Benner on Tech: Seeking European Unicorns
People are Talking About…
The big U.S. unicorns are raising ever-larger private funding rounds. Most recently, Pinterest confirmed in a regulatory filing that its investors now value it at $11 billion, up from $5 billion less than a year ago. The last few months have seen Uber, Lyft, Nextdoor, Snapchat and SpaceX all raise monster private rounds.
Forget dead unicorn predictions. For now, investor appetite for pieces of venture-backed companies shows no signs of abating.
But a couple of data points have me wondering whether we’ll see a unicorn rotation of sorts, with investors turning from the very expensive U.S. venture market to buying opportunities in Europe. Two things could spur such a move: lack of competition and quantitative easing.
While more than 50 private U.S. companies boast valuations north of $1 billion, there are only about half a dozen European startups in that category. Over the past few weeks, I’ve also heard from more venture investors that they’re putting money into much cheaper British and European companies for a fraction of what they’d have to pay for similar companies in Silicon Valley.
And the launch of the European Central Bank’s 1.1 trillion euro quantitative easing program has drawn investors around the globe into riskier assets in Europe. Eurozone stock markets have outperformed the U.S., U.K. and Japan since the ECB confirmed it would go through with the bond buying program. Stocks might just be the beginning. America’s own quantitative easing programs have drawn tons of investment to U.S. stocks, private companies and high-yield bonds over the past few years.
If we get unicorn rotation, the late stage companies in established markets like the U.K., Germany and Scandinavia should benefit. So far this year, Delivery Hero, Shazam and FarFetch have raised rounds that value those companies at over $1 billion. Whither Spotify, which is rumored to be chasing an $8 billion valuation, and the payments company Powa? Firms with a global outlook might be more active in Europe than the Silicon Valley set. I'm curious to see what players such as DST, Tiger Global and Valar do in the next few months. If Europe is heating up, then expect seed rounds to get bigger too, mirroring another trend that we’ve seen here in the U.S.
Etsy sellers that have moved from handmade goods to mass produced products underscore the company’s central tension, says the New York Times. It will have to give up its handmade ethos if it wants to sell enough products to be IPO-ready.
Lyft’s CEO Logan Greencame out swinging at SXSW, where he said that Uber has “crossed a handful of lines,” Bloomberg reports. (I don’t think that Lyft’s positioning itself as the good guy will have a deleterious effect on Uber’s ability to raise money or gain customers.)
Pinterest confirmed in a regulatory filing that it raised $367 million at a price per share that values the company at $11 billion, reports Bloomberg. The company said it may raise another $211 million.
Xiaomi is working with the Chinese athletic gear maker Li Ning to make a “smart” running shoe, Reuters reports.
A group of VCs will give you $50,000 if you can come up with a name for their new venture firm, Fortune reports.
Dan Levitan, who founded the venture firm Maveron with Starbucks founder Howard Schultz, told Strictly VC that current private company valuations are based “more on greed and fear, which we’ve seen before.”
People and Personnel Moves
Brent Callinicos, Uber’s chief financial officer, is leaving the ride-hailing company, reports the Wall Street Journal. Callinicos will advise Uber until a replacement is found.
Alex Winter, the documentary filmmaker whose film “Deep Web” examines Silk Road, explained to CNET why the underground bazaar that specializes in contraband reminds him of Napster.
Alibaba's first lock up period is expiring, and the Wall Street Journal has everything you need to know.
Apple will soon accept non-Apple smartphones for gift cards that can be used to the purchase of new iPhones, reports 9to5 Mac. It’s planning a web TV service that will launch this fall with a couple dozen channels, according to the Wall Street Journal. The company was found not guilty of infringing on several wireless patents, Reuters reports.
EBay and Sotheby’s high-end auction partnership kicks off on April 1 with New York-themed prints, paintings and photographs, including the works of Man Ray, Bloomberg reports.
Facebook is rolling out a tool that measures whether app-install ads get people to download app, reports the Information. The company clarified some of its user rules, saying that people can use pseudonyms, but that sexual solicitation, sexual content and sharing naked photos without aren’t allowed, reports the Verge.
LinkedIn acquired a Canadian job-finding startup called Careerify. Deal terms weren’t disclosed.
Nintendo is teaming up with the mobile game maker DeNA to make smartphone games, the Wall Street Journal reports.
Yahoo is making its email more secure with better encryption and “on-demand” passwords, reports the Verge.
About 30 percent of adult Americans have taken at least one step to hide their information from the U.S. government in the wake of the Edward Snowden revelations, says the Pew Research Center.
Cablevision Systems will be the first pay-TV provider to offer the over-the-top service HBO Now, but Variety says that pricing hasn’t been announced.
Forbes Media acquired Camerama, a photo sharing app. Terms weren’t disclosed.
News and Notes
Bankers are leaving finance and going into tech, Bloomberg reports.
The .sucks domain name is almost here, and Marketing Land says companies will pay big bucks to defensively buy .sucks domain names.
At a panel on the lack of gender and racial diversity in tech, Google’s executive chairman Eric Schmidt spent a lot of time interrupting, talking over and directing his co-panelist, Megan Smith, the U.S. chief technology officer, reports the Wall Street Journal.
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