Extra Crunch Friday: 9 top space tech VCs on the market's opportunities and challenges

Welcome to Extra Crunch Friday

For our latest investor survey, Darrell Etherington spoke to a group of VCs who actively invest in space-based technologies to learn about how this niche sector has changed since the COVID-19 pandemic began.

“On the whole, the group sounds fairly optimistic about the sector and its potential,” he found.

Three key takeaways: 1) defense spending isn’t going anywhere; 2) sensors, data access and security offer huge opportunities, and 3) spacetech’s TAM is as vast and limitless as the heavens themselves.

Here’s who he spoke to:

• Chad Anderson, Managing Partner, Space Capital
• Ethan Batraski, Partner, Venrock
• Will Porteous, General Partner and COO, RRE Ventures
• Shahin Farshchi, Partner, Lux Capital
• Tess Hatch, Vice President, Bessemer Venture Partners
• Matt Kozlov, Managing Director, Techstars Starburst
• Rayfe Gaspar-Asaoka, Principal, Canaan Partners
• Rob Coneybeer, Managing Director and co-founder, Shasta Ventures
• Dylan Taylor, Chairman and CEO, Voyager Space Holdings

Pivoting from VCs to founders, next Thursday, Plaid CEO Zach Perret will appear on Extra Crunch Live.

Plaid is best known for creating APIs that support fintech applications and was purchased earlier this year for $5.3 billion by Visa. We’ll ask Perret about the sale, the recent boom in fintech interest and find out why investors are rushing to fund API-focused startups.

Thanks for reading! I hope you have a safe and relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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Why are unicorns pushing back IPOs when the Nasdaq is near record highs?

“The unicorns are still at it, Vision Fund 2 or no Vision Fund 2,” wrote Alex Wilhelm in today’s morning column.

Instacart’s recent raise boosted its valuation above $13 billion, and DoorDash hopes to stack more cash until its pre-money valuation tops $15 billion.

Investors don’t seem to be skittish about these late-stage unicorns, but at these prices, “only the largest and richest companies might be able to afford buying them,” he concludes.

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Extra Crunch Live: Join Superhuman CEO Rahul Vohra for a live Q&A on June 16 at 2pm EDT/11 AM PDT

Sponsored by TechCrunch

Curious about how Superhuman innovated email and what it's taking on next? Join the conversation and bring your questions!

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We asked 12 Boston startups about their diversity efforts

A November 2017 study by the Mass Technology Leadership Council found that it would take until 2085 for Black workers in the Boston area to reach the same hiring rate of white men. Latinx workers wouldn’t reach that stage until 2045, and women would have to wait until 2070.

For their June Boston column, Natasha Mascarenhas and Alex Wilhelm polled 15 area startups about their D&I initiatives:

“Only a handful of companies responded, which wasn’t a good sign,” they found.

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Airbnb, Lyft and Uber: When to call it a comeback

Uber and Lyft shed much of their value in March after widespread lockdowns began to curb the spread of the novel coronavirus, but both have since largely rebounded.

Airbnb cut 25% of its staff to help it survive the COVID-19 era, but in recent weeks, the company is seeing year-over-year growth in the number of nights booked on its platform.

The lesson? Investors perceive companies that make deep spending cuts as better poised for recovery.

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Software's meteoric rise: Have VCs gone too far?

B2B software valuations are riding high; at least 14 enterprise software companies have a market cap above $20 billion.

“It seems inevitable that venture capital firms will also over-rotate into software,” says Steve Sloane, a partner at Menlo Ventures.

According to Sloane, these valuations reflect “the specific incentives of mega-funds,” as “these investors are incentivized to aggressively push valuations upward so that they can keep up with capital commitment timelines.”

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Gauging growth in the most challenging environment in decades

After closing a $40 million Series C round just before the COVID-19 slowdown, LA-based FloQast developed a new business plan that assumed its runway was shrinking.

The idea was intended to be a thought exercise for the founders, but after the pandemic hit, FloQast reduced its burn rate with a small round of layoffs and other cutbacks.

In a guest post for Extra Crunch, FloQast CEO Michael Whitmire brings readers inside his process for keeping the company on track as it charts a course. “Play the game with the hand you were dealt,” he advises.

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Decrypted: DEA spying on protesters, DDoS attacks, Signal downloads spike

The wave of protests over George Floyd’s death has impacted the cybersecurity world: the U.S. Drug Enforcement Agency was granted authority to conduct “covert surveillance” on protestors and DDos attacks against law enforcement and activists are on the rise.

Also: VMWare acquires a network security firm and Israel cybersecurity think tank Team8 has raised $104 million as it plans to spin out its own VC arm.

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What to consider before publishing your diversity memo

Many VC firms have recently announced that they’re stepping up their efforts to be more inclusive when it comes to who they hire and fund, but without “actual numbers and a deadline,” there’s no sure way to benchmark their progress, reports Natasha Mascarenhas.

She gathered several general principles for investors who want to reach underserved communities. Step one: disclose your current diversity statistics.

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Tulsa is trying to build a startup ecosystem from scratch

Aerospace and energy are the top industries in Tulsa, Oklahoma, but a consortium of academics, philanthropists and VCs are working to foster a startup ecosystem in the city.

Ron Miller examined the efforts, which aims to “create future-proof jobs” and raise the standard of living for area residents.

“Our mandate is to really establish the strategy for the city to figure out what are the handful of opportunities that show the most promise for growth and in which Tulsa can be positioned as a leader, not just a participant,” said Nicholas Lalla, co-founder and managing director of Tulsa Innovation Labs.

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The pace of startup layoffs may be slowing down

Using data provided by Layoffs.fyi, Alex Wilhelm unpacked the numbers for startup layoffs since the COVID-19 pandemic and associated lockdowns began.

“The number of people laid off stayed aloft from March to April and into the first weeks of May,” he reports.

“In contrast, the total number of companies cutting staff declined from early April through the end of May; fewer companies cut staff as time went along, then, but it appears that they made larger cuts.”

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