Month: April 2021

Cross-border payments startup dLocal has raised $150 million at a $5 billion valuation, less than seven months after securing $200 million at a $1.2 billion valuation.

This means that the five-year-old Uruguayan company has effectively quadrupled its valuation in a matter of months.

Alkeon Capital led the latest round, which also included participation from BOND, D1 Capital Partners and Tiger Global. General Atlantic led its previous round, which closed last September and made dLocal Uruguay’s first unicorn and one of Latin American’s highest-valued startups.

DLocal connects global enterprise merchants with “billions” of emerging market consumers in 29 countries across Asia-Pacific, the Middle East, Latin America and Africa. More than 325 global merchants, including e-commerce retailers, SaaS companies, online travel providers and marketplaces use dLocal to accept over 600 local payment methods. They also use its platform to issue payments to their contractors, agents and sellers. Some of dLocal’s customers include Amazon, Booking.com, Dropbox, GoDaddy, MailChimp, Microsoft, Spotify, TripAdvisor, Uber and Zara. 

In conjunction with this latest round, dLocal has named Sumita Pandit to the role of COO. Pandit is former global head of fintech and managing director for JP Morgan, and also worked at Goldman Sachs.

“Sumita is a highly respected and accomplished fintech investment banker, and she’s played a pivotal role advising some of the world’s most successful fintech companies as they’ve scaled to become global leaders,”  said dLocal CEO Sebastián Kanovich in a written statement.

Meanwhile, former COO Jacobo Singer has been promoted to president of dLocal.

The company plans to use its new capital to enhance its technology and continue to expand geographically.

Alkeon General Partner Deepak Ravichandran believes that emerging markets represent some of the fastest growth opportunities in digital payments.

“However, as global merchants look to access these markets, they are often faced with a complex web of local payment methods, cross-border regulations, and other operational roadblocks,” he said in a written statement. “dLocal’s unique platform empowers merchants with a single integrated payment solution, to reach billions of customers, accept payments, send payouts, and settle funds globally.”

Source: Tech Crunch

The first quarter of 2021 was a busy season for technology exits. Coming off a hot period in the final quarter of 2020, it was no surprise that tech upstarts pursued liquidity through a variety of mechanisms as the new year began.

There were IPOs, there were direct listings, there were PE deals. Hell, we even saw enough SPACs that we lost track of a few; amid all the noise, you’ll miss the occasional note no matter how well-tuned your ear.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

Each path is still open for later-stage startups to pursue exits: The IPO market was welcoming until a few minutes ago and private equity firms are stacked with cash and willing to pay higher multiples than they might in more normal times. And there are sufficient SPACs to take the entire recent Y Combinator class public.

Choosing which option is best from a buffet’s worth of possibilities is an interesting task for startup CEOs and their boards.

DigitalOcean went public via a traditional IPO, raising a slug of capital in the process. The SMB-focused public cloud company likely felt like a somewhat obvious IPO candidate when you read its results. The Exchange spoke with the company’s CEO, Yancey Spruill, about the choice.

Latch, in contrast, decided that a SPAC was its best route out the gate. The Exchange caught up with the company’s CFO, Garth Mitchell, about the transaction and why it made sense for his company.

And, finally, The Exchange spoke with AlertMedia’s founder and CEO, Brian Cruver, about his decision to sell his Texas-based company to a private equity firm.

To prevent this post from reaching an astronomic word count, we’ll give a brief overview of each deal and then summarize the company’s views about why their liquidity choice was the right one.

Three paths to liquidity

Kicking off with DigitalOcean, a few notes: First, the company has been pretty darn public about its growth in the last few years. We knew that it had an annualized run rate of around $200 million in 2018, $250 million in 2019 and around $300 million in the first half of 2020. It later announced that it hit that mark in May of last year.

So when DigitalOcean decided to go public, we weren’t bowled over. The company wound up pricing at $47 per share, the high end of its range. Since then, its stock has struggled somewhat, falling below $37 per share before recovering to $43.80 at the end of trading yesterday.

Enough of all that. Why did the company choose to go public via a traditional IPO? Spruill said his company looked at SPAC deals and direct listings. It selected the IPO route because it fit the company’s goals of generating a broad base of shareholders while creating a branding opportunity.

The cost of an IPO is comparable, he added, to other exit options. Spruill also praised the IPO process itself, noting that its rigorous requirements made DigitalOcean a better company.

Earlier in our chat, I asked Spruill a question that I put to every CEO on IPO day: How are you feeling? It’s a bit of a sop, but it sometimes elicits insights from executives and founders who, after weeks of discussing their companies’ inner workings, are asked a rare personal question.

Spruill said he felt incredible and that nothing could replicate an IPO as the culmination of so much work put into building a company and its team. If you add up the wins and losses over time, with more of the former than the latter, and can cross the finish line with the right metrics and market, you can earn a spot to be “grilled” by the “best investors,” he said.

Those investors put $750 million or so into his company, Spruill added. Funds that it can use to retire debt and free up more cash flow. Not a bad day, I’d say.

Source: Tech Crunch

By now, all companies are fundamentally data driven. This is true regardless of whether they operate in the tech space. Therefore, it makes sense to examine the role data management plays in bolstering — and, for that matter, hampering — productivity and collaboration within organizations.

While the term “data management” inevitably conjures up mental images of vast server farms, the basic tenets predate the computer age. From censuses and elections to the dawn of banking, individuals and organizations have long grappled with the acquisition and analysis of data.

One oft-quoted example is Florence Nightingale, a British nurse who, during the Crimean war, recorded and visualized patient records to highlight the dismal conditions in frontline hospitals. Over a century later, Nightingale is regarded not just as a humanitarian, but also as one of the world’s first data scientists.

As technology began to play a greater role, and the size of data sets began to swell, data management ultimately became codified in a number of formal roles, with names like “database analyst” and “chief data officer.” New challenges followed that formalization, particularly from the regulatory side of things, as legislators introduced tough new data protection rules — most notably the EU’s GDPR legislation.

This inevitably led many organizations to perceive data management as being akin to data governance, where responsibilities are centered around establishing controls and audit procedures, and things are viewed from a defensive lens.

That defensiveness is admittedly justified, particularly given the potential financial and reputational damages caused by data mismanagement and leakage. Nonetheless, there’s an element of myopia here, and being excessively cautious can prevent organizations from realizing the benefits of data-driven collaboration, particularly when it comes to software and product development.

Taking the offense

Data defensiveness manifests itself in bureaucracy. You start creating roles like “data steward” and “data custodian” to handle internal requests. A “governance council” sits above them, whose members issue diktats and establish operating procedures — while not actually working in the trenches. Before long, blockages emerge.

Blockages are never good for business. The first sign of trouble comes in the form of “data breadlines.” Employees seeking crucial data find themselves having to make their case to whoever is responsible. Time gets wasted.

By itself, this is catastrophic. But the cultural impact is much worse. People are natural problem-solvers. That’s doubly true for software engineers. So, they start figuring out how to circumvent established procedures, hoarding data in their own “silos.” Collaboration falters. Inconsistencies creep in as teams inevitably find themselves working from different versions of the same data set.

Source: Tech Crunch

I use Feedly to work my way through each day’s stream of politics, tech, and media stories. Today, I am greeted with a picture of something called Feedly Cloud and the following message:

Scheduled Maintenance Feedly will be back in less than 30 minutes.

60 minutes later, it still says that. Feedly is built on RSS aggregation of my favorite news sources, things like the New York Times, Washington Post, Techcrunch, Protocol, Deadline, Techmeme, and writers like Om Malik and Benedict Evans. Notice that very few newsletter authors make this list, mostly because they push via email. I wonder if that is because vendors like Substack and Revue want to promote their subscription model, but if so that is shortsighted. It’s not about the subscription, it’s about the relationship.

I pay a monthly fee to Feedly, and I get a piece of the Web I can call my own. If I see something I want to find later, I put it in the read later “folder.” If I think I might want to refer to it in the newsletter, I push it to a Feedly board that I can import into Revue along the right side of the screen. If I want to push a story live to the Telegram stream, I drop it on a board where a series of bots posts it to a chain of locations ending with the @gillmorgang Twitter identity. If I click the Feedly icon, it’s now less than 90 minutes ’til Feedly won’t be back.

Luckily, Revue has a section in the right screen list called My Items, where I’ve added a link to a Rolling Stone story with the following title:

Hear How Beck Turned Paul McCartney’s ‘Find My Way’ Into a Funky Dance Number

Rolling Stone has gone to a partial firewall model with a subscribe button, but kindly leaves access to the Vevo promo video embedded on the Gillmor Gang newsletter link below. Someone on the YouTube page has posted part of the Rolling Stonewalled text Wikipedia-style in the comments section, copied below (Beck speaking:)

I remember hanging out with Paul and his wife Nancy several years ago and Nancy mentioned that she wanted to go out dancing before calling it a night. We ended up at some club in West Hollywood and I remember noticing that Paul and Nancy were TEARING IT UP – really enjoying themselves more than anyone else on the dance floor. Last year when he asked me to remix this track, I remembered that night and wanted to try to recapture that amazing spirit I felt while watching him on the dance floor…sort of my little tribute to Paul “in his groove.” When I then heard the falsetto vocal in Paul’s original track I wanted to lean further into something really loose and funky – I pulled out my Hofner (because of course) and put down a few bass lines…and everything came to life from there. The best part of the entire experience, though, came a week after I’d turned in the remix, when Paul called to tell me he’d been dancing in his kitchen to the track all week.

The track runs 4:56, so a few clicks later I’m probably down to 80 minutes to go.

Maybe this is a more serious problem, I begin to suspect. Is there a business model problem here? McCartney is getting paid. Beck is getting paid. Steely Dan is not getting paid for that wonderful chord, the one where the keyboard stretches out to the horizon and meets the rhythm track. I’m getting paid, too. Click it again, go ahead.

I went back to the original version of this song, a record called McCartney III which the artist has written, played all the instruments, and recorded track by track during the pandemic. It’s fun, reminiscent of the original McCartney I he released to break up the Beatles in 1970. But this reimagining with Beck I like a whole lot better. Paul may have been the cute one, but he always glowed in resonance with John Lennon. “It’s getting better all the time… Can’t get much worse.” Beck doesn’t have the Lennon mordant wit, but he brings a sardonic edge that works in this vaccinated time.

As Joe Biden joked in his press conference the other day about his predecessor, “Oh God, I miss him.” Not really. We’re reimagining how to get back to work from everywhere, and I bet the answer is a lot more like life + than hybrid. On this episode of the Gillmor Gang, Denis Pombriant uses Zoom’s Stop Video button to great effect to opt out of more Fungible talk, non or otherwise. Now you see him, now you don’t. But he can hear you. It’s Zoom’s new Instant Clubhouse effect. Clap on, clap off. Somehow I doubt we’re eager to give that up as a collaboration tool going forward. Clap back on.

Just then, Feedly came back to life.

from the Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, March 26, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

Source: Tech Crunch

If you watch funding announcements as we do, you may have noticed something this year. There are a lot of mega-rounds coming together, and Tiger Global is involved in a notable number of them, often as the round’s co-lead.

Just this week alone, half a dozen companies have announced rounds that the New York-based investing giant has led, co-led, or written follow-on checks into, including HighRadius, a company whose $300 million Series C round it co-led with D1 Capital; Cityblock Health, whose $192 million in extended Series C funding Tiger Global led; and 6sense, which received a follow-on check from Tiger Global as part of a $125 million Series D round. The firm is also reportedly in talks to co-lead a $300 million round in a five-year-old, AI chipmaker called Groq.

If you’re wondering where all that money is coming from, wonder no longer. Though Tiger Global sent a letter to its investors back in January, saying was raising $3.75 billion for its thirteenth venture fund (titled XIV, apparently for superstitious reasons), a new SEC filing shows that new fund just closed with almost twice that amount: $6.65 billion.

That’s a lot of billions, even in this market, and especially for Tiger Global, which closed its 12th fund with $3.75 billion in capital commitments only last year.

We’ve reached out to the firm to learn more, but as we noted back in January, when we caught wind of its fundraising plans, Tiger Global seemingly had a strong case to present potential limited partners.

Among its most recent reasons to celebrate, portfolio company Stripe is now valued at $95 billion, following closing a $600 million round earlier this month. Tiger Global also owned 10% of the gaming company Roblox ahead of direct listing that it staged earlier this month to become a publicly traded outfit. The company’s market cap is currently $38 billion.

In 2020, numerous of its portfolio companies also either went public or were acquired, including Yatsen Holding, the nearly five-year-old parent company of China-based cosmetics giant Perfect Diary; the cloud-based data warehousing outfit Snowflake; and Root insurance, a nearly six-year-old, Columbus, Ohio-based insurance company.

As for M&A, Tiger Global saw at least three of its companies swallowed by bigger tech companies last year, including Postmates’s all-stock sale to Uber for $2.65 billion; Credit Karma’s $7 billion sale in cash and stock to Intuit; and the sale of Kustomer, which focused on customer service platforms and chatbots, for $1 billion to Facebook.

Tiger Global, whose roots are in hedge fund management, launched its private equity business in 2003, spearheaded by Chase Coleman, who’d previously worked for hedge-fund pioneer Julian Robertson at Tiger Management; and Scott Shleifer, who joined the firm in 2002 after spending three years with the Blackstone Group. Lee Fixel, who would become a key contributor in the business, joined in 2006.

Shleifer focused on China, Fixel focused on India and the rest of the firm’s support team (it now has 22 investing professionals on staff) helped find deals in Brazil and Russia before beginning to focus more aggressively on opportunities in the U.S.

Every investing decision was eventually made by each of the three. Fixel left in 2019 to launch his own investment firm, Addition. Now Shleifer and Coleman are the firm’s sole decision-makers.

Tiger Global’s investors include a mix of sovereign wealth funds, foundations, endowments, pensions and its own employees, who are collectively believed to be the firm’s biggest investors at this point.

Some of Tiger Global’s biggest wins to date have included a $200 million bet on the e-commerce giant JD.com that produced a $5 billion for the firm. According to the WSJ, it also cleared more than $1 billion on the Chinese online-services platform Meituan, which went public in 2018.

The firm also reaped a massive windfall through its investment in the connected fitness company Peloton, 20% of which the firm owned at the time of Peloton’s 2019 IPO.

Source: Tech Crunch

When you think of the core members of the C-suite, you probably think of the usual characters: CEO, CFO, COO and maybe a CMO. Each of these roles is fairly well defined: The CEO controls strategy and ultimately answers to the board; the CFO manages budgets; the CMO gets people to buy more, more often; the COO keeps everything running smoothly. Regardless of the role, all share the same objective: maximize shareholder value.

But the information age is shaking up the C-suite’s composition. The cyber market is exploding in an attempt to secure the modern enterprise: multicloud environments, data generated and stored faster than anyone can keep up with and SaaS applications powering virtually every function across the org, in addition to new types of security postures that coincide with that trend. Whatever the driver, though, this all adds up to the fact that cyber strategy and company strategy are inextricably linked. Consequently, chief information security officers (CISOs) in the C-Suite will be just as common and influential as CFOs in maximizing shareholder value.

It’s the early ’90s. A bank heist. A hacker. St. Petersburg and New York City. Offshore bank accounts. Though it sounds like the synopsis of the latest psychological thriller, this is the context for the appointment of the first CISO in 1994.

A hacker in Russia stole $10 million from Citi clients’ accounts by typing away at a keyboard in a dimly lit apartment across the Atlantic. Steve Katz, a security executive, was poached from JP Morgan to join Citi as part of the C-suite to respond to the crisis. His title? CISO.

After he joined, he was told two critical things: First, he would have a blank check to set up a security program to prevent this from happening again, and second, Citi would publicize the hack one month after he started. Katz flew over 200,000 miles during the next few months, visiting corporate treasurers and heads of finance to reassure them their funds were secure. While the impetus for the first CISO was a literal bank heist, the $10 million stolen pales in comparison to what CISOs are responsible for protecting today.

Source: Tech Crunch