$450M for Noname, two billion-dollar rounds, and good news for crypto startups | Equity Podcast

This episode is presented by invest Puerto Rico if you believe your business Can go anywhere Puerto Rico is the [Music] Place hello and welcome back to equity The Tech runch podcast where we unpack The numbers and the Nuance behind the Headlines this is Alex and today is May 8th 20 24 welcome back my friends to our Wednesday show where we dig into the Critical startup ADV Venture Capital Stories from the week thus far before we Get into the show rundown though a note I woke up with a very sore throat this Morning which happens when you have a Small child but if I sound lethargic or Cranky I'm not I am merely in pain so no Worries there all is well on the show This morning we have good news for the World of crypto Venture Capital then a Big deal in the world of cyber security A couple of $1 billion funding rounds The latest from monzo and then to wrap Us up a new segment pitch deck tear down Hosted by our very own ha comps all Right let's Go starting off with some good news this Morning the pace at which Venture Capitalists are putting money into Startups in the crypto world is picking Up so after rising from a multi-year low Of $1.2 billion back in Q4 of 20 23 Crypto startup fundraising bounced back To $1.7 billion in the first quarter and

Crunch based data indicates that the Sector could do even better in the Second quarter that is underscored by a Recent report from coin market cap they Say that in April crypto startups raised $ 1.02 billion across 161 investment Rounds now that was actually a little Bit down from what was seen in March When 1.09 $9 billion was raised by the Same cohort of startups that said yes it Was down but coin market cap says and I Quote it was the first time since October November 2022 that the crypto Industry has experienced two consecutive Months of funding surpassing the $1 Billion Mark and crunch base agrees its Q2 data point for crypto startups is Already at 1.2 billion so what to make Of all that I think it means that web 3 Funding is finally regaining its footing That said while it is good that Venture Investment into crypto startups is on The rise it remains Miles and Miles Beneath the 10 plus billion dollars that Web3 startups raised per quarter back in Late 21 and early 22 so if you want to Think about it another way it's not that Hard to post impressive gains if you've Already seen most of your volume Evaporate that said for web 3 Founders Good news is just that good news [Music] Moving on to Startup news a couple of Weeks ago Tech runch broke the story

That public cyber security company aamai Was in discussions to acquire noname Security it's a startup that works in The API security place and the deal was Supposed to be around $500 million the Deal has since been confirmed though at A lower price so aamai on Tuesday said That it has agreed to buy no name in a $450 million deal I think this Transaction underscores an ongoing push For consolidation inside the cyber Security market and that just makes good Sense Point Solutions are lovely and Important for many things but in a Market of myriad cyber threats full Packages probably make more sense now The reason why this deal matters apart From being a nine figure transaction is That no name was valued at a billion Dollars during its last fund raise in December of 2021 so it's selling for Less than half that price tag this is Therefore a good data point for what Might happen to many unicorns that raise At a billion dollars or more during the Last vure boom and are now facing a much More conservative valuation market now Aami said that the deal will deliver About $20 million in Revenue during its Fiscal year you can kind of run the math There on the revenue multiple but it Seems that the $450 million price deck Was more merciful than mercenary and That this Deal's dollar amount makes

Reasonable [Music] Sense it's buy one get one day here at Equity and by that I mean if you buy one Billion doll deal you get two because we Have two the first one comes from whiz It is a startup that is building an Allinone Cloud security platform going Back to our previous discussion about Point Solutions versus more broad Offerings and thanks to a new funding Round it is on an acquisition march to Expand ahead of an eventual IPO now the Company just raised a billion dollars to Help make all those deals in the form of A Series E that was co-led by andreon Horowitz light speed and Thrive sure Three leads is a bit much but it's hard To add up to a billion dollars it's a Lot of checks so I'm not worried about It the new series e values whiz at $12 Billion making it one of the most highly Valued startups or really just companies Period in cyber security today now the New york-based startup does want to go Out there and try to buy two different Types of companies for its acquisition Push one of which are X unicorns this is Where the preceding aamai deal I think Really tells us what to expect in the Future and then also quote younger Startups superstars with a great Trajectory ahead of them according to The company more money more deals I love

To see it let's see what whiz buys next Then for our second billion dollar deal There is wave W yve which is a UK born Startup that is developing self-learning Rather than rule-based systems for Autonomous driving that work helped it Close 1.05 billion in a series C notably That was led by SoftBank group now Techwrench writes that waves approach to Autonomous driving is actually very Similar to Tesla's but unlike Elon Musk's EV company wave plans to sell its Tech to other oems instead of building Cars itself two big billion dollar deals In one week I love to see [Music] It enough cyber security news let's talk About fintech because CNBC reports that Monzo has raised $190 million more and That means that the British Neo bank has Now raised north of $600 million this Year now in valuation terms monzo is now Worth 5.2 billion instead of its Preceding 5 billion presumably as long As I'm doing the math right early this Morning this was a deal at a flat Pre-money valuation to its preceding 2024 Capital injections all right so Lots of cash in hand what is ahead for The company CNBC sites International Expansion getting into pensions and Expanding its feature offerings more Broadly surely it can afford to do all Three of those at once now do recall

That we have seen some Neo Banks report Improved Financial results in the last Couple of years including monzo a Company that tried the US market and Pulled back but also reached cash flow Positivity and profitability back in 2023 so now with more cash in the bank It can expand its overall feature RIT And perhaps even take another run at Several International Markets a couple of short stories that I'm going to squeeze in here before we Get to the pitch deck tear down first of All Tik Tok is suing the US government Because it wants to block a law that Would ban the social media service in The us if its parent company bite dance Fails to sell it within a year so I went Ahead and I read bits of this lawsuit I Didn't get to read the whole thing time Is short but tiktock argued inside of it That quote the Chinese government has Made it clear that it would not permit a Divestment of the recommendation engine That is a key to the success of Tik Tok In the United States and if you're Trying to make the point that you are an Independent company from your Chinese Parent company and then you read that The Chinese government is in charge of This this well it kind of makes the laws Point moving on oo do you recall the Indian budget chain startup that raised All that money years ago and saw its

Valuation scale to10 billion well According to three sources talking to Tech runch it's raising more money but At a valuation of $3 billion or less now $3 billion is still $3 billion more than I have so far from it that I'm going to Look down at that number but at the same Time if you're measuring down from 10 10 Three just isn't that much what's next In Tech that's not the right question It's where Puerto Rico more than just a Tropical Paradise it's an Innovations Paradise where startups and Global Players coexist in a vast and vibrant Ecosystem where Talent runs deep highly Skilled and bilingual plus the island Offers the most competitive tax Incentives in the US if you believe your Business can go anywhere Puerto Rico is The place find out more at invest pr.org [Music] TechCrunch all right we're shaking up Equity by adding a segment we're talking About Pitch deck tear Downs yes we are Going to bring that Tech wrench series To your ears learning what VC's do and Do not want from Tech wrench's very own Venture Capital whisper haa comps I have Had the absolute pleasure of working With haa a ton over the years he is Smart he is witty he is knowledgeable he Freaking loves pitch decks and Founders Adore hearing him talk about what works And what doesn't so I'll let ha

Introduce himself but I can't wait to Hear this haa take it away thank you Alex for those of you who are not Familiar with me I am haa camps and I've Been around the block a few times here At Tech crunch before I joined the first Time back in 2016 and I've written more Than a thousand articles for Tech crunch Since then so I have a broadcast Journalism degree and I love radio so It's super fun to be back on the podcast And I've started a bunch of companies Over the years so I've really done the Entrepreneu journey myself I did a Hardware company I've done a B2B SAS Company I've done several BTC software Companies and you know some of them had Some Venture backing some of them were Bootstrapped and some of them were utter And complete failures but that's how you Learn right I went through a couple of Accelerators and learned a lot from that As well here in San Francisco I ended up Being the director of portfolio at a VC Firm and I'll tell you what seeing The Good the Bad and the Ugly from the Inside for about a 100 startups is a Hell of a way to learn everything there Is to know about startups during the Pandemic I started working as a pitch Coach I wrote a couple of books about How to pitch one is called pitch perfect And the other one is called pitch guide And on TC plus I've written extensively

About how investors think when they're Trying to invest in early stage startups One of the things I'm best known for Here at Tech crunch is the pitch deck Tear down series basically we take a Pitch deck and we review it I've done 93 So far probably 94 by the time this goes On air and those pitch decks have raised $1.4 billion in total the concept for The pitch Tech tear Downs is pretty Simple it's three things that worked and Three things you can improve I love Being able to show examples of pitch Decks out in the wild that were really Successful but it's also good to remind Yourself that a lot of Founders don't Fully understand how VCS think and what You need to focus on in order to Successfully raise money you can always Get the full pitch deck tear downs and The pitch decks themselves on on Tech Runch but we figured it would be fun to Highlight some of the learnings that We've had over the years here on Equity So the last pitch Tech tear down that I Published was the no QX pitch deck the Company is a Stockholm based startup That helps companies improve their goal Setting using collaborative mechanisms And experiences for building better Companies this is a very small round They only raised $200,000 so it's a Preed deck it's kind of a friends and Family deck which is essentially what in

The valley they would call a party round Right you get a bunch of people together The El throw some money in the ring and Call it a day now the pitch deck has 18 Slides and 18 slides may not sound like A lot but most startups do just fine With just 16 slides get to the point Tell the story you need to tell and get Out the pitch te doesn't have to tell The full story of what you're trying to Do it just has to kind of frame the Conversation you're about to have to Investor and for most people 16 slides Does that really well now no QX was Actually really interesting they a bit Of an outlier in that the structure I Usually follow the three good slides and The three things you could improve Didn't really work for this one it turns Out even the good slides had some issues And it was nothing I like full-throated Loved about this pitch deck but it still Means you can learn a lot from it so let Me take a look at some of the things we Did learn a few quick tips you Absolutely don't need three problem Slides if you need three slides to Explain what the problem is it either Means that as a Founder you don't fully Have a good grasp but what the problem Is or do you need to do a little bit More work on figuring out okay how do You highlight the problem that this Company is solving in a much simpler way

And especially for a preed deck right if You have to convince somebody that this Is a problem worth solving it may not be A problem worth solving right don't over Index on that another thing that came up In this deck is that the traction needs To be real traction now if you're Raising a preed round honestly you Probably don't have Revenue yet but for Most companies your traction is your Revenue like how much money you're Making how quickly is that growing I Like to think of fundraising as a staged Drisking process and what I mean by that Is like for every stage of fundraising The company becomes less risky becomes More valuable becomes more interesting To investors but with lower risk comes Lower reward right nonetheless people Will want to understand what is risky About your company and what have you Done so far to reduce that risk and so For every company like you've done Something maybe all you've done is Assembl incredible team but that is Enough that in itself Dr risks the Company other ways you could drisk it is Maybe you've spoken to a bunch of Customers maybe you've built a prototype Maybe you've solved a hard part of the Technological challenge or maybe you've Got a pattern like think about all the Things you've done so far in this Business and how that can be told as a

Story for how your company is less risky Now than it was three or six or 12 Months ago that is traction so tell the Story about your traction or about your Drisking the final thing that I really Struggled with with the noku X deck was The team slide especially in the earlier Stages all the company has to go on is Your team so you've got to explain why Do you have extraordinary founder market Fit why does your set of Founders have a Perfect match with the market you're About to go into now that could mean a Number of things maybe you have an Incredible Rolodex of potential Customers maybe you have enormous Experience in building products in this Space or maybe there's something else About your team that makes an investor Go holy crap this is a problem worth Solving and these are the people to do It now if you're not able to tell that Story I mean my recommendation would be To think about are you really the right People to start this company probably Talk about that a little bit more in the Future but keep that in the back of your Mind the question that you're trying to Answer is why is your team going to win And the no QX slide you know they have a Lovely team as far as I can tell but There's nothing that jumps out at me and Goes reach for your wallet this is worth Investing so just a recap you don't need

Three problem sles keep it simple Traction needs to be real traction so Think about what that means and you've Got to explain why your team is going to Win over every other team trying to Solve this problem there's that and a Bunch more in the full pitch deck tear Down of no QX check it out on Tech Crunch and we'll include a link in the Show notes all right if you want to Submit your own deck to pitch deck tear Down go to any of the pitch deck tear Downs on Tech runch and follow the Submit your deck link you can find me Online on Twitter at haa that's Haj and I'll be spending a lot of time with you Here on Equity so make sure to subscribe To the podcast wherever you get your Podcasts don't forget to follow Equity Pod on Twitter as well and I'll see you Soon Equity is hosted by myself Alex Wilhelm and Tech rench senior reporter Mary and as vetto we are produced by Teresa loans solo with editing by Kell Bryce Durban is our illustrator and a Big thank you to the audience Development team and Henry pette who Manages Tech runch audio products thank You so much for listening and we'll talk To you next time

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