Bitcoin goes bananas, Coinbase's soaring expectations, and SPAC frenzy: friend or foe?

February 19, 2021
 
 
Before we part ways, dear readers, we've got this week's StrictlyVC Download for you, with featured guest Ed Sim of Boldstart Ventures, an 11-year-old, New York-based venture firm that has been investing in pre-product SaaS startups since 2010. Among the firm’s early bets is the subscription service email super service Superhuman; Kustomer, a customer-service startup that Facebook acquired in November for a reported $1 billion; and Snyk, a company that helps developers use open-source code and stay secure and was valued at $2.6 billion during its last funding round in September.
 
Sim is always affable, but he also seems to know what he's doing; to learn where he's placing his bets these days, check it out.
 
Major thanks to Montgomery Securities for sponsoring this week's episode. Don't miss its first-ever virtual summit coming up Wednesday, March 3rd, and featuring insights from Jennifer Tejada of PagerDuty, Martin Casado of a16z, and Michael Milken of the Milken Institute, among dozens of other speakers. 
Top News
 
Cryptocurrency exchange Coinbase was valued at just over $100 billion in a recent private market share sale ahead of its upcoming public listing, reports Axios. The sale reportedly happened today when 127,000 shares were sold at $373. Who bought the shares isn't known, but Coinbase could go public at a higher initial valuation than any other U.S. tech company since Facebook, notes the outlet.
 
In related news, Bitcoin today crossed the $1 trillion milestone for the first time, eventually soaring past $56,000 per Bitcoin before settling (for now) at around $55,800.
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As the SPAC Frenzy Continues, Questions Arise Around How Much the Market Can Absorb
 
Another week and the biggest story in a sea of big stories continues to center on SPACs, these blank-check companies that raise capital through IPOs expressly to acquire a privately held company and take it public. But some industry watchers as starting to wonder: Is this party just getting started, with more early guests still trickling in? Have we reached the party’s peak, with the music still thumping? Or did someone just quietly barf in the corner, a sure indicator that it’s time to grab one’s coat and leave?
 
It certainly feels like things are in full swing. Just today, B Capital, the venture firm cofounded by Facebook cofounder Eduardo Saverin, registered plans to raise a $300 million SPAC. Mike Cagney, the fintech entrepreneur who founded SoFI and more recently founded Figure, a fintech company in both the home equity and blockchain space, raised $250 million for his SPAC. Even Michael Dell has made the leap, with his family office registering plans this afternoon to raise a $500 million blank-check company.
 
Altogether, according to Renaissance Capital, 16 blank-check companies raised $3.4 billion this week, and new filers continue to flood into the IPO pipeline, with 45 SPACs submitting initial filings this week (compared with 10 traditional IPO filings). 
 
Perhaps it’s no wonder that we’re starting to see headlines like one in Yahoo News just yesterday titled, “Why some SPAC investors may get burned.”
 
Massive Fundings
 
Evox Therapeutics, a five-year-old, Oxford, England-based exosome therapeutics startup, has raised £69.2 million in Series C funding. Redmile Group led the round, joined by OrbiMed, Invus and earlier investors Oxford Sciences Innovation, GV, Eli Lilly and Cowen Healthcare Investments. UKTN has more here.
 
Xingsheng Youxuan, a three-year-old, Hunan, China-based grocery shopping app, raised $2 billion in new funding at a $6 billion pre-money valuation earlier this month, reports Reuters. Sequoia Capital China led the round, joined by Tencent, KKR, Primavera Capital Group, FountainVest Partners, Hengda, DCP and Temasek. Reuters has more here.
 
Big-But-Not-Crazy-Big Fundings
 
Podimo, a two-year-old, Copenhagen-based subscription service for short form audio stories and podcasts, has raised an additional €11.2 million in funding. The round is led by Chr. Augustinus investment fund, and comes just eight months after the company announced its €15 million Series A round. Existing investors and the Spanish venture firm Aldea Opportunity Fund also participated. TechCrunch has more here.
 
Promise, a 3.5-year-old, Bay Area-based company that today integrates with official payment systems to offer what it says are more forgiving terms on fees and debts for customers who can't pay all at once, has raised $20 million in funding from earlier backers Kapor Capital, XYZ, Bronze, First Round, Y Combinator, Village, and others. The company has now raised $30 million altogether. TechCrunch has more here.
 
Smaller Fundings
 
AccountsIQ, a 13-year-old, Dublin, Ireland-based subscription-based financial management software startup that aims to simplify how multi-entity businesses “capture, process and report” their financial results, raised €5.8 million from Finch Capital. TechCrunch has more here.
 
Rx Redefined, a four-year-old, Oakland, Ca.-based medical supply chain distribution and billing platform, has raised $2 million in seed funding. Silverton Partners led the round, joined by Saturn Five. More here.
New Funds
 
Avid Ventures, a year-old, New York-based early-stage venture fund that was formed by Addie Lerner, who was previously an investor with General Catalyst, General Atlantic and Goldman Sachs, and Tali Vogelstein, a former investor at Bessemer Venture Partners, has closed its debut fund with $68 million in capital commitments. The firm intends to back founders in the U.S., Europe, and Israel. Its anchor LPs are the Schusterman Family Investments and the George Kaiser Family Foundation; others of its limited partners incude Foundry Group, General Catalyst, 14W, Slow Ventures and LocalGlobe/Latitude through its Basecamp initiative that backs emerging managers. TechCrunch has the story here.
 
Ion Pacific, a six-year-old, Hong Kong-based investment firm, has launched its second secondaries fund focused on the venture ecosystems in the U.S., Asia, and Europe; it has already held a first close on the vehicle with more than $40 million in capital commitments, says the outfit. DealStreetAsia has more here.
Exits
 
Acast, a nearly seven-year-old, Stockholm, Sweden-based podcast marketplace that provides premium hosting, distribution and ad sales (and has raised at least $130 million to date from investors), has acquired RadioPublic, a five-year-old, Boston-based Somerville, Ma.-based podcast distribution platform that raised nearly $5 million from firms like Bose Ventures and Project 11 Ventures. TechCrunch has more here.
 
IBM is exploring a potential sale of its IBM Watson Health business, according to WSJ sources, as the technology giant’s new chief executive moves to streamline the company and become more competitive in cloud computing. IBM is reportedly studying alternatives for the unit that could include selling to a private equity firm or merging with a blank-check company. The unit, says the WSJ, which employs artificial intelligence to help hospitals, insurers and drugmakers manage their data, has roughly $1 billion in annual revenue and isn’t currently profitable. More here.

Publicly traded SailPoint has agreed to buy Intello, a New York-based SaaS application management startup that had raised around $5.8 million from investors. The companies did not disclose terms of the deal. TechCrunch has more here.
 
Afield but interesting: Second City, the storied comedy theater was sold to a private equity group on Thursday, the company said in a statement. The group, ZMC, run by Strauss Zelnick, invests in media entities; Zelnick is also the chief executive of Take-Two Interactive Software, the video game conglomerate behind Grand Theft Auto. The sale price was not disclosed but was estimated at around $50 million, according to The Financial Times. More here.
(Also) Going Public
 
Alpha Capital Acquisition, a Latin America tech SPAC led by LetGo co-founder Alec Oxenford, raised $200 million in its IPO. 
 
Choice Consolidation Corp., a new cannabis industry SPAC, has raised $150 million in an IPO on the Canadian NEO Exchange. It's just the latest cannabis SPAC; Benzinga covered a few others recently.
 
Forest Road Acquisition II, a new SPAC led by Disney vets Tom Staggs and Kevin Mayer, has registered plans for a $300 million IPO. Just last week, their first SPAC announced plans to buy digital fitness specialist Beachbody Company and take it public.
People
 
Parler, the social media site popular among conservatives for championing free speech, seemingly banned John Matze, its cofounder and former CEO, today before restoring his access later in the day. Screenshots that Matze shared on a Telegram channel showed his account had been made private after he'd made a post asking his 722,000 Parler followers what they thought the fair market value of the company was. BuzzFeed News, which has the scoop, reports that earlier this week, Matze had asked his Parler followers to join him on the messaging app Telegram. After BuzzFeed contacted a Parler spokesperson about the situation, the social network unblocked the account, according to Matze, who provided a screenshot. More here.
 
Margaret Mitchell, the co-lead of Google's Ethical AI team, says that the company has fired her following an investigation into her use of corporate email, says Axios. It reports that Mitchell is out over her effort to search corporate correspondence for evidence to back up the claim of her former co-lead, Timnit Gebru, who has said she was forced out of the company in December. TechCrunch has more, including a letter sent earlier by Mitchell to Google's press team, here.
 
A federal judge in California yesterday sentenced venture capitalist Imaad Zuberi to 12 years in prison for falsifying records to hide his work as a foreign agent while lobbying high-level U.S. officials. Zuberi, who had donated nearly $1 million to Donald Trump's inaugural committee and previously donated to host of both Republican and Democratic politicians, was also fined $1.75 million and ordered to pay $15.7 million in restitution. NBC News has more here.
 
Robinood CEO Vlad Tenev never thought he'd "get roasted for being too polite."
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Essential Reads
 
Apple is working on a magnetically attached battery pack for the newest iPhones, an accessory that would wirelessly charge the handset and provide the company with another potentially lucrative add-on product, says Bloomberg. The outlet says that the new accessories have had challenges, and that Apple could still scrap the project. It also reminds that in 2017, Apple announced an AirPower mat that would charge an Apple Watch, iPhone and AirPods earphones but canceled the product late into its development due to issues related to overheating.
 
Sequoia Capital told its investors today that some of their personal and financial information may have been accessed by a third party, after a Sequoia employee's email was successfully phished, Axios has learned. More here.
Detours
 
Liquid Death to the rescue.
 
Room rater.
 
Vaccine wranglers: “It’s a mad rush,” said Gai Walny, 39, who has bagged about 20 vaccine appointments for the parents of friends and others and who is typically in pajamas with three electronic devices going at once.
Retail Therapy
 
You choose: Marlon Brando's Hollywood house or John Travolta's Maine manse. (They'll both set you back around $5 million.)
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