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British low-alcohol spirits startup CleanCo lands €7.8 million to promote ‘hangover-free drinking’ internationally

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British premium low-alcohol spirits startup, CleanCo, has secured around €7.8 million in funding as investors and consumers reveal an insatiable thirst for hangover-free drinking. The latest investment takes the total now raised by the business to around €10.2 million.

The company within the “nolo” (no- or low- alcohol) category received the cash injection from existing and new gold-stamped investors including: Ursula Burns, board member of Uber and former board member of Diageo, and Stonebridge PLC, a digital-first consumer brand investment firm set up by DTC entrepreneur James Cox, who shall also advise the company on its future growth plans.

Providing people with a healthier alternative to traditional tipples, CleanCo has cultivated a loyal ‘sober-curious’ following of over 50,000 customers in just 15 months with its authentic taste and ‘cheeky-luxe’ positioning.

Recording +580% uplift in sales since the start of ‘Dry January 2021’ and +1419% YoY, the low-abv spirits business founded by TV personality and entrepreneur, Spencer Matthews  with the support of ex-director of the Gin Guild, Justin Hicklin, who acts as Chairmain. CleanCo uses traditional distilling methods to create low-alcohol spirits, and entered the market in November 2019 with CleanGin, followed by CleanRum in May 2020, both at 1.2% ABV. 

The fresh funds raised in its latest financing push will support the brand’s international expansion, including plans to launch a number of significant new markets in H1 2021. The new funds will also allow for ‘significant’ marketing investment in the UK to increase brand awareness. 

“Nobody wakes up saying “I wish I drank more last night,” explained co-founder Matthews, who has been sober since 2018. “Anyone can have a good reason to avoid or reduce their intake of alcohol. After a sub-par 2020, many of us will start 2021 with a sore head, coupled with fresh resolve and ambition to change destructive habits. We want more drinkers to be aware that there are choices when it comes to drinking high- or low-strength alcohol. At CleanCo, we’re offering an easy transition with quality and credible replacements – without compromising on taste or social experience.”

The UK producer of spirits has also just released its first ready-to-drink, canned cocktail range, featuring 0.5% ABV twists on classic serves. CleanRum & Cola is made using traditional Jamaican rum techniques and is said to deliver undertones of caramel and cayenne pepper, paired with ‘premium cola’. Meanwhile, CleanGin & Tonic offers a ‘crisp botanical blend’ of juniper, grapefruit, cardamom, mint, ginger and cinnamon. The London-headquartered company also plans to release a vodka later this year.

“Our concept is absolutely in line with market trends, as people look to change their drinking habits and as health conscious consumers consider their options,” said Justin Hicklin, Chairman of CleanCo.

To create low or no alcohol beverages, manufacturers often replace the alcohol with sugar, but to reduce the sugar and retain full flavour is challenging, and unique to CleanCo, in a closely guarded and developing process, which Hicklin reveals only as a “multiplicity of distillations.”

Source: https://www.eu-startups.com/2021/01/british-low-alcohol-spirits-startup-cleanco-lands-e7-8-million-to-promote-hangover-free-drinking-internationally/

SaaS

Investors still love software more than life

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Despite some recent market volatility, the valuations that software companies have generally been able to command in recent quarters have been impressive. On Friday, we took a look into why that was the case, and where the valuations could be a bit more bubbly than others. Per a report written by few Battery Ventures investors, it stands to reason that the middle of the SaaS market could be where valuation inflation is at its peak.

Something to keep in mind if your startup’s growth rate is ticking lower. But today, instead of being an enormous bummer and making you worry, I have come with some historically notable data to show you how good modern software startups and their larger brethren have it today.

In case you are not 100% infatuated with tables, let me save you some time. In the upper right we can see that SaaS companies today that are growing at less than 10% yearly are trading for an average of 6.9x their next 12 months’ revenue.

Back in 2011, SaaS companies that were growing at 40% or more were trading at 6.0x their next 12 month’s revenue. Climate change, but for software valuations.

One more note from my chat with Battery. Its investor Brandon Gleklen riffed with The Exchange on the definition of ARR and its nuances in the modern market. As more SaaS companies swap traditional software-as-a-service pricing for its consumption-based equivalent, he declined to quibble on definitions of ARR, instead arguing that all that matters in software revenues is whether they are being retained and growing over the long term. This brings us to our next topic.

Consumption v. SaaS pricing

I’ve taken a number of earnings calls in the last few weeks with public software companies. One theme that’s come up time and again has been consumption pricing versus more traditional SaaS pricing. There is some data showing that consumption-priced software companies are trading at higher multiples than traditionally priced software companies, thanks to better-than-average retention numbers.

But there is more to the story than just that. Chatting with Fastly CEO Joshua Bixby after his company’s earnings report, we picked up an interesting and important market distinction between where consumption may be more attractive and where it may not be. Per Bixby, Fastly is seeing larger customers prefer consumption-based pricing because they can afford variability and prefer to have their bills tied more closely to revenue. Smaller customers, however, Bixby said, prefer SaaS billing because it has rock-solid predictability.

I brought the argument to Open View Partners Kyle Poyar, a venture denizen who has been writing on this topic for TechCrunch in recent weeks. He noted that in some cases the opposite can be true, that variably priced offerings can appeal to smaller companies because their developers can often test the product without making a large commitment.

So, perhaps we’re seeing the software market favoring SaaS pricing among smaller customers when they are certain of their need, and choosing consumption pricing when they want to experiment first. And larger companies, when their spend is tied to equivalent revenue changes, bias toward consumption pricing as well.

Evolution in SaaS pricing will be slow, and never complete. But folks really are thinking about it. Appian CEO Matt Calkins has a general pricing thesis that price should “hover” under value delivered. Asked about the consumption-versus-SaaS topic, he was a bit coy, but did note that he was not “entirely happy” with how pricing is executed today. He wants pricing that is a “better proxy for customer value,” though he declined to share much more.

If you aren’t thinking about this conversation and you run a startup, what’s up with that? More to come on this topic, including notes from an interview with the CEO of BigCommerce, who is betting on SaaS over the more consumption-driven Shopify.

Next Insurance, and its changing market

Next Insurance bought another company this week. This time it was AP Intego, which will bring integration into various payroll providers for the digital-first SMB insurance provider. Next Insurance should be familiar because TechCrunch has written about its growth a few times. The company doubled its premium run rate to $200 million in 2020, for example.

The AP Intego deal brings $185.1 million of active premium to Next Insurance, which means that the neo-insurance provider has grown sharply thus far in 2021, even without counting its organic expansion. But while the Next Insurance deal and the impending Hippo SPAC are neat notes from a hot private sector, insurtech has shed some of its public-market heat.

Stocks of public neo-insurance companies like Root, Lemonade and MetroMile have lost quite a lot of value in recent weeks. So, the exit landscape for companies like Next and Hippo — yet-private insurtech startups with lots of capital backing their rapid premium growth — is changing for the worse.

Hippo decided it will debut via a SPAC. But I doubt that Next Insurance will pursue a rapid ramp to the public markets until things smooth out. Not that it needs to go public quickly; it raised a quarter billion back in September of last year.

Various and Sundry

What else? Sisense, a $100 million ARR club member, hired a new CFO. So we expect them to go public inside the next four or five quarters.

And the following chart, which is via Deena Shakir of Lux Capital, via Nasdaq, via SPAC Alpha:

Alex

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Source: https://techcrunch.com/2021/03/06/investors-still-love-software-more-than-life/

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Start Ups

The Product Manager asterisk

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Product manager might be one of the most grey roles within a startup. However, as a company progresses and the team grows, there comes a time when a founder needs to carve out dedicated roles. Of these positions, product management might be one of the most elusive — and key — roles to fill.

Ken Norton, who recently left his job as director of product at Figma to consult rising PMs, thinks it’s easier to start with defining what they aren’t: the CEO of the product.

“Product managers need to realize that there is a lot of janitorial work that gets done in product management,” he said. “It’s not fun or glamorous, and it’s certainly not being the CEO of the product. It’s just stuff that needs to get done.” I wrote up a guide on how and when to hire your first product manager that expands on some of these insights, including how focus might be the biggest trait to interview for:

Hiring continues to be one of the hardest parts of building a startup, and those early employees can define the trajectory, culture and eventual success of it. Even during TC Sessions: Justice this past week, Precursor’s Sydney Thomas explained how startups need to make “pretty final decisions, pretty early on in what type of company you want to build.”

It’s a slight asterisk to the common narrative of how startups pivot every other day. It’s not that simple, and I’ll probably remind you of that every other week, dear Startups Weekly readers.

The rest of today’s newsletter will include notes on a hot up-and-coming edtech IPO, an exit that includes Jay-Z, and the latest in agricultural tech robots. Also, remember you can always find me on Twitter @nmasc_ or e-mail me at natasha.m@techcrunch.com.

The public markets get educated

It’s been yet another busy week for the public markets. I published a scoop earlier this week that Coursera is filing to go public soon, which would be one of the first debuts that will let us see how an education company’s finances changed, and accelerated, amid the pandemic’s impact on remote learning.

Here’s what to know: Like clockwork, Coursera’s S-1 dropped late Friday, giving us the first glance of the numbers behind the business. The startup tried to pain a picture of a path of profitability, with rising revenues as well as rising net losses. We get into the meat of it here. 

Image Credits: Fotograzia / Getty Images

What’s better than one billionaire? Two 

One of the biggest headlines of this past week was Square buying a majority stake of Tidal. A fintech and music collaboration might not seem that obvious, but the music economy remains one of the most under-tapped (and under-innovated) opportunities that remains out there.

Here’s what to know: Square CEO Jack Dorsey used his other company, Twitter, to share more information about the $297 million deal. As part of this transaction, Tidal owner Jay-Z got a board seat with Square, triggering conversations about the future of musical NFTs. The deal also officially confirmed that Jay-Z isn’t just a businessman, he’s a business, man.

Singer Jay-Z performs before US President Barack Obama speaks at a campaign rally in Columbus, Ohio, on November 5, 2012. After a grueling 18-month battle, the final US campaign day arrived Monday for Obama and Republican rival Mitt Romney, two men on a collision course for the world’s top job. The candidates have attended hundreds of rallies, fundraisers and town halls, spent literally billions on attack ads, ground games, and get out the vote efforts, and squared off in three intense debates. AFP PHOTO/Jewel Samad (Photo credit should read JEWEL SAMAD/AFP/Getty Images)

Decentralized insect farming, anyone?

In this week’s Equity Wednesday episode, we brought on TC’s climate tech editor, Jonathan Shieber, to talk about the opportunities within agtech right now. We covered a lot within the 20-minute episode: from $100 million for mealworms, farm-to-grill robots and decentralized insect farming.

Here’s what to know: Farms have always had a compelling reason to turn to robotics to make tedious work much, much easier. We got into two different businesses and their approaches on how to serve farm robots, from SaaS leases to selling the robots one by one.

Image Credits: Fernando Trabanco Fotografía / Getty Images

Around TechCrunch

Thanks to all of you who tuned into TC Sessions: Justice this past week, it was so fun to hang — and make sure to give virtual kudos to my colleague, and showrunner, Megan Rose Dickey.

Next up is TechCrunch Early Stage, our yearly event that is all about tactical advice to help new and first-time founders navigate the Wild West world that is venture capital and startups. We just announced the judges of the pitch-off competition, and have already landed top-tier venture capitalists to share what you won’t find on Twitter: behind the scenes startup advice that is beyond 180 characters.

It’s the bootcamp you always wished you could attend, so get your tickets here.

Across the week

Seen on Extra Crunch

Understanding how investors value growth in 2021

Dear Sophie: Can you demystify the H-1B process and E-3 premium processing

11 words and phrases to cut from your VC pitch deck

Making sense of the $6.5B Okta-Auth0 deal

Seen on TechCrunch

SoftBank makes mountains of cash off of human laziness

Mary Meeker’s Bond has closed its second fund with $2 billion

The technology selloff is getting to be somewhat material

What China’s Big Tech CEOs propose at the annual parliament meeting

And finally…

I wanted to end by using this platform to address the rise of anti-Asian violence across our country. Conversations around how to be a more inclusive and anti-racist society need to be more loud, and more collaborative in order for change to actually happen. Intention around inclusion will impact the world we live in, the startups we create and the success of our collective. Here are some resources to donate, petition and learn.

Thanks,

N

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Source: https://techcrunch.com/2021/03/06/the-product-manager-asterisk/

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EdTech

A first look at Coursera’s S-1 filing

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After TechCrunch broke the news yesterday that Coursera was planning to file its S-1 today, the edtech company officially dropped the document Friday evening.

Coursera was last valued at $2.4 billion by the private markets, when it most recently raised a Series F round in October 2020 that was worth $130 million.

Coursera’s S-1 filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year. It paints a picture of growth, albeit one that came at steep expense.

Revenue

In 2020, Coursera saw $293.5 million in revenue. That’s a roughly 59% increase from the year prior when the company recorded $184.4 million in top line. During that same period, Coursera posted a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

Notably the company had roughly the same non-cash, share-based compensation expenses in both years. And even if we allow the company to judge its profitability on an adjusted EBITDA basis, Coursera’s losses still rose from 2019 to 2020, expanding from $26.9 million to $39.8 million.

To understand the difference between net losses and adjusted losses it’s worth unpacking the EBITDA acronym. Standing for earnings before interest, taxes, depreciation, and amortization, EBITDA strips out some non-operating costs to give investors a possible better picture of the continuing health of a business, without getting caught up in accounting nuance. Adjusted EBITDA takes the concept one step further, also removing the non-cash cost of share-based compensation, and in an even more cheeky move, in this case also deducts “payroll tax expense related to stock-based activities” as well.

For our purposes, even when we grade Coursera’s profitability on a very polite curve it still winds up generating stiff losses. Indeed, the company’s adjusted EBITDA as a percentage of revenue — a way of determining profitability in contrast to revenue — barely improved from a 2019 result of -15% to -14% in 2020.

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Source: https://techcrunch.com/2021/03/05/a-first-look-at-courseras-s-1-filing/

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Start Ups

Coursera Files To Go Public After Online Learning’s Big Year

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Following a busy year for edtech, online learning platform Coursera has filed to go public.

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Coursera is backed by investors including The World Bank and EDBI. The investors set to receive the biggest payout from the IPO include New Enterprise Associates, G Squared, Kleiner Perkins and Future Fund.

As a private company, Coursera raised more than $443 million in funding, according to Crunchbase. It last raised a $130 million Series F led by NEA in July 2020.

Coursera reported $293.5 million in revenue in 2020, up 59 percent from $184.4 million in 2019. Its net loss also grew in that period from $46.7 million in 2019 to $66.8 million in 2020.

As of the end of 2020, the company has over 77 million registered learners on its platform. More than 4,000 academic institutions, 2,000 organizations and 300 government entities had used Coursera for student, employee and resident training, the company said in its S-1. 

Edtech in general has been a topic of discussion over the past year as the COVID-19 pandemic has forced distance learning on teachers and students. The company acknowledged how the pandemic “sharply increased the need for online learning beginning in 2020,” but also stated in its Risk Factors section that it couldn’t predict if the online learning trend would stick.

“Although we believe our business has also been positively impacted to some extent by several trends related to the COVID-19 pandemic, including the increased need or willingness of businesses, governments, and educational institutions to adopt remote, online, and asynchronous learning and training, we cannot predict whether these trends will continue if and when the pandemic begins to subside, restrictions ease, and the risk and barriers associated with in-person learning and training decrease,” Coursera wrote.

It also acknowledged among its risk factors that, “while the COVID-19 pandemic has accelerated the market for online learning solutions, it is still less mature than the market for in-person learning and training, which many businesses currently utilize, and these businesses may be slow or unwilling to migrate from these legacy approaches.”

Coursera is one of the bigger names in the world of edtech, partnering with well-known institutions like Stanford University and Princeton University to offer courses such as Introduction to Logic, Machine Learning and Essentials of Palliative Care. 

One of its more interesting risk factors: Coursera acknowledged that the reputation of for-profit postsecondary institutions and the scrutiny they’re under could negatively impact its business, despite the company steering clear of them.

“Even though we do not market our solutions to these institutions, this negative media attention may nevertheless add to the skepticism about online higher education generally, including our solutions,” the company wrote.

Coursera is one of several venture-backed companies to file to go public in the past week. ThredUp, AppLovin, Compass and Vizio all filed S-1 registration documents with the Securities and Exchange Commission this week. 

Morgan Stanley, Goldman Sachs and Citigroup are among the underwriters for Coursera’s IPO. The company has applied to list on the New York Stock Exchange under the ticker COUR. 

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

While 2020 wasn’t a banner year for most things, that’s also true for M&A dealmaking in cybersecurity. However, last month saw some interesting…

While shares opened at $39, they slid throughout the day to close at $34.80, down 12 percent.

The company reported about $1.45 billion in revenue in 2020, up from $994.1 million in 2019.

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Source: https://news.crunchbase.com/news/coursera-files-to-go-public-after-online-learnings-big-year/

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