Plaid CEO touts new ‘clarity’ after failed Visa acquisition

Yesterday, we spoke with Plaid CEO and co-founder Zach Perret after news broke that Visa no longer plans to buy his company for $ 5.3 billion.

The deal was heralded in early 2020 as a sign of the growing importance of fintech startups. Then it failed to close, eventually running into a lawsuit from the U.S. Department of Justice. A few months later, the acquisition was dropped.

Sentiment in the market changed since the transaction was announced. As TechCrunch reported yesterday, there’s a good deal of optimism to be found amongst investors and others that Plaid will eventually be worth more than the price at which the Visa deal valued it.

What follows is a summary of our conversation with Perret, digging into a number of topics we felt most were pressing in the wake of Plaid’s unshackling.

Now what?

First and upfront: it does not appear that Plaid is racing to the public markets via a blank-check company, or SPAC, a question several readers asked on Twitter. Our impression from our chat regarding near-term liquidity via the public markets is that those with their hopes up have them up a few years too early.

TechCrunch asked Perret how it feels to be free from his erstwhile corporate boss.

He said that the last few years have been a “rollercoaster,” adding that when they made the choice to sell, it made sense at the time from mission, and delivery perspectives — Visa wanted to accomplish similar things and could give his company access to a wide network of potential customers.

Startups – TechCrunch

Lime touts a 2020 turnaround and 2021 profitability

Micromobility company Lime says it has moved beyond the financial hardship caused by the COVID-19 pandemic, reaching a milestone that seemed unthinkable earlier this year.

In short, the company is now largely profitable.

Lime said it was both operating cash flow positive and free cash flow positive in the third quarter — a first — and is on pace to be full-year profitable, excluding certain costs (EBIT), in 2021.

During the WSJ Future of Everything event Thursday, Lime CEO Wayne Ting painted a far rosier picture of the company’s future than one might have expected.

There was a time when Bird and Lime, competing domestic scooter rental companies, were raising capital at a torrid pace, fighting for market share, regulatory breathing room and sidewalk real estate. Then, the pandemic hit and the companies had to take shelter.

Lime underwent a round of layoffs in April, taking on capital from Uber the next month in a down-round that brought its valuation under the $ 1 billion mark. As it announced in a blog post that TechCrunch reviewed before publication, it paused most of its operations for a month during the early COVID-19 days.

“It was certainly a very, very tough decision for us earlier this year and I know we weren’t the only company during COVID,” Ting said during the event.I think it’s been in so many ways helpful to us to realize how hard these choices can be. We’re going to be growing headcount again. We’re going to do so in a careful way so that we’re not going have to make hard choices like the ones we made earlier this year.”

Now things are better, Lime says. Much better. Indeed, the company claims that it is the “first new mobility company to reach cash-flow positive for a full quarter.”

Cash flow positivity, in general, is an important threshold for a startup to reach as it implies that the company can largely self-fund from that point forward, limiting its dependency on external cash for survival.

Lime also claims that it “reached EBIT positive at the company level over the summer.” The specifics of the phrase “EBIT positive” are important. Was the company employing strict EBIT on its math and not discounting share-based compensation, or was it measuring using adjusted EBIT as many startups do, removing the cost of share-based compensation that shows up in GAAP results? According to the company the number did exclude share-based compensation, making the news slightly smaller.

Perhaps the most bullish data point from Lime is that it expects to be full-year profitable in 2021. TechCrunch asked for specifics because again how one measures profitability matters. It turns out, Lime is basing this projection on EBIT, as opposed to more traditional net income. For a startup this is not a surprising decision, but before we declare Lime fully “profitable,” we’ll want some more GAAP metrics.

Still, it appears that Lime is not going to die, and is, importantly, putting capital into developing new products. The company provided the first example of that new product pipeline on Thursday with the launch of the Gen4 scooter in Paris. It also teased a so-called “third and fourth mode” in the first quarter of 2021 as well as the addition of a swappable battery.

The scooter company wouldn’t give TechCrunch much information about what these third and fourth modes will be. The first two modes are bikes and scooters, which leaves skateboards, cars, flying cars and boats?

Lime did give TechCrunch a little bit of clarification, stating that “move beyond,” means the company will be operating an additional mode, accessed through the Lime app, in line with its goal to serve any trips under five miles. These modes will build on the Lime Platform play, but this will be operated by Lime rather than a partner.

Lime has long discussed reaching profitability. Perhaps because it and its competitor Bird were infamous for their losses during their early unicorn period.

By November of 2019, Lime was talking about reaching EBIT positivity in 2020. But the start of 2020 was not kind on the company, with 100 of its staff losing their jobs and 12 markets getting dropped. At the time TechCrunch wrote that “Lime is hoping to achieve profitability this year by laying off about 14% of its workforce and ceasing operations in 12 markets,” with the company itself writing at the time that “financial independence [was its] goal for 2020, and [that it was] confident that Lime will be the first next-generation mobility company to reach profitability.”

Depending on how you measure profitability, that could be true.

Things didn’t get easier for Lime later in the year. Its competitor Bird underwent layoffs, and Lime cut more staff in April. At the time, Lime said that it was focused on coming “back stronger than ever when this is over.”

The company is certainly in better shape than it was in April and May. So, how did Lime come back from the brink? In its own estimation, the company took time during its pause to “drill down on getting the business right, narrowing [its] focus and strengthening [its] fundamentals.” That might sound like corporate babble, but by taking a nearly full stop in its operating business, Lime could probably see a bit more clearly what was working and what was not. And with some cuts to what wasn’t, it could set up a future in which its operations were leaner, and more unit-economically positive.

And, now, here we are asking niggling questions about just what sort of profit Lime is really making. Instead of, you know, who might buy its leftover office furniture. It’s a nice turnaround.

Startups – TechCrunch

Strava raises $110 million, touts growth rate of 2 million new users per month in 2020

Activity and fitness tracking platform Strava has raised $ 110 million in new funding, in a Series F round led by TCV and Sequoia, and including participation by Dragoneer group, Madrone Capital Partners, Jackson Square Ventures and Go4it Capital. The funding will be used to propel the development of new features, and expand the company’s reach to cover even more users.

Already in 2020, Strava has seen significant growth. The company claims that it has added more than 2 million new “athletes” (how Strava refers to its users) per month in 2020. The company positions its activity tracking as focused on the community and networking aspects of the app and service, with features like virtual competitions and community goal-setting as representative of that approach.

Strava has 70 million members, according to the company, with presence in 195 countries globally. The company debuted a new Strava Metro service earlier this year, leveraging the data it collects from its users in an aggregated and anonymized way to provide city planners and transportation managers with valuable data about how people get around their cities and communities — all free for these governments and public agencies to use, once they’re approved for access by Strava.

The company’s uptick in new user adds in 2020 is likely due at least in part to COVID-19, which saw a general increase in the number of people pursuing outdoor activities, including cycling and running, particularly at the beginning of the pandemic when more aggressive lockdown measures were being put in place. As we see a likely return of many of those more aggressive measures due to surges in positive cases globally, gym closures could provoke even more interest in outdoor activity — though winter’s effect on that appetite among users in colder climates will be interesting to watch.

Strava’s app is available free on iOS and Android, with in-app purchases available for premium subscription features.

Startups – TechCrunch

Airbnb’s new rival from Finland touts one advantage: It’s ‘ridiculously cleaner,’ snaps €4M funding

Bob W announces a €4 million seed funding round led by Founders VC (Copenhagen, Denmark, and Silicon Valley, CA) with participation from leading Nordic and Baltic real estate investors like NREP and Kaamos. Additional investors include the Baltic VCs Superangel and United Angels as well as prominent angel investors from Germany and the Nordics.

Locally curated, high-quality suites

Bob W is an alternative to hotels and hosted homes – locally curated, high-quality suites featuring the livability and affordability of short-stay homes, embedded in the local community. Coupled with a strong branded consistency, quality standards, focus on sustainability, integrated local services, and 100% digital and touchless. 

 “Thanks to our unique combination of touchless hospitality features, like online check-ins, 24/7 keyless entry & chat-based customer service, zero required face-to-face interaction, absence of shared spaces such as front desks, and the recently launched ‘Ridiculously Clean Standard’, Bob W is the smartest, safest, and cleanest hospitality choice in the new normal,” says Niko Karstikko, CEO & Co-Founder.

Exceptionally clean for post-COVID era travelling

The Ridiculously Clean Standard is a meticulous 63-step program designed to clean, sanitise, disinfect, and, finally, seal every suite. Exceeding industry standards, the program features highlights such as the use of specialised equipment, including electrostatic disinfectant sprayers and management inspection of every suite prior to its sealing. 

However, Bob’s vision is not merely to provide a safer, reinvented travel experience. Rather, it is to craft a future where tech, hospitality, and real estate come together to maximise efficiency and create value.

The brand also has plans to expand beyond 1,000 units across the Nordics, Baltics, and the UK over the next 24 months. Bob W is developing a full-stack hospitality tech platform, which will serve as the foundation for an asset-light growth strategy going forward.

“Bob W is grabbing hospitality by the horns and reinventing it for the modern traveller,” adds Niko Karstikko, Co-founder & CEO.

“Since the first meeting, we’ve been impressed with Bob W’s team and what they have accomplished with limited resources. Considering the current situation that’s hitting the hospitality industry harder than most, our esteem has not waned. While being lean and nimble has been a clear advantage, their super scalable, tech-enabled model lends itself well to market fluctuations,” says Tommy Andersen, Co-founder & Managing Partner, by Founders.

“We believe the founders’ strong complementing profiles and experience make them perfectly positioned to target the intersection between tech, hospitality, and real estate. We look forward to supporting the team on their journey onwards,” he adds. 

Main image credits: Bob W

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Startups – Silicon Canals