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Reporter’s Notebook: High Valuations Go To Those With Low Carbon Footprints

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With wildfires and acrid smoke along the West Coast, and hurricane-unleashed flooding in the Southeast, it’s timely to be worried about climate change. But against the backdrop of sky-high fossil fuel consumption, more dramatic evidence of glacial melting, and all-too-apparent failures and limitations of governments, it’s tough to find much to be positive about.

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This week I managed to find small solace in an unlikely place: A review of valuations for major companies. It’s not much against the wrath of Mother Nature. But here it is: Markets have been rewarding companies with low carbon footprints, and penalizing those with high fossil fuel consumption.

This is true in private markets, which we cover here at Crunchbase, as well as the public ones.

In major exchanges, large fuel producers and consumers that once dominated the markets (think Exxon, GM, Chevron) are now worth a tiny fraction of tech behemoths like Google and Apple, companies with core offerings of software and power-efficient gadgets.

Meanwhile, in private markets, it’s hard to find a single member of the Crunchbase Unicorn Leaderboard that’s a heavy fossil fuel producer or consumer. Rather, companies like payment tech provider Stripe, electric truck maker Rivian, and video game and software company Epic Games top the ranks in our list of private companies valued at $1 billion and up. The closest any get to a big carbon user are platforms like Instacart and DoorDash that make deliveries. But often they are just offsetting trips customers would otherwise make themselves.

In the tech press, we tend to closely follow the rise of valuations among industry leaders in our sphere. One thing that’s noteworthy is Big Tech’s upward ascent over the past few years, which comes as much as Big Oil is in a drawn-out decline. That means the two have drifted further apart.

Here’s a case in point. Seven years ago, ExxonMobil had a market capitalization of about $420 billion. Google, meanwhile, was valued around $340 billion.

Fast-forward from 2013 to 2020, and the picture is radically different. Google now has a market cap of roughly $1 trillion(!), while Exxon’s is around $160 billion. So Google went from being worth less than one Exxon to being worth six Exxons.

And Google isn’t even the most valuable of the tech behemoths. Apple is now worth $1.9 trillion–six times more than Exxon and Chevron combined. Microsoft is at around $1.5 trillion.

The valuations investors are willing to attach to low carbon-footprint software companies are lofty enough that this summer Exxon saw itself booted after a 92-year reign on the Dow Jones Industrial Index to make way for Salesforce1. Heck, even Snowflake, the deeply unprofitable data warehousing company that went public last week, now has a market capitalization worth well over one-third that of Exxon.

If we look at hot areas for venture funding and IPOs, we see more evidence that low carbon footprints deliver returns. Investors are putting record sums into plant-based protein startups, seen as a more humane and environmentally sound alternative to meat. The first big IPO of the batch, Beyond Meat, is now worth over $9 billion. Other low-carbon sectors, including connected fitness, sustainable packaging, telemedicine and distance learning are all seeing a surge in deals. While some of that may be pandemic-related, it’s likely we’ll also see longer-term shifts.

So, does this change of financial fortunes mean we can ease our climate worries? No. I’m not a staunch believer in the power of markets to single-handedly cure societal ills. Certainly for a problem as global and vast as climate change, the overwhelming consensus is that it will require cooperative efforts of companies, governments, citizens and NGOs.

But for those of us who think following the money tells us something about where we’re headed, much about the current direction looks positive from a climate perspective. Because the money is certainly moving away from the purveyors and power users of fossil fuels. And it’s heading to those for whom going carbon neutral can be a minor extra cost in a very profitable business.

Illustration: Li-Anne Dias.

Gene sequencing firm Illumina plans to buy cancer screening startup Grail in a cash-and-stock deal worth $8 billion.

Y Combinator today released three new lists on Black-, Latinx- and women-founded portfolio companies as a part of its startup directory.

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

Source: https://news.crunchbase.com/news/reporters-notebook-high-valuations-go-to-those-with-low-carbon-footprints/

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The Briefing: RVShare raises over $100M, Google disputes charges, and more

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

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RVShare raises over $100M for RV rentals

RVShare, an online marketplace for RV rentals, reportedly raised over $100 million in a financing led by private equity firms KKR and Tritium Partners.

Akron, Ohio-based RVShare has seen sharp growth in demand amid the pandemic, as more would-be travelers seek socially distanced options for hitting the road. Founded in 2013, the company matches RV owners with prospective renters, filtering by location, price and vehicle types.

Previously, RVShare had raised $50 million in known funding, per Crunchbase data, from Tritium Partners. The company is one of several players in the RV rental space, and competes alongside Outdoorsy, a peer-to-peer RV marketplace that has raised $75 million in venture funding.

Funding news

  • BrightFarms closes on $100M: Indoor farming company BrightFarms said it secured more than $100 million in debt and new equity capital to support expansion plans. The Series E round of funding was led by Cox Enterprises, which now owns a majority stake in the company, and includes a follow-on investment from growth equity firm Catalyst Investors.
  • Anyscale inks $40MAnyscale, the Berkeley-based company behind the Ray open source project for building applications, announced $40 million in an oversubscribed Series B funding round. Existing investor NEA led the round and was joined by Andreessen Horowitz, Intel Capital and Foundation Capital. The new funding brings Anyscale’s total funding to more than $60 million.
  • Klar deposits $15M: Mexican fintech Klar closed on $15 million in Series A funding, led by Prosus Ventures, with participation from new investor International Finance Corporation and existing investors Quona Capital, Mouro Capital and Acrew. The round brings total funding raised to approximately $72 million since the company was founded in 2019. The funds are intended to grow Klar’s engineering capabilities in both its Berlin and Mexico hubs.
  • O(1) Labs rakes in $10.9M: O(1) Labs, the team behind the cryptocurrency Mina, announced $10.9 million in a strategic investment round. Co-leading the round are Bixin Ventures and Three Arrows Capital with participation from SNZ, HashKey Capital, Signum Capital, NGC Ventures, Fenbushi Capital and IOSG Ventures.
  • Blustream bags $3M: After-sale customer engagement company Blustream said it raised $3 million in seed funding for product usage data and digital transformation efforts for physical goods companies via the Blustream Product Experience Platform. York IE led the round of funding for the Worcester, Massachusetts-based company with additional support from existing investors.Pillar secures another $1.5M: Pillar, a startup that helps families protect and care for their loved ones, raised $1.5 million in a seed extension to close at $7 million, The round was led by Kleiner Perkins.

Other news

  • Google rejects DOJ antitrust arguments: In the wake of a widely anticipated U.S. Justice Department antitrust suit against Google, the search giant disputed the charges in a statement, maintaining that: “People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.”
  • Facebook said to test Nextdoor rival: Facebook is reportedly testing a service similar to popular neighborhood-focused social Nextdoor. Called Neighborhoods, the feature reportedly suggests local neighborhood groups to join on Facebook.

Illustration: Dom Guzman

Venture investors and leaders in the fintech space can visualize a future where such startups will move toward again rebundling services.

Root Inc., the parent company of Root Insurance, launched its initial public offering and is looking at a valuation of as much as $6.34 billion.

Clover Health posted rising revenues and a narrower loss in its most recent financial results, published in advance of a planned public market debut.

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

Source: https://news.crunchbase.com/news/briefing-10-21-20/

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Syte Sees $30M Series C For Product Discovery

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Online shopping has become the norm for most people in 2020, even coaxing traditional retail brands to up their presence to stay competitive. However, now that shoppers can’t see and touch products like they used to, e-commerce discovery has become a crucial element for customer acquisition and retention.

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Enter Syte, an Israel-based company that touts creating the world’s first product discovery platform that utilizes the senses, such as visual, text and voice, and then leverages visual artificial intelligence and next-generation personalization to create individualized and memorable customer experiences, Syte co-founder and CEO Ofer Fryman told Crunchbase News.

To execute on this, the company raised $30 million in Series C funding and an additional $10 million in debt. Viola Ventures led the round and was joined by LG Technology Ventures, La Maison, MizMaa Ventures and Kreos Capital, as well as existing investors Magma, Naver Corporation, Commerce Ventures, Storm Ventures, Axess Ventures, Remagine Media Ventures and KDS Media Fund.

This brings the company’s total fundraising to $71 million since its inception in 2015. That includes a $21.5 million Series B, also led by Viola, in 2019, according to Crunchbase data.

Fryman intends for the new funding to be put to work on product enhancements and geographic expansion. Syte already has an established customer base in Europe, the Middle East and Africa, and will now focus expansion in the U.S. and Asia-Pacific.

Meanwhile, Syte has grown 22 percent quarter over quarter, as well as experienced a 38 percent expansion of its customer base since the beginning of 2020.

“Since we crossed $1 million annual recurring revenue, we have been tripling revenue while also becoming more efficient,” Fryman said. “We can accelerate growth as well as build an amazing technology and solution for a business that needs it right now. We plan to grow further, and even though our SaaS metrics are excellent right now, our goal is to improve them.”

Anshul Agarwal, managing director at LG Technology Ventures, said Syte was an attractive investment due in part to its unique technology.

“They have a deep-learning system and have created a new category, product discovery that will enable online shopping in a way we never had the ability to do before,” Agarwal said. “The product market fit was also unique. We believe in the strong execution by the team and the rapid growth in SaaS. We looked at many different companies, and the SaaS metrics that Syte showed are the strongest we’ve seen in a while.”

Illustration: Li-Anne Dias

Venture investors and leaders in the fintech space can visualize a future where such startups will move toward again rebundling services.

Root Inc., the parent company of Root Insurance, launched its initial public offering and is looking at a valuation of as much as $6.34 billion.

Clover Health posted rising revenues and a narrower loss in its most recent financial results, published in advance of a planned public market debut.

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

Source: https://news.crunchbase.com/news/syte-sees-30m-series-c-for-product-discovery/

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Intellimize Closes $12M Round Of New Funding

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Website optimization startup Intellimize has landed $12 million in new funding, the company announced Wednesday. 

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Intellimize automatically optimizes websites using artificial intelligence. Marketers are able to use the software to try different experiences in parallel and in real time. 

“With A/B testing, all the work is on me,” said CEO Guy Yalif in an interview with Crunchbase News. “With intelligent website optimization, the work is on the machine.”

The company uses machine learning to adjust web pages to respond to a customer’s behavior over time. When a customer goes on a company’s website, Intellimize can give the  customer’s location, time of day, previous website behavior summary, traffic source and other information so marketers can optimize the customer’s experience.

Intellimize says it delivers an average of 46 percent increase in online conversations. And more online conversations can lead to more sales and revenue.

Intellimize, which is based in San Mateo, competes with companies like Granify, accoridng to Owler. 

Addition led the round, with participation from previous investors including Homebrew, Amplify Partners, and Precursor Ventures. The new round brings Intellimize’s total funding to $22 million.

In terms of growth, Yalif said Intellimize had seen its in-target revenue grow 5x in the last year. The company counts Snowflake, Sumo Logic, Tableau, and Unilever Prestige among its customers.

The company plans on using the new funding to significantly expand its team, with a particular focus on people with machine learning expertise, Yalif said.

Intellimize last raised an $8 million Series A led by Amplify Partners in April 2019.

Illustration: Li-Anne Dias

The commerce platform helps direct-to-consumer and B2B brands establish an e-commerce platform designed for their needs.

San Francisco-based Handshake has raised an $80 million Series D led by GGV Capital. 

The SPAC phenomenon is opening the door to the kinds of companies that in recent years have not been tapping public markets.

There’s a lot that’s lost in the clamor to “do something” about the tech industry, namely the impact on smaller companies and the overall innovation…

Source: https://news.crunchbase.com/news/intellimize-closes-12m-round-of-new-funding/

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