Following a record year, Illinois startups kick off 2019 on a strong foot

Illinois’s startup market in 2018 was very strong, and it’s not slowing down. Let’s take a quick look at the state of venture in the Land of Lincoln.

Illinois’s startup market in 2018 was very strong, and it’s not slowing down as we settle into 2019. There’s already almost $100 million in new VC funding announced, so let’s take a quick look at the state of venture in the Land of Lincoln (with a specific focus on Chicago).

In the chart below, we’ve plotted venture capital deal and dollar volume for Illinois as a whole. Reported funding data in Crunchbase shows a general upward trend in dollar volume, culminating in nearly $2 billion worth of VC deals in 2018; however, deal volume has declined since peaking in 2014.1

Chicago accounts for 97 percent of the dollar volume and 90.7 percent of total deal volume in the state. We included the rest of Illinois to avoid adjudicating which towns should be included in the greater Chicago area.

In addition to all the investment in 2018, a number of venture-backed companies from Chicago exited last year. Here’s a selection of the bigger deals from the year:

Crain’s Chicago Business reports that 2018 was the best year for venture-backed startup acquisitions in Chicago “in recent memory.” Crunchbase News has previously shown that the Midwest (which is anchored by Chicago) may have fewer startup exits, but the exits that do happen often result in better multiples on invested capital (calculated by dividing the amount of money a company was sold for by the amount of funding it raised from investors).

2018 was a strong year for Chicago startups, and 2019 is shaping up to bring more of the same. Just a couple weeks into the new year, a number of companies have already announced big funding rounds.

Here’s a quick roundup of some of the more notable deals struck so far this year:

Besides these, a number of seed deals have been announced. These include relatively large rounds raised by 3D modeling technology company ThreeKit, upstart futures exchange Small Exchange and 24/7 telemedicine service First Stop Health.

Globally, and in North America, venture deal and dollar volume hit new records in 2018. However, it’s unclear what 2019 will bring. What’s true at a macro level is also true at the metro level. Don’t discount the City of the Big Shoulders, though.

  1. Note that many seed and early-stage deals are reported several months or quarters after a transaction is complete. As those historical deals get added to Crunchbase over time, we’d expect to see deal and dollar volume from recent years rise slightly.

More scooter dollars, Slack’s revenue projections, and the IPO traffic jam

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. We’re back! After what I think was our first-ever break, Kate Clark and I sat down to dig into the latest startup venture news. There was a lot. We had to skip a few rounds to squeeze the […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

We’re back! After what I think was our first-ever break, Kate Clark and I sat down to dig into the latest startup venture news. There was a lot. We had to skip a few rounds to squeeze the show down to size, but we still hit the biggest stories.

First, Lime and Bird are raising again. In Bird’s case, the company is sticking around its last valuation, adding a few hundred million to its coffers. Lime is said to be raising a hundred million more, bringing its valuation in line with Bird’s own. When all this is said and done, and what’s expected to happen actually does, Bird and Lime could add $700 million to their bank accounts, making both scooter shops double unicorns.

Next we tucked into the Chariot shutdown. Ford’s decision to shutter its bus-van-techie-transport startup that it bought back in 2016 was surprising news. (Chariot vehicles have become a regular part of the San Francisco cityscape over the years.) The company is shuttering its UK operations first, followed by its U.S.-based routes.

Pivoting back to our regular fare, Slack’s financials partially leaked. Early-2018 era projections aren’t the best tool for figuring out how a company is performing today, but it’s better than nothing. Slack has lots of cash, is growing very quickly, and is climbing toward the $500 million mark this year, if it’s old growth expectations hold up. (I tacked on Palantir’s latest into this segment as well.)

Finally, the government is partially shut down as you’ve heard. It’s blocking IPO progress for a host of companies, many of whom come from tech. How long this pileup builds will determine how soon any tech shop can debut.

It’s good to be back, and I promise to never mention Peloton again. If for no other reason than making our beloved producer laugh is verboten. Stay cool!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Global VC market sees highest-ever concentration of supergiant dollar volume in Q4 2018

Is the market mostly buoyed by the billions raised by the biggest private tech companies, or is a rising tide in this extended aquatic metaphor raising all ships?

For the global VC industry, 2018 was a supergiant year. Crunchbase projects that 2018 deal and dollar volume surpassed even the high-water mark left by the dot-com deluge and the drought that followed.

As covered in Crunchbase News’s global VC report reviewing Q4 and the rest of 2018, projected deal volume rose by 32 percent and projected dollar volume jumped 55 percent since 2017. For all of 2018, Crunchbase projects that well over $300 billion was invested in equity funding rounds across all stages of the venture-backed company life cycle. (This figure includes an estimate of transactions that were finalized in 2018, but won’t be publicized or added to Crunchbase until later. More on how Crunchbase projects data can be found at the end of that report.)

Is the market mostly buoyed by the billions raised by the biggest private tech companies, or is a rising tide in this extended aquatic metaphor raising all ships? In other words, is the bulk of the capital going to only a handful of the largest rounds? That’s what the numbers show.

In the global VC pool, capital is definitely sloshing toward rounds totaling $100 million or more. In the chart below, you can see what percent of reported global VC dollar volume was raised in “supergiant” rounds versus deals of smaller size.

 

In the year, over 56 percent of worldwide dollar volume can be attributed to supergiant rounds. With 61 percent of reported capital coming from supergiants in the final quarter, Q4 2018 has the highest concentration of supergiant dollar volume of any single quarter on record.

Big money weighs on the market

Following that same theme, the calendar year 2018 is the most concentrated year on record. In the chart below, we show how much capital was raised in non-supergiant (<$100 million) venture rounds over the past decade. (It’s basically the bottom part of the first chart, with the data aggregated over a longer period of time.)

For the first time in at least a decade (and likely ever) supergiant, $100 million+ VC rounds accounted for a majority of reported capital raised. So in summary: Q4 2018 had the highest share of supergiant VC dollar volume on record, and 2018 was the most concentrated year on record.

On the one hand, the results are not surprising, considering that the biggest-ever VC round (a preposterously large $14 billion Series C raised by Ant Financial) and several rivals for that top spot were closed last year. That big round made a big splash. It was the year of multi-billion-dollar global growth funds, SoftBank and scooter CEOs worth supergiant sums, at least on paper. But was it good for the smaller players too?

Seed and early-stage deal and dollar volume were both up in 2018, but then again, so is everything toward the end of a bull market cycle. The question is, when the bottom falls out, between supergiant and more normal-sized rounds, which has the farthest to fall?

SoftBank’s triple, Pinterest is going public, and the market meltdown

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had 75 percent of the core crew on hand to chat: Connie Loizos, Danny Crichton, and myself. Kate will be back on the show early next year, we promise. We were also joined by Menlo […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had 75 percent of the core crew on hand to chat: Connie Loizos, Danny Crichton, and myself. Kate will be back on the show early next year, we promise. We were also joined by Menlo Ventures‘ Venky Ganesan who was a super great addition to the team.

There was a lot to get through. In fact, we had to toss a few things overboard toward the end due to time. So, we didn’t get to US-China cross-border venture flows, or the new Lightspeed China fund, but we did dig into:

SoftBank’s latest three mega investments. SoftBank let loose a trio of titanic checks into three companies, including $385 million into Fair, a car-focused company, $400 million into Relay Therapeutics, which deals with “protein motion,” and $500 million into Cambridge Mobile Telematics. That’s what, $1.285 billion announced in a single week?

Pinterest’s impending IPO. As expected, Pinterest is going public. We riffed on its recent revenue growth and the timing of its debut. Honestly, I’m pretty giddy to read this S-1, and I doubt that I am alone.

The US market’s crisis. Recording this late in the day on the 20th, we cut the episode right after U.S. tech stocks took a pounding. Dropbox fell under its IPO price as other SaaS players like Box took big hits. Social fell, as Snap and Twitter both swooned, the former falling under $5 per share temporarily. The pain went on, and on, and on.

Big Chinese tech stocks at 52-week lows. It’s not only American tech stocks that are in trouble, however; Chinese tech shops that have already gone public are taking their lumps as well. Indeed, as Danny detailed, many firms that were running hot before are now testing full-year lows.

Equity’s impending two-week vacation. And to celebrate all of that, this podcast is taking the first two weeks of 2019 off. Mostly so that TechCrunch can decamp to Vegas for CES, but also because after more than 100 episodes, we need to catch our breath. (And restock the fridge with Red Bull. Danny did yawn on this episode, after all!)

Next week we have a special holiday episode involving the ever-brilliant Connie and a guest. Past that, as mentioned above, we are off for two weeks. So, we’ll be back as a group in the middle of January.

Until then, a big thanks one last time for hanging out with us over the last couple of years. Chat soon!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Ridesharing IPOs and $850M for Luckin, Plaid and Zymergen

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had the regular crew back together which was good fun. Connie took point, we had Danny mic’d up in New York, and I was onsite to help the crew natter along with Bubba Murarka, a former VC […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had the regular crew back together which was good fun. Connie took point, we had Danny mic’d up in New York, and I was onsite to help the crew natter along with Bubba Murarka, a former VC and founder who now cuts checks on his own.

Thematically, this was a week of mega rounds so we had little choice but to go over more than a few. And Uber is out there doing its IPO thing. So, we started with cars and pivoted to rounds.

Regarding Uber and Lyft, it’s mostly been said, but we took a noodle through the historical context of two other temporally close IPOs between rivals, Visa and Mastercard, and talked about the impending offerings for a minute, as we couldn’t resist. Do they lose too much money? Is there an advantage to going first? That sort of thing.

After, we got to the new funding rounds. First up was the Luckin Coffee $200 million round. The rise of Luckin in China has been simply astounding. I wanted to know some boring financial results, which our guest found a bit old-fashioned, but we all agreed that the company has hit on something big. And something big in China to boot, which means the company has been heading straight north.

Next, we touched on Plaid and its own $250 million infusion. The Kleiner-sourced round was far more money than the financial API company had raised before. It was a staggering amount of capital. Coming on the heels of the recent public-market success of Twilio and the private-market success of Stripe, both API-based companies, may have played a part in the rounds construction.

The good times are not merely coffee and software-focused, however. Zymergen also picked up a nine-figure round: $400 million.

So much for a seasonal slowdown. Hang tight, we’ll be right back.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

SoftBank’s Vision Fund inches closer to $100B

Much has been said about the SoftBank Vision Fund, mostly in awe of the size of the investment vehicle. Today, however, the Vision Fund inched yet closer to that twelve-figure goal.

Much has been said about the SoftBank Vision Fund (SBVF), mostly in awe of the size of the investment vehicle.

It’s important to remember that the $100 billion number most often associated with the gargantuan fund is only a target. Today, however, the Vision Fund inched yet closer to that 12-figure goal as it continues to pour billions of dollars into technology companies around the world.

So far in 2018 the SoftBank Vision Fund has invested in more than 20 deals, accounting for over $21 billion in total investment. That sum didn’t all come from the Vision Fund of course — SoftBank’s Vision Fund typically invests alongside one or more syndicate partners who help fill out bigger rounds — but the amounts are nonetheless staggering. The chart below shows the Vision Fund’s investments since its inception in 2017.

In an annual Form D disclosure filed with the Securities and Exchange Commission this morning, SBVF disclosed that it has raised a total of approximately $98.58 billion from 14 investors since the date of first sale on May 20, 2017. The annual filing from last year said there was roughly $93.15 billion raised from 8 investors, meaning that the Vision Fund has raised $5.43 billion in the past year and added six new investors to its limited partner base.

In a financial report from November, SoftBank Group Corp disclosed (p. 21, Note 1) it has invested an additional $5 billion in the fund, which is “intended for the installment of an incentive scheme for operations of SoftBank Vision Fund.” It brings SoftBank’s total contribution to $21.8 billion, in line with original targets.

The most recent Form D also cites six more limited partners. Crunchbase News presumes that the $430 million in new capital we cannot source back to SoftBank came from those new partners. SoftBank declined to comment on who they are.

Uncertainty looms over Vision Fund 2

One of the primary challenges an investor as big as the Vision Fund faces is sourcing capital. SoftBank doesn’t have a lot of choice about who it can take on as limited partners. To fill out a $100 billion fund (or something larger), government-backed investors are some of the only market participants with the financial wherewithal to anchor its limited partner base. And, sometimes, international politics and venture finance collide.

Saudi Arabia’s Public Investment Fund committed $45 billion to the SBVF; it’s the single biggest backer of the fund. Saudi Crown Prince Mohammed bin Salman is implicated in the extrajudicial torture, murder, dismemberment and disposal of Saudi dissident and Washington Post columnist Jamal Khashoggi in early October.

In November, TechCrunch reported that SoftBank would wait for the outcome of Khashoggi’s murder investigation before it decides on Vision Fund 2. New revelations this weekend close the window of reasonable doubt around bin Salman’s involvement in the murder.

This past weekend, The Wall Street Journal reported that the U.S. Central Intelligence Agency intercepted 11 messages sent between bin Salman and one of his closest aides, who allegedly oversaw the execution squad, in the hours before Khashoggi’s death. Amid mounting international and intelligence community consensus, though, the White House continues to defend Saudi Arabia.

Given these recent developments, it’s uncertain how SoftBank’s relationship with the Vision Fund’s principal backer will change going forward. Whether anything changes at all is itself an unknown at this point too.

SoftBank COO Marcelo Claure said there was “no certainty” of a follow-up fund back in mid-October.

Lyft’s going public, Uber’s eyeing Bird, Utah’s tech scene and trade tensions

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had Connie Loizos in the studio along with Kate Clark, myself and a special guest. The special guest was fitting, as it was a special episode. Why? Because this is our 100th episode, a milestone […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had Connie Loizos in the studio along with Kate Clark, myself and a special guest. The special guest was fitting, as it was a special episode. Why? Because this is our 100th episode, a milestone that would have probably seemed a silly idea back when we started the show.

This week our first guest, SaaStr founder and venture capitalist Jason Lemkin came back on the show. When he first showed up, we talked Elon Musk. This time it was ridesharing liquidity, ridesharing M&A and more.

Sadly two of our founding members (Katie Roof and Matthew Lynley) are elsewhere as we reach 100 shows, but a big cheers to them for their work. Hugs and thanks to Chris Gates for producing Equity with a rare mixture of kindness and patience. Material appreciation to TechCrunch’s Henry Pickavet and Yashad Kulkarni for approving and shepherding the project thus far, and a big round of appreciation for Connie Loizos, Danny Crichton and Kate Clark for joining the hosting crew.

Finally, thanks to you for sticking with us. Millions of downloads, live shows successful and not and three-figures of episodes later, we’re still here!

Alright, enough self-congratulation. Let’s talk tech. And money.

This week we had a bit of a laundry list of topics to get through. The first of which was Lyft’s now publicly known, but privately filed IPO document. The company is going public about going public while staying private about the same matter.

Regardless, Lyft’s decision to go public now should mean it’s the first out of the gate. Uber will go public second. Which company that order will assist isn’t super clear. In the past, it was thought that the first of Uber and Lyft to go public would expose itself to pricing pressure from its yet-private competitor. But this deep into the ridesharing saga, and with both companies still so unprofitable, perhaps that isn’t the case.

Uber may be scooter shopping regardless, so perhaps its IPO isn’t in the offing. Yes, reporting indicates that the company may be playing Duck Hunt because it could be taking aim at Bird. With an M&A gun? This analogy isn’t good.

If Uber buys Bird, say, does that mean Lyft buys Lime? Even though Uber is a Lime investor? Place your bets.

Next up we riffed on Utah’s tech scene, the well-known Silicon Slopes . The region’s 2018 has been big. Podium raised and posted big revenue growth figures. Pluralsight and Domo went public. And most recently, Weave raised $37.5 million. It’s a big year for the state. My view is that it is no longer up-and-coming. Our guest agreed.

And finally, Kate took us through the Huawei fiasco. The company’s CFO has been detained in Canada for what MSNBC calls “U.S. extradition.” Oof. This at a time when the American premier is rattling about in his barrel about trade. The stock market is worried. Maybe we should be as well.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Asana raises $50M, Airbnb gets a new CFO, and a 2019 IPO preview

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week as TechCrunch Disrupt Berlin came to life, Kate Clark and I snagged some mics and dug through the biggest news of the week (a $50 million check), and talked through who may go public next year, […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week as TechCrunch Disrupt Berlin came to life, Kate Clark and I snagged some mics and dug through the biggest news of the week (a $50 million check), and talked through who may go public next year, and what those IPOs might look like.

Our usual fare, if you will. (If you are missing Danny and Connie, fear not, they will be back next week.)

This week we hit two news items and one roundup. Here’s the skinny:

  • Asana raises $50 millionYep, Asana went back to the funding well this week for its Series E, despite having raised a $75 million Series D earlier this year. The company’s funding pace might seem aggressive, but we’re hearing that many startups are looking to tack on extra cash. Why? Because the market might change, and so the savvy are stacking chips in case the cashier closes. Oh, and the company dropped a number of relative growth metrics that were, I have to say, impressive.
  • Airbnb gets a new CFO. After its old CFO took off, Airbnb’s eventual IPO was on hold. You can’t go public without a CFO. But now it has one! And that means that the company can eventually sell shares on a public exchange, whenever it deigns to sell equity to the hoi polloi. But put your checkbook down, as it’s far from clear precisely when Airbnb will pull the trigger and give us an S-1.
  • Speaking of which, let’s talk decacorn IPOs. Not my best segue, but it’ll do. There are a number of private tech companies worth $10 billion or more (10x unicorns, or, ahem, decacorns) that will probably try to go public next year. You can read about it here, but the gist is that Uber, Lyft, Pinterest and Airbnb need to go public, and there’s reason to believe that they are going to do it next year.

All that and we managed to mispronounce “EBITDA” a few times.

That’s Equity for this week. Have a listen and we’ll be back in just seven days!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Equity podcast: A Thanksgiving-ish special episode

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. It’s the day after Thanksgiving, so if you are reading this in America I hope there is a pet leaned up against your legs and that you are sitting next to a fire while staring down one more […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

It’s the day after Thanksgiving, so if you are reading this in America I hope there is a pet leaned up against your legs and that you are sitting next to a fire while staring down one more plate of leftovers.

We made this episode for just such a moment. Welcome to our take on a relaxed episode of Equity, a show normally featuring four people arguing about this or that. This week, it’s just TechCrunch’s Kate Clark and myself digging into some of the strangest and most interesting rounds of the year. Thus far, at least.

So what made our cut?

We hope that you are well and that the holidays are as delightful and full of joy as they can be. And if you are having a bad run of the end of the year, big hugs from the Equity crew. We think you are just perfect.

Stay warm!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Uber’s financials, Qualtric’s $8B exit and what’s going on at WeWork

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had the excellent Connie Loizos on the air, we had Danny Crichton on the horn from New York, I was in the studio mostly hacking up one lung or the other, and we had Matt Howard […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had the excellent Connie Loizos on the air, we had Danny Crichton on the horn from New York, I was in the studio mostly hacking up one lung or the other, and we had Matt Howard of Norwest Venture Partners.

And so, with smoke in the Bay and snow in the Big Apple, we dug into what we love. Namely, dollars.

Uber was first in line due to the scale of its results. The firm disclosed its third-quarter results including slowing growth (in percentage terms), steep losses on a GAAP basis (GAAP means that all costs were counted) and adjusted losses that fell in the period.

So, a mixed bag. I found it to be somewhat negative (more of my view here); our guest was more bullish. Feel free to write in and let us know who you think is right.

Next up was the big deal of the week, effectively. The Qualtrics exit to SAP for $8 billion in cash, a portion of which it borrowed, as we point out. The deal meant that the company didn’t actually go public (boo), but it still made a hell of a splash all the same.

I chatted with the CEOs of SAP and Qualtrics, and have the notes here if that’s useful.

Finally, we riffed on the latest WeWork numbers which include a $3 billion warrant, and a massive third-quarter loss. WeWork lost more money in the quarter than it generated in revenue. That is, as they say, not great.

Many companies lose money while growing and work out great! But for every Facebook, there are a few Snaps, and I can’t tell which side of the coin WeWork lands.

Oh, and this Instacart story happened. What’s up with that?

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.