The Exchange: IPO season, self-driving misfires and a fintech letdown

Welcome to The TechCrunch Exchange, a forthcoming weekly newsletter from the TC crew about startups, money, and markets. You can sign up for it here, and receive it regularly when it formally launches in a few weeks. You can email me about it here, or talk to me on Twitter. Let's go!

In the last week there were 23 rounds worth $50 million in the world, according to Crunchbase data. The rounds were worth a total of $3.72 billion, with a median value of $80 million and an average size of $161.9 million. So in case you were under the impression that late-stage money was under threat, it's not.

And it's not hard to see why; with the public markets flirting with new record highs, late-stage startups are able to raise on the back of strong comps. High public valuations help late-stage startups defend their own prices as much as rising stocks can help direct venture investment to certain sectors at the earlier-stages of startup land.

It's also a situation that can lead to a rash of IPOs, which we're on the cusp of seeing. With Agora out this week to good effect, and Lemonade in the wings alongside Accolade, nCino, and GoHealth, things are heating up.

This week The Exchange and TechCrunch more broadly tried to take on the matter, asking questions about Lemonade's impending public offering, trying our best to explore the S-1 filings of nCino and GoHealth (two IPOs not from California or New York), parsing Accolade's proposed IPO valuation after it reignited its march to the public markets, and working to grok Agora's pretty solid IPO pricing.

But there was still more going on. Over on Extra Crunch and TechCrunch this week, we also chewed over Lemonade's first whack at IPO pricing (down from its prior valuation) and what's good about it (better than we'd expected), and talked about the host of companies that we are excited about seeing go public over the next few quarters and years.

What's coming

There are reasons to expect more of the same going forward in terms of IPO density. Looking into Q3 - now just days away - there are some VCs who anticipate a tide of software IPOs as many unicorns try to get public before the election, and while valuations are super hot.

Redpoint's Jamin Ball is of this view:

Buy side is rolling out the red carpet for SaaS! Wouldn't shock me to see a flood of SaaS IPOs in Q3. Zoominfo was the first offering of the year and it only happened in June. Crazy to see a 6 month hiatus (https://t.co/Bg1I3WxgBa was last before ZI) Lots of pent up demand!

- Jamin Ball (@jaminball) June 26, 2020

You can think of today's public markets as a do-over for unicorns that should have gone public last year, but put it off. Or in racing terms, it's a free pit stop for cars that made an error. But if you don't get out while the getting is this good, what the hell were you waiting for? That's the multi-billion-dollar question.

Money, markets, mistakes

Let's catch up on the week's biggest market news and how we feel about it. As always, we'll lean toward the private markets but talk about public tech companies when they matter to the startup world.

Social companies took a hit late in the week after Snap, Facebook, and Twitter fell sharply was trading came to a close, after major advertisers like P&G, Unilever, and Verizon* decided that they might actually care what sort of content their ads are shown against. Bear in mind that this sort of ad-dollar yanking is not new; publishers have dealt with this sort of thing for ages. However, social tech companies haven't taken as many hits from this as they might have over time. Welcome to reality, y'all. For startups? It's not great for social startups that Facebook and Twitter are taking very public knocks. If they the startups wanted to raise new capital, that is.

SaaS startups - early and late-stage alike - should take heart that the recent spate of public SaaS earnings went pretty ok. There were some misfires, but it could have been worse. And with SaaS shares on the rise again, it's a lovely time to be a SaaS company. Putting metrics on it, you can find over a dozen public SaaS companies that are worth more than 25x their next year's sales. That's insane.

Something we're tracking is the pace of SaaS investing in 2020. So far, Crunchbase has 648 rounds for companies tagged as SaaS in 2020 through June 26, 2020. Looking at the same interval last year, it was 1,135. Dollars are down from $12.15 billion in the year-ago period, to $9.36 billion this year. Now, there is venture data lag there, but, all the same, it's not precisely what we expected to see. Perhaps middle-tier SaaS startups are struggling?

The Zoox deal with Amazon shows how far private-market self-driving rounds valued startups ahead of reality. At one point self-driving engineers were the unobtanium of the labor market. Now, we wonder. Still, a $1 billion deal isn't the end of the world for any company. For self-driving startups, it could mark the end of the good times in the sector, if we hadn't already crossed the zenith and began a trudge towards its nadir.

Cybersecurity is still hot hot hot, as this week Salesforce poured capital into security startup Tanium. Tanium is now worth $9 billion. 2019 IPO CrowdStrike has been outperforming as a public company, making its sector look rosy at the same time. Some of that beneficence could be at play here.

Fintech is hard. Uber is backing out of its fintech push, it appears. Sure, every company is going to be a fintech company of sorts in time, but not, apparently, like this. Chime et al, rest easy, Uber's downshift from its formerly frenetic fintech fight indicates that not every major company is going to be able to take a slice of this particular consumer pie.

And, finally, the excellent Kate Clark has notes on startup valuation trends: The median valuation for Series C or later-stage financings increased to a new high of $120 million in the first half of this year, from $80 million for 2019, according to data provided to The Information by research firm PitchBook." It's still good times, we suppose.

There's so much more to talk about in the worlds of startups, money and markets, but we have to stop here. This newsletter will come out every Friday once we get all the pipes linked up. So, go ahead and subscribe here (it's 100% free) so that you miss precisely zero entries. Chat soon!

*Verizon owns Verizon Media Group, which owns TechCrunch, which, in turns, owns me.