Extra Crunch Friday: TechCrunch’s favorite companies from 500 Startups’ latest demo day

Welcome to Extra Crunch Friday

Demo days at startup accelerators are a big deal around here.

These events aren’t just a chance to review the latest cohort of hopeful entrepreneurs — they’re a showcase for products and services that will compete for VC and consumer attention over the next few years.

You never know where a hit will come from, which is why these events capture our attention. Here’s just one example from Y Combinator’s Summer 2013 Demo Day:

Positioning itself as the “FedEx of today,” it hopes to provide a logistics framework that goes beyond food and can be used for any type of on-demand order.

(That startup was DoorDash, by the way.)

Yesterday, Jon Shieber and Alex Wilhelm covered 500 Startups’ 27th demo day and selected eight companies as their favorites:

• Stack
• Adapty
• MightyFly
• Omnitron Sensors
• AWSM
• Memechat
• Ryu Games
• Apothecary

Thank you very much for reading Extra Crunch this week! I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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How the GameStop stonkathon helped Robinhood raise $3.4B last week

I’ve never used “stonkathon” in a headline before, but it’s been that kind of week.

The war between hedge funds and day traders over GameStop vaulted discount trader Robinhood into the headlines for days.

But how did it affect the company’s financial health?

This morning, Alex Wilhelm examined why Robinhood’s investors were willing to inject $3.4 billion more into the company in just one week.

“More trades means more PFOF (payment for order flow) revenue,” says Alex. “And Robinhood effectively doubled in size.”

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Udemy’s new president discusses the reskilling company’s future

Reporter Natasha Mascarenhas interviewed Greg Brown, new president of digital learning platform Udemy, after his company announced that it surpassed $100 million ARR.

A new arm of the company, Udemy for Business, just secured a 100,000-employee contract with Cisco Systems to offer software, business and technology courses.

“The opportunity that the company sees has really forced us to reallocate resources and strategy,” said Brown.

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Why one Databricks investor thinks the company may be undervalued

After scaling its ARR to $425 million and reaching a valuation of $28 billion, data analytics company Databricks is clearly IPO-ready.

Battery Ventures has backed Databricks since 2017, so Alex Wilhelm interviewed General Partner Dharmesh Thakker to understand why he thinks the company may be undervalued.

“Whether it’s digital transformation, whether it’s analytics, data is everywhere,” said Thakker. “So the TAM is massive.”

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4 strategies for deep tech founders who are fundraising

Deep tech founders face special challenges when pitching investors: they usually don’t have a product, customers or revenue.

It’s difficult enough to ask a stranger for a check when there’s a beta product, but how do you drum up interest in an unproven idea that may exist largely in your imagination?

“Early-stage investors are in the business of funding dreams,” says angel investor Jessica Li.

“Investors are less interested in the intricacies of your technology and more interested in what impact it can create.”

Step one: use storytelling to highlight your big vision.

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Edtech valuations aren't skyrocketing, but investors see more exit opportunities

Investors funded edtech startups with $10 billion last year as the pandemic forced widespread adoption of remote learning.

The valuations of these companies aren’t rising at the same rate as SaaS or fintech startups, but “where edtech lacks in impressive valuations, investors see it gaining in exit opportunities,” writes Natasha Mascarenhas.

For our latest edtech investor survey, she interviewed:

• Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed, Clever)
• Ashley Bittner, founding partner, Firework Ventures (a future-of-work fund with portfolio companies LearnIn and TransfrVR)
• Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
• John Danner, managing partner, Dunce Capital (an edtech and future-of-work fund with portfolio companies Lambda School and Outschool)
• Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multistage generalist fund with investments including Forage, Clever and Outschool)
• Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly valued companies including BYJU’s, Newsela and Masterclass)
• Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy and BibliU)
• Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer, and Aula)
• Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
• Daniel Pianko, co-founder and managing director, University Ventures (a higher-ed and future-of-work fund that is backing Imbellus and Admithub)
• Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
• Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

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Deep Science: AIs with high class and higher altitudes

In his latest recap of recent breakthroughs in applied science and technology, Devin Coldewey looked at how researchers are using AI to:

• Categorize thousands of pieces of classical music
• Read MRIs to spot patients with schizophrenia
• Track elephant herds via satellite
• Improve accessibility on mobile phones

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Spotify Group Session UX teardown: the fails and their fixes

In the latest of a series of articles that examines user experiences for consumer apps, UX expert Peter Ramsey and TechCrunch reporter Steve O’Hear studied Spotify Group Session, the shared-queue feature that permits users to create playlists collaboratively.

“Many of these lessons can be applied to other existing digital products or ones you are currently building,” such as the need to add context for important decisions and how to best use “react and explain” prompts.

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Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt discuss pitch decks, pricing and how to nail the narrative

Extra Crunch Live returned this week with two guests: Lightspeed Venture Partners’ Gaurav Gupta and Raj Dutt, co-founder and CEO of Grafana Labs.

In addition to walking us through the presentation that encouraged Lightspeed to invest in Grafana’s Series A, the duo also gave direct feedback to audience members about their pitch decks.

Watch a video with our complete episode, or read highlights from the chat to get Gupta and Dutt’s insights on what goes into a successful pitch deck.

New episodes of Extra Crunch Live drop each Wednesday at 12 p.m. PST/3 p.m. EST/8 p.m. GMT.

Here’s a breakdown of the complete episode with Gaurav Gupta and Raj Dutt:

• How they met — 2:00
• Grafana’s early pitch deck — 12:00
• The enterprise ecosystem — 25:00
• The pitch deck teardown — 32:00

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