and ability to sell a $4 box of cereal for $40, according to “The Airbnb Story.”

Y Combinator, which was founded by Graham, Jessica LivingstonTrevor Blackwell and Robert Morris, had been around for about four years when Airbnb joined the accelerator. It was a standout company among its Y Combinator batch, according to reMail founder Gabor Cselle, who was also part of YC’s winter 2009 batch alongside Airbnb. 

“I remember them often not making the Tuesday night dinners because it was clear that their whole thing was taking off,” Cselle said. “They emerged as the ‘winners’ of the batch pretty early on.” 

Y Combinator was much smaller then, with Graham and Livingston very involved with the founders. The YC W09 batch was fewer than 20 companies, and it was also during the Great Recession.

“Paul called us the cockroach class,” Cselle said. “Because there was no funding. Everything was collapsing and this was the Great Recession and investment was hard to find. And it was this notion of ‘y’all need to figure it out on very little amounts of money and survive and come out of this recession and be very well-positioned coming out of the recession.’”

Cselle recalled when he realized Airbnb had “made it.” While recruiting an engineer to join his company, Cselle began the conversation of figuring out where the candidate would stay while in town. As it turned out, the candidate planned to stay at a “new thing called Airbnb.”

“Y Combinator was brave in investing in the downturn and keeping the ball rolling rather than closing up shop,” Cselle said.

Back when Airbnb went through YC, the terms of the accelerator’s deal was that YC would invest $20,000 for a 6 percent stake in the company. Airbnb has yet to release its S-1 registration document detailing its financials, so it’s unclear how much that stake is worth now. 

The Airbnb founders still keep close ties to their YC roots, beyond returning to speak to YC batches, according to Ralston.

“They still meet with our founders every year. They talk to Paul (Graham) often. They’re still close to a bunch of folks at YC. They’re still obviously close to Michael (Seibel), who referred them,” Ralston said. “One thing we like to say is we work with companies … from idea to IPO, and that’s true with the Airbnb founders. The companies that go through YC still come in for office hours, they still meet with us.”

YC’s alumni network

This year alone,  the number of YC companies to go public will double. Dropbox went public in 2018 as Y Combinator’s first company to become publicly traded. Bonfire also went public in 2018, though it was through an acquisition, and PagerDuty went public in 2019 through an IPO.

YC’s network benefits from seeing the accelerator’s alumni succeed, whether those companies have gone public or not, according to Ralston.

“The only way you can make it through those super hard times is via an incredible belief in your goal and vision,” he said. “And when you have this sort of validation of that, it really matters. That’s why it’s important to us and founders to come back and talk about your story.”

Originally published by
Sophia Kunthara | October 29, 2020
Crunchbase

 
Read more…
Silver Level Contributor

Image: Gabrielle Henderson - Unsplash

If you thought that landing your seed or Series A round was painful, think again. Securing a Series B is often harder.

“You are still early in the maturity curve but need to be able to evidence that the company is well on a path to becoming a global leader,” says Nicola McClafferty, a VC investor at Draper Esprit. 

While Series A investors expect a startup to show evidence that its product has true potential, at Series B investors want to see a proven track record of new business milestones and progress, backed up by stacks of metrics showing impressive growth.

That means not all startups make it to Series B. According to Dealroom data, European companies landed 200 Series A funding rounds in Q3 2020, but just over half that managed to scrape a Series B, with 107 rounds reported. 

There are, however, many ways to improve your chances of raising a Series B. Sifted spoke to a bunch of top late-stage VCs to find out more.

Be crystal clear on your go-to-market strategy

In most cases, startups have already proven their product by the time they come to raise Series B — but they often continue to focus too much on the product and fail as a result. 

Instead, your focus should be on your go-to-market strategy, say both Elina Berrebi, founding partner at Gaia Capital Partners and Lucile Cornet, VC investor at Eight Roads Ventures.

Be clear on what moving into new markets means for your company. “International expansion is usually sold as an essential part of the use of proceeds, but most times the go-to-market strategy is unclear,” says Berrebi.

When pitching international expansion plans to late-stage investors, be pragmatic and precise instead of too ambitious. “It is more convincing to elaborate on one or two key geographies with a granular and precise approach, instead of speaking of 10 countries and being too simplistic for each,” adds Berrebi.

Present investors with plenty of data on markets; if they realise you’ve misunderstood something, it won’t look good. “Not having a strong grasp of market potential — whether inflated or too low creates a challenge for fundraising,” says Dave Rosenberg, head of marketing, business development and private equity for EMEA at Oracle NetSuite. “Lack of data and detail in this area will leave open questions for investors about your product and category.”

Finally, make sure you’re ready to act on your-go-to market strategy too. It should be “functioning and ready to scale,” Cornet tells Sifted. 

“Don’t become overly focused on metrics. Series B is about finding the balance between the narrative and the metrics.”

Get a good business management system

Optimising your tech stack at this stage could reap big rewards. The key is to have a sophisticated set of tools that shows your next potential investor valuable and promising information about your business. But what kind of stuff are they keen to get their eyes on?

Having a fully optimised tech stack is not essential at the Series B stage, says Draper Esprit’s McClafferty, but the “management team [should ideally] have good visibility and access to all of their business data to support key decision making, people management and the fundraising process”. 

The sophistication of this data varies between business-to-consumer (B2C) and business-to business (B2B) companies, adds McClafferty. Nevertheless, important tools and software for most companies include sales customer relationship management (CRM), customer analytics, enterprise resource planning (ERP) and integrated financial reporting.

Rosenberg agrees that financial data and CRM systems are imperative to help a company scale when wooing investors. He also reminds business-facing companies that managing data and metrics is just as important as it is for consumer-facing companies, even if it might not seem as essential on the surface. “Your business management system is a core part of your business infrastructure and an extension to your product, even though it is not consumer-facing,” Rosenberg tells Sifted.

It’s also worth adding a business intelligence (BI) tool to your tech stack, to compile data from finance, marketing, sales, team and more — and then sharing that with potential investors. “A few startups actually give direct access to their BI tool during due diligence, which is a great proof of transparency,” Berrebi says.

On the operational side, Cornet recommends tools like Funnel.io to centralise marketing data, or Spendesk for spend and management tracking.

Mesmerise investors with metrics

Having a good business management system is just the tip of the iceberg. Companies often fail to show enough data to demonstrate their chance to dominate the market, says McClafferty. So what kinds of numbers do investors want to see from them and what should you be tracking?

Cornet says some important metrics don’t make it into pitch decks often enough. “Details about the sales cycle, win/loss ratio and conversion rates of the pipeline are all highly important indicators that I rarely see.”

Don’t forget to highlight how you’ve managed your money either. “It’s easier to prove you have a sound business model when you can show you’ve been capital efficient from seed and Series A, while small and nimble,” says Berrebi.

Meanwhile, demonstrating that your business is sparking international interest and customers are returning will earn you brownie points in Cornet’s eyes. “It is always positive to see international traction, which proves that the product can work in another geography. [At Eight Roads] we focus a lot on topline growth combined with customer retention and satisfaction, which — especially in times of Covid — shows the resilience of the business and proves that the product is ‘mission critical’ as opposed to ‘a nice to have’.”

“Not having a strong grasp of market potential — whether inflated or too low creates a challenge for fundraising.”

Other metrics for startups to keep track of include revenue growth, annual recurring revenue (ARR), market growth and customer acquisition cost (CAC). “Basically, any metric that can go up and to the right should be going in that direction,” says Rosenberg.

Investors aren’t fools, though, so be realistic with the numbers you pitch. “On metrics, startups tend to be overly optimistic and not rigorous enough about their lifetime value projections, with only 1 to 2 years of cohorts history. A good understanding on why we are where we are today and an explanation of where we could reasonably land tomorrow (accounting for churn) is already a good ground for discussion,” says Berrebi.

“Don’t become overly focused on metrics. Series B is about finding the balance between the narrative and the metrics. Companies still need a compelling pitch around why they are best positioned to win a very large market,” adds McClafferty.

Be resilient — especially now

Raising a Series B at the moment isn’t necessarily harder than it was pre-Covid, but it might take more time, says Rosenberg. “[Fundraising] just takes a lot longer due to proximity and scheduling. For companies, there are a lot of distractions right now so you have to be highly aware of the fundraising process and make sure you are marching down the path to success everyday.”

Demonstrating how you’ve adapted over the last year could help you stand out, says Berrebi. “How companies have reacted in the lockdown period with regards to things like strategy and layoffs tells investors a lot about management resilience and vision. Developing a strong environmental, social and corporate governance (ESG) policy is critical right now.” 

Investors are really eyeing those resilient startups that have shown great results in this tough climate, says McClafferty. “The best companies — those that have shown exceptional execution, growth and good cash management even through this difficult year — continue to raise really strong B rounds from top investors.”

Originally published by
Connor Bilboe | October 22, 2020
Sifted.eu

Read more…
Gold Level Contributor

Image: Amogh Manjunath - Unsplash

Mehran Ebadolahi has dedicated the last 11 years to building an edtech startup in Los Angeles. But now the Harvard-educated attorney is planning to join an exodus of entrepreneurs leaving expensive startup hubs in hopes of maximizing savings for their companies by moving elsewhere. 

Ebadolahi, co-founder and CEO of TestMax, which offers test preparation for the GRE, LSAT and other exams, has opted to set up a new headquarters for his company in Tempe, Ariz. Compared to Los Angeles, he said he pays significantly less to lease space, saving about $4,000 a month. 

"We want to have a headquarters and be able to engage with our team in person," Ebadolahi said, "The real epiphany is, why does that have to be in Los Angeles?"

Since pandemic lockdown measures took effect seven months ago, some early-stage startup founders have shifted parts of their businesses away from startup hubs like San Francisco and New York, where operating costs for their budding companies are much higher. 

An increase in remote hiring has also made the decision to leave easier than ever. 

Kate Lister, president of Global Workplace Analytics, a research and consulting firm for employers, said companies are dramatically reducing their downtown space or setting up in regional hubs, with the understanding that a big portion of their workforce will be remote in the future.

Nearly 70% of full-time workers in the US are working from home during the pandemic, according to a recent survey conducted by Owl Labs and Global Workplace Analytics that featured responses from over 2,000 full-time employees between the ages of 21 and 65. And one in two respondents said they won't return to jobs that don't offer remote work after the pandemic.

"Hiring remote talent is not only cost effective, it also allows for a greater diversity and inclusion, which has been shown to increase innovation," said Lister.

Lister said founders and investors are learning that while virtual meetings may not have all the same benefits of being face-to-face, the savings can frequently outweigh the costs.

The ability to recruit remote engineers was the catalyst for Ebadolahi to move his company from Los Angeles to Arizona. Over the past few months, he has hired 14 remote employees based in states like Tennessee and Ohio,.

Like many founders during the pandemic, Ebadolahi has also been trying to raise more capital remotely. While some companies have had fundraising success, certain investors don't think the trend will last. 

Adam Struck, founder of Struck Capital, a seed-stage venture capital firm based near Los Angeles, said that if founders are considering moving out of Los Angeles because they believe dealmaking and investor check-ins via Zoom are going to be the new normal in the long-term, they are probably wrong. 

"If early-stage founders feel VC ecosystems such as Los Angeles have nothing left to offer, they might get hurt from over-indexing the current situation," he said. 

But not all VCs feel the same way. 

"The coronavirus pandemic has taken geography out of the VC dealmaking equation," said Cathy Connett, CEO and managing partner of Minneapolis-based Sofia Fund, which invests in women-led businesses primarily in the US Midwest.

Connett said entrepreneurs have been moving to Twin Cities neighborhoods in the past few years to improve their quality of life. The pandemic has only accelerated the trend, as early-stage founders continue to realize that in-person networking is not an integral part of the dealmaking process anymore, and relocating may not necessarily mean a compromise on founders' ability to get VC funding.

The startup exodus also seems to be an offshoot of a larger migratory trend that's taking place across the country. From April to August of this year, New York and the San Francisco Bay Area saw net arrival declines of more than 20% year-over-year, according to LinkedIn data. 

Not all founders are entirely turning their back on established VC hubs, however. 

Though she's not fully ready to move her company away from its New York headquarters, Heidi Lehmann, co-founder of Kenzen, the developer of a health analytics platform for industrial workers, has spent the past few months exploring options for her company in Kansas City. 

"I may even be giving up my apartment for a bit in New York and spend the majority of my time to focus on building out the Kansas City team," said Lehmann. "I would not do that if I did not see potential for the company there."

Originally published by
Priyamvada Mathur | October 23, 2020
Pitchbook


 

 

Read more…
Silver Level Contributor

RVShare raises over $100M for RV rentals

Image: Marian Mocanu - Unsplash

RVShare, an online marketplace for RV rentals, reportedly raised over $100 million in a financing led by private equity firms KKR and Tritium Partners.

Akron, Ohio-based RVShare has seen sharp growth in demand amid the pandemic, as more would-be travelers seek socially distanced options for hitting the road. Founded in 2013, the company matches RV owners with prospective renters, filtering by location, price and vehicle types.

Previously, RVShare had raised $50 million in known funding, per Crunchbase data, from Tritium Partners. The company is one of several players in the RV rental space, and competes alongside Outdoorsy, a peer-to-peer RV marketplace that has raised $75 million in venture funding.

Originally published by
Crunchbase News | October 22, 2020

Read more…
Silver Level Contributor

Image: Alec Favale - Unsplash

Analyst expectations of firms’ earnings are on average biased upwards, and that bias varies over time and stocks, according to new research by experts at Wharton and elsewhere. They have developed a machine-learning model to generate “a statistically optimal and unbiased benchmark” for earnings expectations, which is detailed in a new paper titled, “Man vs. Machine Learning: The Term Structure of Earnings Expectations and Conditional Biases.” According to the paper, the model has the potential to deliver profitable trading strategies: to buy low and sell high. When analyst expectations are too pessimistic, investors should buy the stock. When analyst expectations are excessively optimistic, investors can sell their holdings or short stocks as price declines are forecasted.

“[With the machine-learning model], we can predict how the prices of the stocks will behave based on whether or not the analyst forecast is too optimistic or too pessimistic,” said Wharton finance professor Jules H. van Binsbergen, who is one of the paper’s authors. His co-authors are Xiao Han, a doctoral student at the University of Edinburgh Business School; and Alejandro Lopez-Lira, a finance professor at the BI Norwegian Business School.

The researchers found that the biases of analysts increase “in the forecast horizon,” or in the period when the earnings announcement date is not anytime soon. However, on average, analysts revise their expectations downwards as the date of the earnings announcement approaches. “These revisions induce negative cross-sectional stock predictability,” the researchers write, explaining that “stocks with more optimistic expectations earn lower subsequent returns.” At the same time, corporate managers have more information about their own firms than investors have, and can use that informational advantage by issuing fresh stock, Binsbergen and his co-authors note.

The Opportunity to Profit

Comparing analysts’ earnings expectations with the benchmarks provided by the machine-learning algorithm reveals the degree of analysts’ biases, and the window of opportunity it opens. Binsbergen explained how investors could profit from their machine-learning model. “With our machine-learning model, we can measure the mistakes that the analysts are making by taking the difference between what they’re forecasting and what our machine-learning forecast estimates,” he said.

“We can measure the mistakes that the analysts are making by taking the difference between what they’re forecasting and what our machine-learning forecast estimates.”–Jules H. van Binsbergen

Using that arbitrage opportunity, investors could short-sell stocks for which analysts are overly optimistic, and book their profits when the prices come down to realistic levels as the earnings announcement date approaches, said Binsbergen. Similarly, they could buy stocks for which analysts are overly pessimistic, and sell them for a profit when their prices rise to levels that correspond with earnings that turn out to be higher than forecasted, he added.

Binsbergen identified two main findings of the latest research. One is how optimistic analysts are substantially over time. “Sometimes the bias is higher, and sometimes it is lower. That holds for the aggregate, but also for individual stocks,” he said. “With our method, you can track over time the stocks for which analysts are too optimistic or too pessimistic.” That said, there are more stocks for which analysts are optimistic than they’re pessimistic, he added.

The second finding of the study is that “there is quite a lot of difference between stocks in how biased the analysts are,” said Binsbergen. “So, it’s not that we’re just making one aggregate statement, that on average for all stocks the analysts are too optimistic.”

Capital-raising Window for Corporations

Corporations, too, could use the machine-learning algorithm’s measure for analysts’ biases. “If you are a manager of a firm who is aware of those biases, then in fact you can benefit from that,” said Binsbergen. “If the price is high, you can issue stocks and raise money.” Conversely, if analysts’ negative biases push down the price of a stock, they serve as a signal for the firm to avoid issuing fresh stock at that time.

When analysts’ biases lift or depress a stock’s price, it implies that the markets “seem to be buying the analysts’ forecasts and were not correcting them for over-optimism or over-pessimism yet,” Binsbergen said. With the machine-learning model that he and his researchers have developed, “you can have a profitable investment strategy,” he added. “That also means that the managers of the firms whose stock prices are overpriced can issue stocks. When the stock is underpriced they can either buy back stocks, or at least refrain from issuing stocks.”

For their study, the researchers used information from firms’ balance sheets, macroeconomic variables, and analysts’ predictions. They constructed forecasts for annual earnings that are a year and two years ahead for annual earnings; similarly, they used forecasts that were one, two and three quarters ahead for quarterly earnings. With the benchmark expectation provided by their machine-learning algorithm, they then calculated the bias in expectations as the difference between the analysts’ forecasts and the machine-learning forecasts.

Originally published by
Knowledge at Wharton | October 13, 2020
University of Pennsylvania

Read more…
Standard

Indian payments processor Razorpay has joined the Unicorn ranks after raising $100 million in Series D financing.

The funding round was co-led by Singapore’s sovereign wealth fund, GIC, and Sequoia, with participation from existing investors Ribbit Capital, Tiger Global, Y-Combinator and Matrix Partners.

The six-year old company provides businesses with the ability to accept payments across multiple channels, incorporating over 100 payment instruments. Customers include the likes of Facebook, Google and Wikipedia.

Razorpay is currently riding the Coronavirus wave as more businesses switch to digital payments and move online during the pandemic. The company says that two out of three businesses onboarding on Razorpay are accepting digital payments for the first time.

In a blog post, the firm states: "With Covid causing a potential paradigm shift in the way commerce happens in the country, we are seeing multiple new demographics of businesses looking to move online and start leveraging internet and mobile technology."

Razorpay's ultimate aim is to become a singular hub for all financial operations following the successful roll-out last year of RazorpayX, a neobanking product which has served over 10,000 businesses - processing their payroll through Opfin, paying for expenses through corporate card and paying their vendors in real time. The company has also introduced credit lines for cash-strapped businesses, doling out loans to 5000 companies through relationships with banking partners.

The impact of coronavirus on digital payments will be discussed in depth at EBAday 2020. For delegate passes, register now and join leaders from across Europe's payments ecosystem as EBAday addresses 'The Turning Point in Payments Transformation'.

Originally published by
Finextra | October 12, 2020

Read more…
Standard

Image: Quan Le - Unsplash

Clearbanc, the world’s largest ecommerce investor, is coming to the UK with a $500m pot of money and a funding model that disrupts the way traditional VC investment works.

Instead of taking equity stakes in startups like a conventional VC, Clearbanc — founded by Canadian Dragons’ Den star Michele Romanow and her partner Andrew D’Souza — lends money for a 6-12% flat fee. It uses an AI-based model to decide which businesses to back, taking the human completely out of the decision making process.

Clearbanc has invested in 8x more female-led businesses than the VC industry average.

The results so far — after lending more than $1bn to more than 3,300 companies mainly in North America — has been to dramatically democratise access to capital. Clearbanc has invested in 8x more female-led businesses than the VC industry average — which was 2.8% in the US last year.

It also puts more money into companies located outside VC hotspots. In a UK pilot programme, where Clearbanc lent $30m to some 250 companies, more than 70% of investment went to companies located outside of London.

“We wanted to change the whole system. There are quite a few things wrong with the current VC model.”

“We wanted to change the whole system. There are quite a few things wrong with the current VC model. Companies’ ability to raise money often depends so much on their geography and access to investors,” says D’Souza. “We wanted to make it much easier for anyone to access funding, no matter where they were based.”

Another problem, says Romanow, is that founders often have to give up control of their companies too quickly to get enough money for day-to-day operations like online marketing.

The realisation came to her during the Dragons Den show.

“It is crazy to use the most expensive form of funding to pay for something repeatable.”

“We watched 250 pitches in 17 days. In pitch after pitch from ecommerce companies, we were asking the founders what they needed to raise money for and it was always for funding their advertising on Facebook and Google. Almost 50% of VC dollars raised are going to Facebook and Google,” says Romanow. “It seemed crazy that they were using the most expensive form of funding (VCs) and giving up equity to pay for something repeatable like that.”

Romanow saw one father-and-son mobile phone case business on Dragon’s Den, which was looking for $100,000 in investment and offering 20% of their company in exchange.

“It wasn’t the kind of company that was going to be sold to Apple for 10x in a few years, but it was a good business,” she says.

Instead of the equity-dilutive deal Romanow proposed an alternative arrangement — a loan with a 6% flat fee — as long as she could see their Facebook ad account. After founding and running successful Canadian ecommerce businesses Buytopia and SnapSaves Romanow believed she had a good sense for what “good” should look like there, and felt she could help the company optimise its efforts.

The experiment worked — Romanow made a small profit and hatched an idea for creating a platform to offer a similar deal to thousands more companies.

“Just hiring a few more female partners at VCs isn’t going to change things enough. You need a completely different system.”

Clearbanc has also added a programme that helps ecommerce companies with their inventory costs. Clearbanc buys the inventory upfront and the ecommerce retailer pays back the cost only when the goods are sold to customers.

Ecommerce companies joining the platform plug their revenue and marketing data into the Clearbanc system and receive an investment decision in 20 minutes, based just on these numbers.

A number of VCs such as InReach Ventures, Blossom Capital and EQT use AI to find promising startups in unusual places, but most would still have humans making the actual funding decision.

“It is taking the bias out of the funnel,” says Romanow, part of the reason why Clearbanc has ended up backing so many more women.

“We’ve been watching the numbers on VC investment into female-backed business not changing at all for years. I think just hiring a few more female partners at VCs isn’t going to change things enough. You need a completely different system.”

How it works:

Who can apply?

The platform is for any digital commerce business, mainly ecommerce companies, but it will also work for software companies, mobile app developers and B2B Saas companies. Companies need to already have a product-market fit and sales of around $10,000 a month to be fundable.

How much funding can you get?

$10,000 to $10m depending on the size of your business. Once you put your company information into the system, it will calculate the amount you can borrow.

Will you definitely get funding?

Some businesses will be judged too early. But if you stay connected to the platform, once your business reaches an investment-ready stage, Clearbanc will get in touch with you.

Can Clearbanc really make money this way?

“The system looks at a ton of data to de-risk decisions,” says Romanow.

It is also the opposite model to VCs, points out D’Souza. VCs take a lot of equity because the success rates of their portfolio companies are relatively low — only one in ten is expected to succeed and that one success pays for the rest.

“When you are a portfolio company in a VC, you are a lottery ticket. With us, we expect 99% of our companies to succeed,” says D’Souza.

Originally posted by
Maija Palmer | October 8, 2020
sifted.eu

Read more…
Gold Level Contributor

Hans Leybaert, CEO (left) and Laurent Marcelis, CFO (right)

Hans Leybaert slept surprisingly well the night before taking his company Unifiedpost public; the biggest moment of his career.

By then, he was out of juice, with the lead up to the initial public offering (IPO) having tired him out.

“We felt the threat that there would be a global correction on the stock exchange just before we went public”, says Leybaert, speaking a week after Unifiedpost’s listing — Belgium’s first tech IPO. “That created some pressure.”

As it goes, Leybaert didn’t need to lose any sleep. Although European stock markets dropped 4% the day before the listing, UnifiedPost — which offers cloud platform solutions for identity and payment services — raised €252m and left Leybaert in high spirits. He even got to ring the bell in person, with Belgium having partially relaxed its coronavirus restrictions.

A week later, with the IPO adrenaline settling down, Leybaert spoke to Sifted about the gamble of taking his company public, which was the culmination of three years prep.

Here are his top lessons and takeaways.

Step 1: Get the team ready

Unifiedpost began preparing for a public listing back in 2017, when it enrolled on the TechShare pre-IPO programme, run by pan-European stock exchange Euronext.

The programme was a year long, encompassing several workshops on everything from legal to governance. According to Leybaert, TechShare helped the various attending team members begin to conceptualise a future as a public company.

“For them, it was a real introduction of what this could mean for the company,” Leybaert says.

“Of course, after you’re in the programme, it’s a lot of hard work… The process takes a while. But [the programme] is a good introduction. Colleagues could feel the impact.”

Unifiedpost began preparing for the IPO within months of finishing the TechShare programme, and says it would have listed earlier if it hadn’t been for coronavirus.

So far, seven alumni from TechShare’s different cohorts have gone public.

Step 2: Think first. Don’t do an IPO if it’s just for the exit

The IPO route was the only real option to fuel turbo-growth at Unifiedpost, which is reported to turn over €70m in annual revenue and counts BMW and Nike among its clients (as well as thousands of SMEs).

Meanwhile, an acquisition was off the cards because of the nature of the business, says Leybaert.

“One of the main reasons for doing an IPO was we wanted to stay an independent company. Our model is based on a lot of partnerships, so being bought would not fit the agenda,” he told Sifted.

The only other consideration was to raise a large amount of growth equity from private capital firms. But that was not attractive either because, Leybaert says, “you are not in the driver’s seat anymore.”

For Unifiedpost then, the decision to IPO was clear, despite some of its peers — including Funding Circle — having faced a tough time on the public markets.

“On Euronext Brussels, we are the first [fintech listing]. So there’s not a lot of examples here,” Leybaert laughed

“But I don’t look to other companies, we look to ourselves… The investor base we have selected [to buy public shares] is one with a long-term agenda. So we try to avoid hedge funds who play with the stock too much.”

Leybaert insists that the company’s early investors did not put pressure on the team to list in order to cash out, noting that many have retained their stake since it went public.

“If you see [an IPO] just as an exit, it’s dangerous,” he tells Sifted, arguing that companies should only go public if they believe they’re on a growth journey.

“It’s really important you believe you will be a growing company… If you do it for the wrong reasons, it becomes a disaster.”

The next big consideration after deciding whether to do an IPO is where to list.

US exchanges have growing appeal among European tech companies like Checkout.com and Klarna, who already say they would rather list stateside than in local exchanges.

Certainly, American public investors have historically been more bullish than in the UK, meaning tech companies have often secured higher valuations in New York than in London or Paris.

But there are signs of a changing tide after The Hut Group’s record-breaking listing in London last month, and Unifiedpost’s early signs of success on the public market.

Leybaert says the decision to list locally in Belgium with Euronext made perfect sense.

“We are a Belgian company, so for us, it was a logical step to go public on the Brussels stock market. That local aspect in combination with the international allure of Euronext made it obvious for us that a listing here is the most interesting, now and for the company’s future ambitions,” he says.

“[In fact] the book building filled up immediately… The commercial interest was there.”

Step 4: Sit back and enjoy the music… but not for too long

Unifiedpost may only be one week into life as a public company, but Leybaert is already keen to knuckle down.

“Everyone says you have to celebrate. That’s ok for one or two days but then it’s back to business,” he laughs.

The IPO, Leybaert reminds himself, is just the start of a more gruelling growth journey.

For now, even the celebrations have been an understated affair, with coronavirus precautions limiting the afterparty to a small group of just 30 team members.

But party or not, Leybaert knows he has plenty to celebrate.

The IPO has proven an early success; he’s received clear endorsement from new stakeholders to continue as CEO — and, of course, he’s finally gotten his sleep back.

Originally published by
sifted.eu | October 2, 2020

Euronext is the leading pan-European exchange, covering Belgium, France, Ireland, the Netherlands, Norway and Portugal, with close to 1,500 listed issuers worth €3.8tn in market capitalisation as of end June 2020. Euronext is also the largest listing venue for tech companies in Europe with 477 tech issuers. Euronext’s mission is to support and help companies through and along their financing journey from before the listing through to the completion of the operation.

Read more…
Silver Level Contributor

Three months after its global launch, soccer star David Beckham’s startup Guild Esports has been listed on the London Stock Exchange (LSE), valued at about 40 million pounds ($52 million).

CNBC reported that the London-based company is the first esports firm to go public on the LSE. It raised 20 million pounds ($26 million) through its initial public offering.

Beckham, co-owner of Major League Soccer team Inter Miami CF, owns nearly 5 percent of Guild. Blue Star Capital, Pioneer Media Holdings and Toro Consulting are the major shareholders.

“Throughout my career, I’ve been lucky enough to work with players at the top of their game, and I’ve seen firsthand the passion and dedication it takes to play at that level,” Beckham said at the launch of Guild in June. “I know that determination lives in our esports athletes today, and at Guild we have a vision to set a new standard, supporting these players into the future. We are committed to nurturing and encouraging youth talent through our academy systems.”

Guild has said it intends to start a global esports team that can enter competitions and win prize money. Talented gamers can earn cash through competitions, sponsorship deals and merchandise.

Esports is big business, and has surged in popularity during the COVID-19 pandemic. In 2019, more than 440 million viewers watched people play games online. By 2023, that number is expected to reach 646 million, according to Newzoo, the games market insights and analytics company.

Listing on the LSE is expected to “raise the public profile and provide new funds for the company’s expansion and long-term growth,” Guild said.

The global esports market is currently valued at $1.1 billion and is estimated to grow 42 percent to $1.56 billion by 2023, Newzoo found.

Last month, The New York Times reported online sportsbooks have benefited since COVID-19 eradicated most live sports, leaving millions of fans with nothing to do. As casinos closed, firms like DraftKings and FanDuel expanded their online sports betting options and partnerships to keep the action going during the pandemic. In September, DraftKings signed a multi-year arrangement with the New York Giants NFL team, making DraftKings the franchise’s official sports betting, iGaming and daily fantasy operator.

Originally posted
PYMNTS
 

Read more…
Gold Level Contributor

Illustration: Dom Guzman

When Flatfile CEO David Boskovic was looking to get the company off the ground, he didn’t look any further than Colorado, where he was based. Flatfile, which enables bulk data transfers between businesses, is a remote-first company, but about 40 percent of its workforce is based in the state, Boskovic said.

“Hiring, finding great talent in Colorado, and being able to pay competitively for that talent is a lot more accessible than building a company in San Francisco,” Boskovic said. “I’ve always favored remote companies. This wasn’t a COVID decision.”

With COVID-19 and remote work causing many people to reconsider where they live, cities like Austin, Denver and Salt Lake City have increasingly come into the spotlight as emerging startup hubs.

Crunchbase News has written about Austin and Utah’s tech scenes plenty in the past, but it’s been a while since we’ve looked at the startup ecosystem in Colorado. And now, since more people are eyeing the Centennial State because their jobs are no longer tied to San Francisco or New York, we thought it was time to run the numbers on how Colorado compares as a startup hub.

In recent years, Colorado has become a hot spot for San Francisco Bay Area tech companies to open secondary offices. Tech giants like GoogleFacebook and Salesforce all have offices in the state, as do private companies like Gusto and Robinhood. And notably, Palantir Technologies, the data analytics company going public this week, recently moved its headquarters from Palo Alto, California, to Denver.

But Colorado’s startup ecosystem has also been growing from within, with local companies raising billions in venture capital and seeing large exits. According to Crunchbase data, 2018 saw the most venture capital investment into Colorado-based startups in the past five years, with about $2.4 billion invested across 401 deals. Last year wasn’t far behind with $2.3 billion invested across 357 deals. It should be noted that 2018 and 2019 combined had eight “supergiant rounds,” or deals that were above $100 million.

In Denver particularly, 2019 saw the largest amount of venture capital investment into startups based in the city. About $931 million was invested in Denver-based startups across 152 deals, according to Crunchbase data. In 2020 so far, of the nearly $700 million that has been invested in Colorado-based companies, about $298 million went to Denver-based companies. This year so far has only had one funding round that was at or above $100 million (DispatchHealth‘s $135.8 million Series C).

7983213660?profile=RESIZE_710x

7983214497?profile=RESIZE_710x

Looking back

Colorado’s tech scene isn’t exactly new—IBM, for example, opened a research center in the state in the 1970s. But it was around 2005 or 2006 that tech really started to accelerate in the state, according to Seth Levine, a founding partner at Colorado-based investment firm Foundry Group. Denver-based accelerator program Techstars was founded in 2006 and Foundry Group, one of the most active investors in the state, was founded in 2007.

The “tipping point” for Colorado’s startup scene to explode happened somewhere around 2010, Levine said. Before then, recruiting people to work in Colorado was harder because they were often concerned about Colorado being a place where businesses could scale and concerned about the maturity and size of the tech ecosystem. As Levine put it, if the job a person moved to Colorado for didn’t work out, would there be other opportunities in the state or would they have to move back to where they came from?

But following multiple large exits for companies, and people realizing the other appeals of living in Colorado, those concerns have been alleviated. 

“I feel like we reached some sort of critical mass somewhere in the 2007 to 2010 timeframe and that stopped being a question and that’s accelerated companies moving here and companies being started here because there was this greater access to talent and greater access to capital,” Levine said.

Also of note is the phenomenon of large tech companies acquiring Colorado-based companies. Microsoft, Google and Twitter, to name a few, have all acquired Colorado-based companies, giving the tech giants a presence in the state. Several Colorado-based companies have also gone public since 2015: 

7983219676?profile=RESIZE_710x

Livability

The livability of Colorado has also been a major attraction, according to JJ Ament, CEO of local economic development group Metro Denver Economic Development Corp. Downtown Denver is the city’s urban core, but it’s not far from the mountains and country, making activities like hiking and skiing very accessible. And Denver itself is relatively easy to get to—it’s only a couple hours by plane to either coast and major airlines like United, Southwest and Frontier all have hubs at Denver International Airport.

“The talent clustering around these various industries has been tech-heavy over the last 10 years for sure,” Ament said. “More and more companies are discovering they have a great place to live, they have a talented workforce, and, while we’re not cheap anymore, we’re still a relative value, pricewise, to the coasts. The combination of those things have made us really attractive for those folks, and I think COVID has really accelerated that trend.”

The helpfulness of Colorado’s startup community has also been a big plus, Bokovic of Flatfile said. That sentiment was echoed by Nicole Glaros, chief investment strategy officer at Techstars. Glaros recalled how in the past when a startup would fail, the startup community would rally around the founder, organizing a happy hour to celebrate the founder and assist him or her with a job search or next venture.

But with COVID, there will likely be more startups based in Colorado, Glaros said.

“We’re just seeing a lot of new startups come in, and a lot of early-stage VCs pop up, too,” Glaros said, adding that investors have been reconsidering where they’re based. “So as that grows, that will just feed the cycle.” 

Originally published by
Sophia Kunthara | September 29, 2020
Crunchbase

 
Read more…
Standard

Greenlight raises $215m for kids' debit card

Greenlight Financial Technology, the startup behind an app and debit card for kids, has joined the unicorn club after closing a $215 million Series C funding round at a $1.2 billion valuation.

The series was led by Canapi Ventures and TTV Capital with participation from Bond, DST Global, Goodwater Capital, Fin VC and Relay Ventures. JPMorgan Chase and Wells Fargo have previously invested.

Atlanta-based Greenlight combines a "smart" debit card with an app to help kids improve their financial literacy while giving parents controls on spending.

Parents can pay allowances, manage chores and set flexible, store-level spend controls, while kids explore lessons in earning, saving, spending and giving.

Launched in 2017, the company now serves more than two million parents and kids, who have collectively saved more than $50 million.

The new funding will be used to push this growth, with the firm gearing up to roll out a revamped app and investing tools in the next few months.

Originally published by
Finextra | September 24, 2020

Read more…
Gold Level Contributor

Rafal Modrzewski, is the cofounder and chief executive of Iceye.

 

Finnish space startup Iceye has raised €74m in fresh funds in a further sign that the so-called “new space” ecosystem in Europe is growing at pace.

The company, which was founded in 2014, deploys radar satellites that collect images of the surface of the Earth at any time of day, in any weather conditions.

While other companies use similar technology, Iceye does so using microsatellites that weigh less than 100kg. With smaller satellites, it can offer a much cheaper service than larger rivals. In 2018, it was the first company to launch a SAR microsatellite in space.

The company — which sells the live data to government departments dealing mainly with maritime operators and disaster situations — is part of a new generation of tech startups disrupting the multi-billion euro space industry.

Imagery from disaster areas

Speaking to Sifted, cofounder and chief executive of Iceye Rafal Modrzewski said that the company initially started out tracking the movement of ice in the arctic — hence the name Iceye.

The challenge he said was that ice around shipping lanes could change quickly, and mariners wanted real-time information which was not being provided by larger satellites (which tended to be in a higher orbit and therefore slower).

“It very quickly became obvious that the reason why ice was so hard to track is that there weren’t enough revisits,” he says, referring to the time it takes for satellites to orbit the earth and take a picture of the same spot again.

It turns out, he says, that smaller satellites at lower orbits rotating faster around the earth were “perfect” for helping track the ice, he said.

“But then it very quickly became obvious that what was useful for ice monitoring in the Arctic was useful to cover many other disaster areas globally.”

In Europe, there is a diverse range of space companies such as ThrustMe, Exotrail and Methera Global coming to the fore in recent years. For microsatellites, there are only a few players and Iceye is emerging as one of the leaders.

Excitement about the company is highlighted by the fresh injection of capital, which was made by Newspace Capital as well as existing investors Seraphim Capital, Drapers Group, Space Angels and OTB Ventures.

Iceye is now a leader when it comes to making small satellites using so-called SAR (synthetic-aperture radar) technology.

So far the company has a constellation of three satellites in space providing satellite imagery.

Following the raise, Iceye says it wants to add another four spacecraft within the next six months. Next year the company is planning to add another 10, but even with the extra four, Iceye says it will be able to supply imagery from most places on earth within three to four hours.

There are a number of European startups that build parts or complete microsatellites, such as Sweden’s Gomspace and Bulgaria’s EnduroSat, but Iceye is pretty much alone in doing SAR microsatellites imagery. Iceye’s competitors are mainly large satellite companies such as Airbus, optic satellite companies and new SAR companies such as Japanese Synspective and US-company Capella space.

With the lack of interest from European countries, Iceye’s main customers are the North and South American governments, for which the company has been used to collect imagery from a lot of disasters.

“We have been in a number of oil spills, like the oil spill in the Gulf of Oman when a tanker was supposedly hit by a missile,” says Modrzewski. “Then we were there on-site taking pictures of those oil spills and following them through to make sure that we know where the oil is about to land.”

The Finnish startup has recently reached 200 employees and reported revenue in the tens of millions of dollars last year, according to the company.

Originally published by
Mimi Billing | September 22, 2020
sifted.eu

Read more…
Silver Level Contributor

Anna Omstedt, started the female network Pokerface after attending Grundarpoker.

On a Friday evening in August 2007, the offices of the online review site Testfreaks opened for 30 odd startup founders. Why? To play poker.

The poker evenings, which have since become an institution happening three times a year, are run by founders for founders and have consistently managed to attract the crème de la crème of the tech scene such as Klarna’s Sebastian Siemiatkowski and Spotify’s Daniel Ek.

This is the story of that secretive event, which has been instrumental in shaping the Stockholm startup ecosystem from humble beginnings to a global tech city. It’s also one which highlights how important networks are for an ecosystem and that great things can come out of community meetups — as long as you get the right people to attend.

So what was the first game like? Serial entrepreneur Anna Omstedt attended and was fascinated by the atmosphere.

“There was just me and another woman in the mix and it was a crazy amount of testosterone with an open bar with beer taps set up in the office,” she tells Sifted. “The first person to run out of poker chips had to run to McDonald’s across the road and buy cheeseburgers for everyone as a kind of punishment.”

There was even a bit of ass-pinching happening from time to time in the early days, something that Josefin Landgård, the cofounder of the telemedicine platform Kry, experienced. She was introduced to the club by a cofounder for her first startup in the first year it ran.

“It was both terrifying and great fun. It was a bit of a shock to be 24 years old and get pinched in the ass in this context,” she says. “It was also so much of my money that you had to tell yourself that you invested in your network.”

The buy-in wasn’t more than €50, but one could purchase more chips during the first hour of play.

How did it get so established?

The poker night has always been invite-only and attended by the best of Stockholm tech. With members such as Siemiatkowski, Ek and the likes of Martin Lorentzon, the networking possibilities were truly something that no other event could offer.

And where the successful founders are, that is also where the venture capital wants to be. Hans Otterling, a long-term partner at Northzone was an early supporter of the event, with Northzone as a sponsor. According to him, it was a great place to meet with founders and it provided something that did not really exist anywhere else at the time.

“This was before [Nordic tech conference] Slush and what was on offer were pretty boring conferences and seminars you had to sit through to actually get to talk to the other people afterwards,” Otterling says.

“Lots of connections and businesses were done during these poker nights but what was so different about them was that they were so much fun. You were hanging out from 5 pm to late at night and no one lost too much money. And the winner was expected to spend all the winnings at the bar later that night.”

With almost only founders present, the events have also become known as a place where business relationships start. One example of this when the e-commerce founders Susanne Najafi and Sara Wimmercranz met in 2010.

“We were seated at the finalists’ table and I remember thinking, who is that star who speaks so much,” Najafi says and laughs. “Whilst I can stay quiet for hours on end analyzing hands, Sara’s talking was getting into people’s heads.”

“We were both in e-commerce and started to help each other out. Five years later we founded the venture capital firm Backing Minds,” she tells Sifted.

This was just one of many businesses that were born around the poker table. But how it managed to get so many founders to join was both about execution but also about timing.

The hype around poker had seen an upswing around the turn of the millennium. The reason for this was the birth of online poker sites and a special hold card camera that made poker a popular time-wasting activity in front of the television.

No outsiders except a few sponsors

For Kristofer Arwin, one of the founders of the poker night who had made a smaller fortune selling his comparison site Pricerunner, poker had become a hobby in the early 2000s.

And as meetups for founders were pretty dry with a lot of focus on sponsors at the time, Arwin could see the value of something a bit more laissez-faire. Together with his brother Martin Arwin and other Pricerunner people such as Peter Carlsson and Magnus Wiberg, the poker nights started.

“At the beginning, I thought that the poker nights would be a business opportunity to make money but after a few poker nights we forgot about that idea,” Kristofer Arwin says. “Even though we had sponsors for food, drinks and the place where we were, we have never made any money out of it.”

Apart from invited founders, only a few paying sponsors were allowed to attend. Non-founders, except those sponsoring the event, were denied entry.

“We have been pretty tough on that rule. That is what makes this event different from others – it is done by founders for founders.”

“But the few sponsors that are there are very much liked by everyone,” Arwin adds.

The network Grundarpoker, as it is called in Swedish, got a few offshoots. Anna Omstedt, now an active organiser of the main event, started a female-focused poker night Pokerface after attending Grundarpoker.

And for Otterling, the poker evenings were not over because he moved to the UK in 2014.

“I liked it so much that I opened a similar event in London and then another when I was in Cape Town last year,” he says.

“Kristofer Arwin and the rest of the guys should have a lot of praise – they managed to create something that was both fun and valuable for the ecosystem.”

Grown from 30 to 350 members

The key was to get enough interesting people to join to get others to come along. Arwin didn’t push too much on the poker skills in his original invite in 2007. This has continued and Arwin always sends out a short leaflet about how the game is done to help people without previous experience.

“If you just follow the instructions in the leaflet you can do pretty well. We even have people winning the whole game without ever played before,” he says and adds: “but for us, it has been very important to have the stars attending.”

By getting the tech elite to join, the interest for the poker network has grown considerably over the years. And although Arwin won’t name any of the members he says the interest has grown. Now they have about 350 people on the list but only 100 are allowed at each event.

With the coronavirus crisis, the last poker night, planned for late August, was cancelled. Instead, a small group of people were invited to spend a day at sea, Josefin Landgård being one of them.

“I have known these people for almost 15 years now, that makes it a really good base for a strong network”, she says.

The selection criteria to get an invite to the poker nights are unknown, except for being a tech founder. But as some people say, you never ask for an invite – you get one if you deserve it. As a journalist, one is pretty certain of never receiving one.

Originally published by
Mimi Billing | September 21, 2020
sifted.eu

Mimi Billing is Sifted’s Nordic correspondent. She also covers healthtech, and tweets from @MimiBilling

 

Read more…
Gold Level Contributor

Illustration: Li-Anne Dias

Data warehousing company Snowflake went public on Wednesday in the largest software IPO ever, raising nearly $3.4 billion and valuing the company at $33.2 billion.

Its stock opened at $245 on Wednesday during its public market debut, about 104 percent above its IPO price. At the opening price of $245 per share, the company’s valuation reached nearly $68 billion.

The company closed its first day of trading at $253.93, nearly 112 percent above its IPO price.

“Obviously it’s tremendous validation for the movement of companies of all sizes and all industries to the cloud,” Sigma Computing co-founder Rob Woollen said on Wednesday after Snowflake’s debut. Woollen was an entrepreneur-in-residence at Sutter Hill Ventures, which led Snowflake’s Series A round, and saw the company do one of its early fundraising presentations. He later co-founded the data analytics company Sigma Computing, and built the company to leverage Snowflake’s platform.

That appetite for cloud-native data infrastructure is also validation for the early bets by the investors who backed Snowflake.

Here are some of the biggest winners in the historic IPO.

Sutter Hill Ventures

Palo Alto, California-based Sutter Hill Ventures led Snowflake’s $5 million Series A in August 2012, betting early on cloud-based data infrastructure. It was also involved early on in Snowflake through its managing director, Michael Speiser, who served as Snowflake’s CEO and CFO from August 2012 through June 2014, according to the company’s S-1.

That bet is now paying off big time–the firm owns 49,564,848 shares of Snowflake’s Class B common stock, or 17.4 percent. At Snowflake’s IPO price of $120 per share, Sutter Hill Ventures’ stake in the company comes out to $5.9 billion. When the company’s stock opened at $245 on Wednesday, it pushed Sutter Hill Ventures’ stake past the $12 billion mark.

Altimeter Capital

Altimeter Capital came in as the lead investor for Snowflake’s $79 million Series C in June 2015, according to Crunchbase. It’s the VC firm with the second-largest stake in the company, with Altimeter Partners Fund LP owning 36,286,307 shares of Class B common stock. That chunk comes out to nearly $4.4 billion at the IPO price of $120. 

ICONIQ Capital

ICONIQ Capital led Snowflake’s $105 million Series D in September 2017. The firm holds 14 percent of Snowflake’s Class B common stock, or 33,752,048 shares. The IPO price of $120 gives ICONIQ a more than $4 billion stake in the company.

Redpoint Ventures 

Menlo Park, California-based Redpoint Ventures also got in early on Snowflake. The firm led the $26 million Series B in October 2014, and now owns 21,928,585 shares of Class B common stock, or a little over 9 percent. At $120 per share, that comes out to $2.6 billion. 

Sequoia Capital

Sequoia Capital invested in Snowflake relatively late, leading its $450 million Series F in October 2018. That gave it 20,619,156 shares of Class B common stock, or around 8.6 percent. That still comes out to a nearly $2.5 billion stake in the company.

Originally published by
Sophia Kunthara | September 16, 2020
Crunchbase

Read more…
Silver Level Contributor

Zwift Raises $450M for Connected Fitness

Photo: Courtesy of Zwift

Long Beach, California-based Zwift, operator of an online fitness platform that provides indoor riding and running workouts immersed in virtual worlds, announced Wednesday that it has raised $450 million in a Series C round led by KKR.

The investment will go toward accelerating the development of the company’s core software platform and bring Zwift-designed hardware to market. Currently, users of the company’s platform interact, train and compete together by pairing an exercise bike or treadmill to the Zwift app, to power their in-game avatars.

The mega-sized funding round comes as the connected fitness space remains red-hot. Shares of rival Peloton have more than tripled since the company made its public market debut nearly a year ago, with the New York company now maintaining a market valuation of close to $25 billion. In addition, Apple  unveiled its own subscription fitness service on Tuesday.

Originally published by
Joanna Glasner | September 16, 2020
Crunchbase

Read more…
Silver Level Contributor

Illustration: Dom Guzman

Against all odds, the IPO boom has arrived. 

This week, four unicorn startups are making their public-market debuts, to be followed shortly thereafter by several more of the most highly valued U.S. private companies. They will join the 113 companies that have gone public so far this year, including 10 venture-backed and tech companies, and set 2020 up to be the biggest year for IPOs since 2014, when Alibaba went public.

SnowflakeSumo LogicJFrog and Amwell Health are all set to start trading on Wednesday or Thursday this week. Data mining unicorn Palantir Technologies is slated to begin listing on the New York Stock Exchange next week, and Asana, the workplace collaboration company, plans to list the week after. Airbnb is also still expected to go public later this year. 

Snowflake, the San Mateo-based data warehouse unicorn, is set to be the biggest of the bunch going public this week, with an initial valuation out the gate of around $22 billion

How the coming IPOs perform will be a big test of the stability and strength of the U.S. stock market as we head into the final quarter of what’s been a very weird year. 

Originally published by
Marlize van Romburh | September 14, 2020
Crunchbase

 
 
Read more…
Gold Level Contributor

Image: Thomas Thompson - Unsplash

Investment management firm Wave Financial said Friday it has received its first round of investment from clients, and has purchased a 1,000 barrels of Kentucky whiskey it plans to tokenize for prospective investors. 

According to a press statement emailed to CoinDesk, Wave Financial purchased the whiskey from the Wilderness Trail Distillery of Danville, Ky., and plans to tokenize the holding in a year or two. 

Gold, cryptocurrency and real assets such as spirits have become favored alternative investments, according to the company. By tokenizing barrels of whiskey, in this case, investors gain exposure to, and benefit from, price appreciation of that asset.

Originally published by
Jaspreet Kalra | September 11, 2020
Coindesk

Read more…
Gold Level Contributor
Andrew Tuthill, head of JPMorgan equity private market liquidity (L), and Chris Berthe, global co head of cash equities trading (R). Source: JP Morgan
 
KEY POINTS
  • The investment bank is launching a new team to connect sellers and buyers in the burgeoning market for private company shares, according to Chris Berthe, JPMorgan’s global co-head of cash equities trading.
  • He’s lured Andrew Tuthill, a senior VP from trading platform Forge Global, to head up the new team.
  • Institutional investors including hedge funds have asked JPMorgan to source stock in private companies, including the Elon Musk-led SpaceX, Airbnb, Robinhood, Palantir and even TikTok, Berthe said.
  • Unlike shares in public companies like Microsoft, trading in private company stock is complicated and still mostly the domain of old -school voice trading, versus electronic exchanges that close transactions in seconds. Once a trade is negotiated, JPMorgan has to transfer legal ownership of contracts and get clearance from the start-up, a process that can take weeks.

JPMorgan Chase thinks it’s found the next hot market for investors:  Taking stakes in giant, pre-IPO start-ups from SpaceX to Airbnb.

The investment bank is launching a new team to connect sellers and buyers in the burgeoning market for private company shares, according to Chris Berthe, JPMorgan’s global co-head of cash equities trading. He’s lured Andrew Tuthill, a senior VP from trading platform Forge Global, to head up the new team.

“Many of our clients are looking at this as the next frontier,” Berthe said. “What do you do when markets get so high? You’re going to keep looking at value down the chain, and maybe that means getting involved in companies at earlier stages of their lifecycle.”

More than a decade ago, it was much more common for companies to go public earlier in their development, allowing investors to participate in the rise of winners like Amazon and Google. Then plentiful venture capital funding allowed companies to stay private for years longer, leading to a proliferation of unicorn start-ups. There are now 493 unicorns worth more than $1.5 trillion, according to CB Insights.

But that rise has meant that more investors have been shut out of lucrative gains. Case in point: Shares of Uber still trade below the company’s IPO price from more than a year ago, while Uber’s early stage VC investors have made billions.

That caused institutional investors including hedge funds to ask JPMorgan to source stock in private companies, including the Elon Musk-led SpaceX, Airbnb, Robinhood, Palantir and even TikTok, Berthe said. Tiktok is embroiled in an international controversy over the Trump administration’s demand that it sell its U.S. operations to an American company.

At the same time, JPMorgan is seeing more demand from company founders, venture capital funds and wealth management clients to sell their stakes in private companies, he said.

The market for trading private company stock is dominated mostly by boutique brokerages based on the West Coast with names like EquityZen, SharesPost and Forge.

Berthe said he believes that New York-based JPMorgan is the first major Wall Street bank to create a team dedicated to trading private shares. People with knowledge of the operations of Goldman Sachs and Morgan Stanley said that while the firms don’t have dedicated teams, they have been facilitating trades in this market for years. In particular, Morgan Stanley last year acquired Solium, a leading manager of corporate stock plans, giving it access to a wide swath of start-up equity.

Unlike shares in public companies like Microsoft, trading in private company stock is complicated and still mostly the domain of old -school voice trading, versus electronic exchanges that close transactions in seconds. Once a trade is negotiated, JPMorgan has to transfer legal ownership of contracts and get clearance from the start-up, a process that can take weeks.

“The shares are not listed, so whenever an investor buys into those companies, there’s different share classes,” Berthe said. Further complicating matters is that “companies very often include a right-of-first-refusal clause and they can block a transaction between a buyer and a seller for various reasons, generally because of price or because they might have concerns with the buyer.”

Tuthill is tasked with connecting buyers and sellers from across JPMorgan, including investment banking clients, wealth management and trading teams, which should create a deeper market for the asset class.

“Companies are staying private for longer and that dynamic doesn’t look like its changing anytime soon,” Berthe said. “The more the market rallies, the more people are going to want to look at alternatives.”

Originally published by
Hugh Son | September 11, 2020
CNBC

Read more…
Standard

Long-Term Stock Exchange opens for business

Image: Adam Nowakowski - Unsplash

A new stock exchange backed by Silicon Valley heavyweights has gone live, focusing on companies and investors who share a long-term vision in a sector often in thrall to short-term price changes.

The Long-Term Stock Exchange (LTSE) went live this week, with trading of all US exchange-listed securities.

Now the venture is seeking listings, hoping that companies will pick it over the likes of Nyse and Nasdaq thanks to its focus on promoting long-term growth.

Founded by Silicon Valley player Eric Ries, who initially proposed the concept in his 2011 book “The Lean Startup,” the LTSE has secured about $90 million in funding from the likes of Founders Fund, Collaborative Fund and Andreessen Horowitz.

Firms that choose to list on LTSE will need to publish and maintain a series of policies designed to provide shareholders with insight into their long-term strategies, practices, plans and measures.

The underlying principles of these policies should measure success in years and decades, align compensation of executives and directors with long-term performance, engage directors in long-term strategy, and engage long-term shareholders, says LTSE.

Says Ries: "The Long-Term Stock Exchange offers companies a new way to be public that supports the building of sustainable businesses, tightening ties with investors who share a long-term horizon, and a stakeholder approach."
 
Originally published
by Finextra - September 10, 2020
Read more…

JAAGNet Investment Internet Feeds

Master Investor Show 2020 - London - POSTPONED TO DECEMBER 5, 2020

Recurring Revenue Conference - POSTPONED to April 2021 - date to be confirmed

Chicago Venture Summit - POSTPONED to September 2021

JAAGNet Investment Blog Archive

See Original | Powered by elink

JAAGNet Channel Investment Playlist