Extra Crunch Tuesday: Startup valuations have recovered from summer lows

Welcome to Extra Crunch Tuesday

How bullish are Silicon Valley VCs feeling as we head into winter?

A report from Silicon Valley law firm Fenwick & West shows that down rounds accounted for 4% of all venture financing in October; over the summer, they comprised 11% to 17% of the total.

As Alex Wilhelm reports in today’s column, the latest batch of “up-rounds are driving huge valuation gains,” which suggests that the region’s startups have bounced back from their COVID-related doldrums.

Software startups in particular showed signs of health, but there are still “some troubling signs,” he found, as Series A rounds have reached their lowest point of the year and Series C valuation gains have been underperforming.

Still, for startup bulls, “2020 is ending better than we might have hoped,” he concluded.

Thank you very much for reading Extra Crunch this week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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Singapore is poised to become Asia's Silicon Valley

TechCrunch reporters have begun filing year-end stories which explore a technology sector in depth with an eye on the future.

Yesterday, we ran a piece by Catherine Shu that examined how Singapore’s government is attracting tech giants from the U.S. and China via tax incentives and other programs.

“Some of it is probably due to the trade war over the past two years and other difficulties they’ve faced in the States,” said AppWorks partner Jessica Liu.

“Strategically, they also have to find another big market with long-term potential for growth, and I think that’s why they are targeting Southeast Asia.”

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IPO delays are bumming me out

Gaming development platform Roblox decided to push its planned IPO to 2021 — and fintech unicorn Affirm is apparently following suit.

According to Alex Wilhelm, these delays are related to first-day pops we saw for Airbnb and DoorDash, but “if the liquidity train is derailed because some IPO did too well, I will lose my gosh-darn mind.”

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MIT professor wants to overhaul 'The Hype Machine' that powers social media

“We really have a full-blown social media crisis on our hands,” says Sinan Aral, a professor of management at the MIT Sloan School of Management.

For his new book, “The Hype Machine,” Aral considered myriad ways to address social media’s political and economic impacts, but he also included a chapter on neuroscience, because social media directly affects our decision-making skills and perception.

“If you break up Facebook, it’s just going to tip the next Facebook-like company into market dominance,” said Aral.

“What we really need is structural reform of the social media economy, and that involves social network portability, data portability and interoperability legislation.”

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Cloud gaming platforms were 2020's most overhyped trend

For his year-end story, Lucas Matney took a closer look at efforts to shift users towards cloud-based gaming.

With gaming on-demand, consumers can run graphics-intensive experiences on phones and handheld devices without waiting for extended downloads, but “it’s hard to see a future where any of these subscription services succeed.”

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General Catalyst's Katherine Boyle and Peter Boyce are looking for 'obsessive' founders

Jordan Crook interviewed General Catalyst partners Katherine Boyle and Peter Boyce for our last Extra Crunch Live conversation of 2020.

Boyce and Boyle spoke about how they’ve changed their work habits during the pandemic, the tech sectors excite them most and which founder personality traits they find the most compelling.

“I’d say that the common theme among the founders that I support are that they have this sort of obsessive gene or personality, where they will go deeper and deeper and deeper,” said Boyle.

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An even bigger battle for gig worker rights is on the horizon

Megan Rose Dickey’s last Extra Crunch story of 2020 focused on how gig-economy workers are facing off against the companies that employ them to secure better pay and workplace protections.

For her reporting, she interviewed activists to learn more about how they’re continuing to seek higher wages, expanded health benefits and improved safety.

“This is my life, so I will continue to organize and bring together thousands of drivers across the state and nationwide,” said Cherri Murphy, a driver and lead organizer at Gig Workers Rising.

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