Weekly SaaSology ⚡️ 11.06.21
Super Apps 📱, Self-Driving 🚗, and VCs obsessing over mythical creatures 🦄
Hope everyone is having one heck of a start to November! To all celebrating Diwali 🪔, may this auspicious occasion brighten up your life with joy, peace, and success!
Top Seven Investments 🚀
Paytm, an Indian digital payments platform, raised $1.1 billion in an anchor round as a part of its IPO, led by Blackrock, GIC, Canada Pension Plan, and several other institutional investors. Halfway towards its target of $2.45 billion, Paytm is on track for the largest IPO in India. It serves over 57 million users and operates as a super app 📱 collectively offering a payments gateway, insurance, e-commerce marketplace, entertainment and travel booking.
Nuro, a San Francisco-based autonomous delivery business 🚗, raised $600 million at an $8.6 billion valuation in Series D funding led by Tiger Global, with participation from existing investors. Nuro is focusing on building a low-speed electric self-driving vehicle that transports packages (versus people). It is currently piloting its self-driving vehicle for Walmart, FedEx, and Domino’s.
Lime, a San Francisco-based micro-mobility business that provides shared electric vehicles 🛴, raised $523 million in funding led by Abu Dhabi Growth Fund, Fidelity, Uber, Highbridge Capital, and UBS. With plans to IPO next year, Lime raised $418 million as convertible debt (which converts into equity at IPO at a discount). This news comes just days after its core rival, Bird (NYSE: BRDS), announced its intent to go public via a SPAC merger (more next week!).
HoneyBook, a San Francisco-based client management platform, raised $250 million at a $2.4 billion valuation in Series E funding led by Tiger Global, with participation from Durable Capital, Norwest, Citi Ventures, and OurCrowd. It helps independent businesses organize their workflow, streamline client communication, and manage cash flows and payments on a unified platform.
Fountain, a San Francisco-based high-volume hiring platform, raised $85 million in Series C funding led by SoftBank, with participation from B Capital Group, Mirae Investment, and existing investors. Fountain focuses on simplifying, optimizing, and automating the candidate journey to decrease time-to-hire ⏰. It currently serves more than 250 retail, restaurant, delivery, and hospitality businesses such as Chipotle, Uber, and Safeway and competes against talent management platforms like Workstream.
Apollo, a San Francisco-based sales intelligence platform, raised $32 million in Series B funding led by Tribe Capital, with participation from NewView Capital and Nexus Venture Partners. It helps 9,000+ customers like Lyft and Peloton identify leads from a ~220 million contacts database by leveraging unique attributes and advanced algorithms. It competes in a crowded sales engagement market against tools like Zoominfo.
Merge, a San Francisco-based B2B integrations platform, raised $15 million in Series A funding led by Addition, with participation from NEA and angel investors. Unlike integrations platforms such as Zapier and Workato, it offers comprehensive coverage in specific categories. Currently, it serves 600+ customers and focuses on HR, payroll, recruiting, and accounting platforms.
Top Two Trends ☁️
Super Apps 📱
Connie Chan, a partner at a16z, says that “Super Apps” are one of the most exciting trends in the consumer tech space. According to eMarketer, we spend more time on our phones (3 hrs 43 min) than watching television (3 hrs 35 min). She believes that “companies will work together to offer customers more unique products and services, discovering new revenue streams in the process.”
The real kicker is that only 26 minutes of that time is spent on the browser, with more than 3 hours on apps. In China, they have Merituan, WeChat, and Alipay. Connie believes that this trend is already making its way from the east to the west with Super Apps like Uber expanding outside of transportation.
The best example is Merituan. It “took a high-frequency, low-margin business—food delivery—and tacked on more low-frequency, high-margin businesses at low (or zero) customer acquisition costs - leveraging its distribution and understanding of its customers, thinking what other revenue streams can I create with that mindshare?” Another Super App in Asia is Gojek. It offers access to transportation and food delivery and also lets users book massage appointments, moving services, etc.
Omnichannel Commerce 🛒
Moreover, Connie also talks about the evolution of commerce and how companies are evidently leveraging apps, especially social media, for omnichannel retail. She believes that “in the near future, we will be all shopping from our entertainment apps, including video, social media apps, and messaging.” Since it only takes a few taps on the screen to conduct a successful transaction, the buying decision has never been this quick and frictionless.
Startup Spotlight ✨
Founded in 2013, Notion is a San Francisco-based workplace productivity platform with ~$350 million in funding and 200 employees. It serves ~20 million users by offering a single platform to manage individual and team-based projects/tasks and access a centralized knowledge catalog 📙. Notion competes against collaboration tools like Atlassian (NYSE: TEAM) and the newly-minted unicorn Coda.
What was truly fascinating was that VCs literally came knocking on Notion’s door vying for a chance to invest due to their early success in the market. Here’s a tweet from Josh of First Round (seed investor in Notion) that validates the hype:
Last month, Notion raised $275 million at a $10 billion valuation in Series E funding led by Sequoia and Coatue. It’s interesting to see more VC and Hedge funds co-lead, like in this case where Notion goes from unicorn to decacorn status 🦄 in <18 months.
VC Topic of the Week 📚
Ever heard a friend boast that they signed an offer to join a hot startup that just hit “unicorn status”? Did that make you wonder why you are friends with someone who uses mythical creatures 🦄 to describe a business? Just me? Never mind 😂
In 2013, Aileen Lee of Cowboy Ventures coined the term “Unicorn” to refer to startups with a valuation of over $1 billion. Since companies are staying private for longer, there are more unicorns today than there have ever been (1,046 “unicorns” as per crunchbase). Startups have taken an average of seven years to attain unicorn status (so did Notion). This chart illustrates how many unicorns have emerged in the last decade (little dated but shows how 2021 is paving the way to be the best year for unicorns).
If you thought the term “unicorn” was the only reference VCs could make to the mythical world, prepare to be amazed by how weird the startup ecosystem can get.
Decacorn refers to startups with a valuation of over $10 billion
Quadracorn refers to startups with a valuation of over $40 billion
Hectocorn refers to startups with a valuation of over $100 billion
And of course, my favorite “not-so-mythical” term,
Narwhal refers to Canadian startups with a valuation of over $ 1 billion
When asked about “unicorns”, a Professor of Linguistics at UC Berkeley said, “the term romanticizes techno-companies, [taking] them from the remote and unintelligible to the magical and even lovable, while also being rare and powerful”
Tweet of the Week 🐦
Feel free to reach out to me by replying to this email or @dhruvcashpoor on Twitter
This newsletter is intended for informational purposes only. Sources: TechCrunch, Forbes, Notion, Tech in Asia, Business Insider, Crunchbase, SF Curbed, Wired, Tenor, a16z, eMarketer, OpenView Partners, Giphy, GGV Capital, Twitter, HoneyBook