June 25, 2019
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Slack aims to be the most important software company in the world, says CEO

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Slack this morning disclosed estimated preliminary financial results for the first quarter of 2019 ahead of a direct listing planned for June 20.

Citing an addition of paid customers, the workplace messaging service posted revenues of about $134 million, up 66 percent from $81 million in the first quarter of 2018. Losses from operations increased from $26 million in Q1 2018 to roughly $39 million this year.

In addition to filing updated paperwork, the Slack executive team gathered on Monday to make a final pitch to potential shareholders, emphasizing its goal of replacing email within enterprises across the world.

“People deserve to do the best work of their lives,” Slack co-founder and chief executive officer Stewart Butterfield said in a video released alongside a livestream of its investor day event. “This desire of feeling aligned with your team, of removing confusion, of getting clarity; the desire for support in doing the best work of your life, that’s universal, that’s deeply human. It appeals to people with all kinds of roles, in all kinds of industries, at all scales of organization and all cultures.”

“We believe that whoever is able to unlock that potential for people … is going to be the most important software company in the world. We aim to be that company,” he added.”

Slack, valued at more than $7 billion with its last round of venture capital funding, plans to list on the NYSE under the ticker symbol “SK.”

The business filed to go public in April as other well-known tech companies were finalizing their initial public offerings. Following Uber’s disastrous IPO last week, public and private market investors alike will be keeping a close-eye on Slack’s stock market performance, which may determine Wall Street’s future appetite for Silicon Valley’s unicorns.

Though some of the recent tech IPOs performed famously, like Zoom, Uber and Lyft’s performance has served as a cautionary tale for going out in poor market conditions with lofty valuations. Uber began trading last week at below its IPO price of $45 and is today down significantly at just $36 per share. Lyft, for its part, is selling for $47.5 apiece today after pricing at $72 per share in March.

Slack isn’t losing billions per year like Uber but it’s also not as close to profitability as expected. In the year ending January 31, 2019, Slack posted a net loss of $138.9 million and revenue of $400.6 million. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year ending January 31, 2018. In its S-1, the company attributed its losses to scaling the business and capitalizing on its market opportunity.

Workplace messaging startup Slack said Monday, February 4, 2019 it had filed a confidential registration for an initial public offering, becoming the latest of a group of richly valued tech enterprises to look to Wall Street. (Photo by Eric BARADAT / AFP) (Photo credit should read ERIC BARADAT/AFP/Getty Images)

Slack currently boasts more than 10 million daily active users across more than 600,000 organizations — 88,000 on the paid plan and 550,000 on the free plan.

Slack has been able to bypass the traditional roadshow process expected of an IPO-ready business, opting for a path to Wall Street popularized by Spotify in 2018. The company plans to complete a direct listing, which allows companies to forgo issuing new shares and instead sell existing shares held by insiders, employees and investors directly to the market, in mid-June. The date, however, is subject to change.

Slack has previously raised a total of $1.2 billion in funding from investors, including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.

Lyft lost $1.14B in Q1 2019 on $776M in revenue

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In its first-ever earnings report as a public company, Lyft (NASDAQ: LYFT) failed to display progress toward profitability.

The ride-hailing business, which raised $2 billion in a March initial public offering, posted first-quarter revenues of $776 million on losses of $1.14 billion, including $894 million of stock-based compensation and related payroll tax expenses. The company’s earnings surpassed Wall Street estimates of $740 million while losses came in much higher as a result of IPO-related expenses.

“The first quarter was a strong start to an important year, our first as a public company,” Lyft co-founder and chief executive officer Logan Green said in a statement.  “Our performance was driven by the increased demand for our network and multi-modal platform, as Active Riders grew 46 percent and revenue grew 95 percent year-over-year. Transportation is one of the largest segments of our economy and we are still in the very early stages of an enormous secular shift from personal car ownership to Transportation-as-a-Service.”

The company said adjusted net losses came in at $211.5 million compared to $228.4 million in the first quarter of 2018. Next quarter, Lyft expects revenue of more than $800 million on adjusted EBITDA losses of between $270 million and $280 million. For the entire year, Lyft projects roughly $3.3 billion in total revenue on adjusted EBITDA losses of about $1.2 billion.

Lyft was the first of a cohort of venture-backed ‘unicorns,’ including Pinterest, Zoom and soon, Uber — which will make its long-overdue debut on the New York Stock Exchange later this week — to complete a public offering in 2019. Despite a sizeable IPO pop, Lyft shares have sunk since its first appearance on the Nasdaq. Lyft hit a share price of $87 on its first day of trading, up from a $74 IPO price. However, in the weeks post-IPO it’s floated closer to the $60 mark, closing Tuesday down 2 percent at $59.41 per share.

Lyft has never posted a profit and its founders John Zimmer and Green have made it clear they expect to invest in the company’s growth for the next several years as it expands its multimodal offerings and ultimately launches operations overseas.

“The road ahead represents a massive opportunity to serve our communities and drive value for our stockholders,” Lyft’s co-founders wrote in the company’s IPO prospectus. “We take this responsibility to serve our communities and stockholders seriously, and we look forward to proving that with actions and results. If we told you we were building the world’s best canal, railroad or highway infrastructure, you’d understand that this would take time. In that same light, the opportunity ahead requires continued long-term thinking, focus and execution.”

Given Lyft’s unprofitable history, analysts are likely keeping a watchful eye on top-line revenue, active riders and revenue per rider. According to its earnings report, Lyft’s revenue per active rider has grown 34 percent year-over-year to $37.86, while active riders, generally, expanded nearly 50 percent to 20.5 million.

The earnings report comes just three days before Uber is expected to begin trading on the NYSE. The company is set to price between $44 and $50 per share for a fully-diluted market cap of about $90 billion if it prices at the high end. Selling 180 million common shares, Uber plans to raise between $7.9 billion and $9 billion, 4x that of Lyft’s IPO bounty.

Given Lyft’s performance on the stock exchange, investors are likely hesitant to go all-in on Uber’s offering. Reports indicate that Uber slashed targets ahead of its IPO, citing Lyft’s stock nose-dive, with Uber executives “eager to avoid the pitfalls that sunk” Lyft, according to The Wall Street Journal.

“Because Lyft and Uber compete heavily in the U.S., Lyft’s first earnings report will provide insights into Uber’s prospects,” Goodwater Capital managing director Eric Kim told TechCrunch. “At the same time, each company has shown its own unique differentiation. For example, [Uber has] shown very strong unit economics with sub 4-month paybacks and very valuable international stakes worth billions.”

In addition to releasing its first-ever earnings report, Lyft also announced a partnership with Alphabet’s Waymo, the self-driving vehicle juggernaut. As part of the new deal, Waymo will deploy 10 of its vehicles on Lyft over the next few months in the Phoenix area.

The partnership is a bit of a slap in the face to Uber, which just like Lyft is backed by Alphabet.

Some reassuring data for those worried unicorns are wrecking the Bay Area

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The San Francisco Bay Area is a global powerhouse at launching startups that go on to dominate their industries. For locals, this has long been a blessing and a curse.

On the bright side, the tech startup machine produces well-paid tech jobs and dollars flowing into local economies. On the flip side, it also exacerbates housing scarcity and sky-high living costs.

These issues were top-of-mind long before the unicorn boom: After all, tech giants from Intel to Google to Facebook have been scaling up in Northern California for over four decades. Lately however, the question of how many tech giants the region can sustainably support is getting fresh attention, as Pinterest, Uber and other super-valuable local companies embark on the IPO path.

The worries of techie oversaturation led us at Crunchbase News to take a look at the question: To what extent do tech companies launched and based in the Bay Area continue to grow here? And what portion of employees work elsewhere?

For those agonizing about the inflationary impact of the local unicorn boom, the data offers a bit of reassurance. While companies founded in the Bay Area rarely move their headquarters, their workforces tend to become much more geographically dispersed as they grow.

Headquarters ≠ headcount

Just because a company is based in Northern California doesn’t mean most workers are there also. Headquarters, our survey shows, does not always translate into headcount.

“Headquarters location can often be the wrong benchmark to use to identify where employees are located,” said Steve Cadigan, founder of Cadigan Talent Ventures, a Silicon Valley-based talent consultancy. That’s particularly the case for large tech companies.

Among the largest technology employers in Northern California, Crunchbase News found most have fewer than 25 percent of their full-time employees working in the city where they’re headquartered. We lay out the details for 10 of the most valuable regional tech companies in the chart below.

With the exception of Intel, all of these companies have a double-digit percentage of employees at headquarters, so it’s not as if they’re leaving town. However, if you’re a new hire at Silicon Valley’s most valuable companies, it appears chances are greater that you’ll be based outside of headquarters.

Tesla, meanwhile, is somewhat of a unique case. The company is based in Palo Alto, but doesn’t crack the city’s list of top 10 employers. In nearby Fremont, Calif., however, Tesla is the largest city employer, with roughly 10,000 reportedly working at its auto plant there.(Tesla has about 49,000 employees globally.)

Unicorns flock to San Fran, workers less so

High-valuation private and recently public tech companies can also be pretty dispersed.

Although they tend to have a larger percentage of employees at headquarters than more-established technology giants, the unicorn crowd does like to spread its wings.

Take Uber, the poster child for this trend. Although based in San Francisco, the ride-hailing giant has fewer than one-fourth of its employees there. Out of a global workforce of around 22,300, only about 5,000 are SF-based.

It’s unclear if that kind of breakdown is typical. We had trouble assembling similar geographic employee counts at other Bay Area unicorns, mainly because cities break out numbers only for their 10 largest employers. The lion’s share of regional unicorns are San Francisco-based, and of them only Uber made the Top 10.

That said, there is another, rougher methodology for assessing who works at headquarters: job postings. At a number of the most valuable Bay Area-based unicorns — including Airbnb, Juul, Lime, Instacart, Stripe and the now-public Lyft —  a high number of open positions are far from the home office. And as we wrote last year, private companies have been actively seeking out cities to set up secondary hubs.

Even for earlier-stage startups, it’s not uncommon to set up headquarters in the San Francisco area for access to financing and networking, while doing the bulk of hiring in another location, Cadigan said. The evolution of collaborative work tools has also enabled more companies to add staff working remotely or in secondary offices.

Plus, of course, unicorn startups tend to be national or global in focus, and that necessitates hiring where their customers are located.

Take our jobs, please

As we wrap up, it’s worth bringing up how unusual it once was for denizens of a metro area to oppose a big influx of high-skill jobs. In the past couple of years, however, these attitudes have become more common. Witness Queens residents’ mixed reactions to Amazon’s HQ2 plans. And in San Francisco, a potential surge of newly minted IPO millionaires is causing some consternation among locals, along with jubilation among the realtor crowd.

Just as college towns retain room for new students by graduating older ones, however, it seems reasonable that sustaining Northern California’s strength as a startup hub requires locating jobs out-of-area as companies scale. That could be good news for other cities, including Austin, Phoenix, Nashville, Portland and others, which have emerged as popular secondary locations for fast-growing unicorns.

That said, we’re not predicting near-term contraction in Bay Area tech employment, particularly of the startup variety. The region’s massive entrepreneurial and venture ecosystem keeps on producing valuable newcomers well-capitalized to keep hiring.


We looked only at employment at company headquarters (except for Apple) . Companies on the list may have additional employees based in other Northern California cities. For Apple, we included all Silicon Valley employees, per estimates by the Silicon Valley Business Journal.

Numbers are rounded to the nearest hundred for the largest employers. Most of the data is for full-time employees only. Large tech employers hire predominantly full-time for staff positions, so part-time, whether included or not, is expected to reflect only a very small percentage of employment.

Cities list their 10 largest employers in annual reports. We used either the annual reports themselves or data excerpted in Wikipedia, using calendar year 2017 or 2018.

Pinterest employee #1 launches blockchain art market MakersPlace

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Pinterest is a great place to find digital art but a terrible place to sell it. The fact that anything online is infinitely copyable makes it tough for artists to establish a sense of scarcity necessary for their work to be perceived as valuable. Yash Nelapati saw this struggle up close as Pinterest’s first employee. Now he has started MakersPlace, where creators can generate a blockchain fingerprint for each of their artworks that proves who made it and lets it be sold as part of a limited edition.

Similar to Etsy, MakersPlace allows artists to sell their creations while the startup takes a 15 percent cut. Collectors receive a non-fungible cryptocurrency token connoting ownership of a limited-edition digital print of the artwork that they can store in their own crypto wallet or in one on MakersPlace. The MakersPlace site officially launches today after a year of beta testing.

“At Pinterest, we noticed that there are millions of digital creators that are spending countless hours creating digital artwork, but they struggle with basic things like attribution,” says MakersPlace co-founder Dannie Chu, who spent six years leading growth engineering at Pinterest. “Their work is getting printed, copied, shared and ultimately they make very little money from it being put online. If you can’t create a sustainable model for digital creators to create, you’re not going to have art.”

If software is eating art, Uncork Capital wants a seat at the dinner table. It has led a $2 million seed round for MakersPlace, joined by Draper Dragon Fund and Abstract Ventures, plus angels from Pinterest, Facebook, Zillow and Coinbase. They see the crypto-tokenized digital photo of a rose that sold for $1 million last year as just the start of a thriving blockchain art market. “That was a light-bulb moment for us. People are actually valuing digital creations like physical creations,” says Chu.

Hiscox estimates there were $4.64 billion in online art sales (though mostly of traditional offline art) in 2018, compared to Art Basel‘s estimate of $67.4 billion in total art sales for the year. MakersPlace could be well-positioned as more art is sold online and more of it becomes truly digital. “MakersPlace has already partnered with thousands of incredible digital artists selling their unique artwork, a testament to the easy-to-use platform they’ve built,” said Uncork Managing Partner Jeff Clavier. “They’ve also created a seamless and fun, one-stop-shop for discovering and collecting digital artwork.”

The startup’s technology is designed so artists fingerprinting their work don’t need extensive blockchain experience. They just upload it to MakersPlace before sharing it elsewhere, verify their identity through an integration with Civic where they take a photo holding their driver’s license, and an Ethereum-based token is generated with the creator’s name, the art’s name, its impression and edition number and the date. An Ethereum token name, ID, contract ID and creator’s ID are all assigned so there’s a permanent record of authorship.

Art collectors can browse MakersPlace’s categories for animation, photography, drawings, pixel art and 3D creations; explore recent and popular uploads; or search by specific artist or art piece. They can buy art with a credit card or with Ether; use, display or distribute it for non-commercial purchases; or resell it on the secondary market. MakersPlace assumes no ownership of the art it hosts.

One major concern is that artists unaware of MakersPlace might have their works fraudulently fingerprinted and attributed to a thief. Chu says that “We use a mix of website, email and identity verification services to do this (we use This is a strong deterrent to uploading and establishing attribution for stolen digital creations.” But you could still imagine the headache for less-tech-savvy artists if their creative identity gets hijacked.

There’s plenty of other blockchain entrants into the art world, from Blockchain Art Collective‘s NFC stickers for registering physical art to artist tipping platform ArtByte. Many startups are trying to solve the art attribution problem, including Monegraph, KnownOrigin, Bitmark, CodexProtocol, Artory and more. MakersPlace will have to hope its talent, Silicon Valley funding and focus on digital works will differentiate it from the pack.

As we move to a culture where so many of the things that represent our identity, from photographs to music, have become endlessly replicable, the concept of possession has lost its meaning. Yet we’re still hoarders deep down, scared of not having enough. “Collecting is an innate human behavior, but as people become more urban, mobile and minimalist, physical keepsakes have become less appealing,” Nelapati concludes. “Our mission is to create a platform that incentivizes creators by giving them ownership over the work they produce.”

[Featured Image: bunny style by Chocotoy]

Startups Weekly: Zoom CEO says its stock price is ‘too high’

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When Zoom hit the public markets Thursday, its IPO pop, a whopping 81 percent, floored everyone, including its own chief executive officer, Eric Yuan.

Yuan became a billionaire this week when his video conferencing business went public. He told Bloomberg that he actually wished his stock hadn’t soared quite so high. I’m guessing his modesty and laser focus attracted Wall Street to his stock; well, that, and the fact that his business is actually profitable. He is, this week proved, not your average tech CEO.

I chatted with him briefly on listing day. Here’s what he had to say.

“I think the future is so bright and the stock price will follow our execution. Our philosophy remains the same even now that we’ve become a public company. The philosophy, first of all, is you have to focus on execution, but how do you do that? For me as a CEO, my number one role is to make sure Zoom customers are happy. Our market is growing and if our customers are happy they are going to pay for our service. I don’t think anything will change after the IPO. We will probably have a much better brand because we are a public company now, it’s a new milestone.”

“The dream is coming true,” he added. 

For the most part, it sounded like Yuan just wants to get back to work.

Want more TechCrunch newsletters? Sign up here. Otherwise, on to other news…


IPO corner

You thought I was done with IPO talk? No, definitely not:

  • Pinterest completed its IPO this week too! Here’s the TLDR: Pinterest popped 25 percent on its debut Thursday and is currently trading up 28 percent. Not bad, Pinterest, not bad.
  • Fastly, a startup I’d admittedly never heard of until this week, filed its S-1 and displayed a nice path to profitability. That means the parade of tech IPOs is far from over.
  • Uber… Surprisingly, no Uber IPO news this week. Sit tight, more is surely coming.

$1B for self-driving cars

While I’m on the subject of Uber, the company’s autonomous vehicles unit did, in fact, raise $1 billion, a piece of news that had been previously reported but was confirmed this week. With funding from Toyota, Denso and SoftBank’s Vision Fund, Uber will spin-out its self-driving car unit, called Uber’s Advanced Technologies Group. The deal values ATG at $7.25 billion.


The TechCrunch staff traveled to Berkeley this week for a day-long conference on robotics and artificial intelligence. The highlight? Boston Dynamics CEO Marc Raibert debuted the production version of their buzzworthy electric robot. As we noted last year, the company plans to produce around 100 models of the robot in 2019. Raibert said the company is aiming to start production in July or August. There are robots coming off the assembly line now, but they are betas being used for testing, and the company is still doing redesigns. Pricing details will be announced this summer.

Digital health investment is down

Despite notable rounds for digital health businesses like Ro, known for its direct-to-consumer erectile dysfunction medications, investment in the digital health space is actually down, reports TechCrunch’s Jonathan Shieber. Venture investors, private equity and corporations funneled $2 billion into digital health startups in the first quarter of 2019, down 19 percent from the nearly $2.5 billion invested a year ago. There were also 38 fewer deals done in the first quarter this year than last year, when investors backed 187 early-stage digital health companies, according to data from Mercom Capital Group.

Startup capital

Byton loses co-founder and former CEO, reported $500M Series C to close this summer
Lyric raises $160M from VCs, Airbnb
Brex, the credit card for startups, raises $100M debt round
Ro, a D2C online pharmacy, reaches $500M valuation
Logistics startup Zencargo gets $20M to take on the business of freight forwarding
Co-Star raises $5M to bring its astrology app to Android
Y Combinator grad Fuzzbuzz lands $2.7M seed round to deliver fuzzing as a service

Extra Crunch

Hundreds of billions of dollars in venture capital went into tech startups last year, topping off huge growth this decade. VCs are reviewing more pitch decks than ever, as more people build companies and try to get a slice of the funding opportunities. So how do you do that in such a competitive landscape? Storytelling. Read contributor’s Russ Heddleston’s latest for Extra Crunch: Data tells us that investors love a good story.

Plus: The different playbook of D2C brands

And finally, for the first of a new series on VC-backed exits aptly called The Exit. TechCrunch’s Lucas Matney spoke to Bessemer Venture Partners’ Adam Fisher about Dynamic Yield’s $300M exit to McDonald’s.


If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about rounds for Brex, Ro and Kindbody, plus special guest Danny Crichton joined us to discuss the latest in the chip and sensor world.

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