Extra Crunch Tuesday: One final $100M ARR company and the startups we want to meet in 2021

Extra Crunch Newsletter

Tuesday, December 22, 2020 • By Walter Thompson

Welcome to Extra Crunch Tuesday Image Credits: Nigel Sussman Alex Wilhelm began nominating startups to his “$100M ARR club” last year to get a clearer understanding of the relationship between revenue and company valuations. At the time, he said $100 million in annual recurring revenue was a “a pretty good demarcator for what a unicorn should be: rare, valuable and fundamentally desirable.” One year later, he has reconsidered his stance: “Mostly what we managed was to collect a bucket of companies that were about to go public.” Heading into 2021, he’s reframing his perspective to study startups that have reached the $50 million annual run rate threshold. “At $50 million ARR, a startup is scaling to IPO size,” he says. “That's the goal, after all.” If your privately held company has an ARR between $35 million and $60 million and you’d like to talk about growth, Alex would like to hear from you. We’ll continue to publish Extra Crunch this week but will take Friday off for the Christmas holiday. Thanks very much for reading! Walter Thompson Senior Editor, TechCrunch @yourprotagonist Read more

How should SaaS companies deliver and price professional services? Image Credits: m.czosnek / Getty Images “The more ARR, the better.” In 2019, global SaaS revenue was approximately $100 billion, but Gartner forecasts that this figure will reach $140 billion by 2022. Roger Hurwitz, a founding partner at Volition Capital, notes that overall gross margins for these companies is 60% to 80%, but “what is much less obvious is how to charge customers for professional services.” Read more

Holiday Sale: Save $10 on Extra Crunch membership Sponsored by TechCrunch From now until January 3, take $10 off the cost of an annual Extra Crunch membership! Read more

Despite global economic downturn, space startup funding defies gravity Image Credits: NASA According to Meagan Crawford of SpaceFund and Chris Moran with Lockheed Martin Ventures, investor interest in space startups stays strong even when the economy is in turmoil. In an interview with Kirsten Korosec at last week’s TC Sessions: Space 2020, Crawford and Moran spoke about which traits they look for in founder teams and how exits are driving new investments. "As they get more and more capital under management, I think you're going to continue to see a lot of early-stage capital to really boost this industry," Crawford said. Read more

3 VCs discuss space junk and what else they're betting on right now Image Credits: Maciej Frolow/Photodisc / Getty Images Connie Loizos spoke to three investors after TC Sessions: Space 2020 to discuss investment opportunities, regulatory issues and the industry’s long-term sustainability: Tess Hatch of Bessemer Venture Partners Mike Collett, Promus Ventures Chris Boshuizen, DCVC, co-founder of Planet Labs Read highlights from their conversation, or watch/listen to a video with the complete chat. Read more

Fintech startups are increasingly focusing on profitability Image Credits: Krisanapong Detraphiphat / Getty Images “After a few wild years of growth, fintech startups are starting to act more like traditional finance companies,” writes Romain Dillet in his year-end story. Adapting to rapid changes in consumer behavior, many companies made growth a secondary priority as they fine-tuned their product offerings. Examining subscriptions, paid financial products and debit cards, Romain recaps efforts from companies like Robinhood, Monzo and Lydia as they aim to keep users engaged during the COVID-19 era. Read more

As 2020 ends, new unicorn formation continues to impress Image Credits: Nigel Sussman One might expect the public markets to quiet down in the last two weeks of the year, but one would be mistaken. Yesterday, Alex Wilhelm covered the birth of three unicorns: online checkout company Bolt, contract management software company Ironclad, and Qualia, which offers real estate software. “Three unicorns in one day is busy,” said Alex. “To see three come to light on December 21st is a little bonkers.” Read more

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