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Voice-enabled tech has given rise to voice analysis research that provides insight into human behaviors, but raises concerns about privacy and accuracy — It's one of a crop of companies looking for the personal insights contained in our speech. In recent years, researchers and startups …
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Arlington County Board voted 5-0 in favor of an estimated $51M financial package for Amazon's HQ2, which includes a cash grant of $23M to be paid over 15 years — WASHINGTON (Reuters) - Amazon.com Inc's planned second headquarters in northern Virginia cleared a key test on Saturday …
We’ve decided to step back from the breaking news for a minute to conduct a review of seed and early-stage funding trends over the last decade for U.S.-based companies.
I’m fairly certain we can all agree that the environment for startups has changed dramatically in the past 10 years, specifically in two major ways:
What we’ve also seen are recent concerns raised about the decline in seed stage funding by Mark Suster, a partner at UpFront Ventures, as there has not been commensurate growth in early stage funding (Series A and B), to meet this growth in seed-financed companies. This is often expressed as the Series A crunch.
So with venture funding at an all-time high, along with increased growth in supergiant rounds, now seems like an appropriate time to conduct this kind of review.
First, let’s set the stage for our analysis and explain where our data comes from with a few quick facts:
Now, let’s take a look at the trends.
Since 2014 we have seen mostly double-digit declines in less than $1 million rounds each year – a strong pivot from 2008-2014 when we saw double-digit growth.
In 2018 seed funding counts and amounts below $1 million were down from 2015 at 41 and 35 percent respectively. Given that data at this stage can be added long after the round took place, we assess there could be a 20 percentage-point relative increase in 2018 compared to 2017.
If we factor this in, 2018 seed funding counts and amounts below $1 million are down from 2015 at 30 and 23 percent respectively. In other words, seed below $1 million are closer to 2012 and 2017 levels.
Round from $1 million to $5 million also experienced growth from 2008 through 2015, more than threefold for counts and close to threefold for amounts. Upward growth stalled from 2015. However, we do not see a substantial downward trend in the last three years. Dollars invested are stable at $7.5 billion from 2015 through 2017. Counts and amounts are down in 2018 from the 2015 height by 12 percent for deal count and 6 percent for amounts.
At Crunchbase we are always cautious about reporting downward trends for the most recent year or quarter, as data does flow in after the close of the most recent time period. If the trend is over a greater time period, that is a stronger signal for change in the market. Based on data continuing to be added after the end of a year for the previous year, we assess around 10 percentage point increase relative to 2017. This would make 2018 roughly equivalent to 2017 on rounds and slightly up on amounts.
Why is seed flattening? Seed investors report putting more dollars into fewer deals. Or as they raise more substantial subsequent funds, they are putting more dollars into the same number of transactions. Seed funds need to get enough equity for a meaningful stake, should a startup survive to raise subsequent rounds. Seed funds are investing in fewer startups for more equity.
UpFront Ventures’ Suster (referenced earlier) also talks about larger venture firms becoming less active in seed, as investing at the seed stage can limit their ability down the road to invest in competitive startups who emerge as growing contenders in a specific sector. The growth of more substantial funds in venture allows firms to see deals mature before investing, perhaps paying more to get the equity they want, and allowing startups not growing as quickly to fail or get acquired.
As Fred Wilson from Union Square Ventures notes, “In the first five years of this decade, we saw the seed portion of the market explode. In the last five years of this decade we saw the growth portion of the market explode. But over those last ten years, the middle part, the traditional venture capital market, has not changed much.”
For the middle, Series A and B rounds (which used to be the first institutional money in), the market for $5 million to $10 million rounds has almost doubled, but it has taken from 2008 to 2018. In that same period, growth has been slower than round below $5 million. Growth has continued past 2015. Since 2015, rounds are down slightly for one year, and then continue to grow in 2017 and 2018. Counts are up from 2015 by 17 percent and dollars by 18 percent.
Rounds of $10 million to $25 million have grown over 11 years by 73 percentage points for counts, and 78 percentage points for amounts. This is a slower pace than $5 million to $10 million rounds, but continuing to edge up year over year.
Seed is its own class that is here to stay. Indeed pre-seed, seed and seed extension all seem to have specific dynamics. Of the 600-plus active seed funds who have raised a fund below $100 million, close to half have raised more than one fund. In the last three years in the U.S. we have not seen a slowing of seed funds raised for $100 million and below.
When we take into account the data lag, dollars for below $5 million is projected to be $8.5 billion, close to the height in 2015 of $8.6 billion. Deal counts are down from the height by a fifth, which does mean less seed-funded startups in the U.S. Provided that capital allocation is greater than $5 million continues to grow, less seed funded startups will die before raising a Series A. More companies have a chance to succeed, which is good for seed funds, and ultimately for the whole ecosystem.
Spotify says “every monopolist will suggest they have done nothing wrong”, that Apple's response is not new, and is entirely in line with Spotify's expectations — In Friday's early hours, Spotify and Apple traded potshots in their ongoing battle over the App Store.
Sources: Facebook board member Marc Andreessen attended a meeting with Christopher Wylie about Cambridge Analytica's use of Facebook data, in the summer of 2016 — Allegations come as US prosecutors investigate claims of cover-up claims — Facebook is facing explosive new questions …
A look at the online video market in India, valued at $700M+, where 245M watch YouTube on their phones each month and 300+ content creators have 1M+ subscribers — For eight minutes last month, the Swedish video blogger PewDiePie was no longer king of the internet.
Twitter has updated its in-app camera, and made it a lot more useful in the process. For starters, the new Twitter camera can be opened with a single swipe, making it quicker and easier to shoot photos and videos. And you can also broadcast live instantly.
Twitter is primarily a text-based social network. You condense your thoughts into 280 (formerly 140) characters, and tweet them out for the world to judge. And judge they will. However, the rise of Instagram and Snapchat has forced Twitter to evolve.
The new Twitter camera can be opened with a single swipe left. It’s then ready and waiting for you to capture and share what’s happening around you. Which is the very essence of Twitter regardless of whether it’s presented in written form or a visual medium.
There are two options: Capture and Live. Capture allows you to take a photo (with a short press) or shoot a video (with a long press), while Live allows you to start broadcasting live. You can also turn the flash on or off, and switch cameras from front to back.
See it? Tweet it! Our updated camera is just a swipe away, so you get the shot fast. Rolling out to all of you over the next few days. pic.twitter.com/moOEFO2nQq
— Twitter (@Twitter) March 13, 2019
Once you have taken a photo or video, you can add a description, add a location, and then compose a tweet containing the media. Twitter will also suggest tags to add to make your photo or video more visible to the wider world. If that’s something you desire.
To be clear, you can still add media not shot using the Twitter camera. When you’re composing a tweet just hit the Images icon, which opens your Gallery. And from there you can select a folder, and browse through all of the media on your smartphone.
Twitter’s new camera is a vast improvement over the old one. It’s quicker and easier to access, has more options available, and is designed to encourage you to use media as well as words. Which should help prevent your feed from being a boring wall of text.
The new camera is just the start of Twitter’s plans to evolve and adapt the platform to better serve its users. To that end, Twitter has launched a new app called twttr, which is designed to be a testing ground for new features. And here’s how to sign up to twttr.
Read the full article: Twitter’s New Camera Lets You Take Photos Instantly
PC gaming has grown to be a pretty wide niche of people with some far-flung similarities and differences, one thing they all share are souped-up rigs that rely on beefy GPUs. This is fine for those with dedicated machines but PC gaming isn’t too friendly to those trying to pull double-duty on their everyday machine.
Vectordash, launching out of the latest Y Combinator batch, wants to turn your Macbook Air or other underpowered rig into a formidable machine through their cloud gaming service.
The service is charging customers $28 per month to render their games on a cloud machine so that they can be run on non-gaming laptops. The idea of running Fortnite on any machine seems to be a somewhat central idea for the service, though you’ll just as easily be able to log-in to Steam and play through titles that you own.
Launching a cloud-gaming service seems like an expensive proposition, you need a bunch of server centers to host streamers and that’s a lot of upfront cost for an upstart, so Vectordash is cheating a bit and paying users with heavy GPU power to contribute to the gaming hive-mind over the cloud. The service says they’ll pay these GPU renters about $.60 per day for the graphics processing real estate, a number that will cover the electricity but won’t make anyone rich. The trick is, Vectordash is entering a bear cryptocurrency environment where there are tons of GPUs ready to be put to work, so the company will have a market as long as it can stay competitive with crypto mining returns.
Relying on third-party GPU power will leave some difficulty in scaling with such high upfront costs alright taking a steep bite out of margins, but the startup seems to be fine with the tradeoffs and believes that plenty of gamers will see the use of the $28/month service if it means being able to run GPU-hungry games on their Mac or otherwise lightweight laptops.
This does leave the startup in a tricky position where they can likely be undercut on price by a tech giant that is willing to shift some data center power towards the product. At the same time, Vectordash’s distributed model of turning GPUs into sharing economy workers is probably more scalable when it comes to reaching the far-flung corners of the globe.
That’s because a major limiting factor for the technology is that it’s highly dependent on geographic proximity between game streamers and host hardware. As opposed to other streaming services, latency demands are pretty brutal due to the real-time input being sent to the host machines via keystrokes and mouse movements. If users aren’t getting feedback within 20-30ms, the lag grows noticeable and quickly feels unplayable if you’re firing away in something like a first-person shooter, co-founder Sharif Shameem tells TechCrunch.
This means that Vectordash is going to have to be very targeted with the markets they expand to as a game streamer needs to be within about 300 miles from the host machine. They’re kicking things off in the Bay Area and will be focusing efforts on the East and West coasts of the U.S. early-on. Gameplay can max out at 4K 60FPS if your internet connection is solid and can scale things down to 1080p if you’re missing some megabits.
Users can sign up on Vectordash’s site to get early access to the service.
Welcome back to this week’s transcribed edition of Equity, TechCrunch’s venture capital-focused podcast that unpacks the numbers behind the headlines. We’re running an experiment for Extra Crunch members that puts the words of our wildly popular venture capital podcast, Equity, in your eyes instead of your ears.
This week, along with guest Anu Duggal, the founder of Female Founders Fund, the team discussed Uber’s impending IPO, Q1’s IPO pace, Stash’s raise and more changes at Y Combinator that saw Sam Altman take a seat as the accelerator’s chairman.
So if you don’t like podcasts but still want the goodness that is Equity, you can have a read of this week’s episode below.
For access to the full transcription, become a member of Extra Crunch. Learn more and try it for free.
Connie Loizos:
Hello and welcome to Equity. I’m TechCrunch’s Silicon Valley editor Connie Loizos. I’m joined today by Crunchbase News’s Alex Wilhelm.
Alex Wilhelm:
Hello.
Connie Loizos:
Hello. We also have a guest in studio today from New York. Anu Duggal, the co-founder of Female Founders Fund, which has backed a lot of really interesting companies from the wedding site platform Zola to the smartphone lending app Tala, which caters to people and underserved and emerging markets. Anu, thank you so much for swing by today.
Anu Duggal:
Thanks so much for having me.
Connie Loizos:
It’s really great to see you.
Anu Duggal:
You too.
Connie Loizos:
So we were going to talk about the week being sort of slow. In fact, until about an hour ago, we were sort of talking about discussing the fact that there’s been this … a lot of talk and no action yet on the IPO front. Then Reuters broke the news that Uber is planning to kick off its IPO in April, which is just next month. And it’s also just right on the heels of the expected IPO of Lyft, which apparently is coming out at the end of this month.
Alex Wilhelm:
Yes. And this is evidence that the news gods still hate this show because this is, every single week we get on and say well there was no, oh, all the news broke an hour ago. So Connie details here are that we expect the Uber IPO to hit the Road Show in April or to actually get live in April?
Connie Loizos:
I think it’s got an issue. It’s required public disclosure of the S-1 and launching its Investor Road Show. And after that, I’m not really sure how long it takes. Is it maybe like a week later?
With Y Combinator’s Demo Day taking place at Pier 48 in San Francisco next week, its largest batch of companies ever is getting ready to present to an audience of select investors. Having taken Atrium through Demo Day myself, I have first-hand knowledge of the process. When the founders have finished their pitches, the time to talk numbers will closely follow. Chief among the many decisions founders will face during this time is whether to opt for the Pre-Money SAFE or the new Post-Money SAFE, the two standardized legal documents that YC has introduced in recent years.
Both versions are meant to make the process fast, easy and fair for both parties in the early-stage fundraising process. But there are crucial differences between the two that founders should examine carefully.
Essentially, the Pre-Money SAFE is exceptionally favorable to founders because it gets them pre-valuation funding like a convertible note, but debt-free. The Post-Money SAFE sweetens some of the terms for investors, like locking in their percentage ownership in a priced round later on.
Overall, we expect the Post-Money version to become more common, especially if the company is raising a round above $1 million or $2 million, and the investors have more leverage to ask for it in the negotiation.
(Note: This article is aimed at giving founders a general understanding of the changes from Pre-Money SAFEs to Post-Money SAFEs. The information provided is based on my professional experience and opinions, and should not be used without careful consideration and advice by qualified advisors and legal counsel. Also, to learn more and ask questions about Pre and Post-Money SAFEs, join me on April 16th for a webinar where I’ll dive in a bit deeper.)
Today there are two general ways of structuring a startup fundraising round. The first can be called a “priced equity round,” and is characterized by the sale of preferred stock with a fixed valuation.
Leaked specs for Huawei P30 Pro reveal a 6.47-inch display, in-display fingerprint sensor, Kirin 980 octa-core chipset, and a triple-camera system with 10x zoom — Along with full specs for the P30 Pro and P30 — We're still a few days away from Huawei's official announcement of its new P30 Pro …
Apex Legends surprised the gaming world two months ago, bringing a new, frenetic dynamic to the Battle Royale genre of games that has already attracted 50 million players.
That first huge milestone didn’t come at a cheap price — EA reportedly paid Ninja $1 million to stream the game. But now the question concerns whether or not Respawn can keep and convert their new, voracious legion of players.
Luckily for Respawn, Fortnite has paved the way when it comes to monetizing this type of game, offering the game itself for free and generating revenue from a virtual items store and a Battle Pass. The Battle Pass concept lets users subscribe to level up and earn skins, camos and other cosmetic items.
Apex Legends, however, has a unique opportunity to make the Battle Pass even more attractive. For now, that opportunity is called Octane.
Octane is rumored to be the game’s Battle Pass character. We know nothing yet for certain, but a datamine and a few allegedly leaked photos have led folks to believe that Octane has a stim-shot style ability that lets him trade movement speed for his health, with another ability that lets him recover that health out of combat situations.
But his rumored ultimate is the one that people are excited about, should the rumors prove true. Octane’s ultimate ability is believed to be a launch pad, that would let the whole team (and enemies, one would assume) bounce around during a fight.
There’s one curious twist. As we wait for the launch of the Battle Pass, Respawn has placed a handful of the very same launchpads into the game around Marketplace on the map. These are static launchpads, but work nonetheless.
This begs the question: are the launchpads simply a static addition to the map itself, or is Respawn testing out the upcoming ultimate ability of Octane? In either case, Octane represents an interesting opportunity for Respawn and the Apex Battle Pass.
Because Apex Legends is built on a hero system, where individual characters bring unique skills, weapons and gear to the game, Apex can offer new hero characters as part of the Battle Pass. This deviates from Fortnite’s suite of virtual products that offer no in-game advantage and are only cosmetic.
A new character, complete with abilities and skills that could lead to your success, can brew up quite a bit of FOMO among folks undecided about the Battle Pass. New content and hopefully more enticing weapon camos should invite a new wave of growth as the core user base is re-invigorated. But balancing that urgency with the time needed to build a polished, beautiful season’s worth of content is a challenge.
Respawn arguably has work to do on the game it already launched. The explosive growth of the game led to serious server issues early on, and lag has continued to infuriate top players.
All that said, Respawn seems to be handling the pressure well, with some believing that the Battle Pass has already been delayed to ensure a polished launch. For now, it’s a waiting game.
