0:00

This episode is presented by Invest

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Puerto Rico. If you believe your

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business can go anywhere, Puerto Rico

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is the place. Hello

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and welcome back to Equity the TechCrunch

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podcast, where we unpack the numbers and

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the nuance behind the headlines. This is

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Alex and today is April 10th, 2024.

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Welcome to our Wednesday show where we

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dig into the critical startup and venture

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capital stories from the week thus far.

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And today's show is packed because there

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was so much good stuff to choose

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from. So here's what I picked. Gesty's

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big new round that shows just how hard

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it is to get a unicorn price tag

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these days. Another startup buying

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a startup story. You know, I

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love those. Why Monad Labs is

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such a gutsy venture deal? Saira

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and cybersecurity. And finally, a new

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60 million dollar venture fund that

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has a very interesting geographical twist.

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Let's go. First

1:08

up today is Gesty, a

1:10

platform that helps accommodation managers

1:12

handle their business on platforms

1:14

like Airbnb and Verbo. It

1:16

just raised one hundred and

1:19

thirty million dollars. And sources

1:21

tell TechCrunch that the company's

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valuation at its series F

1:25

was around nine hundred million

1:27

dollars post money. Now, the

1:29

startup is based out of New York, but

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does have roots in Israel and says that

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its revenue grew 5x in

1:36

the last three years. And it expects

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to turn profitable this year. I'm reading

1:40

the profitability point as I don't know,

1:43

cash flow positivity. But regardless, those are

1:45

pretty impressive numbers. Now, the company wouldn't

1:47

give us actual revenue figures, but I

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do think when we compare its price

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to its performance, we do get an

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indication about how things have changed in

1:57

the world of venture valuations. this

2:00

round and the space that Guestie competes in

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is heating up. So, Guestie last raised

2:04

a series E of 170 million that valued

2:06

it at 690 million back in August

2:08

of 2022 and Guestie's close

2:15

competitor, Hostaway, raised $175 million

2:17

last May and then within

2:19

a day of that news,

2:21

Get Your Guide raised $194 million. So,

2:24

lots of capital going into the space

2:26

I think because people are once again

2:28

traveling and therefore managing Airbnbs is a

2:30

bigger business so there's more people to

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sell to. Now, how did Guestie

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manage to raise so much money in today's

2:37

market in such a competitive space? I dug

2:39

in just a little bit and

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it turns out the company offers a

2:43

blizzard of services for short term rental

2:45

providers, things like payments and websites and

2:48

actually even capital. So, the company has

2:50

gone broad inside of its niche to

2:52

help get big and keep growing. Ah

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man, it's a lot of work to not

2:57

be a unicorn but then again, the venture

2:59

market is probably back to normal pricing now

3:01

which only feels weird because of how long

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that last bubble lasted. Next

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up, more startup buying startup stories. I'm a

3:08

complete sucker for these so I will always

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put them on the show when I get

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a chance. Today Multiverse which

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is a UK based unicorn that

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TechCrunch says builds apprenticeship programs for

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people to learn tech skills while

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on the job has made an

3:24

acquisition to actually upskill itself. Now,

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in this case, the company is

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buying Searchlight which is a startup

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that builds AI based recruitment and

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assessment products. So, why the time

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up? Well, TechCrunch reports that the

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plan will be to use Searchlight's

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tech to create new AI products

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that Multiverse, its new parent company

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can use to expand its training

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services for professionals. Very cool. Now,

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to give some scale here, Multiverse

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has raised over $400

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million according to Crunchbase. Searchlight,

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in contrast, has raised less than $20 million.

3:58

So we're talking about a roughly $20 million. 20x

4:00

differential in capital raised, so it makes

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sense that Multiverse is doing the acquiring

4:05

and Searchlight is doing the selling. This

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deal reminds me of the Wonder School early

4:10

day transaction that we saw recently and actually

4:12

had the CEOs from on the show a

4:14

few weeks back, I'll throw a link to

4:16

that in the show notes. In

4:18

short, we are seeing larger and

4:20

better funded startups buy smaller, less

4:23

well funded rivals or tuck in

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services really, that can bolster their

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overall product mix and therefore velocity.

4:29

Recall that Guestie does a lot of different

4:32

stuff, well one way to avoid having to

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build all that new stuff from scratch is

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to simply absorb a smaller company that might

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have struggled to raise a round at an

4:40

attractive price and already built what you might

4:42

want to have built yourself, right? I love

4:44

these as they come out we'll talk about

4:46

each and every single one of them that

4:48

I see. Next

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up is a very interesting venture capital funding

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event that made me sit up and wonder

4:55

what I was reading and that's what I

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love to see in a venture capital deal

4:59

because it should be a little bit out

5:02

there, right? That's the case

5:04

with Monad Labs. So Fortune

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got the scoop here, I'm

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going to go ahead and

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quote them, Monad Labs quote

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finalize a $225 million round

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led by Paradigm with additional

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funding by investors including Electric

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Capital and Greenoaks to build

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a layer one blockchain to

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challenge competitors such as Solana.

5:26

Okay, this is awesome. So what does

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all that mean? Well, it means

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that Paradigm and the Monad crew

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think that there is room in

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the market for another base layer

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blockchain or L1 if you want to

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use the term. So think Bitcoin

5:41

and Ethereum and Solana not

5:43

L2s or layer 2 chains

5:45

like base. If you

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need a super crude and stupid analogy, well

5:50

boy do I have one for you. L1s

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are like operating systems to

5:55

L2s which are more like

5:57

apps. That's clearly too far.

6:00

a stretch, but you get the

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idea. And that's why the Monads

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Labs funding round is so interesting.

6:06

Another L1 is a big deal

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if it actually has a shot

6:10

at working, and the Monads

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crew just put nearly a quarter billion

6:15

dollars of investor capital into their pockets

6:17

to try to give it a try.

6:20

I don't think it's really that

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great that we live in a

6:24

two-horse mobile OS world, and nearly

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as limited a PC OS world

6:28

just to be honest. So more

6:30

L1s, returning to my tortured analogy,

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are fine. By me. And

6:35

there is other stuff going on in

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the world of Web3. TechCrunch also recently

6:39

reported that Kiki World just raised $7

6:42

million for its hybrid beauty startup

6:44

slash Web3 service. So how does

6:46

that work? Well, TechCrunch writes that

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the company intends to allow its

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community members to vote on the

6:53

features they want before the beauty

6:55

products are made. And then if

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you do vote, you get points

6:59

and digital tokens. Now, the thing

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that kind of threw me here

7:04

is the blockchain aspect of Kiki

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is kind of obscured. Users will be

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able to vote via email, which

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then makes me kind of wonder why

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you need the blockchain. But maybe this

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kind of like IRL slash Web3 thing

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is going to work. I don't know,

7:19

but Kiki just got $7 million for

7:21

its plan. So let's see. And I

7:23

guess let's see if they eventually build

7:25

it on whatever L1 Monad comes up

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with. What's next

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in tech? That's not the

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in the U.S. If you

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anywhere, Puerto Rico is the

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place. Find out more at

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investpr.org/Tech Ranch. I'm

8:00

going to squeeze one more startup story

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in today. Of course, we will have

8:04

deals of the week on the Friday

8:06

news roundup, but very briefly, Sierra just

8:08

raised $300 million at a $1.4 billion

8:11

price tag, and that's C-Y-E-R-A. This

8:17

is a lot of capital at a unicorn

8:19

price, so it caught my eye because we

8:22

don't see this too often. And then the

8:24

deal is doubly interesting because the company raised

8:26

$100 million last year. We

8:29

don't see that many companies doing back-to-back yearly

8:31

raises, let alone in the nine-figure

8:34

range, let alone tripling from $100

8:36

to $300 million. So

8:39

clearly, whatever Sierra is working on, investors

8:41

are excited by it. And

8:43

what is it doing? Well, data-focused

8:45

cybersecurity. Of course, data is once

8:47

again the hottest thing out there

8:50

because AI wants to eat all

8:52

of it, and cybersecurity is very

8:54

important because, well, everyone's getting hacked.

8:57

I have been a little confused

8:59

by the lack of big cybersecurity

9:01

rounds in the market lately, and

9:03

that's because their public market comps,

9:05

companies like CrowdStrike and Zscaler, are

9:08

some of the fastest-growing companies out there in

9:10

the market. But this Sierra round

9:12

does, in fact, help me understand what's been

9:14

going on because the company just raised enough

9:17

money for five or six big cybersecurity rounds

9:19

all at once. So I guess investors were

9:21

just waiting for Sierra to go back into

9:23

the market. Before

9:28

we go a little bit of

9:30

venture capital news to throw into

9:32

the mix this morning, TechCrunch reports

9:34

that Verid Kepel Africa Ventures, or

9:36

VKAZ, plans to back up to

9:38

21 growth-stage companies

9:40

across the continent after closing its

9:42

first fund of $60 million. Now,

9:45

the fund saw its first and second

9:47

close back in 2022 and is now

9:49

just done fundraising, which

9:52

I think just goes to show how difficult

9:54

and how much the funding market has changed

9:56

for these fees, but given that Africa

9:59

has a con... has seen

10:01

its total venture capital activities

10:03

slow in recent years, it's

10:05

good to see more Africa

10:07

HQed funds investing in the

10:09

area because it's good news

10:11

for local founders. Now Verit

10:13

Kepel Africa Ventures, BKAV, is

10:15

based in Nigeria, but TechCrunch

10:17

writes, is part of a

10:19

growing number of African VCs

10:21

that are receiving backing from

10:23

Japanese institutional investors looking to

10:25

diversify their risks. This is

10:27

very interesting. If you go back in time, there's been

10:29

a lot of coverage of different

10:31

countries investing in Africa. There was China

10:33

doing a lot of infra in Africa

10:35

for a while, for example. And now

10:38

we're talking about Japan investing in African

10:40

VCs. Again, just super cool. And I'll

10:42

just say that I think we'll probably

10:44

see more of this over time, especially

10:46

in societies that have shrinking and aging

10:48

populations kind of looking outside their borders

10:50

to invest. Anyways, BKAV,

10:52

60 million in Africa. Love it. That's

10:57

our show for this lovely Wednesday morning.

10:59

Our Friday roundup with Marianne Azevedo going

11:01

into deals of the week. And the biggest

11:03

themes from this week in startup and venture

11:06

capital news will drop Friday morning for a

11:08

season. But if you need even more from

11:10

team equity, well, we are equity pod over

11:12

on X and threads and we are TechCrunch

11:15

pods over on TikTok. My name is Alex.

11:17

This is equity Wednesday. I'll talk to you

11:19

soon. Bye. Equity

11:23

is hosted by myself, Alex Wilhelm and

11:26

TechCrunch senior reporter, Mary Ann Azevedo. We

11:28

are produced by Teresa Locun Solo with

11:30

editing by Kel. Bryce Durbin is our

11:32

illustrator and a big thank you to

11:34

the audience development team and Henry Picavel

11:36

who manages TechCrunch audio products. Thank you

11:39

so much for listening and we'll talk

11:41

to you next time.