The latest list of YC-backed companies worth over $150M is the most geographically diverse yet

In 2018, Y Combinator released its first mega list of the top companies valued at $150 million or more that have gone through the accelerator.

Over the past four years, it’s updated the list to reflect the current status of its most valued companies. Valuation isn’t the best way to measure a startup’s success or real-life value, of course, and YC has always admitted that. Yet, as the accelerator points out, “it’s the most commonly available metric to compare companies in the startup world.”

Thus, the original list of 101 companies has ballooned to 267 as of February 2022 (YC list isn’t exhaustive; some founders opt out of being listed).

Many factors are responsible for this growth. One is the increasing size of YC cohorts and the acceptance of companies both within and outside the U.S. There were 141 companies from 24 countries in the winter 2018 batch, compared with 377 companies across 47 countries in the summer 2021 group. The second is that companies YC backed four to five years ago, after raising a series of venture capital rounds, are now commanding huge valuations that they didn’t have in 2018.

What this means is that more companies, particularly outside the U.S., have joined this desirable list. Case in point: No African company made the list in 2018. Now, there are six.

Of the 267 companies valued at $150 million or more, over 60 (private and public) are valued at $1 billion or more. The top 10 are Airbnb, Stripe, Coinbase, Instacart, DoorDash, Cruise, OpenSea, Faire, Brex and GitLab (OpenSea, Brex and GitLab represent the crème de la crème of the 11% that are remote companies).

YC says 16% of the companies in its current list (44 out of 267) are based outside the U.S., compared to its first list, which included just seven non-U.S. companies.

According to the accelerator, six new countries home to these companies are making their appearance for the first time: Algeria, Tunisia, Senegal, Chile, Brazil and Singapore. And of the companies that are new to the list, 28% are outside of the U.S.

Regions with the most growth from 2021 are India, Latin America and Africa, the accelerator notes. There are eight Latin American companies, with six new to the list; of Africa’s six representatives, five are new to the list; and India has 10 companies, of which three are making their entrance for the first time.

“We always said YC is founded on the principles that talent is globally distributed. It’s all about investing in the best founders that have a unique insight and are willing to crack on those problems,” Anu Hariharan, partner at YC Continuity Fund, the accelerator’s growth stage fund, told TechCrunch. “We don’t even have any presence anywhere outside the U.S., but the formula is working, which tells us that generational companies are being built everywhere, not just in the U.S.”

Asides from the U.S., no other country has more YC representatives than India. The South Asian nation is also responsible for producing the first company outside the U.S. to be ranked in the top 10 most valuable private YC-backed companies: Razorpay. The fintech, which is 14th overall on the list, was valued at $7.5 billion after its latest round.

Razorpay was one of the earliest startups backed in India alongside Meesho (23rd), the second most valuable YC-backed company in India. Now, the country is home to over 100 YC-backed companies.

Y Combinator’s new batch features its largest group of Indian startups

Hariharan, who is Indian American, said this progression is a ripple effect of the success of YC’s earliest companies in the country. According to her, when one or two YC-backed companies in a region begin to scale while raising huge amounts of capital, it inspires other founders to apply to YC. India accounts for the second-largest volume of applications to YC.

“What does it take fundamentally to start a startup? It’s courage,” she said. “India has a large concentration of software developers, and they, of course, can start a company. But you need courage to start a company versus going and doing a job. So when they see their peers like Razorpay doing so well, you start seeing a lot more people saying, ‘Let me at least try and work on a startup,’” said the partner, whose YC Continuity Fund has backed Razorpay and newer Indian upstarts Groww (39th on the list) and Zepto (114th).

Other Indian companies on the list include Khatabook (110th), Instawork (115th), Clear, formerly Cleartax (127th), OkCredit (177th), Cashfree Payments (224th), and Fampay (264th).

The same phenomenon can be said for Latin America and Africa. Colombia’s Rappi, the super app valued at $5.25 billion and 21st on the list, and Nigeria’s Flutterwave, the payments company that recently reached a valuation of $3 billion and is 36th on the list, opened the door for other companies across both regions to get into YC.

Rappi and Flutterwave have been on the list since 2018 and 2019, respectively. Other companies in Latin America that have since joined include Frubana (103rd), Kovi (143rd), Nowports (160th), Fondeadora (180th), Fintual (227th), Houm (232nd) and Belvo (255th).

In Africa, there’s Wave, the spinoff company of WorldRemit-subsidiary Sendwave at 54th, Reliance Health (204th), Stripe-acquired Paystack (233rd), Yassir (247th) and Kudi (263rd).

There’s no doubt that this new crop of multimillion- and billion-dollar companies from emerging markets will continue to grow, considering YC’s intention to increase its batch to 1,000 startups and double down on these regions with its new sweetened deal. However, one would be too optimistic to think they’ll grow at a fast pace (the percentage of companies headquartered outside the U.S. last year was 14%, compared to 16% this year).

That said, although Y Combinator seems not to have cracked the code on the diversity front with respect to founders’ representation, it has made some headway in the geographic representation of its most valuable companies.

This YC Summer batch features the largest group of African startups yet

Daily Crunch: Asian and Hispanic e-grocer Weee! bags $425 million Series E

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Hello and welcome to Daily Crunch for Monday, February 28, 2022. Today we are bringing exclamation points back. Because it’s Monday, we need the boost, and a startup whose name includes a “!” just raised north of $400 million in a single round. 2022! It’s a whole thing. – Alex

The TechCrunch Top 3

• Technology and Ukraine: As you can imagine, the Russian invasion of Ukraine is in part a technology story. For example, Ukraine is accepting crypto donations, which TechCrunch covered here. And Ukrainian citizens are turning to encrypted messaging tools, and even offline maps during the war. But there’s even more going on at the corporate-level, including Twitter marking tweets tied to the Russian state, going as far as limiting their reach. Russia is angry with American social media companies limiting its reach, but, frankly, too bad.
• What’s your BNPL startup really worth? News of a deal between Zap and Sezzle in the BNPL market had us crunching numbers to figure out what smaller buy now, pay later (BNPL) companies are worth. Why do we care? Because a huge number of startups are building companies around the consumer and business credit model. The news is not great.
• Wee! Weee! has raised a huge round! SoftBank’s Vision Fund 2 has led a $425 million Series E into Weee!, which provides a way for consumers to buy ingredients for different cuisines, so if you need to find pieces of different “Chinese, Japanese, Korean, Vietnamese, Filipino, Indian and Latin” dishes, well, it probably has them. The deal doubles the value of the startup to more than $4 billion, and indicates that SoftBank is still a risk-on operation.

Startups/VC

Speaking of huge venture rounds at high prices, OneCard is in talks to raise what we’ve heard is nine-figures worth of capital at a unicorn valuation. Our piece, by our ace India reporter Manish Singh, also notes that the new round comes just a month after FPL Technologies, the company behind OneCard, last announced new capital.

Catching you up, OneCard is a consumer credit card startup in India that also provides credit scoring services.

Moving along, Y Combinator’s push to fund startups around the world is paying off. Data from the well-known startup accelerator indicates that one in six, or about 16% of the companies it has incubated that are now worth $150 million or more – some 267 now – are headquartered outside of the United States.

I’m not surprised at the ratio, and the rising tally of international companies that it implies. My question is how quickly the portion of high-value Y Combinator-backed startups moves towards being majority international.

• Stämm Biotech raises $17M: Have you heard of bioreactors? They are new to me, but are apparently a key piece of kit in the biomanufacturing world. Stämm, which is based in Buenos Aires, just raised a large Series A for its bioreactor product. It looks something like a big, expensive gaming PC. Regardless, if there is enough market demand for a startup to raise to build more bioreactors, I presume that biology is going to be lit in the coming years.
• The Conductor team are building a company around the project: It’s a tale as old as time. A company creates a tool, and later open-sources it. Then some folks build a hosted version of the product as a startup. In this case, the tool is Conductor, which Netflix built. The team that wrote the code at the streaming giant have now cleaved off to build Orkes, which offers, you guessed, a hosted version of Conductor.
• Robin.io sells to Rakuten telco arm: A few things are going on here. First, Rakuten has a telco-focused business called Rakuten Symphony. It’s pretty recent. Also, the group has purchased Robin.io, which TechCrunch describes as a “startup that offers a Kubernetes platform optimized for storage solutions and complex network applications.”
• TikTok raises video length limit: TikTok is owned by Bytedance, which is technically still a private company. So, I guess, TikTok news belongs in this part of the newsletter. Regardless, you can now make 10-minute TikToks. Which, idk, does seem a bit counter to what the service is known for. Perhaps everything becomes YouTube in the end.
• Oribi sells to LinkedIn for $80M-$90M: Another deal for your eyes today, this time involving Oribi, which we write is “a Tel Aviv startup that specializes in marketing attribution technology.” LinkedIn, of course, is a portal where folks in the sales industry can workshop their slam poetry.
• Flashfood is a good startup name: What does Flashfood do? It sells food that is nearly expired, to help combat food waste. Remember flashmobs? The idea was that they were quickly forming gatherings, back when Twitter was New and Cool. Anyway, between flashmobs, and flashfreezing, we can add flashfood to the flash- category. The company just raised $12.3 million.

Leverage early investors when raising a Series A, says DeepScribe’s Akilesh Bapu

Image Credits: Index Ventures / DeepScribe

While raising a Series A for AI-powered medical transcription platform DeepScribe, CEO and co-founder Akilesh Bapu set clear timelines for the investors he approached.

Index Ventures partner Nina Achadjian received Bapu’s pitch deck while she was still on vacation, but the founder wouldn’t let her schedule a meeting for the following week.

As it turned out, Bapu’s instincts served him well. “When I walked out of the meeting, I went immediately to one of my partners, and was like, ‘Finally, I found the company that is following the right approach,” said Achadjian.

Leverage early investors when raising a Series A, says DeepScribe’s Akilesh Bapu

Big Tech Inc.

• Apple will accrete Dutch fines until the heat death of the universe: That’s our takeaway from the news that Apple has been hit with a sixth penalty from the country’s government over a ruling regarding in-app payments, and dating apps inside its borders. Apple, an American company, is seemingly blasé at the Dutch Authority for Consumers & Market charging it another €5 million. It now owes the country some €30 million, and the fines could stretch to €50 million. Apple might have too much money, I think.
• Google disables live traffic data in Ukraine: The Russian invasion of Ukraine is unearthing a host of interesting technology situations, including how some are using live traffic data to track troop movements. Google has cut off certain maps data in the country, though directions will remain accessible.
• The EU wants to ban Russian media: Sputnik and Russia Today are under the ban-hammer in the European Union. TechCrunch writes that that particular regulatory choice means that “social media firms face pressure to act” in a similar fashion.
• Cruise founder back at the wheel: After a GM exec left the CEO role, Cruise co-founder Kyle Vogt is back in charge. And he’s also the CTO, so expect him to be a little busy in the coming quarters. Self-driving is nearing the point of commercialization, so it will be interesting to see how Cruise evolves from technology to business.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

TechCrunch is recruiting recruiters for TechCrunch Experts, an ongoing project where we ask top professionals about problems and challenges that are common in early-stage startups. If that’s you or someone you know, you can let us know here.

Lucid rolls back production goals even as demand for luxury EV rises

Earnings season rolled along today with notes from Lucid Motors’ fourth-quarter results. The company, like other electric vehicle (EV) companies, is nascent in revenue terms, albeit further along than some. The company publicly debuted as a SPAC company in July last year after merging with Churchill Capital IV.

The company’s value has had a turbulent day. Lucid’s stock rose nearly 10% during regular trading, adding $2.63 to its per-share value. However, after the company reported its results, its shares fell, erasing 10.8% of its value, or around $3.14 per share.

In aggregate, Lucid is net down a fraction today as of the time of writing. Why? Revenue came in under expectations. But as with all companies like Lucid that have been busy building in anticipation of future sales, there’s more to the story.

To get a proper grip on Lucid’s Q4, and full-year 2021, results we’ll start with a look at its non-earnings results, including customer reservations and the like. Then, we’ll explore its financial results in detail.

Reservations and capacity

After announcing 17,000 reservations last November for the Lucid Air, the company’s luxury sedan that boasts a long range and the largest shudders “frunk” on the market, customer reservations topped 25,000 as of Monday, reflecting potential sales of more than $2.4 billion.

The first deliveries for the Lucid Air, which TechCrunch drove for the first time in September, began in November. Only 125 Airs were delivered in the fourth quarter, but to date, there have been a total of 300 — a sign that Lucid might be ramping up production and delivery.

The EV company noted that production currently exceeds 400 vehicles and that 2022 should see a range of 12,000 to 14,000 Lucid Air vehicles being produced, which is down from the 20,000 units Lucid had promised during its Q3 earnings. The company blames supply chain issues for the setback, and expects those issues to lessen in the second half of the year.

Lucid Air production will be powered by Lucid’s manufacturing facilities in Casa Grande, Arizona, where the company’s 2.85 million-square-foot expansion is on track, bringing production capacity from its current 34,000 Lucid Airs per year to 90,000 units, says the company.

Lucid is also building a new manufacturing facility in the Kingdom of Saudi Arabia that it expects to finish by 2025. The company estimates the Saudi plant could bring in up to $3.4 billion in revenue over the next 15 years. For its part, working with Lucid helps Saudi Arabia’s goal of transforming and diversifying its economy by developing sustainable energy and transportation.

But the relationship between Lucid Motors and Saudi Arabia goes further back than this recent agreement. Lucid was founded in 2007 as Atieva, a company that was more interested in supplying the budding EV market rather than manufacturing cars itself. It pivoted to the mission and brand of Lucid Motors in 2016, but had trouble raising funds. The company almost died before being saved by the Saudi Sovereign fund’s $1.3 billion investment in 2018.

Lucid has also gone back on the timing for its Gravity project, its luxury SUV that will also be manufactured in Saudi Arabia. In Q3 2021, Lucid set it was on track to begin production and first deliveries in 2023, but on Monday, the company expects production to begin in the first half of 2024.

The company is exploring additional manufacturing sites in China and possibly Europe, said CFO Sherry House during the Q4 2021 earnings call on Monday.

Financial results

Lucid generated Q4 2021 revenues of $26.4 million. The company sold $21.3 million worth of its Lucid Air Dream Edition vehicles during the period, which its earnings notes helpfully explain has up to 1,111 horsepower, depending on trim selection and other options. The lamest, weakest, slowest, most-pokey car from the company has to glide along with a mere 800 horsepower, we hasten to add.

Regardless, delivering 125 cars after building a total of 400 to date may seem minute, but for an EV company, reaching production ramp is a material milestone.

The deliveries were not enough to push Lucid close to breaking even. Indeed, the company remains nearly comedically unprofitable. Revenue costs came to $151.5 million for the fourth quarter, research costs were $163.6 million and SG&A costs came to a staggering $197.0 million. All told, Lucid posted an operating loss of $485.7 million in Q4 2021. Or, in the quarter, for every car Lucid delivered in the final three months of 2021, it lost $3.9 million in operating terms.

Investors expected Lucid to report revenues of $36.74 million in the fourth quarter, per Yahoo Finance. The company’s GAAP earnings per share losses of $0.64 failed to excite the investing public.

In full-year terms, the pace of Lucid’s investment in scale and R&D is even more obvious. In the calendar year, against revenue of $27.1 million, Lucid posted an operating loss of $1.53 billion, and a GAAP net loss of $4.75 billion.

You might look at a company with $2.58 billion in negative operating cash flow for a year and say, hey, that’s a lot. But Lucid closed out 2021 with cash and equivalents worth $6.26 billion, so it remains utterly stuffed-full of cash. The company can self fund for some time, even if it fails to cover more of its expenses with gross profit in time. Lucid does carry around $2 billion in long-term debt, it’s worth stating at this juncture.

Looking ahead, investors expect the company’s revenue to scale to $2.01 billion in the current year, once again per Yahoo Finance. Is that number possible? Well, with 125 cars delivered in Q4 2021 and $21.3 million worth of revenue from those sales, Lucid had an ASP of $170,000 in the quarter. If it manages to build 13,000 cars, the mid-point of its guidance, sells them all and holds to its Q4 ASP, then the company would see $2.22 billion in 2022 revenues. That’s the bull case.

Bears might note that the company’s ASP should decline with scale, and that the company won’t sell every car is builds this year, but, hey, a battery that is charged to the midpoint is half-full, right, not half-empty?

This story is developing. Check back in for updates. 

BharatPe founder Ashneer Grover resigns from board amid turmoil at Indian fintech

Ashneer Grover, a founder and the public face of BharatPe, has resigned from the board and left the managing director position he held at the Tiger Global-backed Indian fintech startup following weeks-long turmoil at the firm as it undertakes what it says is an an all-encompassing review of business practices and fraud allegations.

On Tuesday midnight (local India time), Grover wrote in a scathing email to the board that he was leaving the firm “effective immediately” following what he described as “baseless and targeted attacks” on him and his family and a “battle of egos” among BharatPe’s other co-founders, investors and board members “under the charade of ‘good governance.'”

The move is the latest in a series of strange events at the fintech startup, which was last valued at $2.85 billion and counts Sequoia Capital India, Insight Partners and Ribbit Capital among its backers.

The 39-year-old Grover, a “shark” in the Indian version of Shark Tank, said in late January that he was going on a two-month leave of absence after an alleged audio clip surfaced on Twitter of a man hurling abusive and life threatening statements over a phone call to a Kotak Bank representative over not getting financing to buy shares in fashion e-commerce Nykaa’s IPO.

The clip created enough pressure on the startup’s board that it announced an investigation into, among other things, financial irregularities charges levelled against Grover and his wife, Madhuri, who served as the startup’s head of controls.

Grover — who rubbished the audio clip in a tweet, which he has since deleted — last month asked the board for the removal of chief executive Suhail Sameer from the board.

A preliminary investigation by Alvarez and Marsal (A&M) commissioned by BharatPe’s board found fraudulent transactions, including payments to non-existent vendors as well as irregularities of invoices being produced to substantiate spends, Indian newspaper Economic Times reported last month.

The board terminated the position of Madhuri Grover last week, following which she tweeted damaging information about the startup’s other co-founders and questioned the integrity of Rajnish Kumar, a board member of BharatPe and who previously served as the chairman of the State Bank of India.

“The fundamental fact is that all of you as investors are so far removed from reality that you’ve forgotten what real businesses look like and have no appreciation for what it took to run this enterprise day in and day out,” wrote Ashneer in the Tuesday email, a copy of which was seen by TechCrunch.

“None of you, including the ones based in India, have ever been to our office even once, since the pandemic turned our lives upside down and sought to suffocate the economy. […] This is how connected you are to BharatPe. Your views of businesses and problems on the ground are so colored by the windows of the Ivory Tower in which you all reside that you have no connect whatsoever with the human element of the business.”

“It is sad that you have even lost touch with the founder. […] For you, the founder of this company has been reduced to a button to be pressed when needed. I cease to be a human for you. Today, you have chosen to believe gossip and rumors about me instead of having a frank conversation. You are easily spooked because you have no touch with reality.”

Grover is — and remains — the largest individual shareholder of BharatPe. He has previously offered to sell his entire stake in the firm.

Leverage early investors when raising a Series A, says DeepScribe’s Akilesh Bapu

Raising a Series A is a different ball game from raising a seed round, and for Akilesh Bapu, CEO and co-founder of AI-powered medical transcription platform DeepScribe, giving prospective investors a hard deadline while leaning on early investors for support and guidance made all the difference.

“We were at this trajectory as a company where we had a semblance of product-market fit,” said Bapu, reflecting on the summer of 2021. “We had proven our product. We had about 200 live customers on the platform… We were excited about bringing DeepScribe to more customers and looking for the best partners to us there — not just in the short term but also in the long term. We had a long-term vision… and wanted a partner that bought into that vision.”

Eventually, the company closed a $30 million Series A round led by Index Ventures partner Nina Achadjian, as the duo discussed on the latest episode of TechCrunch Live, our weekly program featuring entrepreneurs, developers and investors. The entire episode is available below, along with a portion of DeepScribe’s Series A pitch deck.

If not for the fact that Bapu and his team had set deadlines for the funding round, he said DeepScribe might have not partnered with Index — Achadjian was on vacation when she read their pitch and tried to push the meeting to the following week, but Bapu said the process was moving fast. They met the following day.

Afterwards, Achadjian was sold. “When I walked out of the meeting, I went immediately to one of my partners, and was like, ‘Finally, I found the company that is following the right approach,” she said.

When I walked out of the meeting, I went immediately to one of my partners, and was like, ‘Finally, I found the company that is following the right approach.’ Nina Achadjian

She added that this was a critical win for DeepScribe, as it’s essential to leave potential investors fired up and armed with a few bullet points, including on the team and market.

Prepare for due diligence

Since Index was interested in DeepScribe, the firm started conducting due diligence.

Achadjian said founders can expedite the process by anticipating questions, especially on market size and competitive landscape. Companies can also provide investment firms with summaries of customer call notes.

“Then we come up with a list of key questions we want to go deep on,” Achadjian said. “What’s the business model? How do you scale? References. I actually called one of Akilesh’s Berkeley professors. We do a lot of customer calls and check references on the entrepreneurs. Then, honestly, we like to spend time with the team and see them in different environments.”

Stämm Biotech raises $17M for its next-generation, 3D printed bioreactor

In that past year, there’s been a lot hype around biomanufacturing — from growing cell-based meat to microbe-powered medicine manufacturing. But none of synthetic biology’s darlings without one key piece of equipment: a bioreactor. While the world debates how best to bring biology-fueled manufacturing into existence, one company is already rethinking its most important instrument.

Stämm Biotech, founded in 2014, is developing a desktop-sized bioreactor that looks pretty different from the tanks, tubes, and knobs traditionally seen in industrial or even benchtop bioreactors. The Buenos Aires-based company just announced a $17 million Series A round; combined with previous seed and pre-seed rounds, that brings its total raised to $20 million.

To get what Stämm is doing, you have to know what a bioreactor usually looks like, and what’s going on inside it. At a basic level, industrial scale bioreactors are giant, sterilized tanks. Those tanks are filled with the medium needed to grow a certain type of cell or microorganism, which may either produce the desired product or be the product itself.

These cell cultures are stirred using a motorized instrument, kept at the correct temperature using coolants, and supplied with the right amount of oxygen (or lack thereof) to support their growth. You can also do this process in a single-use bag, rather than a tank, which cuts down on the time needed to re-sterilize a tank before you can grow something else.

What Stämm has done is essentially cut the tank, stirring, and tubes out of the equation entirely. Instead, it’s developing a unit that 3D prints a dense network of microchannels that pass cells through the nutrients and oxygen they need. The movement itself acts as the stirring motion.

An example of a 3D printed fluid channel piece. Cells, oxygen, and nutrients can be added at a variety of places.

Those channels are designed using Stämm’s software component. You can think of the whole process as a “CDMO [contract development and manufacturing organization] on the cloud” as Yuyo Llamazares, the co-founder and CEO of Stamm told TechCrunch.

“We detected this breach between the will to develop a biological product and the abilities of tools that were out in the market. That inspired us to take ownership of this problem,” he said.

There’s already been significant interest in the biomanufacturing space based on the idea that growing stuff in cells is the next wave of manufacturing, from biopharmaceuticals to chemicals, textiles, fragrances, and even full cuts of meat.

For instance Ginkgo Bioworks, which reached IPO with a $15 billion valuation, is one company especially bullish on both pharma and non-pharma applications of biomanufacturing. But the evidence of such world-changing manufacturing has leaked in slowly. (And, as of writing, Ginkgo’s market cap was closer to $7.24 billion)

None of the promise of biomanufacturing can actually happen without the bioreactors. Stämm’s approach is to scale down the size of the reactor through the use of microfluidics.

CG representation of the fluid flow through one of the printed pieces.

At the moment, the company claims to be able to reduce the size of a biomanufacturing facility by two orders of magnitude. But it is still operating on a smaller scale than most large bioreactors. Stämm’s bioreactors can reach an output of about 30 liters, not the thousands often seen at industrial scale. (That said company does claim that its core concept can scale to about the to about 5,000 liters).

Despite the potential of the technology, Stämm is still in the early stages of commercializing it. It currently is working with one European biopharma company focusing on producing biosimilars, and says it has five potential new partners in the pipeline. The company plans to move to “pilot scale” in 2022.

At this moment new partnerships are Stämm’s major metric of success, said Llamazares. “We want to interact firsthand with as many partners as possible, understand how the product that we have developed can further help,” he said.

If you dive a bit deeper into the business side of things, Stämm is still working out some kinks. When I asked Llamazares the cost of one of the units, he didn’t give a dollar figure. Stämm is looking to get clients used to working with microfluidic bioreactors, as opposed to the traditional machines, he said. In the meantime, the price of the machines and services isn’t fixed.

“We are exploring at this stage, understanding diverse business models and interaction with clients,” he said.

As for this round, Stämm plans to double its headcount to around 200, and expand its international presence. The company will also further refine and develop its microfluidic bioreactors and the tools needed to control them.

New investors in the round include lead investor Varana, Vista, New Abundance, Trillian, Serenity Traders, Teramips, Decarbonization Consortium. They join existing investors Draper Associates, SOSV, Grid Exponential, VistaEnergy, Teramips, Cygnus Draper, and Dragones VC, who also participated in the round.

The PR boss behind Groupon, Lemonade and Squarespace shares how to land press coverage at TechCrunch Early Stage

Fledgling early-stage founders need two essentials to get their startups off the ground and onto solid footing — funding and media exposure. Earned media can translate into funding, but it can also translate into more recruiting options for folks who have just fundraised. And, if you place an article in the right publication, it can also grow your customer base.

Media coverage in credible outlets can shift your startup’s trajectory in the right direction without using any of your marketing dollars. It introduces your company to a wider or more targeted audience and, ultimately, it can be a sign that you’ve finally made it.

Sounds great, right? But you’re not the only startup looking to score high-quality media coverage. Journalists are inundated with a veritable firehose of pitches on the daily. They, like their audiences, can have short attention spans and will likely grow impatient with pitches that are too long-winded or aren’t relevant to them.

Learning how to establish mutually respectful, enduring relationships with journalists will serve you now and throughout your entrepreneurial career. Developing your media-pitching skillset ranks right up there with honing your investor pitch.

That’s why we invited Elliot Tomaeno, founder and CEO of ASTRSK, to share best practices in the aptly named session, How To Get Earned Media at TechCrunch Early Stage on April 14. He’ll detail the way journalists think about news and outline effective strategies to cut through the noise and grab their attention. In short, he’ll explain why he believes the most important work takes place before you send the first email to a reporter.

Tomaeno founded ASTRSK, a NYC-based PR firm, in 2012. He brings a wealth of experience weaving compelling startup stories and pitching them to the press. During the past decade, Tomaeno’s client roster has included dozens of innovative companies including Groupon, Lemonade, Misfits Market, Moo, Prime Video, Squarespace, THINX and TomboyX.

ASTRSK has participated in launching more than 300 startups and tech products, and it’s been part of 12 exits. An angel investor, Tomaeno placed bets on the Female Founders Fund and is an LP in Primary Ventures.

Prior to ASTRSK, Tomaeno spent 15 years developing his PR acumen at various agencies in San Francisco, NYC, London and Paris. Companies he worked with include Facebook, Eventbrite, Squarespace, Frank & Oak, Glu Mobile, ClassPass and Zola.

Tomaeno’s spent his life telling startup’s stories to the press, and at TC Early Stage, he’ll share the right way to attract and pitch journalists to help you land invaluable media exposure for your business.

TC Early Stage sessions provide plenty of time to engage, ask questions and walk away with a deeper, working understanding of topics and skills that are essential to startup success. There are just a few more tickets left at this price so register now to reserve your seat before prices almost double!

Equity Monday: Fintech consolidation could be picking up

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. Every Monday, Grace and Alex scour the news and record notes on what’s going on to kick off the week.

This weekend was yet another that was full of news from Ukraine, which meant that the tech market was slightly quieter than usual. But not so quiet that we didn’t have lots to chat about, so here’s the latest:

• The Russian startup market isn’t huge — data here — but when we consider the number of startups in Ukraine as well, the impact of Russia’s war and the world’s sanctions will bite. Russia is also tangling with American tech giants, which isn’t going well.
• Over the weekend, the American Republican Party bashed large American tech companies. Gone are the days when the GOP was a reliable simp for corporate power. Today it’s more fashionable to pump SPACs like TMTG, or Rumble.
• Weee! raised a huge sum from the second Vision Fund, we report, and OneCard is set to raise a massive round in short order, despite how recently it announced its preceding round. (Oh, and this looks very neat.)
• And Zip is buying Sezzle, in more BNPL market consolidation. A sign of the times, we decide.

That is our show! Lots more to come this week, so get ready!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Ownit helps brands sell products, at the point of discovery, with one click

We’ve all seen a product on social media that looks interesting, so you click the “shop now” button and are taken over to a new site. But wait, you weren’t finished on the social media site, and when you go back, everything has refreshed.

Ownit unveiled a checkout experience today, after testing with 10 companies, that gives direct-to-consumer brands a way to sell their products without that interruption. Its technology connects social, commerce and payment options at the point of discovery so consumers can buy in one tap via an “Ownit Connected Checkout link.”

From the link, consumers go to a web page interface on top of the app and can make purchase choices from their favorite commerce site, including Shopify and Amazon, and pay with Apple Pay, Google Pay, Shop Pay or PayPal — features not often available because some social media sites don’t often play well with certain payment options, Ownit co-founder and CEO Payman Nejati told TechCrunch.

Nejati started San Francisco-based Ownit less than a year ago with Evan Shiue and Joel Tan, and all three have vast experience in checkout. This is Nejati’s fifth startup, and most of his experience is in grocery checkout, while Shiue has a background in autonomous checkout at Standard Cognition and Walmart, and Tan in conversational checkout with Amazon’s Alexa.

The global pandemic was the driver for many people to start an e-commerce brand, and while many tools enable them to start easily, Nejati says the right tools haven’t been there to help those companies grow as easily. In addition, brands still deal with challenges, like cart abandonment rates of 75%.

Needless to say, they’ve thought a lot about what’s going on at the point of purchase, even going so far as to boast that customers will double sales conversion or pay nothing. They knew they were on to something as they saw checkout companies like Bolt, Checkout.com and Rapyd collectively raising over $3 billion investments in the past 18 months.

Image Credits: Ownit

“We knew checkouts at the point of purchase will explode, but we wonder if the user was going to the storefront, and is the company investing in sending them there from another platform, like social media,” Nejati added. “At the same time, the new iOS was making those costs unbearable. So we thought, what if you don’t have to go there, but we could capture someone at the point of discovery — that was the lightbulb moment.”

Proving that checkout continues to be a hot area for investors, Ownit itself announced initial funding Monday, an $8 million seed round from Caffeinated Capital, SciFi VC, GGV Capital, Abstract Ventures and a group of angel investors that include founders and executives of companies including Meta, Pinterest, Honey, Product Hunt, Standard Cognition and Anycart.

Nejati explained Ownit is like the “Plaid of e-commerce;” what it is doing is a “heavy tech lift,” involving connecting people, merchants and payment options seamlessly. The ultimate goal being to become the merchant of record by going after capital to get everything squared away correctly from the beginning versus taking shortcuts that make it difficult to scale.

As such, the new capital will be deployed into what Shiue called “the three Cs”: conversion, which he considers “the North Star for its brands;” customer onboarding; and connections to deepen the three pillars of its tool suite of social, commerce and payment platform relationships.

The company has 11 employees currently and Shiue expects to be at 30 by the end of the year.

Among Ownit’s 10 early beta customers are consumer packaged goods companies, cosmetics and nutrition. Customers were encouraged to test sales through Shopify versus through Ownit, and Shiue said initial results have been positive, showing campaigns saw an average of two times the conversion lift via text marketing and three times conversion via email marketing.

Up next, Nejati and Shiue say they still have some catching up to do in the market as they work to build out this brand new space in checkout.

Checkout is the key to frictionless B2B e-commerce

Flashfood raises $12.3M to scale its grocery app that helps tackle retail food waste

Toronto-based Flashfood, a mobile marketplace that provides customers with access to discounted food nearing its best-by date, has raised $12.3 million in Series A funding led by S2G Ventures. The app allows users to browse through available deals at participating stores near them. Customers can also purchase items directly in the app and then pick up their order from the Flashfood zone in their participating store.

The app was founded based on Flashfood CEO Josh Domingues’s personal experience in 2016. His sister who was a chef called him one night distraught saying that she had to throw away $4,000 worth of food. Domingues thought it was a joke but was shocked to learn that the food was from a catered event and that throwing out uneaten food was the norm in the food and grocery industries. After months of researching, Domingues thought about creating an app that lets you buy food nearing its best before date at a discounted price, after which Flashfood was born.

Founded in March 2016, Flashfood has numerous grocery partners across Canada and the United States, including Giant, Loblaw, Giant Eagle, Tops, Family Fare, Stop & Shop, Tops, Price Rite Marketplace and more. Flashfood says it has saved shoppers over $100 million on their grocery bills and that regular shoppers save more than $540 per year on average through the app. The company also says it has diverted more than 34 million pounds of food from landfills.

As for the new funding, Flashfood CEO Josh Domingues says the investment will be used to support the company’s continued expansion in the United States and allow it to work toward a more sustainable food system.

“The funding will be used to expand our U.S. presence to offer more shoppers discounted grocery items that would otherwise end up in landfills,” Domingues told TechCrunch. “In addition to expanding Flashfood’s footprint through new grocers and other strategic partnerships, we’re also investing in our technology to make Flashfood accessible to a broader base of consumers.”

Image Credits: Flashfood

Flashfood’s Series A investment included participation from ArcTern Ventures, General Catalyst, Food Retail Ventures, Rob Gierkink and Alex Moorhead. S2G Ventures managing director and founder of OpenTable, Chuck Templeton, will also be joining Flashfood’s board of directors.

In terms of the future, Domingues says Flashfood will continue to expand its existing partnerships in more locations and that the company will have more to announce in the coming months.

“We’re currently focused on scaling across the US, expanding our existing partnerships into more locations and adding new partners to make Flashfood available from coast to coast,” he said. “As we do that, we’re exploring opportunities to further our impact across the supply chain and will have some exciting news around that in the coming months. We know that retail food waste is a global issue and the category potential is as staggering as the size of the problem. Solutions are urgently needed and ultimately, we’re building a company to solve the retail food waste problem at a global scale.”

The app is currently available in Ontario, Quebec, Manitoba, British Columbia, Nova Scotia, Prince Edward Island, New Brunswick, Saskatchewan, Alberta and Newfoundland. As for the United States, the app is available in Kentucky, Nebraska, Indiana, Iowa, Wisconsin, Illinois, Florida, Michigan, Ohio, West Virginia, Virginia, Maryland, Pennsylvania, Delaware, New York, Massachusetts and Rhode Island. The app can be downloaded through the Apple App Store and the Google Play Store. 

HearHere raises $3.2M to scale its immersive storytelling road-trip app

Santa Barbara-based HearHere, the company behind an audio entertainment and immersive storytelling road-trip app, has raised $3.2 million in seed funding led by RV and outdoor retailer Camping World. The app aims to foster deep connections and understandings of the places and histories of the land that users are traveling through when on a road trip. With users’ permission, HearHere pushes information to users as they’re driving, giving them informational tidbits in three- to five-minute segments about their surroundings, including points of interest they might not have known about.

Launched in August 2020, HearHere currently has more than 100,000 registered users and offers more than 8,880 stories across the United States. The GPS-powered app serves up stories based on users’ location and interests. HearHere CEO and co-founder Woody Sears told TechCrunch in an interview that the stories inform users about the history and natural landscape of the area that they’re in. About half of the stories featured in the app are based on history, while the rest focus on national wonders, sports, music and local insights.

“There’s no shortage of stories that can be told about all these places in America,” Sears said. “There are millions of stories, so you have to be somewhat selective in the beginning. For some of those, we were inspired by things like historical markers, and then [took] them a layer deeper. We’re not just focused on major tourist destinations, like cities and national parks, but on all the things in between that connect people to cities.”

Once users enable location access, they can explore nearby stories based on their current location. When users aren’t on the road, they can access a map of the United States and choose to see stories based on their interests. The idea of the app is to surface the unknown or forgotten history of regions. Sears’s neighbor, actor Kevin Costner, liked the idea of the app so much that he joined its team as a co-founder, narrator and investor in 2020. 

Image Credits: HearHere

“I serendipitously met Woody through our children and was immediately hooked on the vision and mission of HearHere,” said Costner in a statement. “HearHere prioritizes authenticity and truth in our stories. We cover America’s past, which as you know, in addition to the rich stories, unfortunately also involves a deep history of tragic events like the displacement of Indigenous people, the treatment and history of African American people, the experiences and influence of the Hispanic and Asian communities, and the many, many other groups of peoples who came to this country to pursue all of the opportunities, hopes and dreams that it offered. We tell these stories because they are crucial to understanding the full history of a location and our nation, and until those thousands upon thousands of stories are chronicled and told, our history isn’t complete.”

In terms of the new funding, Sears says the investment will be used to continue to grow the app’s content library and expand its functionality in different ways, such as introducing offline listening capabilities. The startup also plans to use the funding to grow its team. HearHere currently has 26 people on its content team, primarily consisting of contractors with a background in travel journalism. The team also includes researchers, writers, editors and narrators.

The company’s seed round included a strategic investment from AAA and participation from Pasadena Angels, SeraphGroup and others. The seed round follows HearHere’s $1.6 million pre-seed funding announced last year, which also included investments from Camping World, AAA, Pasadena Angels and more. Sears said Camping World’s involvement in HearHere’s pre-seed and seed funding round was a result of the companies’ “natural synergy,” as HearHere provides entertaining and educational content that RVers can enjoy during their journeys throughout the country. Last year, Camping World announced plans to integrate HearHere into its trip planning tool to provide consumers with real-time content as they travel.

The app is available on the Apple App Store, with an Android launch expected to come soon. Free accounts come with five stories, while paid accounts cost $36 per year and come with unlimited access. HearHere is currently available in the continental United States, with plans to launch in Alaska and Hawaii later this year.

Weee! delivers second big funding round in a year, this time backed by SoftBank

Coming off of a year where monthly active users grew 150% year over year, ethnic e-grocer Weee! secured $425 million in Series E funding toward its goal to be “the primary source for food at home,” Larry Liu, Weee!’s founder and CEO, told me.

It’s been a few years since we dug into what the company was doing, but to bring you up to speed, it was founded in 2015 and offers over 10,000 locally sourced and hard-to-find Chinese, Japanese, Korean, Vietnamese, Filipino, Indian and Latin offerings for customers.

One of Liu’s missions is product assortment, so Weee! typically adds more than 500 new products per week. It also partners with over 1,000 restaurants to offer authentic food-at-home options for customers, many as a result of the company’s acquisition of RICEPO, an Asian food delivery company, in October.

This new monster round not only comes about a year after the company’s $316 million Series D round last March, but boosts Weee!’s valuation to $4.1 billion. It also nearly doubles the company’s total fundraising, bringing it to over $800 million to date, Liu said.

Taking in the new capital was an intentional move for Liu, who wants to grow the business to the next level. While it has made progress, he wants to deepen Weee!’s supply chain, focus on building relationships with vendors, do more direct importing of products to the U.S. and expand into two more ethnicities.

“We have a really powerful and unique value proposition in targeting underserved communities and want to offer the most amazing assortment for the community,” he added. “That is our biggest differentiation, and that strategy is working well for us.”

In addition, the company will also advance its warehouse automation and artificial intelligence technology to offer the most relevant product recommendations.

Weee! Currently has about 1,500 employees and will continue to build out a team to scale, including on the go-to-market side, where Liu said the company had not invested heavily before, saying, “We are a best-kept secret, and a lot of people didn’t know about us, but we want to make sure people know what we are doing.” The company this month hired filmmaker Jon Chu as chief creative officer.

SoftBank Vision Fund 2 led the financing and was joined by Greyhound Capital. As part of the investment, Lydia Jett, managing partner at SoftBank Investment Advisers, will join Weee!’s board of directors.

“The market for ethnic groceries and food is massively underserved in the U.S. and we believe that Weee! is in a prime position to meet the demands of customers,” Jett said in a written statement. “Weee!’s strong execution capabilities and reach across multiple ethnic groups, coupled with a unique customer experience model leveraging AI, has enabled it to scale effectively in a rapidly evolving grocery market.”

For Liu, product assortment and pricing are most important. He is looking to expand into household and beauty items so that Weee! can transition into more of a mainstream store versus only ethnic items.

“We believe convenience is important, too, but that doesn’t mean you have to get items in 30 minutes,” he added. “We are focused on bringing people affordable access to the products they love and see the future being a store where we can offer a wide variety of products.”

What grocery startup Weee! learned from China’s tech giants

Better Dairy slices into new funding for animal-free cheeses

Food tech company Better Dairy is closer to getting its aged and hard cheeses into the testing phase after securing $22 million in Series A funding.

The U.K.-based company, founded in 2019 by Jevan Nagarajah, is still in the R&D phase of developing animal-free cheeses using precision fermentation. We initially got to know Nagarajah and Better Dairy back in 2020 when the company raised £1.6 million in seed funding in a round led by Happiness Capital.

At the time, he explained that animal-based dairy farming was “hugely unsustainable,” needing 650 liters of water to produce just 1 liter of milk and utilizing a process that emits the equivalent of over 1.7 billion tonnes of CO₂ into the atmosphere each year.

Instead, Better Dairy is using precision fermentation to produce products that are molecularly identical to traditional dairy, Nagarajah said. The process is similar to brewing beer, with the end result being dairy.

While other food tech companies are tackling softer cheeses like mozzarella or whey proteins, Better Daily is targeting hard cheeses, a process that is more complex, in a more sustainable way.

Image Credits: Better Dairy

“We see limitations in hard cheese, similar to trying to create animal-free steak,” Nagarajah added. “By building a team that includes a chief scientific officer with 30 years of expertise making proteins for the pharmaceutical industry, we realized we could go complex and do it consciously.”

Happiness Capital is back for the Series A, this time as a participant to the co-lead of RedAlpine and Vorwerk. Joining them are Manta Ray, Acequia Capital and Stray Dog Capital.

Better Dairy is not alone in going after the dairy space. Companies like Clara Foods, NotCo, Climax Foods and Perfect Day are all working on animal-alternative cheese and dairy products. However, Nagarajah believes that the new funding, aimed at advancing the precision fermentation technology, will help the company get out ahead of the competition to become the first player to launch hard cheeses in this space.

The company is investing the capital into expanding its workforce from eight people to 35 and into a new 6,000-square-foot laboratory and office space in East London.

Better Dairy is working on the science to nail down texture and then maturation so that all of the components can come together under one product that has a shelf life. Nagarajah is optimistic that the precision fermentation will get to unit economics — a.k.a. price parity with similar artisanal cheeses — in the next 18 months or so.

“We need the right space and equipment to upgrade our science,” he added. “It is not just about being animal-free and sustainable, but also delicious. If it tastes better then it becomes a no-brainer and a benchmark for success. There is a benefit for doing it the right way because if not, the time it takes to unwind it all could take years.”

Looking Beyond Meat, the future of food investment looks pretty cheesy

Fintech Roundup: More female founders in fintech? Yes, please

Welcome to my new weekly fintech focused column. I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and me riff on all things startups! And if you want to have this hit your inbox directly once it turns into a newsletter (soon!), sign up here.

It’s been really tough concentrating during the latter part of this week due to global events so forgive me if my tone is less upbeat than normal. My heart goes out to all of the people of Ukraine and our TechCrunch readers there.

This week, I wrote about a couple of instances in which fintech companies went horizontal with their approach. Pipe, which aims to be the “Nasdaq for revenue,” announced it was expanding into media and entertainment. And corporate spend startup Ramp told TC exclusively it is branching out in the travel space.

Truth be told, Pipe’s foray into media and entertainment was a bit of a surprise and it will be interesting to see if it proves to be a lucrative decision. The company seems confident that its model can apply to many verticals beyond SaaS, which is where it started.

Meanwhile, Ramp’s expansion into travel puts it into direct competition with TripActions, which did the reverse move when the pandemic hit but pivoting from helping companies manage travel expenses to corporate spend in general. You may recall that a few weeks back, I took a look at this increasingly crowded and competitive space. It’s clear that it’s only going to get more heated and you know I’ll be paying close attention.

Women in Fintech

Image Credits: Co-founders Gloria Lin and Joel Poloney / Bonnie Rae Mills Photography

It feels like we are seeing an increasing number of fintech startups led by females and I’m very much here for it. Last week I wrote about two startups that had female co-founders and CEOs and I was so impressed with them both. Gloria Lin’s background as Stripe’s first product management hire and being on the team that helped prototype ApplePay paved the way for her to eventually help start Siteline, a fintech aimed at helping commercial trade contractors get paid faster and easier. Her mission is also a personal one. Her father owned a trade contracting business while she was growing up and she saw firsthand the struggles he faced with having to wait months to get paid. Construction is the one of the least digitized industries out there. So it was good news to report that Siteline had emerged from stealth with $18.4 million in funding — $15 million of which was raised in a Series A led by Menlo Ventures and $3.4 million that was raised in a seed round led by Brick & Mortar Ventures and First Round Capital – to advance on its effort to “reimagine construction finance.” This is also at least the fourth construction tech company I’ve written about in the past year with a female co-founder. Love to see it!

Image Credits: Co-founder and CEO Lily Liu / Piñata

I also reported on a startup called Piñata, co-founded by Lily Liu, which wants to help renters get rewards for paying their rent on time and build their credit at the same time that just raised $13 million in Series A funding led by Wilshire Lane Capital toward that effort. I have written about other startups who want to help renters build a credit history (because really, how unfair is it that on-time rent payments have not been factored in historically?). Piñata says its differentiator in that it is free to renters. The company makes money from the property management companies and landlords that sign up for its service via a monthly subscription for a premium customizable program. It also generates revenue through brands and partners on the business development side of what it does via fees. 

Still, we have a long way to go in seeing more equal gender representation when it comes to leadership roles in fintech. In 2020, Deloitte reported that “in the world of startups, the global fintech founder community was still dominated by men, with women making up just 7% of the total pool.”

Funding across the globe

Africa

MarketForce, a retail B2B and end-to-end distribution platform founded in Kenya, raised $40 million in Series A funding for its merchant inventory financing and expansion across Africa. MarketForce, which was launched in Uganda, Tanzania and Rwanda last year after growing beyond Kenya and Nigeria, plans to introduce buy now, pay later (BNPL) options to help merchants access fast moving consumer goods (FMCGs) on credit. It also plans to enter additional markets in East and West Africa, reported Annie Njanja.

Asia

India’s Niyo raised $100 million in a new financing round as the consumer-facing neobank platform looks to add lending and insurance to its offerings and make deeper inroads in the world’s second largest internet market. Accel and Lightrock India co-led the Bengaluru-headquartered startup’s Series C financing round, reports Manish Singh, our man on the ground in the country.

Philippines-based fintech PayMongo, which enables merchants to accept digital payments, raised $31 million in Series B funding with an eye on regional expansion. Investors include Justin Mateen’s JAM Fund, ICCP-SBI Venture Partners and Lisa Gokongwei’s Kaya Founders, along with returning investors Global Founders Capital and SOMA Capital, writes Catherine Shu.

Europe

HUBUC, which touts itself as “AWS for financial services” raised a $10 million seed funding round co-led by WndrCo and Runa Capital. The startup emerged from Spain.

Latin America

Image Credits: Leasy

Leasy, a Peruvian startup that offers automobile financing to ride-hailing drivers in Latin America via a subscription model, secured $2 million in equity and $15 million in debt. I talked to the company’s founders, who actually hail from Italy and Spain originally, and they emphasized their goal with the startup is to help break the cycle of poverty for some of the unbanked in Latin America. Impressively, the company says it has been profitable since its first month of operation. They plan to use their new capital in part to expand to Mexico.

United States

Promise, which works with utilities and government agencies to provide flexibility in payments for people who can’t cover their whole water or electricity bill at once, has seen enormous growth over 2021 and raised a $25 million B round to keep accelerating, reports Devin Coldway. I love this concept.

Ember, a Salt Lake City-based proptech company, raised $17.4 million in a financing that was led by PayPal co-founder Peter Thiel. The startup’s mission is to develop Ember as “a streamlined technology platform  for buying and owning luxury vacation property.”

Speaking of luxury vacation properties, Pacaso – which wants to give people a way to co-own a luxury home – announced last week that it generated nearly $300 million in full year 2021 revenue and that in its first year of operation, it sold about 400 units. In September, we reported that Pacaso – which was co-founded by former Zillow executives Austin Allison and (CEO and co-founder) Spencer Rascoff – had raised $125 million at a $1.5 billion valuation.

Down in Tampa, where it’s likely warmer than the freezing temps Austin has been seeing, a startup called Funnel Leasing announced a $36.5 million Series B. The property management software company called the round, which was led by RET Ventures, “preemptive.” Funnel started as an apartment marketing platform in 2010, but in 2018, began expanding its focus and today describes itself as a “full-stack platform for the entire apartment rental process.” 

FeeX, a New York-based fintech that aims to help financial advisors “securely” manage their clients’ retirement accounts and other held away assets, announced last week that it had raised $80 million across three recent funding rounds led by Lightspeed Venture Partners. 

Back on the West Coast, San Mateo-based Skipify, a “frictionless commerce” startup that lets merchants offer instant checkouts on their websites, apps and marketing channels, announced that it had received a strategic investment round from PayPal Ventures, Synchrony, Amex Ventures and Okta Ventures. While it did not disclose how much it raised, Skipify did say that this round, in addition to its recent Series A co-led by Flourish Ventures and Point72 Ventures, follows its “partnership with Google to enable shopping and interactive features inside the email channel.”

Signs of turbulence?

Not all news this past week was rosy.

Nu, the parent company of Nubank, reported its fourth-quarter financial performance, and in response to rapid revenue growth and improving economics, the company saw its value drop 9% in regular trading after falling sharply in recent sessions, reported Alex Wilhelm. As of mid-week, Nu was worth just $8 per share, and was officially underwater from its IPO price and down about a third from its all-time highs. In general, publicly traded fintech stocks have fallen by 40% since late October 2021, reports Forbes, with valuations taking a beating.

So, clearly, Nu’s not alone in its struggles. Digital bank Chime is reportedly planning to postpone its planned IPO until the second half of this year, according to Forbes.

Also this past week, VCCircle reported that OKCredit – a fintech backed by the likes of Tiger Global and Lightspeed – is said to have laid off around 40 employees, as the Bengaluru, India-based startup reportedly “struggles to monetize its business.”

How all this recent vulnerability will impact private fintechs remains to be seen, but one has to wonder if investors will move a bit more cautiously than they did last year when it felt like they were basically throwing money at companies in the space hoping to be backing the next big thing.

Still, more capital

Despite some recent bumps, the amount of capital out there for startups in the space continues to grow.

i80 Group, an investment firm that provides credit to growth and venture-backed companies, announced a multi-year fund commitment from ICONIQ Capital. It did not disclose the amount of the investment. Founded by former Goldman Sachs investment banker Marc Helwani in 2016, i80 told me last year that it had committed more than $1 billion to over 15 companies, including real estate marketplace Properly, finance app MoneyLion and SaaS financing company Capchase.

Image Credits: Wilshire Lane Capital Founder and Managing Partner Adam Demuyakor / LinkedIn

Wilshire Lane Capital, which invested in the aforementioned Pinata, announced it had received $40 million in LP commitments with the first close of its debut fund. The fund’s target size is $125 million.  Founded by Adam Demuyakor, the firm’s latest fund is focused on investments in early-stage (i.e. predominantly Series Seed through Series B stages) proptech companies. A couple of very cool things about Wilshire Lane Capital besides its investment thesis is that a) it’s a Black-owned VC firm, which we simply need more of and b) more than 80% of its portfolio companies have a founding member or management team with at least one woman or underrepresented minority. 

One-stop shops

Last but not least, personal finance company SoFi revealed it was acquiring banking-software maker Technisys SA in an all-stock deal worth $1.1 billion. Investors didn’t seem thrilled with the news, with the company’s stock dropping about 8% after the announcement after already dipping by more than 30% since the beginning of 2022. The acquisition appears to be symbolic of SoFi’s intent to transition from its original focus of refinancing student debt to more of a one-stop shop, my friend The Financial Revolutionist points out, who wonders if they are concerned that the company is biting off more than it can chew?

This kind of goes back to the point I made at the beginning of this column. More and more fintechs appear to be going horizontal. In some cases, it’s a risk worth taking. But not all. Only time will tell which companies will emerge the better for it.

Until next Sunday, take care and be safe.