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This week, the team discussed Y Combinator moving to San Francisco, Airbnb acquiring HotelTonight and an infusion of cash into the ride-hailing industry.
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Kate Clark: Hello, and welcome to Equity. I am TechCrunch’s Kate Clark, and I’m joined this week by Alex Wilhelm from Crunchbase News.
Alex: Hey Kate. How are you?
Kate Clark: I’m good. It’s nice to have you in studio this week.
Alex: It is. It’s raining here. It’s terrible. The weather is not what I expected when I moved here seven, six years ago, but I don’t know, we’re still in the middle of the universe of tech, so it’s not that bad.
Kate Clark: I’m a Seattle-ite, so I try not to complain about the rain, but this is really annoying.
Alex: All right, one more thing on that. I’m from Oregon, and I left there for a reason, and now I’m back in, and the weather has followed me. Anyways.
Kate Clark: Yep, that’s how I feel. All right. Well, there’s a ton of news this week, so I want to hit on a few things just right off the bat.
Kate Clark: Let’s start with Precursor Ventures. Precursor Ventures is a pre-seed fund led by Charles Hudson. They have closed a $31 million fund this week, which is double the size of their debut fund.
Alex: This is fun, because the first fund was actually 15.3 million, so it’s just ever so slightly more than double, but they probably shot for roughly double, and what’s cool is we were going back through the archives, and Charles Hudson, the kind of main person at Precursor was a guest back in June of 2017, which means that Equity is officially old.
Alex: That’s terrifying. Moving on, Coral Capital has raised $46 million for itself, and this is interesting, because of its pedigree. Kate, what was it before it was called Coral Capital?
Kate Clark: It was 500 Startups Japan. So, it looks like they’ve decided to roll out as an independent fund, completely separate from 500 Startups.
Alex: Next up is NEA, which is raising a three point $6 billion fund, which if it closes on size, is going to be the largest NEA fund to date, but we were talking before the show, and we were thinking about the name of NEA, which is New Enterprise Associates, and we think it’s actually just three random words they put together to form an acronym.
Kate Clark: I think they should have just named themselves NEA, because you know they wanted to just be called NEA. Why do you need to have an acronym?
Alex: Well call them NEA, you know, I mean, I don’t know if that’s worse, or better than three random words.
Kate Clark: That’s a good point. That’s worse. NEA is worse.
Alex: They should call it like a tree, like, you know, Cedar Birch, Sequoia Hill.
Kate Clark: We don’t need anymore of that. Rock River Ventures Creek. Yeah.
Alex: It’s even worse than private equity. All right. Last quick hit of the day is Munchery, which we’ve talked about the show a couple of times, and they have finally filed for bankruptcy.
Kate Clark: Yeah. I’ve been following the Munchery debacle the whole time. So, I was interested, and of course, unsurprised to see that they finally filed for bankruptcy. I recommend anybody who’s been vaguely interested in this whole Munchery saga, to go read the story I wrote on their bankruptcy filing, because it includes the filing, and the story, and it is very interesting to page through.
Alex: It’s good, because it describes how they fell apart essentially.
Kate Clark: Exactly. The CEO, James Beriker, he tells the whole story within the filing of what exactly happened, including that they, blame is not necessarily the right word, but they said the Blue Apron IPO being such failure, and all the press, and media that came with that made it really difficult for Munchery, and other food delivery, or meal kit startups to raise additional venture capital, which obviously doesn’t help a company that’s on the verge of folding.
Alex: Yeah. This makes me think a little bit about what I write, ’cause I always think that I’m writing for people that don’t have influence, but sometimes we cover something kind of to that, that actually change things a bit.
Alex: Anyways. The Blue Apron is still in business, and Munchery is not, that’s the Tldr. Now, we’re going to move into something I’m pretty excited about it, because Y Combinator is very near, and dear to everyone’s heart in Silicon Valley. If you’ve been around for a while, you’ve been to founder dinners, you’ve met these people, but there are possibly some changes afoot in the great land of YC. So Kate, what’s up?
Kate Clark: Yeah, so YC is in the process of finding a new HQ, and they’re looking at San Francisco. So what’s notable about that, is YC has for a very long time, been located in Mountain View, and if you don’t live in the Bay area, that’s about an hour south of San Francisco. I just doubted myself, ’cause I’m new to San Francisco.
Alex: It’s actually west, it’s in the middle of the ocean.
Kate Clark: So yeah, so YC is looking to move to San Francisco. So I mean, what does that mean? A lot of venture capital firms in the last several years that were based in Silicon Valley have moved to San Francisco, to be closer to entrepreneurs who for the most part, they want to live in San Francisco, which I understand, because I personally wouldn’t want to live in Silicon Valley either.
Alex: The only caveat to that is if you do go to like a place like Sunnyvale, and go out in the burbs, it is silent, and SF for all the joy that it was brought me in my years here is loud.
Kate Clark: You want to live in a silent town?
Alex: I turn 30 really soon, and that’s just what an aging into, but I have a question. Is this their only HQ, or they kind of do an HQ two up in SF?
Kate Clark: You know, I don’t know the full details. My sources tell me that they actually aren’t sure what they’re going to do with their Mountain View headquarters.
Alex: Okay.
Kate Clark: So if I had to guess, I’d say they’re probably going to do a full fledge moving to San Francisco. They already have satellite offices here. They have a big presence here. It’s not going to be some crazy huge transition, but those companies are going to be, you know, hanging out in San Francisco full time.
Kate Clark: They’re not going to be making that trek up to Mountain View, or down to Mountain View, sorry, for their, you know, whatever it may be, their weekly dinners, and mentorship sessions. So, just to give a few examples of some venture capital firms that have made that move.
Kate Clark: Shasta ventures, Norwest venture partners, Accel, GV, General Catalyst, NEA, Benchmark, Kleiner just for example, a lot of those firms do operate two offices. So, it just depends. some of them have shut down their Silicon Valley offices, and a lot of them have chosen just to maintain, and operate two separate offices.
Alex: This is kind of the founder friendly dynamic that we’ve seen. It used to be you had to go make the pilgrimage to Sandhill Road down in Silicon Valley to go find these investors, ’cause they didn’t exist anywhere else. You couldn’t go find them, and they weren’t gonna come to you. They were busy sitting there counting their money.
Alex: Now, they’re up in SF, they’re a bit more aggressive, they want to be in the mix, and they want to be nearer to the ground of where the younger folks are, which is here in the city. So, it’s the whole dynamic kind of in microcosm in this HQ discussion.
Kate Clark: Yeah, and on top of that, I mean, them shopping for a new HQ is not the only thing that’s going on at YC, and I think that’s partially why it’s so interesting that they are moving in addition to moving to SF, YC has increased the amount of capital that they invest in each of their companies from 120,000, to 150,000.
Kate Clark: They’ve admitted a whole bunch more companies to their latest cohort. I think it’s maybe around 220 companies, 50% larger than its Spring 2018 cohort.
Alex: 50%?
Kate Clark: Yeah.
Alex: In one year.
Kate Clark: The cohort, to cohort increase was 50% according to the TechCrunch writer that covered the latest cohort. So because of that huge increase, cause it was like 132 companies, and now it’s like 220 companies, or something.
Alex: I don’t even know that many names. I can’t even imagine that many people, that’s crazy.
Kate Clark: I mean, try to imagine a demo day with 220 companies, and imagine what I was going to say is that they have now two stages, because they have so many companies. So, they have two separate rooms I’m assuming.
Alex: This just sounds like dilution to me in a sense, because the best part of the YC Demo Day experience, aside from the terrible food which I’m going to make fun of it until I die, was that you were in one room, and everyone who had one moment in the spotlight, everyone was there from like people that were like Joe Montana, to like Joe VC, and you were all just stuck in a room together.
Alex: It was really meritocratic in a way, because it was literally like first come, first serve for chairs. One time, I sat on against the wall, and it was fine, but now this is a much more slick experience. It’s more divvied up, it’s less pirate-y
Alex: You know? It feels less early stage. It feels more polished. I guess everything’s going that way, but to me it feels slightly off theme.
Kate Clark: Yeah, and they also have a live stream now, because they anticipate there’s just so many people who want to go to these demo days, and aren’t unable to including top tier investors. Top tier investors don’t necessarily even have a seat at these, because they are these incredibly exclusive events.
Alex: But that was the point. That’s like saying, ‘We put a live stream in the club, because you couldn’t get in the front door.’ I don’t know.
Kate Clark: I mean, two stages to me does seem a bit like it’s sort of hacking at the core of what YC is supposed to be doing.
Alex: It’s like if Stanford quadrupled it’s class sizes.
Kate Clark: Exactly, that is what’s it like.
Alex: Maybe that’s actually okay. I wouldn’t be opposed to that.
Kate Clark: I think people close to YC claim that they’re able to scale really well, because they can just add operating partners, and they can add mentors to companies all the time. So, if they’re able to expand their team, why shouldn’t they be able to expand their cohorts?
Alex: Last thought about this, ’cause I just talked to a YC CEO earlier this week about what makes YC special. So, I have a little bit of notes from them about this, and he said that the reason why YC was spectacular, it wasn’t the capital, it wasn’t the location, it was the fact that they had the best mentors on hand, because they could help you with precisely the problem you were having at the precise stage you were at.
Alex: They just did one thing. They did it really well, and they had the exact people you needed to help you at that stage of a company’s growth. If you just put add operating partners, as you just said they might, which they might, and that might even work, but they might not be at the same quality level.
Alex: Can you find two X, that number of people who are that good? And if not, you will dilute the magic. If you had add a fifth house to Harry Potter, Hufflepuff will be fifth, you know?
Kate Clark: Right, and I think the same argument can be made to any venture capital firm. A really good venture capital firm can’t just hire anybody. I mean, of course they can’t just hire any former entrepreneur as an operating partner to help invest, and mentor company. So, I guess the question really is how far does venture capital scale, how far does an accelerator like YC scale, and to the point that it is really diluting its core offerings.
Alex: I know we’re on this for too long, so I’ll move on, but the question of scaling at YC is again, a microcosm of the issue of scaling in the whole VC market. Like, everything’s gotten stretched out longer in a company’s life cycles.
Alex: Other funds have moved into the venture capital space, and the question is, is there enough innovation, and growth actually to support these valuations, and capital influxes? And I dunno.
Kate Clark: Yeah, I could talk about this for a very long time. So, let’s move on from small checks, to big checks. Alex, tell me about the greatest billion dollar round of the week.
Alex: Well, it’s the greatest 1.4, $6 billion round for a week if I’m going to be annoyingly precise about it. 1.5, if you’re rounding. Guess who led this Kate? Was it the Vision Fund? It was.
Kate Clark: Yeah, I’m going to guess it was the Vision Fund.
Alex: Shockingly enough, it was.
Kate Clark: Put money on that.
Alex: I have a quote from actually TechCrunchs’ Jon Russell, one of my absolute favorite Tech Crunchers, maybe my favorite.
Kate Clark: He’s great.
Alex: He said that this grab investment quote, ‘Takes Grabs ongoing series H to 4.5 billion’, which is an amazing sentence.
Kate Clark: I don’t know how Jon Russell keeps up with Grabs funding rounds, ’cause I feel like there’s just one all the time.
Alex: He’s been really good about covering them when they’re rumored, covering them when they come together, and then covering them at the end. So, he kind of wraps you into this like Southeast Asia, Grab, Go-Jek funding saga.
Kate Clark: He really does, he does.
Alex: Every night when I go to bed, I read Jon Russell’s funding stories. They just put me right to sleep, not in a bad way Jon, in a good way. So, I was thinking about scale, and this is one of the biggest venture capital rounds in aggregate to date. I know there’s at least one bigger one, which was the ANT financial series C of 14 billion from last year, I think it was like June, or July of last year.
Alex: So, this is not the biggest aggregate, but it’s certainly among the largest we’ve ever seen. Total capital raised to date by Grab is eight point $8 billion, and my notes there say holy sharks, ’cause I didn’t know they had raised that much capital to date, that’s more than I expected, and I just couldn’t help myself, but I was curious from whence does this capital come, if not all from the Vision Fund, and Crunchbase had 40 known investors written down for this company, and I grabbed the fun ones.
Alex: So, did you know that Microsoft, Toyota, Honda, Yamaha, and DiDi have all put money into this company, along with about three dozen venture capital firms?
Kate Clark: I did not know that, but I’m not extremely surprised by that.
Alex: You have to bundle so hard to build one of these companies, ’cause ride hailing apparently takes an infinite amount of capital to get right.
Kate Clark: Apparently it does.
Alex: Okay, so here’s some more numbers for the folks out there who want more of them, which is me. Go-Jek, another player in the region has raised a very modest in comparison, three point $1 billion in known capital, and then we go up in scale.
Alex: DiDi, the biggest player in China has raised about $20 billion. Now, this is inclusive of a lot of things. This is not just raw, equity capital. There’s often some debt in here. There’s a weird secondary round thrown in, but it gives you an idea of the scale we’re talking about.
Alex: Uber, $24 billion. Lyft, a smaller number of 4.9, but that’s like what 60, 61, 62 billion of capital has gone into just the bigger ride hailing companies that we know of.
Kate Clark: And do we know where does Grab operate? Does it operate all across Southeast Asia?
Alex: That’s my impression, but I would have loved to fact checked that.
Kate Clark: I think it does. The reason I thought of that is Lyft, Lyft only having raised 4.9 billion just seem so small, compared to say Uber’s 25 billion, or DiDi’s 20 billion, but the big difference is that Lyft really only operates in the US.
Alex: Right, it’s a one in country play, which is maybe why it’s losing less money, than a lot of other companies, it’s not running offices around the world, but also your total addressable market, or TAM is going to be smaller.
Alex: Although of course, the US is quite a large market. Grab though is Singapore based, and operates in Singapore obviously, and then Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar, and Cambodia per this page.
Kate Clark: Okay, so indeed across Southeast Asia.
Alex: Indeed, across Southeast Asia, as expected. I mean, if you raise that much capital, you’re not targeting one country, unless you’re Lyft, and then half. Hey everyone, don’t forget this episode is brought to you by SharesPost. All right, well let’s scoot.
Alex: Actually, I’m going to segue to myself here, ’cause I threw something in the agenda today that I’m pretty excited about. I know Kate finds Fintech to be literally the best thing of all time.
Kate Clark: It’s not my favorite topic.
Alex: Just because we have time, can just like scratch my itch here? Why don’t you like Fintech?
Kate Clark: I don’t know, to be completely honest, I just don’t find it to be particularly interesting. When I’m reading about a Fintech company, I just don’t get excited. Well, I was going to say, maybe I’m not super interested in finance, but given what I do …
Alex: You do know what the show is about, don’t you?
Kate Clark: I like venture capital. I like tech. When it comes to hard financial services, I’m less excited.
Alex: Okay. But we should draw a rough different circles of fin services, versus Fintech, and I know they get really muddied, and I think actually Chime is more fin services than Fintech if I’m being totally honest, but I like the idea, and this is just maybe me, but anything that involves moving billions of dollars around on a daily basis is interesting, cause of just the scale of movement, and also I hope some of the money will land on me at some point in time, like it’ll kind of leak out.
Kate Clark: It’s certainly an important sector, and worth paying attention to. I guess I’m just glad my job is not specifically Fintech reporter.
Alex: Bad news about your next drop assessment. All right, Chime. Chime raised $200 million led by DST, and has now raised a total of about $300 million. So, if you go back a couple of weeks on the show, Kate, and I were talking about how some companies are now raising more money in one round than they’ve raised to date.
Alex: This is a big thing with companies often out of China. This is one of those times they raised two x in one round [inaudible 00:14:33] they’d raised proceeding. So, this comes a little bit less than a year after the series C of $70 million, and back then it was valued at about 500 million post money.
Alex: I don’t know the new Chime valuation, but we can presume it’s getting close, if has not yet met the Unicorn threshold of $1 billion. Since the series C of last year, it’s grown it’s staff to 120 people, acquired something called Pinch, which I have never heard of, and I’ve already forgotten about, and then I finished that sentence, and critically, they grew from 1 million accounts roughly a year ago, to about 3 million now.
Alex: So, that’s pretty aggressive growth. That’s pretty impressive. It shows that there’s a lot of demand out there for these quote, ‘Neo banks’, and if you want to look more of the category Acorns, which started as a savings company, which is now moving into banking is another competitor.
Alex: And critically they raised a $105 million series E in late January of this year. So, there’s a lot of money in the space, Chime, this Chime round was kind of long rumored, so it’s not a shock that it’s here, but it has landed, and that’s $300 million into this space across two rounds, in just a couple of months. So, it’s hot, VC’s are excited about it.
Kate Clark: And you’re excited about it. It’s good some people are excited about Fintech.
Alex: Well, one person is enough, one person outvotes incorrect majority. It’s the old saying. All right, let’s move on to something that everyone cares about, which is the Vision Funds. Sorry everybody, but as we all know, it’s very active around the world, and now it’ll be more active in Latin America.
Kate Clark: Indeed. Yeah. SoftBank loves to make headlines, and in addition to leading some big rounds, it has created the SoftBank Innovation Fund, which it announced this week.
Kate Clark: So far, they have raised $2 billion in committed capital with a reported goal of raising five billions for this fund, which is going to invest in Argentina, Brazil, Chile, Columbia, and Mexico covering various industries like e-commerce, digital, financial services, healthcare, mobility, and insurance.
Kate Clark: So, just basically they’ve got this huge bucket of capital to invest in a bunch of disrupters in Latin America.
Alex: So, did I have that wrong? This is a distinct fund from the Vision Fund, but still from SoftBank? Or is this a fund that comes from the Vision Fund’s southern part, and is going to take on other investment to make it up to the 5 billion.
Kate Clark: I don’t know if this is coming from the Vision Fund. It seems to me this is coming from SoftBank, that they’ve created like sort of the sister fund called the SoftBank Innovation Fund that’s completely independent from the Vision Fund.
Alex: I wanted to correct myself, cause I definitely introduced this incorrectly, and that’s totally my fault. So, SoftBank, Softbank Innovation Fund aimed at Latin America, distinct from, but sister to the Vision Fund, got it.
Kate Clark: Yeah, exactly. Yeah, that is exactly right. So, according to TechCrunches Ingrid Lunden’s reporting, Latin America is a huge market. So, there are 375 million internet users, and 250 million smartphone users, which puts Latin America ahead of the US in terms of sheer numbers.
Kate Clark: As far as the retail e-commerce space in Latin America, it doubled in the last three years going from 54 billion in 2018, from 29.8 billion in 2018, so we’re seeing some pretty insane growth in that region.
Alex: That’s super impressive, and we know that SoftBank’s already put money into some places in the regions, and when it’s these companies that you’ve heard of, I think it was 99 which is kind of an Uber rival down in Brazil, and I think there was actually a DiDi component to that, I think DiDi bought it.
Alex: Which was one of the bigger acquisitions we’ve seen in the Latin American space, and then also has put a 100 million into a company called, is Logey, or Loggy.
Kate Clark: I’m not going to tell you, because I don’t know.
Alex: It’s L-O-G-G-I, which is a pretty cool name actually. I don’t hate that, but I don’t know how to pronounce it.
Kate Clark: I wanna say, Loggi.
Alex: Let’s go with Loggi.
Kate Clark: But my gut is usually wrong about pronunciation.
Alex: I’m gonna go with Logi. No, Logi just sounds wrong, now that I say it, it’s Loggi.
Kate Clark: So, yeah, so bottom line is, it’s obvious based off these numbers that Latin America is a huge destination for VC investments. So, I think we’re going to see that skyrocket in the next few years. Masayoshi Son, the SoftBank Ceo, his statement was, ‘Latin America is on the cusp of becoming one of the most important economic regions in the world, and we anticipate significant growth in the decades ahead.’
Alex: Yeah, and just to throw a little bit of light, and color on that, my team reached out to a Latin American venture capital association, and they said that investment in the region had grown to about 1.1 billion in 2017, up from, and this is from memory here, but 500, 600 million in 2016.
Alex: So, there’s a lot of growth in the area. This amount of capital is large in comparison to the yearly dispersion of capital across the region. So, it could have an outsize in impact, and maybe act as an accelerant to a huge part of the world that honestly, we don’t talk about enough on the show, frankly. So, shame on us.
Alex: Now today, before we recorded, news broke that everyone’s favorite company that refuses to grow up, and go public has bought a company that everyone actually liked to use. So, what happened with Airbnb, and HotelTonight?
Kate Clark: Yeah, I feel like something always breaks just hours before the show every week, which is not a bad thing, ’cause it gives us some fresh news to play around with.
Alex: It really likes to take our agenda, and throw it away, and make us start again.
Kate Clark: So this week, Airbnb announced its intent to acquire HotelTonight. So, we don’t have the price on this deal, because Airbnb declined to give a price, but some reports are indicating that it was worth about 465 million, which is probably exactly right, cause HotelTonight’s last valuation was 463 million.
Kate Clark: So, that’s just north of that. Sounds like a pretty logical number. So, if you’re unfamiliar, I’m HotelTonight is an app where you can log on, and then book a hotel room day of. So, if you’re just somebody who’s really bad at planning, or if you’re a business traveler who just doesn’t really make their accommodations far in advance, you can just hop on the app, and then book a room for that night.
Kate Clark: I’ve used it before. I think it’s pretty useful. I saw on Twitter today, tons of people were like, ‘I love HotelTonight, and now it’s going to get screwed at Airbnb’, which I mean, it’s going to remain independent for the time being. So, there’s not going to be any massive changes incoming.
Alex: The question is, how long is for the time being, and how much will it get Airbnb-ified, though it’s ironic now that we’re seeing companies that used to be the upstarts, now become the incumbents, and therefore squash the upstarts. Like, that’s a weird dynamic that I didn’t expect to have happened, but Airbnb is [crosstalk 00:20:22]
Kate Clark: Right, it’s true. People who remember that beginning of Airbnb, I think are really like, ‘Oh wow, now they’re going into the hotel business. They were so against the hotel business, they wanted to share homes’, and I think how I started my story today, I was like, ‘They have to expand beyond tree houses, and quirky homes, because they’re going public, they have to appeal to investors, and I think part of that appeal is showing them that they can be this massive, travel marketplace’, just like Uber wants to become the ultimate transportation business.
Alex: Yeah. I mean, if you’re going to sell to a new customer base, like, I don’t know, business customers, you can’t offer them really cool tree houses in Austin that have upside down bunk beds. You need to have accommodations …
Kate Clark: That you have to book six months in advance.
Alex: And yeah, that’s just not gonna work. So, if you want to pick up an entire class of new people, bring a lot more revenue to your platform, maybe buy some growth effectively, this makes a lot of sense, provided they can not dilute the experience that makes HotelTonight special, because you are correct, it has fans, which is kind rare for a hotel booking thing, ’cause no one ever goes, ‘Expedia, yay!’.
Alex: I’ve never heard someone do that ever in my life, but I want to dial back just for a second, and go back to that $465 million exit number compared to evaluation of four, six, three. That’s a disappointing exit for the last capital in, because they put money in, and they got money out at some probably flat valuation, and that means they’ve just loaned to their money away, and got it back for effectively nothing, which is the opposite of what you want to see.
Kate Clark: Yeah, you’re right. I mean, their last round of capital was I think, I want to say about a $37 million round, and that was in 2017, and I was doing a bit of research on HotelTonight earlier today, and I noticed a couple of years before that, they did have some layoffs, and they did run into some financial trouble.
Kate Clark: So, I think that perhaps flat valuation could be tied to some maybe troubles with scaling that they had before that, but that’s all hearsay.
Alex: So, here’s a question that I have about this. So, Airbnb is going to go public eventually just because it absolutely has to. It’s going to put it off until the last minute, and then go kicking, and screaming apparently, but it will happen.
Alex: Okay. So, you’re Airbnb, you’re big, you got a great brand, you’re well known, you’re one of the more financially healthy unicorns that’s going to go public in this year, or next year, but you go out, and buy HotelTonight.
Alex: So, from the T leads, I’m thinking you’re buying growth, and access to a new customer demographic, fair enough?
Kate Clark: Yes, absolutely.
Alex: But there’s no way HotelTonight would have sold for a flat valuation if it was growing, and was profitable. So, you’re buying growth in some capacity for dilution, cause acquisitions are expensive, and some negative net income, which means that your IPO is probably delayed. I tried to put this together in my head. That’s my best guess.
Kate Clark: Yeah, you’re right. I mean, you do pose an interesting question. I think for one, we don’t know that, that’s the deal size. We don’t know they paid 465 million, because we haven’t confirmed that with our own sources.
Kate Clark: So, perhaps it’s larger, which would point to an alternative narrative than what you’re posing, or Airbnb is not going to go public until say, the second half of 2020. They haven’t, like Slack, Pinterest, Lyft, and Uber, those companies have taken concrete steps forward toward that IPO. Airbnb is one of the only unicorns that’s rumored to go public that actually has not done that.
Alex: They have not to my knowledge hired bankers, they have not privately filed. So, there’s some precursor steps, if you will, that have yet to happen. So, they’re probably the furthest away among the decacorn class.
Kate Clark: Right, and given that this is one of, or if not the largest acquisition that Airbnb has ever completed, that’s going to delay them IPO. If they were planning on, say going public in June, which Brian Chesky at one point did say they were going to go public before June, 2019, which is in like what three months?
Alex: That’s coming up.
Kate Clark: I mean, that’s not happening.
Alex: I mean, never say never, where there’s a will, there’s a way, or whatever that stupid cliche is, but it doesn’t seem likely.
Kate Clark: It seems very unlikely, and again, given the size of this acquisition, which is not complete yet, they just announced their intent to acquire HotelTonight.
Alex: Okay.
Kate Clark: So, it’s not closed. That it’s gonna take a whole bunch of things.
Alex: It’s a half billion dollar deal, give, or take, it’s gonna take a while to swallow, even if you’re Airbnb sized. If you were Microsoft, you wouldn’t even notice. If you’re Google, or you know, one of the big, big companies, those are 50 times as big.
Kate Clark: I should say, so HotelTonight raised a total of 131 million in venture capital funding, and I thought this was really interesting. So Axel, sorry, Accel.
Alex: You can call ’em Axel, that’s fine.
Kate Clark: Accel was the very first investor HotelTonight.
Alex: Okay.
Kate Clark: And they invested in almost every single round subsequently.
Alex: Okay.
Kate Clark: So, they are now HotelTonight’s largest stakeholder. So, I guess, you know, bullet point is just that this is going to be a really nice deal for Accel.
Alex: Well, I mean I’m curious if it’s a cash deal, or a cash stock deal, or a stock deal, cause I’m curious if they would rather have a stock in Airbnb pre IPO to catch that first day pop, which will presumably be two, and four. I would love to find that out. If you know, send us an email, or a tweet.
Kate Clark: Yeah, I would really like to know that too.
Alex: That would be great, and someone on the show is listening right now does know that, and is not going to tell us, and I’m cross with them.
Kate Clark: Just send us an email. We won’t tell.
Alex: Yeah, we won’t tell anyone except for each other. That’s okay. All right. That is all the time we have for this week. Kate, as always, lovely to see you. Great to talk to you. Thank you everyone for showing up. Thanks to Chris for producing it, and we’ll see you all in seven days. Bye.
Kate Clark: Bye.
Alex: Hey Kate, what’s this extra crunch thing I keep hearing all about?
Kate Clark: Basically, Extra Crunch is everything you love about TechCrunch, and more. Imagine if TechCrunch were a magazine. That’s an Extra Crunch. Here’s the spiel. Extra Crunch gives you access to in depth coverage on how startups become successful, challenges facing the startup community, enhanced reader tools on techcrunch.com, member only conference calls, and more.
Kate Clark: Sign up today by visiting Techcrunch.com/subscribe. Extra Crunch is awesome though really, you guys should all check it out. I recently wrote a deep dive on fertility tech, interviewed a ton of VC’s, and founders in the space, and produced a really awesome piece on it.
Alex: If you’re a longtime Equity listener, you’ve heard of Danny Crichton, he’s been on the show a half dozen, two dozen times, he is one of the biggest, and most integral parts of Extra Crunch. So if you love Danny, there’s a lot more Danny to get.
Kate Clark: If you haven’t signed up for Extra Crunch yet, all new members receive a free trial, and even better, if you’re an annual member, you receive discounts to TechCrunch events like TechCrunch Disrupt. Enter the Promo Code Equity to save 20 % on an annual membership plan. Again, that’s techcrunch.com/subscribe, select the annual plan, and enter the Promo Code Equity.