Eargo raises $52M for virtually invisible, rechargeable hearing aids

Eargo wants to become the ultimate consumer hearing brand.

The company’s small and virtually invisible direct-to-consumer hearing aids, which come in an AirPods-style chargeable case, are designed to help destigmatize hearing loss. One month after revealing its newest product — the Eargo Neo ($2,550), which can be customized remotely via the case’s Bluetooth connectivity — the startup has closed a $52 million Series D, bringing its total raised to date to $135 million.

The latest round of capital comes from new investor Future Fund (Australia’s sovereign wealth fund) and existing investors NEA, the Charles and Helen Schwab Foundation, Nan Fung Life Sciences and Maveron. 

Headquartered in San Jose, Eargo, which counts 20,000 users, will use the cash to continuing crafting and innovating new products targeting baby boomers. The newly-launched Eargo Neo is the business’s third line of high-tech hearing aids. The first, Eargo Plus ($1,450), was released in 2017 and the Eargo Max ($2,510) was launched the following year.

“We can see that the product is really making a difference for users,” Eargo chief executive officer Christian Gormsen told TechCrunch. “We have the opportunity to really create a leading brand in the consumer hearing health space.”

Roughly 48 million Americans, or 20 percent of the population, suffer from hearing loss but, aside from some Medicare Advantage programs, insurance companies provide no reimbursement for hearing aids. Despite high price tags — this is expensive tech — Eargo’s priority is still to make its hearing aids as accessible as possible and to send a message that there’s nothing wrong with admitting to hearing loss.

“Getting a hearing aid feels like admitting a defeat like there’s something wrong with you but that’s not true, hearing loss is natural and happens,” Gormsen said. “The number one challenge for the entire industry is awareness. There is so little knowledge about hearing loss out there; it’s such a stigmatized category and how do you change that? The current channel doesn’t do anything to address it, the only way you can address it is through education and communication.”

“I think we’ve come far, but we are looking at 48 million Americans and we are still barely scratching the surface.”

 

500 Startups Japan becomes Coral Capital with a new $45M fund

The 500 Startups Japan crew is going independent. The VC firm announced a $30 million fund in 2015, and now the follow up is a new $45 million fund called Coral Capital.

Helmed by James Riney and Yohei Sawayama, just like 500 Startups Japan, Coral will essentially continue the work the U.S. firm made in Japan, where it made more than 40 investments including Kakehashi, satellite startup Infostellar, SmartHR and Pocket Concierge, which was acquired by American Express.

“Coral provides a foundational role within the marine ecosystem, it’s symbolic about how we want to be in the Japanese startup ecosystem,” Riney told TechCrunch in an interview.

LPs in the fund include 500 Startups backers Mizuho Bank, Mitsubishi Estate, and Taizo Son — the brother of SoftBank CEO Masayoshi Son and founder of Mistletoe — and Shinsei Bank as well as other undisclosed institutional investors, who Riney said account for nearly half of the LPs. Riney said the fund was closed within two and a half months of fundraising and Coral had to turn some prospective investors away due to the overall interest shown.

Riney said that the scandals around 500 Startups — founding partner Dave McClure resigned in 2017 after admitting he’d been a “creep” around women — “wasn’t really a strong consideration” for starting Coral.

“It’s something we’d been wanting to do for a while,” he explained.

Coral Capital founding partners James Riney and Yohei Sawayama previously led 500 Startups Japan

Riney explained that Coral won’t mix in with 500 Startups Japan investments, and the team will continue to manage that portfolio whilst also running the fund.

Thesis-wise, the plan is to continue on from 500 Startups Japan, that means going after early stage deals across the board. Riney said that over the last four years, he’s seen more founders leave stable jobs and start companies which bodes well for Japan’s startup ecosystem.

“Now you’re seeing people more into their careers who see entrepreneurism as a way to fundamentally change their industry,” he said in an interview. “That bucks the trend of risk aversion in Japan which is commonly the perception.”

He sees the arrival of Coral as an opportunity to continue to push startup culture in Japan, a country well known for massive corporations and company jobs with an absence of early stage capital options for founders.

“There’s a lot of work we can do and the impact we can make in Japan is much higher than in somewhere like Silicon Valley,” Riney said.

“Pretty much every corporate has a startup program, but few of them are strong leads within seed or early stage deals, they tend to feel more comfortable in later stage investments. There have been investors investing on behalf of corporations who got the courage to spin out and go alone… but it is still much much fewer than other countries,” he added.

Failed meal-kit service Munchery owes $6M to gift card holders, vendors

Several weeks after a sudden shutdown left customers and vendors in the lurch, meal-kit service Munchery has filed for bankruptcy. In the Chapter 11 filing, Munchery chief executive officer James Beriker cites increased competition, over-funding, aggressive expansion efforts and Blue Apron’s failed IPO as reasons for its demise.

Munchery owes $3 million in unfulfilled customer gift cards and another $3 million to its vendors, suppliers and various counterparties, the filing reveals. The company’s remaining debt includes $5.3 million in senior secured debt and convertible debt of approximately $23 million. Munchery says its scrounged up $5 million from a buyer of its equipment, machinery and San Francisco headquarters.

The business had raised more than $100 million in venture capital funding, reaching a valuation of $300 million in 2015 before ceasing operations on January 22 and laying off 257 employees in the process. Munchery was backed by Menlo Ventures, Sherpa Capital, e.Ventures, Cota Capital and others.

The company, which failed to notify its vendors it was going out of business, has been scrutinized for failing to pay those vendors in the wake of its shutdown. To make matters worse, emails viewed by TechCrunch show Munchery continued aggressively marketing its gift cards in emails sent to customers in December, weeks before a final email to those very same customers announced it was ceasing operations, effectively immediately.

An email advertising Munchery gift cards sent to a customer weeks before the startup went out of business.

The latest court filings shed light on Beriker’s decision-making process in those final months, touching on Munchery’s frequent pivots, the company’s 2017 layoffs, its plans to scale sales of Munchery products in Amazon Go stores and failed attempts at a sale. Beriker is the sole remaining Munchery board member. He has not responded to several requests for comment from TechCrunch.

In the third quarter of 2018, Munchery, at the recommendation of its board, hired an investment bank to find a buyer for the startup, to no avail. Beriker suggests the lack of a buyer, coupled with industry trends like larger-than-necessary venture capital rounds and inflated valuations, were cause for the startup’s failure to deliver.

“The company expanded too aggressively in its early years,” the filing states. “The access to significant amounts of capital from leading Silicon Valley venture capital firms at high valuations and low-cost debt from banks and venture debt firms, combined with the perception that the on-demand food delivery market was expanding quickly and would be dominated by one or two brands– as Uber had dominated the ridesharing market– drove the company to aggressively invest in its business ahead of having a well-established and scalable business model.”

Increased competition from well-funded competitors drove the startup off course, too, and the epic failure that was Blue Apron’s IPO, which had a “material negative impact on access to financing for startups in the online food delivery business,” was just the cherry on top, according to Beriker’s statements.

Munchery’s vendors, who were not notified or paid following Munchery’s announcement, have provided outspoken criticism to the company and venture capital’s lack of accountability in the weeks following Munchery’s shutdown. Lenore Estrada of Three Babes Bakeshop, among several vendors owed thousands of dollars in unpaid invoices, orchestrated a protest outside of Munchery investor Sherpa Capital’s offices in January. She said she has spoken with Beriker and founding Munchery CTO Conrad Chu in an attempt to pick up the pieces of the failed startup puzzle.

“None of us who are owed money are going to get anything,” Estrada told TechCrunch earlier today. “But [Beriker], after fucking it all up, is still getting paid.”

Beriker, indeed, is still earning a salary of $18,750 per month, one-half of his pre-bankruptcy salary, as well as a “success fee based on the net proceeds recovered from the sale of the company’s assets up to a maximum of $250,000,” the filing states.

View the full bankruptcy filing here:

Startups Weekly: Flexport, Clutter and SoftBank’s blood money

The Wall Street Journal published a thought-provoking story this week, highlighting limited partners’ concerns with the SoftBank Vision Fund’s investment strategy. The fund’s “decision-making process is chaotic,” it’s over-paying for equity in top tech startups and it’s encouraging inflated valuations, sources told the WSJ.

The report emerged during a particularly busy time for the Vision Fund, which this week led two notable VC deals in Clutter and Flexport, as well as participated in DoorDash’s $400 million round; more on all those below. So given all this SoftBank news, let us remind you that given its $45 billion commitment, Saudi Arabia’s Public Investment Fund (PIF) is the Vision Fund’s largest investor. Saudi Arabia is responsible for the planned killing of dissident journalist Jamal Khashoggi.

Here’s what I’m wondering this week: Do CEOs of companies like Flexport and Clutter have a responsibility to address the source of their capital? Should they be more transparent to their customers about whose money they are spending to achieve rapid scale? Send me your thoughts. And thanks to those who wrote me last week re: At what point is a Y Combinator cohort too big? The general consensus was this: the size of the cohort is irrelevant, all that matters is the quality. We’ll have more to say on quality soon enough, as YC demo days begin on March 18.

Anyways…

Surprise! Sort of. Not really. Pinterest has joined a growing list of tech unicorns planning to go public in 2019. The visual search engine filed confidentially to go public on Thursday. Reports indicate the business will float at a $12 billion valuation by June. Pinterest’s key backers — which will make lots of money when it goes public — include Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital, Fidelity and SV Angel.

Ride-hailing company Lyft plans to go public on the Nasdaq in March, likely beating rival Uber to the milestone. Lyft’s S-1 will be made public as soon as next week; its roadshow will begin the week of March 18. The nuts and bolts: JPMorgan Chase has been hired to lead the offering; Lyft was last valued at more than $15 billion, while competitor Uber is valued north of $100 billion.

Despite scrutiny for subsidizing its drivers’ wages with customer tips, venture capitalists plowed another $400 million into food delivery platform DoorDash at a whopping $7.1 billion valuation, up considerably from a previous valuation of $3.75 billion. The round, led by Temasek and Dragoneer Investment Group, with participation from previous investors SoftBank Vision Fund, DST Global, Coatue Management, GIC, Sequoia Capital and Y Combinator, will help DoorDash compete with Uber Eats. The company is currently seeing 325 percent growth, year-over-year.

Here are some more details on those big Vision Fund Deals: Clutter, an LA-based on-demand storage startup, closed a $200 million SoftBank-led round this week at a valuation between $400 million and $500 million, according to TechCrunch’s Ingrid Lunden’s reporting. Meanwhile, Flexport, a five-year-old, San Francisco-based full-service air and ocean freight forwarder, raised $1 billion in fresh funding led by the SoftBank Vision Fund at a $3.2 billion valuation. Earlier backers of the company, including Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express all participated in the round.

Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

Menlo Ventures has a new $500 million late-stage fund. Dubbed its “inflection” fund, it will be investing between $20 million and $40 million in companies that are seeing at least $5 million in annual recurring revenue, growth of 100 percent year-over-year, early signs of retention and are operating in areas like cloud infrastructure, fintech, marketplaces, mobility and SaaS. Plus, Allianz X, the venture capital arm attached to German insurance giant Allianz, has increased the size of its fund to $1.1 billion and London’s Entrepreneur First brought in $115 million for what is one of the largest “pre-seed” funds ever raised.

Flipkart co-founder invests $92M in Ola
Redis Labs raises a $60M Series E round
Chinese startup Panda Selected nabs $50M from Tiger Global
Image recognition startup ViSenze raises $20M Series C
Circle raises $20M Series B to help even more parents limit screen time
Showfields announces $9M seed funding for a flexible approach to brick-and-mortar retail
Podcasting startup WaitWhat raises $4.3M
Zoba raises $3M to help mobility companies predict demand

Indian delivery men working with the food delivery apps Uber Eats and Swiggy wait to pick up an order outside a restaurant in Mumbai. ( INDRANIL MUKHERJEE/AFP/Getty Images)

According to Indian media reports, Uber is in the final stages of selling its Indian food delivery business to local player Swiggy, a food delivery service that recently raised $1 billion in venture capital funding. Uber Eats plans to sell its Indian food delivery unit in exchange for a 10 percent share of Swiggy’s business. Swiggy was most recently said to be valued at $3.3 billion following that billion-dollar round, which was led by Naspers and included new backers Tencent and Uber investor Coatue.

Lalamove, a Hong Kong-based on-demand logistics startup, is the latest venture-backed business to enter the unicorn club with the close of a $300 million Series D round this week. The latest round is split into two, with Hillhouse Capital leading the “D1” tranche and Sequoia China heading up the “D2” portion. New backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital, Xiang He Capital and MindWorks Ventures also participated.

Longtime investor Keith Rabois is joining Founders Fund as a general partner. Here’s more from TechCrunch’s Connie Loizos: “The move is wholly unsurprising in ways, though the timing seems to suggest that another big fund from Founders Fund is around the corner, as the firm is also bringing aboard a new principal at the same time — Delian Asparouhov — and firms tend to bulk up as they’re meeting with investors. It’s also kind of time, as these things go. Founders Fund closed its last flagship fund with $1.3 billion in 2016.”

If you enjoy this newsletter, be sure to check out TechCrunch’s venture capital-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss Pinterest’s IPO, DoorDash’s big round and SoftBank’s upset LPs.

Want more TechCrunch newsletters? Sign up here.

Investors are still failing to back founders from diverse backgrounds

The large majority of venture dollars are invested in companies run by white men with a university degree, according to a new report by RateMyInvestor and Diversity VC.

This new data reveals that despite the lip service investors have paid to backing founders from diverse backgrounds, much, much, more work needs to be done to actually achieve the industry’s stated goals. It also shows the vast gulf that separates the meritocratic myth that Silicon Valley has created for itself from the hard truths of its natural nepotistic state.

In 2017, venture capital investment reached $84.24 billion, a height not seen since the dot-com bubble of the early 2000s. The data from RateMyInvestor and Diversity VC covers a survey of the seed to Series D investments made during that year from what the two organizations selected as the top 135 firms by deal activity. Those firms invested in 4,475 companies, which collectively included 9,874 co-founders, according to the report.

Of those co-founders only 9 percent were women, while 17 percent identified as Asian American, 2.4 percent identified as Middle Eastern, 1.9 percent identified as Latinx and 1 percent identified as black.

“VCs should make more of a deliberate effort to spend quality time with communities of color that are otherwise unfamiliar,” said Suzy Ryoo, a venture partner and vice president of technology at Cross Culture Ventures . “Another tactical suggestion would be to co-host salon dinners community events with the growing group of early-stage venture funds managed by diverse investors, such as Cross Culture Ventures, Backstage Capital, Precursor Ventures, etc.”

The data compiled by Diversity VC and RateMyInvestor contains some other staggering statistics. Ivy League-educated founders captured 27 percent of all the dollars invested in venture capital startups, while all graduates from all other universities across the U.S. represented 50 percent of venture funding. Founders who graduated from international institutions had nearly 16 percent of venture funding. Founders without a university degree accounted for around 6 percent of the total capital invested.

Finally, investors are still wildly reluctant to leave Silicon Valley to look for new deals, according to the survey. This despite skyrocketing prices for real estate and talent and the emergence of big technology ecosystems in cities across the U.S.

“Silicon Valley has done a poor job of fostering diversity of all forms, especially diversity of thought,” said DCM partner Kyle Lui. “VCs and founders tend to back/hire people who are in their existing network who most likely share the same views as them, went to the same school as them, and shared similar life experiences as them.”

Investors are still failing to back founders from diverse backgrounds

The large majority of venture dollars are invested in companies run by white men with a university degree, according to a new report by RateMyInvestor and Diversity VC.

This new data reveals that despite the lip service investors have paid to backing founders from diverse backgrounds, much, much, more work needs to be done to actually achieve the industry’s stated goals. It also shows the vast gulf that separates the meritocratic myth that Silicon Valley has created for itself from the hard truths of its natural nepotistic state.

In 2017, venture capital investment reached $84.24 billion, a height not seen since the dot-com bubble of the early 2000s. The data from RateMyInvestor and Diversity VC covers a survey of the seed to Series D investments made during that year from what the two organizations selected as the top 135 firms by deal activity. Those firms invested in 4,475 companies, which collectively included 9,874 co-founders, according to the report.

Of those co-founders only 9 percent were women, while 17 percent identified as Asian American, 2.4 percent identified as Middle Eastern, 1.9 percent identified as Latinx and 1 percent identified as black.

“VCs should make more of a deliberate effort to spend quality time with communities of color that are otherwise unfamiliar,” said Suzy Ryoo, a venture partner and vice president of technology at Cross Culture Ventures . “Another tactical suggestion would be to co-host salon dinners community events with the growing group of early-stage venture funds managed by diverse investors, such as Cross Culture Ventures, Backstage Capital, Precursor Ventures, etc.”

The data compiled by Diversity VC and RateMyInvestor contains some other staggering statistics. Ivy League-educated founders captured 27 percent of all the dollars invested in venture capital startups, while all graduates from all other universities across the U.S. represented 50 percent of venture funding. Founders who graduated from international institutions had nearly 16 percent of venture funding. Founders without a university degree accounted for around 6 percent of the total capital invested.

Finally, investors are still wildly reluctant to leave Silicon Valley to look for new deals, according to the survey. This despite skyrocketing prices for real estate and talent and the emergence of big technology ecosystems in cities across the U.S.

“Silicon Valley has done a poor job of fostering diversity of all forms, especially diversity of thought,” said DCM partner Kyle Lui. “VCs and founders tend to back/hire people who are in their existing network who most likely share the same views as them, went to the same school as them, and shared similar life experiences as them.”

Startups Weekly: Even Gwyneth Paltrow had a hard time raising VC

I spent the week in Malibu attending Upfront Ventures’ annual Upfront Summit, which brings together the likes of Hollywood, Silicon Valley and Washington, DC’s elite for a two-day networking session of sorts. Cameron Diaz was there for some reason, and Natalie Portman made an appearance. Stacey Abrams had a powerful Q&A session with Lisa Borders, the president and CEO of Time’s Up. Of course, Gwyneth Paltrow was there to talk up Goop, her venture-funded commerce and content engine.

“I had no idea what I was getting into but I am so fulfilled and on fire from this job,” Paltrow said onstage at the summit… “It’s a very different life than I used to have but I feel very lucky that I made this leap.” Speaking with Frederic Court, the founder of Felix Capital, Paltrow shed light on her fundraising process.

“When I set out to raise my Series A, it was very difficult,” she said. “It’s great to be Gwyneth Paltrow when you’re raising money because people take the meeting, but then you get a lot more rejections than you would if they didn’t want to take a selfie … People, understandably, were dubious about [this business]. It becomes easier when you have a thriving business and your unit economics looks good.”

In other news…

The actor stopped by the summit to promote his startup, HitRecord . I talked to him about his $6.4 million round and grand plans for the artist-collaboration platform.

Backed by GV, Sequoia, Floodgate and more, Clover Health confirmed to TechCrunch this week that it’s brought in another round of capital led by Greenoaks. The $500 million round is a vote of confidence for the business, which has experienced its fair share of well-publicized hiccups. More on that here. Plus, Clutter, the startup that provides on-demand moving and storage services, is raising at least $200 million from SoftBank, sources tell TechCrunch. The round is a big deal for the LA tech ecosystem, which, aside from Snap and Bird, has birthed few venture-backed unicorns.

Pinterest, the nine-year-old visual search engine, has hired Goldman Sachs and JPMorgan Chase as lead underwriters for an IPO that’s planned for later this year. With $700 million in 2018 revenue, the company has raised some $1.5 billion at a $12 billion valuation from Goldman Sachs Investment Partners, Valiant Capital Partners, Wellington Management, Andreessen Horowitz, Bessemer Venture Partners and more.

Kleiner Perkins went “back to the future” this week with the announcement of a $600 million fund. The firm’s 18th fund, it will invest at the seed, Series A and Series B stages. TCV, a backer of Peloton and Airbnb, closed a whopping $3 billion vehicle to invest in consumer internet, IT infrastructure and services startups. Partech has doubled its Africa VC fund to $143 million and opened a Nairobi office to complement its Dakar practice. And Sapphire Ventures has set aside $115 million for sports and entertainment bets.

The co-founder of Y Combinator will throw a sort of annual weekend getaway for nerds in picturesque Boulder, Colo. Called the YC 120, it will bring toget her 120 people for a couple of days in April to create connections. Read TechCrunch’s Connie Loizos’ interview with Altman here.

Consumer wellness business Hims has raised $100 million in an ongoing round at a $1 billion pre-money valuation. A growth-stage investor has led the round, with participation from existing investors (which include Forerunner Ventures, Founders Fund, Redpoint Ventures, SV Angel, 8VC and Maverick Capital) . Our sources declined to name the lead investor but said it was a “super big fund” that isn’t SoftBank and that hasn’t previously invested in Hims.

Five years after Andreessen Horowitz backed Oculus, it’s leading a $68 million Series A funding in Sandbox VR. TechCrunch’s Lucas Matney talked to a16z’s Andrew Chen and Floodgate’s Mike Maples about what sets Sandbox apart.

Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

In a new class-action lawsuit, a former Munchery facilities worker is claiming the startup owes him and 250 other employees 60 days’ wages. On top of that, another former employee says the CEO, James Beriker, was largely absent and is to blame for Munchery’s downfall. If you haven’t been keeping up on Munchery’s abrupt shutdown, here’s some good background.

Consolidation in the micromobility space has arrived — in Brazil, at least. Not long after Y Combinator-backed Grin merged its electric scooter business with Brazil-based Ride, it’s completing another merger, this time with Yellow, the bike-share startup based in Brazil that has also expressed its ambitions to get into electric scooters.

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm, TechCrunch’s Silicon Valley editor Connie Loizos and Jeff Clavier of Uncork Capital chat about $100 million rounds, Stripe’s mega valuation and Pinterest’s highly anticipated IPO.

Global VC market sees highest-ever concentration of supergiant dollar volume in Q4 2018

For the global VC industry, 2018 was a supergiant year. Crunchbase projects that 2018 deal and dollar volume surpassed even the high-water mark left by the dot-com deluge and the drought that followed.

As covered in Crunchbase News’s global VC report reviewing Q4 and the rest of 2018, projected deal volume rose by 32 percent and projected dollar volume jumped 55 percent since 2017. For all of 2018, Crunchbase projects that well over $300 billion was invested in equity funding rounds across all stages of the venture-backed company life cycle. (This figure includes an estimate of transactions that were finalized in 2018, but won’t be publicized or added to Crunchbase until later. More on how Crunchbase projects data can be found at the end of that report.)

Is the market mostly buoyed by the billions raised by the biggest private tech companies, or is a rising tide in this extended aquatic metaphor raising all ships? In other words, is the bulk of the capital going to only a handful of the largest rounds? That’s what the numbers show.

In the global VC pool, capital is definitely sloshing toward rounds totaling $100 million or more. In the chart below, you can see what percent of reported global VC dollar volume was raised in “supergiant” rounds versus deals of smaller size.

 

In the year, over 56 percent of worldwide dollar volume can be attributed to supergiant rounds. With 61 percent of reported capital coming from supergiants in the final quarter, Q4 2018 has the highest concentration of supergiant dollar volume of any single quarter on record.

Big money weighs on the market

Following that same theme, the calendar year 2018 is the most concentrated year on record. In the chart below, we show how much capital was raised in non-supergiant (<$100 million) venture rounds over the past decade. (It’s basically the bottom part of the first chart, with the data aggregated over a longer period of time.)

For the first time in at least a decade (and likely ever) supergiant, $100 million+ VC rounds accounted for a majority of reported capital raised. So in summary: Q4 2018 had the highest share of supergiant VC dollar volume on record, and 2018 was the most concentrated year on record.

On the one hand, the results are not surprising, considering that the biggest-ever VC round (a preposterously large $14 billion Series C raised by Ant Financial) and several rivals for that top spot were closed last year. That big round made a big splash. It was the year of multi-billion-dollar global growth funds, SoftBank and scooter CEOs worth supergiant sums, at least on paper. But was it good for the smaller players too?

Seed and early-stage deal and dollar volume were both up in 2018, but then again, so is everything toward the end of a bull market cycle. The question is, when the bottom falls out, between supergiant and more normal-sized rounds, which has the farthest to fall?

Startups Weekly: Will Trump ruin the unicorn IPOs of our dreams?

The government shutdown entered its 21st day on Friday, upping concerns of potentially long-lasting impacts on the U.S. stock market. Private market investors around the country applauded when Uber finally filed documents with the SEC to go public. Others were giddy to hear Lyft, Pinterest, Postmates and Slack (via a direct listing, according to the latest reports) were likely to IPO in 2019, too.

Unfortunately, floats that seemed imminent may not actually surface until the second half of 2019 — that is unless President Donald Trump and other political leaders are able to reach an agreement on the federal budget ASAP.  This week, we explored the government’s shutdown’s connection to tech IPOs, recounted the demise of a well-funded AR project and introduced readers to an AI-enabled self-checkout shopping cart.

1. Postmates gets pre-IPO cash

The company, an early entrant to the billion-dollar food delivery wars, raised what will likely be its last round of private capital. The $100 million cash infusion was led by BlackRock and valued Postmates at $1.85 billion, up from the $1.2 billion valuation it garnered with its unicorn round in 2018.

2. Uber’s IPO may not be as eye-popping as we expected

To be fair, I don’t think many of us really believed the ride-hailing giant could debut with a $120 billion initial market cap. And can speculate on Uber’s valuation for days (the latest reports estimate a $90 billion IPO), but ultimately Wall Street will determine just how high Uber will fly. For now, all we can do is sit and wait for the company to relinquish its S-1 to the masses.

3. Deal of the week

N26, a German fintech startup, raised $300 million in a round led by Insight Venture Partners at a $2.7 billion valuation. TechCrunch’s Romain Dillet spoke with co-founder and CEO Valentin Stalf about the company’s global investors, financials and what the future holds for N26.

4. On the market

Bird is in the process of raising an additional $300 million on a flat pre-money valuation of $2 billion. The e-scooter startup has already raised a ton of capital in a very short time and a fresh financing would come at a time when many investors are losing faith in scooter startups’ claims to be the solution to the problem of last-mile transportation, as companies in the space display poor unit economics, faulty batteries and a general air of undependability. Plus, Aurora, the developer of a full-stack self-driving software system for automobile manufacturers, is raising at least $500 million in equity funding at more than a $2 billion valuation in a round expected to be led by new investor Sequoia Capital.


Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets


5. A unicorn’s deal downsizes

WeWork, a co-working giant backed with billions, had planned on securing a $16 billion investment from existing backer SoftBank . Well, that’s not exactly what happened. And, oh yeah, they rebranded.

6. A startup collapses

After 20 long years, augmented reality glasses pioneer ODG has been left with just a skeleton crew after acquisition deals from Facebook and Magic Leap fell through. Here’s a story of a startup with $58 million in venture capital backing that failed to deliver on its promises.

7. Data point

Seed activity for U.S. startups has declined for the fourth straight year, as median deal sizes increased at every stage of venture capital.

8. Meanwhile, in startup land…

This week edtech startup Emeritus, a U.S.-Indian company that partners with universities to offer digital courses, landed a $40 million Series C round led by Sequoia India. Badi, which uses an algorithm to help millennials find roommates, brought in a $30 million Series B led by Goodwater Capital. And Mr Jeff, an on-demand laundry service startup, bagged a $12 million Series A.

9. Finally, Meet Caper, the AI self-checkout shopping cart

The startup, which makes a shopping cart with a built-in barcode scanner and credit card swiper, has revealed a total of $3 million, including a $2.15 million seed round led by First Round Capital .

Want more TechCrunch newsletters? Sign up here.

Daily Crunch: AR startups face an uneasy future in 2019

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:

1. Magic Leap and other AR startups have a rough 2019 ahead of them 

2018 was supposed to be the year where the foundation of AR was set to expand, but now it looks like momentum has been sucked out of the industry’s heavy hitters.

2. Sorry I took so long to upgrade, Apple 

Apple missed Wall Street’s Q1 sales projections yesterday and the company blamed faltering sales in China for the reason behind the drop. But let’s not kid ourselves; anyone who has an iPhone now is part of the problem. As essential as these devices have become to our lives, it’s too hard for many consumers around the world to justify spending more than $1,000 for a new phone.

BERND THISSEN/AFP/Getty Images

3. China’s lunar probe makes history by successfully soft-landing on the far side of the moon

China crossed a major milestone in space exploration last night by becoming the first country to land a probe on the far side of the moon. Named after the Chinese moon goddess, Chang’e 4 will use a low-frequency radio to survey the terrain of the moon.

4. Mary Meeker targets $1.25B for debut fund, called Bond

With Bond, Meeker is set to be the first woman to raise a $1 billion-plus VC fund.

5. Money is no object: China’s Luckin sets sights on rivaling Starbucks 

Caffeinated drinks are taking off in the tea-drinking nation. Luckin, which is only a year old, has announced an ambitious plan to topple Starbucks and expand to 6,000 stores by 2022.

6. 10 predictions on the future of gaming in 2019 

Will the gaming industry clutch up in 2019?

7. Segway unveils a more durable electric scooter and autonomous delivery bot 

Segway’s Model Max scooter is designed to help services like Bird and Lime reduce their respective operating and maintenance costs, while its new Loomo delivery bot is made for autonomous deliveries for food, packages and other items.