Extra Crunch Tuesday: 4 takeaways from fintech VC in Q3 2020

Welcome to Extra Crunch Tuesday

Alex Wilhelm shrugged off his Election Day distractions long enough to write a column that comprehensively examined fintech investment activity over the last quarter.

In Q3 2020, “60% of all capital raised by financial technology startups came from just 25 rounds worth $100 million or more,” he reports.

Are these mega-rounds funding “the next crop of unicorns?” It’s too early to say, but it’s clear that pandemic-fueled uncertainty is driving consumers into the arms of companies like Robinhood, Chime, Lemonade and Root.

In 1,316 words, Alex captures the state of play in insurtech, banking, wealth management and payments investing: “Now, we just want to see some ******* IPOs.”

Thanks very much for reading Extra Crunch, and if you live in the United States: go vote!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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Is fintech's Series A market hot, or just overhyped?

Financial Venture Studio surveyed more than 100 VCs to gather their opinions on the sector’s Series A market and found “a market that remains in flux, with significant ramifications for early-stage founders.”

The overwhelming majority (85%) of respondents indicated that they’d put money into a Series A round for a fintech startup since the beginning of the pandemic, with nearly half investing in founders with whom “they had a limited or no relationship.”

Said one partner at a large, early-stage fund: “Company creation is way up. There’s a real sense of winners and losers, with winners getting big valuation bumps.”

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Eligible annual and 2-year members can get access to Zendesk’s Sales CRM, Zendesk Support Suite, Zendesk Explore and Zendesk Sunshine.

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Starling Bank founder Anne Boden says new book ‘isn’t a memoir’

“People at the end of their career write memoirs,” Starling Bank founder Anne Boden told TechCrunch’s Steve O’Hear. “I’m at the beginning.”

In Boden’s new book, “Banking On It,” she shares the story of how (and why) she decided to found a challenger bank, eventually parting with colleagues who launched competitor Monzo.

“This is really putting down on paper where we are at the moment,” she said. “It’s been written over several years, and I’m hoping to use this to inspire a generation of entrepreneurs.”

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Pandemic's impact disproportionately reduced VC funding for female founders

Natasha Mascarenhas and Alex Wilhelm collaborated on yesterday’s edition of The Exchange to report on how investors became less likely to fund female founders since the beginning of the COVID-19 pandemic.

Drawing on data from multiple sources, Alex and Natasha found that startups led by women and mixed-gender founding teams received 48% less VC funding in Q3 2020 than in Q2 even though overall funding bounced back.

“From fear in late Q1, to a middling Q2, to a boom in Q3,” they wrote. “It was an impressive comeback. For some.”

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Booming edtech M&A activity brings consolidation to a fragmented sector

Natasha Mascarenhas has owned TechCrunch’s edtech beat since she came aboard at the start of 2020, just a few months before the pandemic led to widespread school closures.

She’s reported on countless funding rounds and interviewed founders and investors who are active in the space, but she recently spotted a new trend: “M&A activity is buzzier than usual.”

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New GV partner Terri Burns has a simple investment thesis: Gen Z

Five years ago, Terri Burns was a product manager at Twitter. Today, she’s the first Black woman — and the youngest person — to be promoted to partner at Google Ventures.

In a Q&A with Natasha Mascarenhas, Burns talked about her plans for the new role, as well as her investment thesis.

“I don’t know what it actually means to build a sustainable business and venture is a really great way to sort of learn that,” said Burns.

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Dear Sophie: Would a Trump win abolish the H-1B visa lottery?

Dear Sophie:

I heard the randomness of the H-1B lottery is going away. What will this mean for our startup’s ability to get an H-1B visa for one of our co-founders?

— Curious in Cupertino

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GV General Partner MG Siegler talks portfolio management and fundraising 6 months into the COVID-19 pandemic

Are founders and investors really leaving Silicon Valley for greener pastures? Now that investors are limited to virtual interactions, are they being more hands-on with their portfolio companies?

In an Extra Crunch Live chat hosted by Darrell Etherington, GV General Partner MG Siegler talked about how the pandemic is — and is not — shaping the way he does business.

“I do feel like things are operating in a pretty streamlined manner, or as much as they can be at this point,” he said.

“But, you know, there’s always going to be some more wildcards – like we’re a week away, today, from from the U.S. election.”

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