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There are some booming online productivity values, and some popular remote first product companies are still announcing rounds of funding amid a huge new wave of unicorn layoffs. But what about the incandescent Software-as-a-Service category as a whole?
In general, spending is expected to decline, of course, which means greater churn and slower growth for large SaaS companies. An informal peer survey compiled by Nick Mehta, CEO of Gainsight, shows that many leading executives in this area expect emigration to double digits in the near future, Alex Wilhelm learned when he discussed the topic this week Researched extra crunch.
But the effects of removing much of the world could still be a major upswing for many large and small businesses. George Kurtz, CEO of the listed cybersecurity company Crowdstrike, expects global growth as mainstream companies are serious about remote for the first time anywhere.
In the meantime, the new index data from Profitwell seem to show a slight recovery in subscriptions after weeks of declines. which Alex examines separately. It's probably too early to be hopeful, but anecdotally, the growth of Extra Crunch has returned to its previous strong level in recent weeks (thanks for the support to everyone).
He also spoke to Mary D’Onofrio, an investor at Bessemer Venture Partners, about evaluating a startup during a downturn. She also pointed out that many of the losses you see are relative. "We are now returning to historic cloud software multipliers. If you look at the emerging cloud index basket, it has been trading seven times in the past (sales). We are currently trading eight times the forward business (sales)." At least for many companies in the room, things are still not that bad.
The venture capital crisis continues
We have written a number of articles every day on the state of startup investments in the face of COVID-19. First, Danny Crichton breaks up the "denominator effect" on theinformationsuperhighway, in which a limited partner is obliged under his own financing agreements to distribute a mix of shares across startups and to rebalance them depending on the circumstances. If the other parts lose too much (such as public stocks), LPs will have to withdraw the amount of money they can have in venture capital firms. As a result, these companies lack the money for startups. Where does it go "If the markets recover quickly, they could quickly reopen their investments in VC and other alternative assets, ”Danny writes. “However, if the markets remain acidic for longer, the VC asset class is likely to move further downward as the portfolio managers reset their portfolios where they need them. It is the tyranny of fifth grade math and a complex financial system. "
How can venture companies navigate this daunting terrain? Connie Loizos signs up for theinformationsuperhighway with Aydin Senkut from Felicis Ventures ("Now is probably the hardest time to start a business"), Charles Hudson from Precursor Ventures (find some family offices that will generally be less orthodox, and possibly less affected) and Eva Ho from Fika Ventures (don't be discouraged, but take the additional challenge to really think about this career choice).
Find out more information about Extra Crunch, including a quick poll among other investors about their approaches, an interview with a risk lender, and a look at funding trends since last year.
The content library is king for TikTok
Why can TikTok dominate the charts against huge competitors? While millions sit at home with the app, Josh Constine addresses the question of why she is likely to continue to beat established consumer goods from companies like Alphabet and Facebook (or consumer startups). It is what he calls the "content network effect", as he described in detail on theinformationsuperhighway:
By facilitating remixes, you can lower the bar for creating user-generated content. You don't have to be amazingly creative or original to do something fun. Each person's life experiences shape their perspective, which could enable them to interpret an idea in a new way. What started with someone tearing audio from two people singing "Don't be suspicious, don't be suspicious" when sneaking through a graveyard on the TV show Parks and Recreation led people to synchronize as they tried, Escaping Her Child's Room Without Waking Her They left the house in clothes they had stolen from her sister's closet, tried to keep a llama as a pet, and took pictures to look bigger. Unless someone has already done the audio clip work, there is nothing that can inspire and empower others to engage with it.
While most people reading this newsletter are likely to have seen the global remote first switch, health care changes are equally important as medical systems try to cope with the pandemic. We had just released a big survey among leading digital health investors in December, but now is the time to update. We checked in with:
Here is Spohn from CRV, who sums up the situation well: “COVID-19 offers opportunities, in particular the rapid introduction of telemedicine / virtual care by clinicians and patients, clinical studies in the cloud and the renewed focus on fast point-of-care diagnosis . With virtual care, we experience a decade of acceleration in just a few weeks. Up to this point there was a high activation energy for the implementation of the first "eVisit", because the alternative (personal support) was so well established and largely available. "
Read the whole thing on Extra Crunch.
All about theinformationsuperhighway
- From Danny: On Monday, productive investor Jonathan Lehr from Work-Bench will come to us for a live conference call on theinformationsuperhighway. Work-Bench was an investor in such remarkable investments as Tamr, Cockroach Labs, Backtrace, Socure and x.ai. Danny and Alex will ask Jon about all sorts of questions about the start-up phase for start-ups today and of course answer questions from Extra Crunch members.
- Disrupt will have a remote version this year, which we now sell as Digital passport. Listen!
In the course of the week
Proposed changes to the Volcker rule could be a lifeline for venture companies affected by the market downturn
The space in between: the stratosphere
Test and track with Apple and Google
Do you want to survive the downturn? Better build a platform
Responsible use of AI to fight the coronavirus pandemic
Credit startups are looking for new businesses from the COVID-19 rescue package
What happens to edtech when children go back to school?
When switching to remote work, monitoring application performance is the big moment of IT
Rebecca Minkoff currently has some advice for e-commerce companies
How are you? Are you participating And above all, do you wet yourself? There's been so much news lately that we're all falling behind a bit, but hey, that's what equity is for. So Natasha, Danny and Alex came together to discuss a number of the greatest stories in the world of private companies.
A warning before we get on the list. We will report layoffs for a while. Do not read more than a hint of this unfortunate situation. We try to talk about the most important news, not what gives our hearts joy or joy (because if it were, we would be in mega-rounds everywhere). With that in mind, here's an overview of this week …
What you can find here!