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VCs reload ahead of the election as unicorns power ahead

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This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

It was an active week in the technology world broadly, with big news from Facebook and Twitter and Apple. But past the headline-grabbing noise, there was a steady drumbeat of bullish news for unicorns, or private companies worth $1 billion or more.

A bullish week for unicorns

The Exchange spent a good chunk of the week looking into different stories from unicorns, or companies that will soon fit the bill, and it’s surprising to see how much positive financial news there was on tap even past what we got to write about.

Databricks, for example, disclosed a grip of financial data to TechCrunch ahead of regular publication, including the fact that it grew its annual run rate (not ARR) to $350 million by the end of Q3 2020, up from $200 million in Q2 2019. It’s essentially IPO ready, but is not hurrying to the public markets.

Sticking to our theme, Calm wants more money for a huge new valuation, perhaps as high as $2.2 billion which is not a surprise. That’s more good unicorn news. As was the report that “India’s Razorpay [became a] unicorn after its new $100 million funding round” that came out this week.

Razorpay is only one of a number of Indian startups that have become unicorns during COVID-19. (And here’s another digest out this week concerning a half-dozen startups that became unicorns “amidst the pandemic.”)

There was enough good unicorn news lately that we’ve lost track of it all. Things like Seismic raising $92 million, pushing its valuation up to $1.6 billion from a few weeks ago. How did that get lost in the mix?

All this matters because while the IPO market has captured much attention in the last quarter or so, the unicorn world has not sat still. Indeed, it feels that unicorn VC activity is the highest we’ve seen since 2019.

And, as we’ll see in just a moment, the grist for the unicorn mill is getting refilled as we speak. So, expect more of the same until something material breaks our current investing and exit pattern.

Market Notes

What do unicorns eat? Cash. And many, many VCs raised cash in the last seven days.

A partial list follows. It could be that investors are looking to lock in new funds before the election and whatever chaos may ensue. So, in no particular order, here’s who is newly flush:

All that capital needs to go to work, which means lots more rounds for many, many startups. The Exchange also caught up with a somewhat new firm this week: Race Capital. Helmed by Alfred Chuang, formerly or BEA who is an angel investor now in charge of his own fund, the firm has $50 million to invest.

Sticking to private investments into startups for the moment, quite a lot happened this week that we need to know more about. Like API-powered Argyle raising $20 million from Bain Capital Ventures for what FinLedger calls “unlocking and democratizing access to employment records.” TechCrunch is currently tracking the progress of API-led startups.

On the fintech side of things, M1 Finance raised $45 million for its consumer fintech platform in a Series C, while another roboadvisor, Wealthsimple, raised $87 million, becoming a unicorn at the same time. And while we’re in the fintech bucket, Stripe dropped $200 million this week for Nigerian startup Paystack. We need to pay more attention to the African startup scene. On the smaller end of fintech, Alpaca raised $10 million more to help other companies become Robinhood.

A few other notes before we change tack. Kahoot raised $215 million due to a boom in remote education, another trend that is inescapable in 2020 as part of the larger edtech boom (our own Natasha Mascarenhas has more).

Turning from the private market to the public, we have to touch on SPACs for just a moment. The Exchange got on the phone this week with Toby Russell from Shift, which is now a public company, trading after it merged with a SPAC, namely Insurance Acquisition Corp. Early trading is only going so well, but the CEO outlined for us precisely why he pursued a SPAC, which was actually interesting:

  • Shift could have gone public via an IPO, Russell said, but prioritized a SPAC-led debut because his firm wanted to optimize for a capital raise to keep the company growing.
  • How so? The private investment in public equity (PIPE) that the SPAC option came with ensured that Shift would have hundreds of millions in cash.
  • Shift also wanted to minimize what the CEO described as market risk. A SPAC deal could happen regardless of what the broader markets were up to. And as the company made the choice to debut via a SPAC in April, some caution, we reckon, may have made some sense.

So now Shift is public and newly capitalized. Let’s see what happens to its shares as it gets into the groove of reporting quarterly. (Obviously, if it flounders, it’s a bad mark for SPACs, but, conversely, successful trading could lead to a bit more momentum to SPAC-mageddon.)

A few more things and we’re done. Unicorn exits had a good week. First, Datto’s IPO continues to move forward. It set an initial price this week, which could value it above $4 billion. Also this week, Roblox announced that it has filed to go public, albeit privately. It’s worth billions as well. And finally, DoubleVerify is looking to go public for as much as $5 billion early next year.

Not all liquidity comes via the public markets, as we saw this week’s Twilio purchase of Segment, a deal that The Exchange dug into to find out if it was well-priced or not.

Various and Sundry

We’re running long naturally, so here are just a few quick things to add to your weekend mental tea-and-coffee reading!

Next week we are digging more deeply into Q3 venture capital data, a foretaste of which you can find here, regarding female founders, a topic that we returned to Friday in more depth.

Alex

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PSA: Your new iPhone 12 or 12 Pro might need need contact tracing re-enabled

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Getting a new phone is exciting, but it can also lead to spending an annoying amount of time adjusting settings, permissions and notifications for all your apps. Cloud backups are supposed to make this process easier, but they don’t always catch everything – for instance, you’ll want to double-check that COVID-19 exposure notifications are still enabled on your new iPhone 12 if you restored from a backup. They might not be, according to BBC News.

If you’re concerned you might be affected, you can re-enable exposure notifications in iOS by opening the Settings app, selecting Exposure Notifications, and clicking “Turn On Exposure Notifications.”

Users first noticed issues with the official National Health Service (NHS) contact tracing app in the UK. When some iPhone 12 and 12 Pro owners tried to open the app after restoring an earlier iPhone backup, they were presented with an error message. Deleting and redownloading the app seemed to solve the problem by prompted the users to re-enable COVID-19 exposure notifications — but also deleted all the locations the users had previously checked into.

It’s not clear if this issue is exclusive to iPhone 12 models or if restoring any iPhone from a backup might turn off the setting: we’re asking Apple and will update you with what we hear. When we restored one of our own iPhone 12 phones from a backup, we did notice exposure notifications were turned off — so we suspect the issue might be at a system level rather than with specific apps like NHS.

The exposure notification system was originally announced in April and uses your phone’s Bluetooth to let you know if you’ve come in contact with someone who’s tested positive for COVID-19. The resulting notification can also direct you to up-to-date COVID-19 information online and where you can schedule a test for yourself.

Contact tracing, whether automatic or conducted manually, is not a magic bullet to get COVID-19 outbreaks under control. But it is one of many steps, including a robust and easily accessible testing program, that can help you find out if you’ve been infected sooner so that you don’t contribute to the spread. Re-enabling these notifications is a low effort way – along with wearing masks and washing your hands – to keep people out of harm’s way.

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Samsung’s original Galaxy Fold adds some of the Z Fold 2’s smartest features for free

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One of the Samsung Galaxy Z Fold 2’s coolest new features was the ability to use the phone’s front display as a viewfinder for the back cameras, which could be really useful for things lining up higher-quality selfies. If you’ve wanted that handy way to take better selfies but have been holding on to the original Galaxy Fold, you’re in luck: Samsung is bringing that selfie functionality and a number of other features from the Z Fold 2 to the first Fold through a software update that’s available starting today.

Samsung will let you use the front screen as a viewfinder for the Fold’s back cameras.
Image: Samsung

The Fold isn’t just getting a new way to take selfies. The update also brings Capture View Mode, which lets you frame a photo with one half of the Fold’s main screen and review up to five of the latest photos or videos you’ve taken on the other half. And Pro Video mode will now let you capture video in a 21:9 aspect ratio and at 24 fps.

The original Fold also gets a few features from the Z Fold 2 intended to improve productivity. App Pair, for example, lets you set a shortcut to launch up to three apps at once in your preferred split-screen layout. That means that if you like to have Twitter open on one half of your screen and YouTube on the other, you can make a shortcut to launch those apps together and set up the way you like them. You now can arrange split-screen windows horizontally, too,

Samsung’s blog notes that the launch date and the features included with the update “may vary by carrier or market,” however, so the update may not be available for your Fold just yet. Samsung tells The Verge it’s looking into when the update will be available in the US.

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Gillmor Gang: Unsuppressed

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[embedded content]

Not just the future of civilization is up for grabs this November. In this age of mobile social computing, we’re figuring out how to vote, entertain, teach, learn, and commit to meaningful change. Thanks to the pandemic emergency, our plans for transforming our country and planet are subject to immediate recall.

Much of the current political dynamic is expressed through the lense of “how much change can we afford to make?” The swing states in the race for the electoral college are those most profoundly affected by the transition from fossil fuel to renewable energy. The choice: how many jobs will we lose by shifting away from oil and gas to wind and solar. Workers in Pennsylvania, Ohio, Texas, and Michigan are fearful of losing their livelihood to a future of retraining and disruption.

Regardless of where we sit along the left/right spectrum, we share the increasing understanding that government doesn’t work. Running for office is a gauntlet of fundraising and promises you can’t keep; legislating is a lobbyist playground where special interests are neither special nor in our interests. The courts are overwhelmed by political power plays timed to inflame and suppress voting turnout. It’s no wonder that the common reaction to this week’s final presidential debate was relief that the campaign is almost over.

The most important fix to the body politic is the mute button. For a brief moment in the debate, we got to experience a few seconds of not talking. Time seemed to stand still, as if we were being handed down a digital tablet of things to not do: don’t interrupt, don’t disrespect, don’t mock, don’t waste our time. Above all, don’t forget the people we’ve lost to the virus. Remember the days when our biggest problems were what show to watch, what music to play, what jokes to tell. It’s amazing what you can hear when the agenda is turned back to ourselves.

In that moment, you can hear things that smooth the soul. In that moment, you can hear the words leaders will have to speak to get our vote next time. I feel much better about the next election no matter how this one turns out. The explosive numbers of early voting tell us a lot about how this will go. The genie is out of the bottle and people are beginning to connect the dots. If the vote is suppressed, it only makes us try harder.

Mobility is about a return to value, to roots, to resilience. Working from home is a big step toward living from everywhere. AR stands for accelerated reality, VR for valued reality. If we want to know what social is good for, switch on the mute button and listen to what you’ve lost. If you can mute the sound, you can unmute it and find your voice.

At first, the mute button was a defensive move. It counteracted the business model of the cable news networks, the repetitive time-filling of partisan perspective mixed with not listening to the grievances of the other side. The hardest thing I’ve had to do is be open to the truth emanating from the least likely location. We are taught to attack our opponent’s weaknesses; a better strategy might be to respect their strengths and adopt them as your own. Don’t worry, though. You probably won’t find too much there to reflect.

Once you experience the mute button envelope, you can hear it even if it’s not there. The rules of the revised debate were that the first two minutes of each candidate’s response used the mute button, then the old rules returned. Even then, the experience of using the mute button informed the rest of the debate. Particularly noticeable was Joe Biden’s response to a series of back and forths when the moderator asked if he had any further response. “… … … No.”

There have been other mute buttons in history. The 18 and a half minute gap spoke loudly when Rose Mary Woods erased a crucial Watergate tape. Before that, we assumed there might be a smoking gun. After that, we knew there might be others, too. Throughout the campaign, we could learn more about what was really going on by listening for the moments when key questions were left unanswered, ducked, or bounced back to the opponent like some Pee Wee Herman playground retort.

Soon we’ll know the answer to the important question: how do we confront the virus? I vote for listening to the science, wearing a mask, socially distancing both off and online, rapid testing, and contact tracing. And the candidates who agree.

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary, and Steve Gillmor . Recorded live Friday, October 23, 2020.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

For more, subscribe to the Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

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