Liquid unicorns, accelerating transitions, and Gen Z’s venture impact

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter for your weekend enjoyment. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend enjoyment.

Ready? Let’s talk money, upstart companies and spicy IPO rumors.

Sadly the best news of the week isn’t a fit here

So far this little newsletter has bested performance expectations, and has quickly become my favorite thing to write each week. Sadly, however, it has a theme and a genre and a remit. Which means that I will not be writing its opening column on the Epic-Apple payment brouhaha. Alas.

But don’t worry. In our world of markets and startups there was a lot to get through.

Namely that a number of unicorns that you know by name appear to be edging closer and closer to going public. There are some big names that are either about to file, or are trending in the direction of public debuts, and we’re getting more and better information than before.

I tried to summarize a bit of this on Thursday, but let’s narrow and just talk IPO mechanics:

  • Palantir may direct list in September. Is it a consultancy? Is it a software company? Is it a mix of both? Don’t know? Don’t want to price it? Just direct list it! Jokes aside that we are this close to a Palantir IPO is a combination of this and exciting. (More on its growth history here.)
  • Airbnb’s IPO is not only back on, it could file this month and go public before the end of the year. And its second-quarter financials leaked. The damage in perspective: After $842 million in Q1 2020 revenue, the firm had a reported $341 million Q2. And in the year-ago Q2 it did north of a flat billy in top line.
  • A coda on Airbnb. Lyft and Uber have not seen their value drop as far as their revenue has in 2020. So, there is a comeback story to be made that investors are willing to buy. That Uber and Lyft are still talking about adjusted profitability, of course, has helped their case. Still, if Airbnb can chart a path back to its former financial position, investors might be willing to overlook its summer results.
  • Stripe hired a CFO. That’s a game-on, though we’re not really expecting a release inside of 2020.

Adding a little more, Coinbase is still expected to debut in perhaps early 2021, and DoorDash is somewhere in the wings.

And then there are the companies that are IPO-scale and just… not going public because they are enjoying extended grand tours of the late-stage startup market funded by the largesse of wealthy relatives. Or late-stage venture funds. Whatever. You get what I mean. Snowflake has annual recurring revenue of $400 million, and it is private. Wild.

We, the S-1-reading public, are hungry for the f****** numbers. Give them to us!

Market Notes

This week’s Market Notes is a bit different than usual as we have two longer topics, instead of a number of little notable entries.

The Exchange caught up with the CEOs of Wix and Cloudinary recently, to chat about their companies (the former is public, the latter is private) and how they are faring during COVID-19.

I know we’re all a bit tired of talking about the pandemic, but how it has changed the business landscape is probably the single biggest story of the year inside of our world. So, let’s see what we learned talking to the execs.


  • TechCrunch spoke with media-management service Cloudinary in January of 2020 because it was a company that had reached $60 million ARR without external capital. It has sold secondary shares here and there to external parties (Bessemer, Salesforce Ventures), but has paid for its own growth. In January, CEO Itai Lahan said that his company had never lacked what it needed to keep growing and “get to the next level.”
  • So, what’s happening over at Cloudinary now that we are deep in the pandemic business cycle? Likening his company to a bulldozer when discussing how Cloudinary operates compared to some startups, Lahan said that his market was varied: E-commerce as a segment is not growing as fast as the company had expected, but social customers had grown quickly in April, and so forth.
  • Cloudinary itself is still growing, and its CEO stressed that it has not had to lay off staff during the pandemic. Cloudinary did burn a little cash for a few months earlier in the year, but remains self-powered with sufficient resources in the CEO’s view.
  • Cloudinary’s marketing VP Sanjay Sarathy was on the call as well, so I asked him if he agreed with Lahan about having all the resources he needs. He predictably agreed, but stressed something that stayed in my head. According to Sarathy, having both self-serve and enterprise sales has been useful; with two paths to market Cloudinary can balance one with the other, making me wonder why more companies don’t do the same.
  • Finally the three of us riffed on the impact that high valuations have on some startup choices. If ARR is highly valued by investors, then startups might pursue less-efficient growth than they otherwise might because they are in some way incentivized to do so. Cloudinary isn’t chasing VC markups in the same way, so it’s world is a bit different. The company remains hugely interesting, and we’ll check back in with them in a few months.


  • Wix recently reported earnings, and I got on the phone with its CEO Avishai Abrahami to chat about its results, and most notably its pandemic-era marketing spend. When some companies are cutting costs and lowering spend, Wix put $119.3 million into sales and marketing in Q2, up from $95.2 million in Q1 2020 and $71.3 million in Q2 2019.
  • What up with that? In short Wix caught the digital transformation acceleration tailwinds and decided instead of just enjoying a boost to invest lots in growing even faster. That cost money, but the firm is pretty stoked about how short its payback cycle is for those expenses. The company said that more than half of its Q2 marketing spend (60%) has been returned to the company in cash terms (some of the revenue is unearned, of course, and will be prorated over time).
  • “We are responding to this continued heightened demand by increasing our investment in marketing, which based on our historical data, will drive continued collections and revenue growth in the near future,” the company said during its earnings cycle.
  • During our conversation Abrahami said that even in places where the pandemic has settled down a bit, the world has not gone back to what it was pre-pandemic. The acceleration of the digital transformation then, is perhaps not a short-term bump, but a whole-cloth reordering of how business happens.
  • Wix also launched a number of products include some ecommerce tooling towards the end of 2019, which Abrahami described as well-timed. He also stressed that COVID-19 is awful and that good business results don’t mean that he’s happy with the state of the world.

So, Cloudinary is chugging along with a slightly uneven growth profile depending on the niche in question. Wix is seeing a perhaps broader acceleration. But both companies are going to come out on the other side of COVID-19 in fine shape. We just hope that Cloudinary still goes public in due time. We want that S-1!

Various and Sundry

  • On Equity this week we dug into how Gen Z is changing fundraising by making it fun and good and bringing attention into the matrix of things that prove market-fit.
  • I covered Cube’s $5 million seed round, which stood out for the part of the market they are tackling, and Mux’s $37 million Series C. Mux does video APIs so that any company can bring video into their service natively. As you can imagine, it’s been busy.
  • Duck Creek priced its IPO at $27 per share after raising its range earlier this week to $23  to $25 per share. The company’s stock opened at $42 per share, up 56%.
  • This week The Exchange was super happy to welcome another author for the first time: Natasha Mascarenhas whom you might know from the Equity podcasting crew. You can read her first entry here, as she was kind enough to fill in for me on my day off.
  • The fintech software-and-card world took a neat turn this week when Ramp added more code to its corp card business. It’s a startup we’ve kept tabs on since its launch earlier this year, and it has managed to grow during the spend-reducing pandemic, which is neat.
  • The Gong round was cool, with the company valued at $2.2 billion after a fresh $200 million in capital. Oh, and it has grown 2.5x this year.

And we have to cut it there as we’re out of room. Thanks for hanging out with us today!

Hugs, fistbumps, and good vibes,