Extra Crunch Tuesday: 5 creator economy VCs see startup opportunities in monetization, discovery and much more

Extra Crunch Newsletter

Tuesday, February 09, 2021 • By Walter Thompson

Welcome to Extra Crunch Tuesday Image Credits: ALLVISIONN / Getty Images The people who produce viral TikTok duets, in-demand Substack newsletters and popular YouTube channels are doing what they love. And the money is following them. Many of these emerging stars have become media personalities with full-fledged production and distribution teams, giving rise to what one investor described as “the enterprise layer of the creator economy.” More VCs are backing startups that help these digital creators monetize, produce, analyze and distribute content. Natasha Mascarenhas and Alex Wilhelm interviewed five of them to learn more about the opportunities they’re tracking in 2021: Benjamin Grubbs, founder, Next10 Ventures Li Jin, founder, Atelier Ventures Brian O'Malley, general partner, Forerunner Ventures Eze Vidra, managing partner, Remagine Ventures Josh Constine, principal, SignalFire Felicis’ Aydin Senkut and Kevin Busque, CEO of enterprise tech company Guideline, will appear on Extra Crunch Live tomorrow at 3 p.m. EST/12 p.m. PST/8 p.m. GMT. The pair will discuss the story behind the $15 million Series B Felicis led, but they’ll also offer feedback on pitch decks submitted by audience members. Only Extra Crunch members can participate, so sign up today to save your spot! Thanks very much for reading, Walter Thompson Senior Editor, TechCrunch @yourprotagonist Read more

Are SAFEs obscuring today's seed volume? Image Credits: Nigel Sussman Simple Agreements for Future Equity are an increasingly popular way for startups to raise funds quickly, but “they don't generate the same paperwork exhaust,” Alex Wilhelm noted this morning. This creates cognitive dissonance: investors see a hot market, while people who rely on public data (like journalists) get a different picture. “SAFEs have effectively pushed a lot of public signal regarding seed deals, and even smaller rounds, underground,” says Alex. Read more

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Container security acquisitions increase as companies accelerate shift to cloud Image Credits: Andriy Onufriyenko / Getty Images Many enterprise companies were snapping up container security startups before the pandemic began, but the pace has picked up, reports Ron Miller. The growing number of companies going cloud-native is creating security challenges; the containers that package microservices must be correctly configured and secured, which can get complicated quickly. “The acquisitions we are seeing now are filling gaps in the portfolio of security capabilities offered by the larger companies,” says Yoav Leitersdorf, managing partner at YL Ventures. Read more

Two $50M-ish ARR companies talk growth and plans for the coming quarters Image Credits: Bryce Durbin / TechCrunch In December 2019, Alex Wilhelm began reporting on startups that had reached the $100M ARR mark. A year later, he decided to reframe his focus. “Mostly what we managed was to collect a bucket of companies that were about to go public,” he said. Since then, he has recalibrated his sights. In the latest entry of a new series focusing on “$50M-ish” companies, he studies SimpleNexus, which offers digital mortgage software, and photo-editing service PicsArt. Alex has more interviews and data dives coming on other companies in this cohort, so stay tuned. Read more

With a higher IPO valuation, is Bumble aiming for Match.com's revenue multiple? Image Credits: Nigel Sussman Dating platform Bumble initially set a price of $28 to $30 for its upcoming IPO, but at its new range of $37 to $39, Alex calculated that it could reach a max valuation of $7.4 to $7.8 billion. Extrapolating revenue from its Q3 2020 numbers, he attempted to find the company’s run rate in yesterday’s column to see if it’s overpriced — and how well it stacks up against rival Match. Read more

Oscar Health's IPO filing will test the venture-backed insurance model Jon Shieber and Alex Wilhelm co-bylined a story yesterday about Oscar Health, which filed to go public last week. Although the health insurance company claims 529,000 members and a compound annual growth rate of 59%, “it's a deeply unprofitable enterprise,” they found. Jon and Alex parsed Oscar Health’s 2019 comps and its 2020 metrics to take a closer look at the company’s performance. “Both Oscar and the high-profile SPAC for Clover Medical will prove to be a test for the venture capital industry's faith in their ability to disrupt traditional healthcare companies,” they write. Read more

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