VC

Pitching Gets Harder

Running and scaling a technology startup is expensive. Abundant cheap capital has evaporated in a world stricken by coronavirus, so if you do manage to get new VC funding, your valuation is likely getting a haircut. 

PitchBook analyzed how COVID-19 will affect venture funding in emerging tech verticals. During the Great Recession, VC investment declined 28% from peak levels, while deal volume dropped 5%. PitchBook says the more mature VC market and last week’s stimulus package could lessen the blow this time. 

Sectors with "significant" impact

Retail health and wellness tech. Startups offering "healthcare at home" services, like direct-to-consumer kits, telehealth consultations, and biometric devices, could receive more investment. The government is lifting regulations and increasing its own investment in the space. 
Foodtech. Think ghost kitchens, online grocers/apps/marketplaces, and delivery/kitchen robotics. These businesses have benefitted from mandatory quarantines. 
Mobility tech. In the short term, companies from Uber and Lime to EV and AV startups are in trouble. 
Internet of things. Industrial IoT investment could be delayed, but companies creating internet-connected devices for healthcare and smart cities could earn more funding. 

"Moderate to significant"

Insurtech. Life insurers will take a short-term hit as the broader industry looks to tech for help with claims automation and disease modeling. 
Fintech. Digital payments could benefit in a contact-averse world, but the market downturn will hurt many fintechs, including those focused on roboadviser, trading, or money transfer services. 

Moderate and low

 AI and machine learning. AI/ML startups received $38.3 billion in funding last year, the biggest sector for VC investment in the study. PitchBook forecasts acceleration of automation timelines and AI in healthcare. 
⚙ Supply chain tech. Companies providing flexible inventory and delivery services are pretty helpful to suppliers at the moment.

Bottom line: The coronavirus's effects on private market players aren't evenly distributed. The funding environment looks friendlier for startups focused on tech that accommodates changing work/life/play patterns.

3D PRINTING

3D Printers Are Working Overtime

A couple weeks ago, I wrote about how 3D printing could help plug the gap in manufacturing personal protective equipment and other critical medical supplies. Demand for these items is through the roof but supply remains choked by, well, a lot of factors. 

In response to the shortage, companies quickly harnessed their 3D printing arsenals and prototyping expertise to make medical equipment instead of car parts or office supplies. HP, Volkswagen, and Ford are helping to create medical gear. Many 3D printing companies are also pitching in, including Carbon, Formlabs, Materialise, Prusa Research, and Stratasys.

• SmileDirectClub is now 3D printing medical supplies in addition to its teeth straightening kits.
• Minnesota deemed digital manufacturer Protolabs an "essential" business so it could stay open and create medical components. 

Bottom line: There are about 47,000 industrial-scale 3D printers in the U.S., an industry analyst told Forbes. Many are idled. The more we can enlist for fighting COVID-19, the better. 

+ While we're here: The CoVent-19 Challenge calls on companies to help create "rapidly deployable, minimum viable" mechanical ventilators.

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Click through here to learn about the program and see if your business qualifies.

DRONES

Drone Giant Incorporated

DJI is one of the world's Most Interesting Tech Firms, a new Bloomberg Businessweek profile reveals. For starters, the Chinese dronemaker is building a new HQ that looks like an altar to the skies (mock-up above). 

The backstory: DJI became the world's top consumer dronemaker by leveraging a deep bench of engineering and hardware acumen, turning drones from hobbyist indulgence into a Best Buy mainstay. Most DJI products are reliable, ready out of the box, and as powerful as smartphones. 

But just ask Icarus

Fly too high and you run into trouble. DJI's focus on affordably priced drones has shrunk margins, leading it to hawk new robotics, cameras, and B2B wares. It's also experienced corporate snafus, most notably a $150 million internal fraud scandal. Then there's COVID-19, which is impacting all tech manufacturing. 

• DJI is persona non grata in D.C., since the U.S. government thinks Beijing could be tapping into DJI drones for espionage. 

Bottom line: DJI’s facing headwinds, but it still controls 77% of the U.S. drone market with no American competitor in sight.

BITS & BYTES

Stat: Microsoft has seen a 775% increase in use of its Azure cloud services in regions that are social distancing and/or sheltering in place. The company will give priority for its services to healthcare workers. 

Quote: "Below the surface, there is a huge battle going on over what the internet will look like"—UN International Telecommunication Union delegate to the FT. China has proposed a new global internet structure that would accommodate autonomous vehicles, smart devices, and “holo-sense transportation”...and enable top-down control.

Watch in full: Tectonix's data visualization shows how spring breakers from a single Ft. Lauderdale beach scattered across the country when returning home. It also shows how easy it is to track mobile phones.

WHAT ELSE IS BREWING

• Microsoft bought Affirmed Networks, a virtualized cloud networking company, for an undisclosed amount. The acquisition will help Microsoft boost its 5G offerings.  
• More Microsoft: It’s divesting its stake in Israeli facial recognition startup AnyVision.
• Federal, state, and local governments are using location data from mobile ads to plan pandemic response strategies, the WSJ reports. 
• OneWeb filed for bankruptcy and axed most employees. The SoftBank-backed startup has launched 74 internet-beaming satellites into space.
• Coinbase’s Commerce platform has processed $200 million in cryptocurrency payments.
• Blue Origin, Jeff Bezos's rocket business, won the "essential" designation from the government. 

WHAT'S VIRTUALLY BREWING THIS WEEK

Monday: It’s Monday again
Tuesday: Adobe Summit 2020; Xiaomi and Huawei report earnings; Equal Pay Day; China releases manufacturing data
Wednesday: ITIF webinar on how much privacy we should trade to survive a pandemic; Atlassian Remote Summit runs through Thursday; Census Day; April Fools’ Day is canceled
Thursday: MIT Energy Conference runs through Friday (virtual)

MARKET RESEARCH

Candor organized a list of tech companies that are staffing up, freezing hiring, or actively laying off employees. If you're looking for an internship or new job, this resource can show where your time is best spent.