Good Morning Friends!
Welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week. Regular Equity episodes still drop Friday morning, so if you’ve listened to the show over the years, don’t worry — we’re not changing it in the slightest. (Here’s last week’s episode, which took a look at The Athletic’s latest round, in case you missed it.)
A Global Selloff
This Monday was a bit of a bad news run. The weekend was stuffed with news, not much of it good. Continued concerns relating to the spread of the coronavirus led to equity selloffs in Asia and Europe. In the United States, markets look set to follow suit. The concerns come as startups had already come under pressure from investors to show a quick path to profitability. Now, their public comps are taking fire as well.
Topping It Off
Today kicks off a huge, two-week earnings run from tech companies worth trillions of dollars. It’s not a great moment for it. (As we note on the show, the economic side of the outbreak is a small portion of the story; it feels a bit crass to cover the moment from a dollars-perspective, but that’s our particular lens.)
Funding Rounds
We also ran through three funding rounds, including MURAL’s $23 million Series A, Otter.ai’s $10 million Series B, and Sawee’s $2.3 million round focused on last-mile logistics. (As a product, I can’t recommend Otter highly enough.)
The Wall Street Journal Story
A Wall Street Journal story was stuck in my head all weekend. According to the Journal’s Eliot Brown, Lime and DoorDash have each been out in the markets trying to raise money lately. Neither has managed to pull it off. If stocks keep selling, what happens next for the infamous unicorns? That’s what we have for you today.
The Implications
What does this mean for startups that are already under pressure from investors to show a quick path to profitability? Will they be able to secure funding in the midst of a global selloff? And what about the unicorn companies, Lime and DoorDash, which have been struggling to raise money?
The Future of Fundraising
As we delve into these questions, it’s essential to consider the broader implications for fundraising. With the rise of unicorns and decacorns, the landscape of venture capital has changed dramatically. Will this new era of investing continue to favor companies that show rapid growth, or will investors begin to prioritize more sustainable business models?
The Rise of AI
In a related note, the use of artificial intelligence in fundraising is on the rise. Companies like Otter.ai are leveraging AI to help founders and their teams streamline communication and data analysis. This trend is likely to continue as startups become increasingly reliant on data-driven decision-making.
Conclusion
As we wrap up this episode of Equity Monday, it’s clear that the global selloff has significant implications for startups and unicorns alike. As we head into a critical period for earnings reports and fundraising, one thing is certain: the tech industry will continue to evolve and adapt in response to changing market conditions.
What’s Next?
Stay tuned for our regular Equity episodes every Friday at 6:00 am PT. We’ll be diving deeper into these topics and more, so subscribe to us on Apple Podcasts, Overcast, Spotify, and all the casts.
About Our Host
Alex Wilhelm is a senior reporter for TechCrunch covering the markets, venture capital, and startups. He’s also the founding host of TechCrunch’s Webby Award-winning podcast Equity.
