We took the pulse of emerging fund managers about what it’s been like for them during these post-ZERP, venture-capital-winter years.
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Good news, crypto founders! Venture capital activity is picking up in the sector, recovering from the multi-year lows investments fell to in late 2023. Put another way, venture folk appear more bullish on web3 than they used to be not very long ago.
But that was hardly the only news item we had to dig into on Equity this morning. Akamai is spending $450 million to buy API security firm Noname, a deal that TechCrunch previously reported would be worth around $500 million. Still, $450 million is a lot of money, and the deal is worth giving thought to given that Noname was valued at more than $1 billion back in 2021.
Speaking of M&A, Wiz is another name in the cybersecurity space that could go shopping, thanks to its recent $1 billion fundraise. It intends to buy both wounded unicorns and hot, smaller startups to bolster its business. The company is now valued at $12 billion, which is a lot. (Wayve also raised north of $1 billion, but is focused on the self-driving space instead of security.)
We also saw Monzo snag $190 million more, bringing its full-year fundraising score to more than $600 million. Meanwhile, TikTok is fighting a potential ban in the States, and Oyo’s been trying to raise new capital at a fraction of its prior worth.
In closing, Haje is bringing Pitch Deck Teardown to Equity! If you have not read the series (start here), you are in for a treat. We’re kicking the new segment off with a look at NOQX’s deck: what worked, what didn’t, and what’s next!
Chat Friday!
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
You also can follow Equity on X and Threads, at @EquityPod.
For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast.
Rubrik’s strong IPO pricing and warm reception by the public markets after its listing add more weight to the perspective that the public markets are not as closed to tech startups as some thought. If Rubrik’s result isn’t enough to break the logjam, well, maybe there’s something else going on.
But there was a lot more that happened this week, which meant that the Equity crew had a pile of news to get through as always, with a little bit of our own mixed in. Happily it was all pretty darn interesting, so Mary Ann and Alex started with Rubrik before pivoting to Pomelo, a startup that has a very interesting twist on the remittances market.
From there it was time to talk about TikTok. What was once an unfathomable result — TikTok being forced to divest from its parent company or face a ban — became reality pretty darn quickly. The United States is not the first company to ban the service, but we noted during the show that the company we are keeping is not the most enticing. Still, here we are; what does it mean for consumers?
And to close, Early Stage. TechCrunch held its annual early-stage focused event this year, and it was a banger. Not to toot our own horn, but it was the second year in a row that our shindig in Boston was packed, useful and lots of fun. The coffee was even good. At a tech conference. Alex had notes.
Equity is back on Monday, thanks for hanging out with us!
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
You also can follow Equity on X and Threads, at @EquityPod.
For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.
The Federal Trade Commission voted 3-2 to ban the use of most noncompete agreements on Tuesday. This ruling means companies can’t require their employees, that aren’t senior executives, to wait a set amount of time before joining a competitor or launching their own company in the same category. While the FTC’s ruling will impact industries like financial services and hedge funds the most, due to the prevalence of such agreements in those industries, it could also impact startups.
The ban could actually be positive news for startup founders and hiring managers in a number of ways. For one, it could open up the hiring pool, says Nick Cromydas, the co-founder and CEO of hiring and recruiting startup Hunt Club.
“Now there will be more potential crosspollination of companies that really understand businesses models and spaces,” Cromydas said. “I expect you will see more hiring with direct domain experience than you’ve seen in a while.”
Ryan Vann, a partner focused on employment law at Cooley, agreed. He said that he’s had clients that were too anxious to hire potentially game-changing talent away from larger companies for fear those companies would act on the noncompete agreement.
Banning noncompete agreements could also encourage startups to foster a strong company culture that makes people want to stay, as opposed to using threats to keep them, Cromydas said.
Some members of the startup community seem happy about the ruling as well — rare these days when it comes to decisions by the FTC. Sarah Guo, the founder at AI-focused VC firm Conviction, tweeted that banning noncompete agreements is a win for innovation. Cole Harrington, the co-founder and CEO at ThoughtWave AI agreed with her.
Understandably, some startup CEOs are worried about how the end of noncompetes could impact the security of intellectual property, but Cromydas said there are other ways for companies to protect themselves. Startups can have employees sign non-disclosure agreements regarding intellectual property, or spend more time filing patents. Instead of blocking an employee’s future employment, such alternatives prevent them from using the previous employer’s intellectual property knowledge at their new jobs.
Startup employees might not see much of a change for two other reasons: noncompete agreements were already very hard to enforce, Vann said, and they were trending out of vogue among startups anyway. Certain states, including startup-heavy California, have existing state laws that restrict them. Although, he added that any client of his that can use them, typically does despite the low-rate of them actually coming into play.
“Even without this ban, it is really, really hard in virtually every court in America to enforce a noncompete unless you have something added that are bad facts like theft of confidential information, soliciting customers before you go, trying to set up competing business before you go,” Vann said. “I would almost never go into litigation unless I was armed with that kind of evidence or misappropriation of trade secrets.”
Given all that, noncompetes are becoming less common, according to company data from Hunt Club. While five years ago 90% of offers that came through Hunt Club’s platform included a noncompete agreement, that figure now is about 40%. Although, Cromydas said he wouldn’t doubt it they were rising again in hot sectors like AI where intellectual property is crucial and the war for talent is high.
So what should startup CEOs do if they currently use noncompete agreements with their employees? Absolutely nothing, according to Vann who questions whether the ban will actually stick. Multiple lawsuits against the ruling have already been filed including one from the U.S. Chamber of Commerce and another from tax service firm Ryan LLC.
Vann thinks this potential ban could be struck down by numerous courts. If it does clear these legal hurdles, startups wanting to hire someone that may have signed one can terminate existing noncompete agreements incredibly easily.
“The worse case scenario if you are a startup, and hire someone with a noncompete, is all you have to do is issue the notice to say that your noncompete is not enforceable,” Vann said. “I would keep it at status quo right now and monitor what’s happening.”
Meta continues to field criticism over how it handles younger consumers using its platforms, but the company is also planning new products that will cater to them. On Monday, the company announced that later this year it will be launching a new education product for Quest to position its VR headset as a go-to device for teaching in classrooms.
The product is yet to be named, but in a blog post describing it, Nick Clegg, the company’s president of global affairs — the ex-politician who has become’s Meta’s executive most likely to be delivering messaging around more controversial and divisive topics — said that it will include a hub for education-specific apps and features, as well as the ability to manage multiple headsets at once without having to update each device individually.
Business models for hardware and services also have yet to be spelled out. With nothing on the table, the company is framing it as a long-term bet.
“We accept that it’s going to take a long time, and we’re not going to be making any money on this anytime soon,” Clegg said in an interview with Axios.
On the plus side, a push into education could mean more diversified content for Quest users, along with a wider ecosystem of developers building for the platform — not the killer app critics say is still missing from VR, but at least more action.
On more problematic ground, the news is coming on the heels of a few other developments at the company that are less positive. Meta’s instant messaging service WhatsApp has been getting a lot of heat over the fact that it is lowering the minimum age for users to 13 in the UK and EU (it had previously been 16).
Monday’s announcement arrives on the heels of Meta prompting Quest users to confirm their age so it can provide teens and preteens with appropriate experiences.
The new initiative will roll out later this year and will only be available to institutions with students 13 years old and up. Meta said it will launch it first in the 20 markets where it already supports Quest for Business, Meta’s workplace-focused $14.99/month subscription. That list includes the U.S. Canada, the United Kingdom and several other English-speaking markets, along with Japan and much of western Europe.
There are a number of companies already in the market exploring the idea of VR in the classroom, with names like ImmersionVR, ClassVR and ArborVR, not to mention the likes of Microsoft, which has been pushing its HoloLens as an educational tool for a while now.
It’s not clear how ubiquitous VR use is in schools: one provider, ClassVR, claims that 40,000 classrooms worldwide are using its products.
But all the same, there remain hurdles to mass market usage. It’s not clear, for example, whether strapping a headset to someone’s face is necessarily a help in a live, educational environment, considering some of the research around young people already getting too much screen time as it is.
And another big question mark will relate to the cost of buying headsets — Quest 3’s, the latest headsets, start at around $500 apiece for basic models — buying apps and then subsequently supporting all of that infrastructure. Meta said that it has already donated Quest headsets to 15 universities in the U.S., but it’s not clear how far it will go to subsidise growth longer-term.
Welcome to TechCrunch Fintech! This week, we’re looking at how two fintech companies serving the underserved are faring, and more!
To get a roundup of TechCrunch’s biggest and most important fintech stories delivered to your inbox every Sunday at 7:00 a.m. PT, subscribe here.
PayJoy is an example of a company with positive unit economics and a mission to help the underserved. It’s not often that we see those two things intersect, so when we do, we get pretty excited. I wrote about the company’s milestone of achieving $300 million in annualized revenue and profitability last year, while also managing to land $150 million in Series C funding. The company’s model is unique: It helps people build credit through pay-as-you-go financing for smartphones. Once the phones are paid off, customers can apply for loans through PayJoy using their devices as collateral. Read all about its growth here.
Petal is another fintech company that aims to help the underserved “build credit, not debt.” Last May, TechCrunch wrote about the company’s $35 million raise and plans to spin off its data unit. Last week, Empower Finance announced its plans to acquire Petal, which apparently began looking for buyers last year “when it was short on cash,” according to Fortune. A spokesperson for Petal told me via email: “Like Petal, Empower … uses cash flow underwriting for its suite of credit products. … With the Petal acquisition, it will soon have a family of credit cards to complement that offering.” Will we see more M&A in 2024? I’m eager to see.
TransferGo, the U.K.-based fintech best known as a consumer platform for global remittances, has raised a $10 million growth funding round from Taiwan-based investor Taiwania Capital, with a view to expanding in the Asia-Pacific region. It last raised a $50 million Series C funding round in 2021. TransferGo claims its growth, combined with the new investment, doubles its valuation.
Brazilian startup Salvy, a mobile carrier for businesses, was the only company based in Latin America in Y Combinator’s latest batch, the accelerator confirmed to TechCrunch’s Anna Heim. That’s a significant drop compared to cohorts that went through the accelerator during COVID when it was remote, but also more recent classes. For example, there were 33 Latin American companies in Y Combinator’s Winter 2022 batch. Could the overall state of the fintech sector be partly to blame? Historically, around one-third of the 231 Latin American companies that went through YC focused on fintech. And with fintech funding on the decline, this could perhaps partly explain YC’s lack of LatAm interest.
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Artificial intelligence can find hidden signals in data across healthcare, and companies like Nvidia are leaning into what this can mean. For example, it announced two dozen new AI-powered tools last week for areas including biotechnology and drug discovery. And Nvidia is not alone.
Century Health is a new startup also getting in on the action. It’s applying AI to clinical data to uncover new applications for drugs. It’s working with pharmaceutical companies and researchers, initially at Yale and UC San Diego, to identify and commercialize the next breakthrough for diseases, like Alzheimer’s, that affect tens of millions of patients.
The mission is a personal one for Century Health’s co-founder and CEO, Vish Srivastava. He watched his grandfather’s Alzheimer’s get to the point where he didn’t recognize Srivastava anymore.
“That sent me down a rabbit hole,” said Srivastava, whose background is in healthcare product development and data. “One of the biggest issues around innovation for new treatments is efficient access to good patient data. This is now only possible because of generative AI. That data sat around for decades because it takes manual effort to normalize and extract insight from it.”
That’s when he teamed up with friend Sanjay Hariharan, a data scientist and applied AI engineer, to form Century Health. They built a platform to extract that hidden data and aggregate it. Researchers and pharma companies subscribe to the platform and can then use that data on approved drugs; to expand to new drugs; or to find insights to expand access to drugs that have already been approved.
The ultimate goal is accelerating access to treatments, Srivastava said.
“Drug development is massively expensive, and on average, takes $1 billion to $2 billion to develop a new drug,” he said. “From the pharma company’s perspective, when their drug is now approved, the mission is to get it to patients as quickly as possible. For us, that also means as affordably as possible with access to good real-world data.”
Now with $2 million pre-seed funding, Century Health will run three to five pilots over the next several months. The goal is to validate the initial technology that collects the data and, most importantly, to see the impact the insights from those data sets can bring, Srivastava said.
He sees these pilots as design partnerships and a way to get feedback on the benefits of drugs, for example, which patient subpopulation might be underrepresented. In addition to the validated technology, another milestone will be to secure early revenue from the pilots, which Century Health can leverage to go after another round of venture capital.
The investment was led by 2048 Ventures with participation from LifeX, Everywhere, Alumni Ventures and a group of angel investors, including Datavant founder Travis May and Evidation founder and CEO Christine Lemke.
Alex Iskold, managing partner of 2048 Ventures, said in a statement, “At 2048 Ventures we have a strong thesis around real-time data, in healthcare and beyond. Vish and Sanjay have a vision to leverage AI and real world patient data to unlock a better feedback loop and ultimately faster and more efficient drug development and commercialization.”
As big social apps are optimizing for maximum engagement using algorithmic feeds and personalized content recommendations, Retro wants to go in the opposite direction: The company is launching a new feature called journals. It’s a flexible way to share photos with your favorite people and create visual records of whatever matters in your life. So the feature can be akin to a shared photo album or used to keep a private record.
Yes, I know. Photo-sharing isn’t new. Many have tried, most have failed. Even Marissa Mayer’s recent attempt — with an app called Sunshine — has raised questions. But it’s important to pay attention to Retro given the résumé of the founding team. The relatively new social app was created by Nathan Sharp and Ryan Olson, two former Instagram team members who played an important role in shipping breakthrough features such as Stories.
With its dedicated focus on photos and videos from your loved ones, Retro is progressively rolling out features that could quickly turn it into a must-have for long-distance friends, extended families and everyone who likes to carefully curate photos and pick the best ones from their camera roll.
Retro’s main feature is a way to share your most important photos of the past week with your favorite people. As you start adding photos, it creates a story of the week that your friends can check out. But that only works if your social graph is a perfect replica of the most important people in your life. Which is why people spend some quality time together and then just dump a bunch of photos in a WhatsApp group or iMessage thread.
Retro’s answer to this use case is journals: A new flexible way to share photos as a group. Co-founder and CEO Nathan Sharp compares the feature to a “photo-first WhatsApp group.”
Retro, which launched last summer, is still fairly under the radar. It is well regarded by product designers who care about social mobile apps. But it hasn’t become a mainstream app. The startup is still shipping features in the hopes that it will unlock a “product-led growth engine,” as Sharp puts it.
“The first task right now is building the perfect product for catching up with family and friends. And then the second part is making sure that your family and friends can easily get on there. … I think journals are a big part of that,” he told TechCrunch. “You can’t really separate those two tasks as a social app but what you can do is focus on features that provide high utility for groups of people which bring them on.”
You can use journals to curate photos around a particular topic. For instance, you can have one family journal for each of your kids so that you can quickly and easily review earlier photos of them, free from the usual clutter of your photo library. It’s a way to foster that unique, individual bond.
You can also have a journal with your partner to share important moments you’ve spent together without spamming all your friends on Retro. Or you can create a journal for your recent weekend trip so that everyone can add and share photos without necessarily adding you as friend on the app.
Image Credits: Retro
“One of the favorite ones that I’ve made is for Valentine’s Day. I made one for my wife, which is just pictures of the two of us. And I went back, like, ten years — we’ve been together ten years,” said co-founder and CTO Ryan Olson. “Now when there’s a picture of the two of us, I just add it there. And it’s fun to have this sort of living thing for the two of us.”
Some people might even use journals for personal projects or hobbies. If you like woodworking, say, and want to track your progress, you could create a journal dedicated to furniture making with just you as the unique journal member.
“A photo journal is like a wonderful format for reviewing something, looking back, reflecting on something that kind of grows very subtly over time — but over long periods,” Sharp said.
The new feature could help build awareness of Retro if the startup can get people using journals during real-life events. Such as scenarios where an organizer might otherwise leave disposable cameras out on tables for guests to snap pics for pooling and sharing later.
“If you’re trying to gather photos at an event, we’ve created this very beautiful QR code that you can either save to your camera roll or print,” Sharp noted. “It’s very easy to just put a QR code and say ‘hey, if you’re at this dinner, share all your photos.’”
There’s also a viral aspect to this feature as journals can be shared outside Retro. In the app, you can generate a public link and share it on your Instagram Story or elsewhere online — there’s no need to install the app to view the photos. So some people might use it to share wedding pictures, for instance.
Building a social consumer app involves many experimentations — and journals are one of those experimentations. As people discover the app by clicking on public links for these shared albums it could, potentially, become Retro’s product-led growth engine. Only time will tell.
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