Bootstrapping to $80M ARR

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So much for a quiet start to the year.

Any hopes of 2021 giving us respite from the turbulent waters of 2020 went splat, as the first week of the New Year was busy with venture capital deals (Divvy! Gtmhub!), IPO news (Affirm! Poshmark! Roblox!), SPAC news (SoFi! BuzzFeed!), and violence in the American capital. We’ll get to all of that in a minute, minus the political stuff as I don’t have the heart to scream again before the work week is over.

Today we’re starting with two growth stories, one from a company that is nearing IPO scale, and the other from a startup that is just getting its feet underneath it after a product launch.

We’ll start with Cloudinary, a media-focused software company that we covered in early 2020, when the bootstrapped company announced that it had reached $60 million in annual recurring revenue, or ARR. I caught up with the private upstart again this week to check in on what it was like to bootstrap through a pandemic.

Cloudinary co-founder and CEO Itai Lahan told TechCrunch that his company has reached $80 million ARR, or 33% growth during a very busy year. Not bad, right? But according to Lahan, Cloudinary had targeted a number over $90 million for the year. So what happened?

Well, Cloudinary intentionally decelerated a little bit.

Lahan walked TechCrunch through how Cloudinary dealt with the COVID-19 pandemic, which had an impact on parts of its customer base. Lahan and the rest of the company decided to slow down, he said, reducing the pace at which it was hiring, among other initiatives. The goal was to get the company through the pandemic, switch to remote work with its culture intact, he said.

The Exchange is looking for startups between $35 million and $60 million ARR that are growing quickly and are willing to share performance metrics. Email in if that’s you. More on the project here.

The gap between the company’s $80 million ARR result and its original goal was a mix of COVID-19’s commercial impact and the company’s own choices, Lahan said.

When’s the last time I heard the CEO of a private technology company tell me that they were making conscious choices to slow their company down? I honestly don’t remember. Lahan had reasons, however, that went past not having recently raised $100 million or whatever. Instead, the company decided to exchange short-term financial growth for what the CEO described variously as long-term growth or sustainable growth.

Lahan said that if Cloudinary focuses on its customers and employees over short-term financial goals, it will grow more in the next half-decade than it will if it decided to sprint as fast as it could today. One example of the choice to go a little slower in 2020? The company has around 285 people today, under its original plan to have around 320.

Wild, right? This is all possible because Lahan and his team at once don’t have to answer to external investors with short, or medium-term time frames in mind for liquidity, and because Cloudinary makes secondary liquidity available to its workers, alleviating internal agitating for an IPO.

Not that we would mind Cloudinary going public so we could dig into its numbers more deeply. It should cross $100 million ARR this year, so it’s nearly time to start sending it regular, annoying emails.

Now on to our smaller company: OnJuno! If Cloudinary is nearly ready to go public, OnJuno is getting ready to think about a Series A. So it’s just a little bit younger.

TechCrunch first spoke with OnJuno in December, right after it launched, trying to figure out why the world needed another neobank of sorts. According to co-founder Varun Deshpande, OnJuno is targeted at affluent individuals, while other neobanks have more traditionally targeted less-wealthy customers.

OnJuno entices them with higher interest rates, and a focus on what Deshpande described as the more debit-focused Asian American community. How is it going? We checked back in with OnJuno, about three-and-a-half weeks after it launched. Per Deshpande, OnJuno expects to reach the $10 million assets under management (AUM) threshold shortly, with users bringing average deposits of $7,000 to $8,000. That’s a multiple of some other neobanks, the startup said.

The fintech upstart said that it expects to reach $100 million AUM in the next two to three quarters, adding that around 80% of its users come from traditional banks. Let’s see how fast it can reach $25 million AUM, and if its deposit averages hold up.

Now, venture rounds, IPOs news, and then — I am sorry — some SPAC news we need to discuss.

Venture capital

Despite it being the first minutes and hours and days of 2021, so very much happened. To pick an example, we have now seen around a half dozen new unicorns born, with another group in the provisional camp.

The pace of new unicorn creation feels exciting, but as we’re still too close to Q4 2020 for comfort, I don’t want to call this a trend yet. But as Divvy puts $165 million to work at a $1.6 billion valuation, Hinge Health blasts to a $3 billion valuation and Salesloft meets the mark and more, it’s been busy.

On the slightly-smaller-but-still-very-interesting side of the VC coin, Bangalore-based Jumbotail picked up $14.2 million this week to help it pursue what we called “the opportunity to digitize neighborhood stores in the world’s second-largest internet market.” That actually sounds cool? And important?

And in an even smaller round, Atlanta, Georgia-based Voxie raised a $6.7 million in Series A. Voxie “offers tools to help businesses automate and manage” their text message-based marketing. This shows how much space there still is in the software market for new startups. I would have bet you an espresso that we had tapped out the text messaging startup space three years ago. Nope!

Coming up, some re-digs into startup clusters. After looking at how quickly startups building corporate-cards-and-software businesses are growing, we’re dipping back into software startups building OKR software. If that’s you, get your data in or be left out.


Zooming out from our regular coverage of IPOs, here’s what you need to know: Affirm and Poshmark are pursuing traditional IPOs at huge markups to their final private valuations. That means that the 2021 IPO market is kicking off like a mirror to the late-2020 IPO market. Expect some big pops in coming months for some companies you know by name.

The other bit of news that matters is that Roblox has scrapped its IPO plans, raised an enormous brick of cash, and now intends to direct list. Why is a perfectly fine question to ask, and one that we tried to answer here.

Takeaways? The IPO market will be active, and perhaps more diverse than expected in 2021. At least to start.

SPACs (alas)

While you are tired and bored of SPACs, and I am as well, they are actually doing things at last that we do care about. In brief to respect your time and sanity:


Lots of venture capital funds raised capital, which we yammered about here on the podcast. But I wanted to throw one more into the mix: Transformation Capital, which put together a $500 million fund focused on digital health.

The nice thing about thematic funds, like this and USV’s new climate fund, is that you actually know what they do. Which in the case of Transformation Capital, is investing “investing in commercial-stage digital health companies,” in its own words. Word.

This is the second such fund from the group, which now has $800 million under management. Cool.