All posts by Moderator

Startups Weekly: What the E-Trade deal says about Robinhood

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How well do Robinhood’s financials stack up against incumbent online brokerages? While we wait for the seven-year-old company’s long-planned IPO, Alex Wilhelm examined Morgan Stanley’s big $13 billion purchase of E-Trade for fresh data comparison points. Robinhood has 10 million accounts — twice what E-Trade has — but it also appears to make much less money per user and has far fewer assets under management, as he covered for Extra Crunch. So while its fee-free approach has destroyed a key revenue stream for competitors, it still has to grow its own “order-flow” business into its private-market valuation.

One solution is to make the platform stickier via social features. On the same day as the E-Trade deal announcement, Robinhood launched a new Profiles feature to encourage users to share stock tips. Josh Constine explored the offering and where it is headed on TechCrunch, concluding that “Profiles and lists, and then eventually more social features, could get Robinhood’s users trading more so there’s more order flow to sell and more reason for them to buy subscriptions.”

Alex also took a look at a new report on fintech funding, which found last year was a peak overall — but skewed towards later-stage companies. Certainly, the wealth management segment is looking mature.

But the category is massive, with many more incumbents left to disrupt. What are fintech investors looking for? Check out our popular investor survey on this topic from November.

How your startup can use TikTok for growth

You know that TikTok is where the cool kids are these days, but maybe… how do I say… it is not the social media platform you know best when it comes to growth. So Geneviève Patterson and Hannah Donovan, founders of TikTok-oriented video editing app TRASH, have published a two-part guide to help you figure it out.
The first part, freely available on TechCrunch, walks you through how to increase your authority ranking in the TikTok algorithm, its review process, and pointers for making your own content. The second part, for Extra Crunch subscribers, goes deep on how TikTok decides whose content gets featured more (and less).

Fifth Wall’s Brendan Wallace: the proptech sector is hot despite WeWork

“Our mandate is any technology that can be strategic to the real estate industry,” the prolific investor told Connie Loizos in an extended interview for Extra Crunch this week. While WeWork may have depressed some investor interest, plenty of models are working great across various segments — so he and his partners are raising more funds. One of the hottest sectors, perhaps surprisingly, is in sustainable buildings. As Wallace details, public pressure, large-tenant pressure, large-investor pressure and new metro requirements have removed any choice that the industry has in the matter:

Make no mistake; we are front-and-center to what is happening in the real estate industry and the collision with technology, and this is the single-most-important thing that has happened to the real estate industry in the last five decades. The real estate industry is going to have to go carbon-neutral and that is brand-new.

Is this sector also your focus? Be sure to check out our survey of investors in construction robotics from last week to find out some of the latest opportunities, plus our overview survey of real estate and prop tech investors from November.

The future of manufacturing and warehouse robotics

Ahead of our big robotics conference at UC Berkeley in early March, we have been producing a whole series of surveys on robotics verticals. This week, our resident financial analyst Arman Tabatabai teamed up with our hardware editor turned conference organizer, Brian Heater, to do a series of interviews with VCs who are focused on warehouse and manufacturing robotics. Investors include:

Read more here.

Tell TechCrunch about gaming startups and remote work

Our media columnist Eric Peckham wants to feature your advice in two upcoming articles. If you have relevant expertise, click the links below and share your opinions.

Across the week

Do AI startups have worse economics than SaaS shops? (EC)

Elon Musk says all advanced AI development should be regulated, including at Tesla (TC)

SpaceX alumni are helping build LA’s startup ecosystem (EC)

Dear Sophie: I need the latest details on the new H-1B registration process (TC)

Tracking China’s astounding venture capital slowdown (EC)

The rise of the winged pink unicorn (TC)

Voodoo Games thrives by upending conventional product design (EC)

Ex-YC partner Daniel Gross rethinks the accelerator (TC)

How companies are working around Apple’s ban on vaping apps (EC)

Rippling starts billboard battle with Gusto (TC)

#Equitypod

This week was a fun combination of early-stage and late-stage news, with companies as young as seed stage and as old as PE-worthy joining our list of topics.

Danny and Alex were back on hand to chat once again. Just in case you missed it, they had some fun talking Tesla yesterday, and there are new Equity videos on YouTube. Enjoy!

This week the team argued about org-chart companies, debt raises, some of the items mentioned above, and much more. Details here.

Fintech startups raised $34B in 2019

Financial services startups raised less money in 2019 than they did in 2018 as VC firms looked to back late stage firms and focused on developing markets, a new report has revealed.

According to research firm CB Insights’ annual report published this week, fintech startups across the world raised $33.9 billion* in total last year across 1,912 deals*, down from $40.8 billion they picked up by participating in 2,049 deals the year before.

It’s a comprehensive report, which we recommend you read in full here (your email is required to access it), but below are some of the key takeaways.

  • Early stage startups struggled to attract money: Per the report, financing for startups looking to close Seed or Series A dropped to a five-year low in 2019. On the flip side, money pouring into Series B or beyond startups was at record five-year high.

    Early-stage deals dropped to a 12-quarter low as deal share globally shifts to mid- and late-stages (CB Insights)

  • Emerging and frontier markets were at the centre stage of the most of the action: South America, Africa, Australia, and Southeast Asia all topped their annual highs last year.
  • Asia outpaced Europe in the second half of last year on both number of deals and bulk of capital raised. In Q3, European startups raised $1.6 billion through 95 deals, compared to $1.8 billion amassed by Asian startups across 157 deals. In Q4, a similar story was at play: European startups participated in 100 rounds to raise $1.2 billion, compared to $2.14 billion* raised by Asian startups across 125 deals*.
  • Emergence of 24 new fintech unicorns in 2019: 8 fintech startups including Next Insurance, Bight Health, Flywire, High Radius, Ripple, and Figure attained the unicorn status in Q4 2019, and 16 others made it to the list throughout the rest of the last year.

    The fintech market globally today has 67 unicorns as of earlier this month (CB Insights)

  • Insurtech sector, or startups such as Lemonade, Hippo, Next, Wefox, Bright Health that are offering insurance services, got a major boost last year. They raised 6.2 billion last year, up from $3.2 billion in 2018.
  • Startups building solutions such as invoicing and taxing services and payroll and payments solutions for small and medium businesses also received the nod of VCs. In the U.S. alone, where more than 140 startups are operating in the space, raised $4 billion. In many more markets, such startups are beginning to emerge. In India, for instance Open and NiYo are building neo-banks for small businesses and they both raised money last year.
  • Nearly 50% of all funding to fintech startups was concentrated in 83-mega rounds (those of size $100 million or above.): According to the research firm, 2019 was a record year for such rounds across the globe, except in Europe.

    2019 saw 83 mega-rounds totaling $17.2B, a record year in every market except Europe

  • Funding of Germany-based startups reached an annual high: 65 deals in 2019 resulted in $1.79 billion raise, compared to 56 deals and raise of $757 million in 2018, and 66 deals and $622 million raise in 2017.
  • Financial startups in Southeast Asia (SEA) raised $993 million across 124 rounds in 2019 in what was their best year.

*CB Insights report includes a $666 million financing round of Paytm . It was incorrectly reported by some news outlets and the $666 million raise was part of the $1 billion round the Indian startup had revealed weeks prior. We have adjusted the data accordingly.