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iHeartMedia to acquire radio adtech company Jelli

Radio giant iHeartMedia announced today that it’s reached an agreement to acquire Jelli, a company bringing programmatic ad-buying to radio broadcasters. In fact, iHeartMedia was already working with Jelli to allow businesses to use programmatic tools to buy advertising on the company’s 850 broadcast radio stations. iHeartMedia also invested in Jelli’s most recent funding round. As a result of the deal, the Jelli team in Silicon Valley will become iHeartMedia’s main adtech operation, and it will still be led by CEO Michael Dougherty. At the same time, iHeartMedia says Expressway by Katz, the programmatic ad exchange created using Jelli technology, will be run independently by Katz Media Group. In a statement, iHeartMedia CEO Bob Pittman said: At iHeart we believe marketing is both math and magic. The math is our rich data and insights about our users and how they relate to our partners’ products and services — and the magic is the incredible creative ideas we bring to our partners, such as our iconic music events, award shows, influencers, podcasts, social reach and our unique on air promotions. Jelli allows us to do something no other company can do — advertisers can now buy and use our broadcast assets, reach and impact just as they use the major digital players. We now offer heavy data and heavy creative innovation all in one place. The financial terms of the acquisition were not disclosed. Jelli’s other investors include Relay Ventures, Intel Capital, First Round Capital and Universal Music Group, and, according to Crunchbase, it raised more than $40 million total. iHeartMedia, meanwhile, filed for bankruptcy in March, though it looks like it’s now preparing to leave Chapter 11 protection.

Twilio shops, Uber and Lyft IPO scuttlebutt, and Instacart raises $600M

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week we had the Three Excellent Friends (Connie Loizos, Danny Chrichton, and Alex Wilhelm) on hand to kick things about with Scale Venture Partner’s own Rory O’Driscoll. As I’ve written the last few weeks, what a pile of news we’ve had recently. And like the last few episodes, we had to pick and choose what to drill into. This week: Twilio-Sendgrid, Palantir, Uber, Lyft, and Tencent Music IPOs, Instacart, and Saudi Arabia. In order, I think? First, we tackled the week’s biggest venture-themed M&A: Twilio buying SendGrid. Keep in mind that they are both recent IPOs; Twilio went out in 2016, and SendGrid in 2017. The $2 billion-ish all-stock transaction is effectively Twilio using its rich market cap (rich in terms of its revenue and profit multiples) to snag an obvious (though intelligent) extension of API-powered communications toolset. Next up we dug into the chance that Palantir is worth $41 billion. Spoiler: It isn’t. Then we chatted the two other recently-floated IPO valuations for Uber ($120 billion) and Lyft ($15 billion). They probably make more sense, depending a little on how you add and then divide. All that and we also touched on the recent delay in the Tencent Music IPO, a profitable company. Then we riffed through the Instacart round ($600 million more at a $7.6 billion valuation; wow), and re-touched on Silicon Valley’s currently least popular dinner party topic: how much Saudi money has recently gone to work powering tech startups. A big thanks to you for not only sticking with Equity for so long, but also for making it quite literally as popular as it has ever been. It’s super fun to have the biggest crew with us every week that we’ve ever had. You, yes you, are a delight. Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.

Magic Leap buys mesh-computing startup Computes

Magic Leap has announced they are acquiring Computes, a decentralized mesh computing startup. Terms of the deal weren’t disclosed. From Magic Leap’s blog post: From the beginning, Chris Matthieu and Jade Meskill started Computes, Inc. based on the principle of enabling the next generation of computing. We believe Magic Leap is the perfect home to achieve this vision Why would Magic Leap want to get their hands on this company? Well, it’s no secret that building a “digital layer” on top of the real world is more than a little compute-heavy; mesh computing offers an attractive future for leveraging the power of grouped systems to push resources to the devices that need it most. The company’s website does a not-so-great job of explaining what exactly they do, but here’s a blip from one of the company’s whitepapers: The Lattice protocol allows authorized computers to self-organize into a mesh computer, limited only by the number and power of the members. Lattice will intelligently allocate work to the best members of the mesh, based on the requirements of the task. This is an interesting idea for AR headset systems, where eventually most of them may be in standby on average and could theoretically push their compute power to another system. Perhaps more likely is offsite PCs with beefy internals offering the headsets a punch. On the far less sexy side, this could also just be a play for the startup to drill down some of its backend services. If you’re still curious about what they do and are interested in some even more mildly dubious explaining, check out this video from Computes’ CEO, which only mildly resembles a video from the Dharma Initiative.  

Palo Alto Networks to acquire RedLock for $173M to beef up cloud security

Palo Alto Networks launched in 2005 in the age of firewalls. As we all know by now, the enterprise expanded beyond the cozy confines of a firewall long ago and vendors like Palo Alto have moved to securing data in the cloud now too. To that end, the company announced its intent to pay $173 million for RedLock today, an early-stage startup that helps companies make sure their cloud instances are locked down and secure. The cloud vendors take responsibility for securing their own infrastructure, and for the most part the major vendors have done a decent job. What they can’t do is save their customers from themselves and that’s where a company like RedLock comes in. As we’ve seen time and again, data has been exposed in cloud storage services like Amazon S3, not through any fault of Amazon itself, but because a faulty configuration has left the data exposed to the open internet. RedLock watches configurations like this and warns companies when something looks amiss. When the company emerged from stealth just a year ago, Varun Badhwar, company founder and CEO told TechCrunch that this is part of Amazon’s shared responsibility model. “They have diagrams where they have responsibility to secure physical infrastructure, but ultimately it’s the customer’s responsibility to secure the content, applications and firewall settings,” Badhwar told TechCrunch last year. Badhwar speaking in a video interview about the acquisition says they have been focused on helping developers build cloud applications safely and securely, whether that’s Amazon Web Services, Microsoft Azure or Google Cloud Platform. “We think about [RedLock] as guardrails or as bumper lanes in a bowling alley and just not letting somebody get that gutter ball and from a security standpoint, just making sure we don’t deviate from the best practices,” he explained. “We built a technology platform that’s entirely cloud-based and very quick time to value since customers can just turn it on through API’s, and we love to shine the light and show our customers how to safely move into public cloud,” he added. The acquisition will also fit nicely with Evident.io, a…

China’s secret startup advantage: liquidity

This year’s rush of IPOs from Chinese tech companies has dominated headlines, but what’s more interesting is how quickly they got there. Traditionally, “going public” represented the gratifying culmination of sleepless nights and missed birthdays that went into building a company. The peak of a lengthy climb, where founders and VCs would finally see the fruits of their labor.  However, Chinese companies appear to be reaching that peak much quicker than their American peers, heading to the public markets only a few years after initial venture investments, and often with little operating history.  Analyzing twenty of the most high profile Chinese tech IPOs this year, the average time from first venture investment to IPO was only around three to five years. Take e-commerce platform Pinduoduo, which pulled in $1.6 billion less than three years after its Series A.  Or the recent IPO of EV-manufacturer NIO, which raised a billion dollars just three-and-a-half years after its Series A and having just delivered its first car in June. China IPO data for 2018 compiled from NASDAQ, Pitchbook, and Crunchbase That’s less than half the average 10-year timeline for venture-backed US tech companies that went public in 2018, including Dropbox, Eventbrite, and DocuSign, which all IPO’d more than a decade after their initial investments. Differences in market maturity, government involvement, and support from large tech incumbents all undoubtedly play a factor, but the speed to liquidity for the Chinese companies is still astounding. Faster liquidity can push cycle of returns, fundraising, reinvestment Speed to liquidity is a critical metric for the health of a startup ecosystem. It creates a positive cycle where faster liquidity can drive faster fundraising, faster reinvestment, faster startup building, and faster public liquidity again.  An accelerated cycle could be especially appealing for funds with LPs that require faster returns due to cash commitments or otherwise. It’s important to note that venture returns are a function of capital and time, so quicker exits will also drive higher returns for the same amount invested.  For example, a $1 million investment with a $5 million exit after ten years would generate an Internal Rate of…

Facebook poisons the acquisition well

Who should you sell your startup to? Facebook and the founders of its former acquisitions are making a strong case against getting bought by Mark Zuckerberg and Co. After a half-decade of being seen as one of the most respectful and desired acquirers, a series of scandals has destroyed the image of Facebook’s M&A division. That could make it tougher to convince entrepreneurs to sell to Facebook, or force it to pay higher prices and put contractual guarantees of autonomy into the deals. WhatsApp’s founders left amidst aggressive pushes to monetize. Instagram’s founders left as their independence was threatened. Oculus’ founders were demoted. And over the past few years, Facebook has also shut down acquisitions, including viral teen Q&A app TBH (though its founder says he recommended shutting it down), fitness tracker Moves, video advertising system LiveRail, and still-popular mobile app developer platform Parse. [Correction: Voice control developer tool Wit.ai has not shut down, just its Bot Engine.] Facebook’s users might not know or care about much of this. But it could be a sticking point the next time Facebook tries to buy out a burgeoning competitor or complementary service. Broken promises with WhatsApp The real trouble started with WhatsApp co-founder Brian Acton’s departure from Facebook a year ago before he was fully vested from the $22 billion acquisition in 2014. He’d been adamant that Facebook not stick the targeted ads he hated inside WhatsApp, and Zuckerberg conceded not to. Acton even got a clause added to the deal that the co-founders’ remaining stock would vest instantly if Facebook implemented monetization schemes without their consent. Google was also interested in buying WhatsApp, but Facebook’s assurances of independence sealed the deal. WhatsApp founder, Brian Acton, says Facebook used him to get its acquisition past EU regulators WhatsApp CEO Jan Koum quits Facebook due to privacy intrusions WhatsApp’s other co-founder, Jan Koum, left Facebook in April following tension about how Facebook would monetize his app and the impact of that on privacy. Acton’s departure saw him leave $850 million on the table. Captivity must have been pretty rough for freedom to be worth that…

Eventbrite’s IPO should encourage tech companies to get out while they still can

Eventbrite is having one hell of a debut on the New York Stock Exchange this morning. Shares of the ticketing startup, founded back in 2006, have shot up over 50 percent in trading on the NYSE. After pricing its shares at $23 in its initial offering, investors have bid up the stock to a whopping $37, putting the company’s valuation at nearly $3 billion. $EB prices $23, opens $36 pic.twitter.com/cYgCuqbmh8 — (@hunterwalk) September 20, 2018 That’s well above where the ticketing company had hoped to be when it initially set terms for the public offering earlier this month. Eventbrite sets IPO range of $19 to $21, valuing it at $1.8B The company started trading priced above its share price and nearly doubled its valuation. And if Eventbrite can do it, really almost any later-stage startup should be thinking about the public markets right now. Performance for the San Francisco ticketing company has been… somewhat lackluster. As we noted when wrote about the company’s offering: Eventbrite is not profitable and has been losing money since 2016. According to the documents, it posted losses of $40.4 million in 2016 and $38.5 million in 2017. In the first six months of 2018, the company has posted a net loss of $15.6 million. The company is making changes to make up for some of those losses — at the end of August, it announced a new pricing scheme for its customers using the “Essentials” package. Its revenue is rising though, increasing from $133 million in 2016 to $201 million last year. Since the beginning of the year tech public offerings have been on a tear. As The Wall Street Journal noted in July, 120 companies had raised $35.2 billion on U.S. exchanges at that point — the best showing for public markets since 2014 and the fourth busiest year since 1995, according to the financial data and analysis service Dealogic. The state of the IPO market We’ve noted before that it’s a bit mind-boggling that investors and their portfolio companies wouldn’t be taking more advantage of these heady times. Nothing lasts forever (not even cold November rain) and certainly…

Cluep, a Canadian startup that raised just $500K, acquired for $40M

Everyone loves a tale of a bootstrapped startup founder’s journey to an eight-figure exit. The team at Toronto-based Cluep have a good one. The founders of the adtech startup raised less than $500,000 from angel investors before selling their company to Impact Group for $40 million ($53 million CAD) this week. Founded in 2012, Karan Walia, Sobi Walia and Anton Mamonov were just 21, 17 and 16 years old, respectively, when they started the digital advertising platform, which uses artificial intelligence to help brands connect and engage with people based on what they are sharing, how they are feeling and the places they’ve been. They, being so young, struggled initially to get the company off the ground. At one point, the trio hacked into computers at a university in Toronto to train the neural networks on large amounts of data sets because they didn’t have enough money to buy their own tech. On a shoe-string budget, they would split meals at Popeyes to get by. “No one wanted to give us money at that time so we had to live off of my student loans,” Walia told TechCrunch. “We did pretty much everything, whether it was programming and building the product, or going out and selling. I was our first sales rep and I was pretty bad early on but I learned.” Ultimately, Cluep was able to raise enough from angels to pay themselves a salary, hire a few engineers and sales representatives and move into an actual office. From that point, their revenue began growing significantly YoY. 2015: $2 million CAD in revenue 2016: $6 million CAD in revenue 2017: $14.5 million CAD in revenue 2018: On track to bring in ~$30 million CAD They fielded offers from VCs toward the end of 2015 and considered raising a proper Series A round of capital, but decided staying independent would lead to the best exit. “This way allowed us to basically maintain control and exit on our terms,” Walia said. Impact Group, a Boise, Idaho-based grocery sales and marketing agency, will operate Cluep independently.

MariaDB acquires Clustrix

MariaDB, the company behind the eponymous MySQL drop-in replacement database, today announced that it has acquired Clustrix, which itself is a MySQL drop-in replacement database, but with a focus on scalability. MariaDB will integrate Clustrix’s technology into its own database, which will allow it to offer its users a more scalable database service in the long run. That by itself would be an interesting development for the popular open source database company. But there’s another angle to this story, too. In addition to the acquisition, MariaDB also today announced that cloud computing company ServiceNow is investing in MariaDB, an investment that helped it get to today’s acquisition. ServiceNow doesn’t typically make investments, though it has made a few acquisitions. It is a very large MariaDB user, though, and it’s exactly the kind of customer that will benefit from the Clustrix acquisition. MariaDB CEO Michael Howard tells me that ServiceNow current supports about 80,000 instances of MariaDB. With this investment (which is actually an add-on to MariaDB’s 2017 Series C round), ServiceNow’s SVP of Development and Operations Pat Casey will join MariaDB’s board. Why would MariaDB acquire a company like Clustrix, though? When I asked Howard about the motivation, he noted that he’s now seeing more companies like ServiceNow that are looking at a more scalable way to run MariaDB. Howard noted that it would take years to build a new database engine from the ground up. “You can hire a lot of smart people individually, but not necessarily have that experience built into their profile,” he said. “So that was important and then to have a jumpstart in relation to this market opportunity — this mandate from our market. It typically takes about nine years, to get a brand new, thorough database technology off the ground. It’s not like a SaaS application where you can get a front-end going in about a year or so. Howard also stressed that the fact that the teams at Clustrix and MariaDB share the same vocabulary, given that they both work on similar problems and aim to be compatible with MySQL, made this a good…

Crypto’s second bubble, Juul has 60 days and three Chinese IPOs

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. After a long run of having guests climb aboard each week, we took a pause on that front, bringing together three of our regular hosts instead: Connie Loizos, Danny Chrichton, and myself. Despite the fact that there were just three of us instead of the usual four, we got through a mountain of stuff. Which was good as it was a surprisingly busy week, and we didn’t want to leave too much behind. Up top we dug into the latest in the land of crypto, which Danny had politely summarized for us in an article. The gist of his argument is that the analogies relating crypto as an industry to the Internet may work, but most people have their timelines wrong: Crypto isn’t like the Internet in the 90s, perhaps. More like the 80s. On the same topic, crypto companies formed a team lobbying effort, and a high-flying crypto fund is struggling to once again post strong profit figures. Moving along, Juul is back in the news. Not, however, for raising more money or posting quick growth. Well, sort of the latter, as the government is after it. The Food and Drug Administration has put Juul on a countdown to get its act together regarding teens and smoking. That the financially impressive unicorn is in as much trouble as it is, is nearly surprising. Finally, we ran through the three most recent Chinese IPOs that hit our radar. Here they are: Meituan Dianping: The Tencent-backed group buying, delivery, and everything company raised over $4 billion in its debut, which was impressive, but also short of expectations. The firm won’t begin trading until the 20th, but it’s one more massive deal that got done in 2018. 111: We spent a minute on the show discussing what counts as a technology company thanks to 111. We voted that the Chinese online-to-offline pharmacy startup did in fact count. So, it’s in our list. Some notes on its debut can be found here. NIO: Finally on our list…

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