So much for a December news slowdown.
The last few days have been so chock-a-block with news from a host of unicorns, we’ve all fallen behind. This morning, The Exchange is going into summary mode to help us better understand the full scope of recent unicorn activity.
Why unicorns? It would be fun to noodle on early-stage news — Salut raised $1.25 million this week and BuildBuddy picked up $3.15 million — but as we’re in the midst of an IPO cycle and 2021 could have even more public debuts than 2020, we have to keep current on unicorn updates.
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What will we cover, then? We’ll go back to Stripe’s possible new round and new valuation. We’ll touch on DoorDash and Airbnb’s expected IPO pricing, along with what we’ve learned from C3.ai’s own S-1 filings. There’s also Gainsight to talk about and the Slack-Salesforce deal.
That’s just the tip of the proverbial iceberg. There’s also recent news from Coinbase, Tanium, Postmates, Olive, Scale AI, Sinch, Gitlab and Kustomer. Then there are rounds for HungryPanda, Flock Freight and Flexe that might make them unicorns — or something rather close. (Update: Also Bizzabo, apparently.)
You can see why it all feels a little overwhelming. But don’t worry, we can get caught up together. Let’s go!
A cavalcade of unicorn updates
There’s no way to make it through all of this news in a reasonable number of words without employing bullet points. Out of respect for your time, I’ll be brief. That said, each of the following news items is worth digging into further if it catches your fancy.
Financial news
- C3.ai dropped an initial pricing range for its IPO. Given how far the company’s growth has slowed, C3.ai’s comfortable expected IPO valuation underscores how interested public markets are in software and tech shops. As far as a bellwether public offering, we have our eyes fixed on C3 and its expected debut that should come next week.
- DoorDash also released an initial price range this week with a valuation that could stretch to $32 billion on a fully diluted basis. Simpler share counts give the company a valuation of between $23.8 billion and $27 billion at its $75 to $85 per share price target. Regardless of how you prefer to calculate market caps of public companies, DoorDash is expected to see a huge valuation bump in its debut. That’s great news for its investors and employees alike.
- Stripe could be worth $100 billion in its next fundraise. We don’t have new gross payment volume data from the company, but its top line has to be in the billions given what we knew a while back. Why doesn’t Stripe go public? The only good answer to that question is, I reckon, that it is investing in some super complicated stuff that won’t pay off for a while, so it’s taking its time to set up for an even more glorious future as a public company. If it is just being shy, I’ll be cross.
- Airbnb is back, baby! That’s pretty much all you need to know. In more granular detail, the company’s valuation could stretch to $35 billion in its IPO, though if you don’t count unexercised options and the like, the numbers run between $26.2 billion to $30.1 billion. No matter: The company’s IPO will be executed at a multiple of its midcrisis valuation and can only be viewed as an impending fundraising success story. I have zero idea how the company will trade after floating, but Airbnb is about to raise quite a lot of much cheaper capital than it managed earlier in the year.
- Gainsight sold itself to private equity show Vista Equity Partners for $1.1 billion. The deal was worth an 11x multiple of the company’s roughly $100 million revenue range. There were some some question marks hovering over the news, like why Gainsight sold for such a low multiple. Perhaps its growth had slowed, or its margins were underformed for what we considered a full-bore software company. It doesn’t matter. The $1.1 billion deal is still a huge exit for a well-known company. And it’s a unicorn-level price, so it’s a unicorn event. So long as we get an eventual S-1 we’re fine with it.
- Olive, which Crunchbase News writes has “developed an artificial intelligence workforce for the health care industry,” recently raised $225.5 million at a valuation of $1.5 billion. If you are asking who as you read this, let me help. Olive is based in Ohio, according to Crunchbase, and has raised more than $450 million to date. And it raised three rounds in 2020. AI for health care is apparently big business.
- Scale AI is another unicorn in a hurry. Just four years old, the company has “created a visual data labeling platform that uses software and people to label image, text, voice and video data for companies building machine learning algorithms,” according to our own Kirsten Korosec, and it just announced a $155 million round at a valuation of $3.5 billion. The unicorn is roughly break-even, which implies that its business has good economics. And its new round implies great growth. What’s not to like?
- Sinch. SoftBank is still at it. After a return to form in its recent quarter, the Japanese telco-cum-venture-fund took a $690 million stake in Sinch, what our own Ingrid Lunden described as “a Swedish company that provides cloud-based ‘omnichannel’ voice, video and messaging services to help enterprises communicate with customers.” We presume that the buy values the aggregate at over $1 billion, though we are guessing. Why care about this one? First, it shows how much cash SoftBank is still willing to throw around. And, two, how cool is it to see a Swedish company do so well? Mycket häftigt!
- GitLab is a company The Exchange knows well, it having turned up in our $100 million ARR club series and part of our chat on the same topic at Disrupt. And we know that it reached $100 million ARR early this year, and $130 million ARR by September, roughly. Unsurprisingly, its rapid growth is attracting investor attention. Per CNBC, the company is “letting some employees sell a portion of their equity in an offering that values the company at over $6 billion.” Two things here: First, GitLab had originally targeted a 2020 IPO, but that was pushed back. Secondly, if the company is at, say, $150 million in ARR today, it’s finding buyers at 40x ARR. Goddamn.
- Kustomer is a company I had never heard of. Admitting this fact was an error, as a material slice of venture Twitter clowned on me for being so poorly informed. Regardless, Facebook knows about the firm as it is buying it for $1 billion. More here if it’s your jam.
- Postmates is now part of Uber, its deal closing this week. Postmates used to have an office next door to TechCrunch in San Francisco. Its CEO would shout hellos as you crossed the street, but then it outgrew the space and TechCrunch eventually left the area as well. (I miss that era of tech. It was smaller, more personal and more fun.) Regardless, Postmates is linking up with Uber because in the Great On-Demand Scale War, it fell behind its new parent company and DoorDash. Now it will have more heft behind it. Let’s see what sort of growth it can bring to the ride-hailing company.
- Slack-Salesforce is another news item on the topic of selling to a larger company after rivals got a bit too strong for comfort. In this case, Slack sold itself to Salesforce because Microsoft decided that it was going to dump resources into its competing Teams product, looking to beat back both Slack and Zoom with a single, integrated offering. The deal is huge and exciting. We did an extra podcast on it here.
- Bizzabo. Recall that $125 million Hopin round from a few weeks ago? Hopin is an online events business that just zoomed from $0 to $30 million in ARR. Bizzabo is a competitor. As I was writing to you this morning, TechCrunch’s report that the company just raised $138 million hit Techmeme. This is precisely the reason why I needed this post today. To put all the Legos back together in my head.
Nonfinancial news
- Coinbase tried to front-run an impending New York Times story last week. The story came out and made its front-running appear half-assed, in retrospect. I know you may disagree with me on this matter. Here’s my take regardless: It’s weird for Coinbase to accept all political changes to doing business that came before 2020 as sacrosanct — not discriminating based on, say, sexual orientation — and also to say that all future political elements of doing business that aren’t directly tied to its business are outside of its orbit and beyond its care. Also tech didn’t engage in politics for a long while and now the industry is a Congressional whipping post. Coinbase’s mission is inherently political as the company wants to break us out of the current, government-approved and comically ossified financial system. And politics is not a dirty word. And Black Lives Matter. Anyway, read the Times piece and the Coinbase blog and form your own view.
- Tanium is moving out of San Francisco. There are a number of these stories floating around about companies and individuals. San Francisco is a boom town. It is currently in between booms. It will boom again in the future. That may not be a tech boom. But tech boom or not, it is still one of the very best cities in the world.
Unicorn question marks
Closing, three rounds. $70 million for HungryPanda, $113.5 million for Flock Freight and $70 million for Flexe. We don’t have valuations on those investments, but I suspect that one or two of the three are now unicorns.
That’s the last few days of unicorn news that I am aware of. There’s probably even more.
In first IPO price range, Airbnb’s valuation recovers to pre-pandemic levels
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