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Briefing: Toast Said To Prep IPO, Oscar Health Sets IPO Price Range, And More

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

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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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Restaurant software unicorn Toast eyes IPO this year

Boston-based Toast, a provider of software for restaurant management, is in talks with underwriters about a potential IPO later this year, according a report in The Wall Street Journal citing unnamed sources.

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Toast is reportedly seeking a valuation of around $20 billion for its public offering, and has tapped Goldman Sachs and JPMorgan as potential underwriters. In its last funding round a year ago, the company secured a valuation of nearly $5 billion.

— Joanna Glasner

Oscar Health sets IPO price range

Health insurance company Oscar Health intends to offer 31 million shares, priced between $32 and $34 each, to raise as much as $1.05 billion in its initial public offering, according to a regulatory filing on Monday.

Oscar filed its S-1 registration document with the U.S. Securities and Exchange Commission on Feb. 5. The company reported more than $488 million in revenue in 2019, up by around 5 percent from about $463 million in 2018.

Its losses also shrunk in that period, from nearly $406 million in 2018 to around $261 million in 2019. The company has approximately 529,000 members across 18 states.

Oscar’s health insurance model includes free virtual care appointments and a program for Medicare-eligible adults.

The company, which was co-founded by Josh Kushner, founder of Thrive Capital, raised more than $1.6 billion in funding from investors including Founders Fund, Thrive Capital, CapitalG and Fidelity.

It is estimated that Oscar’s fully diluted valuation will be approximately $8 billion, Reuters reported.

— Christine Hall

Parallel to public via SPAC

Multi-state cannabis operator Parallel announced Monday it is going public via a merger with special purpose acquisition corporation Ceres Acquisition Corp., backed by entertainment entrepreneur Scott “Scooter” Braun, in a deal that values Atlanta-based Parallel at $1.884 billion.

SPACs, also known as blank-check companies, raise money in an initial public offering and then have two years to acquire a business or businesses.

The Parallel/Ceres transaction is expected to close in the summer, according to the company. At that time, Parallel’s chairman and CEO William “Beau” Wrigley Jr. will remain in the role.

The new company will have pro forma cash on hand of $430 million at close and is expected to generate $447 million in revenue in 2021. It intends to expand its cultivation and production in the U.S.

Since being founded in 2014, Parallel has raised a total of $355.7 million in known venture-backed funding, according to Crunchbase data. It most recently raised $100 million in Series D funding in 2019, led by Edward Brown.

— Christine Hall

Funding rounds

Ageras raises $73M for accounting tools: Copenhagen-based Ageras, an online platform for businesses to find accounting services, raised $73 million in fresh financing from Lugard Road Capital. Founded in 2012, Ageras sold a majority stake to Investcorp in 2017.

— Joanna Glasner

Orka lands $40.7M for shift worker platform: Manchester, U.K.-based Orka Technology Group, a provider of online tools to help with onboarding of hourly shift workers, including an option to withdraw money just after it is earned, raised £29 million ($40.7 million) in a mixture of debt financing from Sonovate and equity funding from the British Business Bank and other backers.

— Joanna Glasner

Fintech

EquityBee banks $20M: EquityBee, which helps startup employees get capital to exercise their stock options before they expire by linking them to investors, raised a $20 million Series A financing round, led by existing investor Group 11, to make additional hires across all departments and expand product offerings. The round brings the Palo Alto-based company’s total funding to more than $28 million, which includes a $6.6 million seed round in 2020, also led by Group 11. In addition to the stock options, EquityBee posts a quarterly pre-IPO “wish list” of companies its investors want to see have a liquidity event soon.

— Christine Hall

Babytech

Nanit inks $25M Series C: Nanit, developing smart baby monitor and sleep tracker devices, closed a $25 million Series C funding round led by new investor GV. The new round brings the New York-based company’s total capital raised to $75 million. Nanit last raised a $21 million Series B in 2020, according to Crunchbase data. Nanit’s proprietary line of Breathing Wear apparel integrates with the Nanit camera to enable parents to safely monitor their baby’s breathing motion without sensors or wires. In 2020, the company doubled its user base and yielded year over year revenue growth of more than 130 percent, the company said. Years ago, babytech was considered a niche market that few investors understood or wanted to get into. Today, anyone considering adding to their family can find technology for everything from fertility to potty training and beyond. Though the market is big, experts say there is still not enough investment in startups focused on the space. Forbes estimated in 2019 that the U.S. babytech market size was about $46 billion, and reported that investors had pumped some $500 million in funding into companies within the sector since 2013. One of the success stories is baby health monitor Owlet Baby Care, which announced on Feb. 16 its plans to merge with Sandbridge Acquisition Corp., a special purpose acquisition company backed by Sandbridge Capital and PIMCO private funds. Owlet raised a total of $48 million in known venture capital investments since the company was founded in 2013, according to Crunchbase data.

— Christine Hall

Illustration: Dom Guzman

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

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Source: https://news.crunchbase.com/news/briefing-2-22-21/

briefing:-toast-said-to-prep-ipo,-oscar-health-sets-ipo-price-range,-and-more

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The Briefing: Hailo Lands $136M Series C

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

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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.

Subscribe to the Crunchbase Daily

Hailo lands $136M for AI chips

Tel Aviv-based Hailo, a startup developing AI accelerator chips for edge devices, announced that it raised $136 million in a Series C funding round led by Poalim and entrepreneur Gil Agmon. The round brings Hailo’s total funding to $224 million.

— Joanna Glasner

SupportLogic raises $50M Series B

San Jose -based SupportLogic closed a $50 million Series B funding round led by WestBridge Capital Partners and General Catalyst. Existing investors Sierra Ventures and Emergent Ventures also participated in the round.

SupportLogic’s AI-based platform allows businesses to act on customer communications in real-time in order to offer better customer service and support.

Founded in 2016, the company has raised approximately $62 million to date, according to Crunchbase data.

— Chris Metinko

SaaS

GitLab raises IPO range: San Francisco-based GitLab, a provider of development and collaboration tools for programmers, raised the proposed share price range for its upcoming IPO. The company now plans to raise around $700 million by offering 10.4 million shares at a price range of $66 to $69, up from the prior range of $55 to $60.

— Joanna Glasner

Illustration: Dom Guzman

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

— Joanna Glasner

Source: https://news.crunchbase.com/news/briefing-10-12-21/

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Square Rolls Up Afterpay As BNPL Market Stays Hot

Payments platform Square plans to buy Afterpay, an Australian buy now, pay later service, in an all-stock deal valued at around $29 billion.

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Payments platform Square plans to buy Afterpay, an Australian buy now, pay later service, in an all-stock deal valued at around $29 billion.

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Melbourne-based Afterpay is publicly traded on Australia’s ASX exchange. It currently counts more than 16 million consumers and nearly 100,000 merchants globally as users of its platform, including major retailers across fashion, homewares, beauty, sporting goods and other categories. The company, backed by investors including Tencent and Coatue, has raised just under $449 million in funding, per Crunchbase data.

Afterpay competes in the increasingly crowded buy now, pay later space, which allows consumers to break up online purchases into smaller payments. Its biggest competitors include Stockholm-based Klarna, which has raised $3.7 billion from private investors to date, and Affirm, which raised $1.5 billion in venture funding before going public in January. Affirm’s share price has since plummeted to less than half of its 52-week high in February, but jumped 14 percent in morning trading on Monday after the Afterpay acquisition was announced.

Another major player in the BNPL space includes fintech giant PayPal, which in 2008 purchased Bill Me Later, an early pioneer in the space.

All told, venture investors poured $1.7 billion into buy now, pay later companies between 2016 and 2020, per Crunchbase data. A Bank of America survey late last year predicted the BNPL market was poised to “grow 10-15 times by 2025 to eventually process between $650 billion and $1 trillion in transactions.”

Venture investors like the BNPL business model because these startups essentially have two revenue streams, Kamran Ansari, a venture partner at Greycroft, which invested in e-commerce pay-over-time financing tool Credit Key, told Crunchbase News earlier this year.

The first revenue source is the actual transaction, when the merchant typically pays between 2 and 3 percent of the purchase price to the BNPL service in exchange for being able to offer that convenience to its customers. The second revenue stream for the BNPL service is interest payments from borrowers.

Square’s shares have surged 105 percent over the past year amid a boom for digital transactions such as its mobile Cash App. It also reported second-quarter earnings on Sunday, revealing that revenue had more than doubled from the same quarter the previous year, to $4.7 billion.

San Francisco-based Square said it plans to integrate Afterpay into its Cash App and seller ecosystem.

“By combining with Square, we will further accelerate our growth in the U.S. and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers, Afterpay co-founders and co-CEOs Anthony Eisen and Nick Molnar said in a statement announcing the deal.

Illustration: Li-Anne Dias.

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

Another major player in the BNPL space includes fintech giant PayPal, which in 2008 purchased Bill Me Later, an early pioneer in the space.

Source: https://news.crunchbase.com/news/square-rolls-up-afterpay-as-bnpl-market-stays-hot/

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Cryptocurrency Experts Say These 4 Factors Are Driving Change In The Industry

The COVID-19

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The COVID-19 pandemic accelerated acceptance of digital currencies like Bitcoin and the underlying blockchain technologies that power them. And while Bitcoin volatility continues — with the currency hitting its lowest point in months this week — investors are optimistic momentum will continue even as the world slowly starts to return to normal.

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The crypto and blockchain sector has attracted nearly $12.4 billion in venture investment into U.S.-based companies since 2017 and $19.4 billion globally, Crunchbase numbers show. In fact, data so far for 2021 shows dollars were nearly 3x from 2020 for both global and U.S. investments. But the sector also faces continued opportunities and challenges going forward, including more widespread adoption and new regulatory pressures from governments around the world.

Case in point: Earlier this month, El Salvador became the world’s first country to adopt bitcoin as legal tender. At the same time, Thailand’s Securities and Exchange Commission ordered its exchanges to delist meme coins, such as Dogecoin, as well as NFTs, exchange tokens and fan tokens, saying those tokens have “no clear objective or substance or underlying [value].”

Stepped-up efforts by China’s government to rein in the crypto space had the largest impact on valuations. On Friday, authorities in China’s Sichuan province, one of the country’s largest mining centers, reportedly ordered cryptocurrency miners to shut down their operations,

Cryptocurrency experts say these kinds of polarizing events put a spotlight on the space.

“Blockchain was accelerated five years in the pandemic,” according to Alon Goren, founding partner at blockchain fintech venture studio Draper Goren Holm.

Here’s a closer look at four factors that are likely to drive big changes in the cryptocurrency space in years to come.

1) Mainstream adoption

Cryptocurrency startups are working to make the process of using, buying, trading and finding digital currencies easier, driving greater consumer awareness and adoption.

Increasingly, mainstream adoption of cryptocurrencies is “crazy important” to the growth of the sector, according to Goren. Still, some of that adoption has come from less serious applications of digital currencies, including “meme coins” — assets based on jokes but with no real value other than those given to them by social indicators — a phenomenon that also concerns Goren because they reinforce the notion that cryptocurrency isn’t legitimate.

“Publicly traded companies can show quarterly earnings, you can follow the CEO on Twitter and you know their opinions on things,” Goren added. “In crypto, you don’t have those kinds of things to show legitimacy.”

Meanwhile, Hsuan Lee, CEO of Portto/Blocto, said the adoption of NFTs — non-fungible tokens — is one of the biggest factors that has changed the industry in the past year. Portto is a Taiwan-based company that aims to make blockchain simple for users and developers.

Although NFTs have been around since 2017, they were initially not appealing for typical use, but that all changed when they became approachable by retail investors, including when sports organizations got involved in selling digital clips and cards, he said.

“The National Basketball Association doesn’t market itself as a blockchain, but offering collectibles on it appeals to fans,” Lee said in an interview. “With those kinds of applications, even introducing a music NFT would potentially attract existing music fans. With that kind of people joining the party, it will make crypto more mainstream.”

Muneeb Jan, a cryptocurrency and fintech expert operating out of Hong Kong, said the investor base for cryptocurrency is still largely retail investors, while major financial institutions are in the discovery phase.

Still, new companies are announcing on a daily basis that they will accept bitcoin and other cryptocurrencies, and banks are facing crypto investor demand to get more involved in the space, Jan said.

“Crypto funds are increasingly viewed as an asset class,” he said in an interview. “There is not much of a use case currently, but they want to jump onto the bandwagon. If more large institutional investors come in, there will be price stability, and it will improve the legitimacy.”

2) Price volatility

Jan believes two of the biggest headwinds slowing more mainstream cryptocurrency adoption are price volatility and the fact that bitcoin as a mode of payment is not yet completely viable due the current inability to quickly process transactions.

Bitcoin has been particularly volatile in recent days. After surging above $40,000 about a week ago, the currency fell below $30,000 this week, recovering to around $32,400 as of Tuesday afternoon. Over the past year, the price grew to a peak of more than $60,000 before falling back to half that at the end of May.

Just processing transactions is not a sustainable use long-term due to the expensive transaction fees associated with it, even though people want bitcoin to be able to do that, he added.

“Other cryptocurrencies are not volatile because the community investing in them have come to a consensus on the price,” Jan said.

Lee said price volatility will be aided by regulations, especially as cryptocurrency is adopted more broadly. Price volatility will only be fixed with time, he said.

“This is a very young market and it has attracted attention, which makes prices volatile,” he added. “It can be dangerous to get into a space without established regulations. Being at an early stage, there is a lot of imagination that can be had for these cryptocurrencies. At the same time, when bad news comes out, it can easily dump harder on crypto than other companies.”

3) Regulatory pressure

Regulations proposed for cryptocurrency have gained steam since the beginning of 2021.

Among them: The U.S. Department of the Treasury announced in May that it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service as part of an effort to curb tax evasion.

“I’m happy to see regulations come into place because it will be good for the industry overall,” Lee said. “It will minimize possible scams or malicious use cases and make it better for everyone to get on board.”

The government is also examining possible regulations of cryptocurrency exchanges with a focus on protecting investors and preventing market manipulation, as well as financial account reporting as it relates to cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies.

Goren called a focus on Bitcoin, Etherium and the public markets “a double-edged sword.” Any real value is eroded when inflation occurs, but Bitcoin is a decentralized currency, so its value holds up well against inflation.

And the more institutions that participate, the more legitimacy it creates so regulators are less likely to fight it, he said.

“Most lawmakers know crypto is not used by criminals, but the people who put them in office are large financial institutions that are cheering when they say that happens,” Goren said.

While he understands why there have to be IRS reporting requirements for tax purposes, he disagrees when government regulations don’t consider Bitcoin a currency, but then treats it like cash.

By instead treating cryptocurrency as a capital asset, the IRS is taxing capital gains, which could also have implications on the venture capital world, he added.

Goren said other countries have a bit more clarity, but there is still misunderstanding in the U.S. when it comes to how cryptocurrencies should be reported financially, and it won’t change until there is clear categorization of cryptocurrencies.

4) Beyond Bitcoin

Rocketfuel Blockchain founder Peter Jensen said it will take time for the public to understand and be comfortable with cryptocurrency, much as people had to acclimate to the idea of online banking and ATM cards before that.

Jensen’s company, based in San Francisco, processes crypto payments. He believes people are distracted by the price volatility of Bitcoin, although it is just one out of some 200 cryptocurrencies.

“We need to move people’s minds away from Bitcoin because who knows if cryptocurrency will survive,” Jensen said in an interview. “There are many cryptocurrencies pegged to the dollar, which means they have zero volatility. If you take those and use them for payment, then you get the benefits of that.”

Global developments — such as El Salvador adopting cryptocurrency and both Sweden and Dubai issuing their own digital currencies — bring promise for the future of the industry, and Jensen predicts the U.S. will eventually issue a digital version of the dollar.

He sees a world where when you get a job, you will have the choice of receiving your paycheck in dollars or cryptocurrency, and there will be no volatility because those funds will be guaranteed by the U.S. government.

“We feel that the U.S. has an opportunity to be ahead, even though China is adopting cryptocurrency faster, as well as those with less-efficient banking systems,” Jensen added. “If we don’t stay in front, we are going to be last.”

Crunchbase Pro queries listed for this article

The query used for this article was “Global Cryptocurrency Companies,” in which “Bitcoin,” “cryptocurrency” and “virtual currency” were the organizational industry search terms. The data was then separated out by changing the headquarters location to “United States.”

All Crunchbase Pro Queries are dynamic with results updating over time. They can be adapted with any company or investor name for analysis.

Illustration: Dom Guzman

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

Stepped-up efforts by China’s government to rein in the crypto space had the largest impact on valuations. On Friday, authorities in China’s Sichuan province, one of the country’s largest mining centers, reportedly ordered cryptocurrency miners to shut down their operations,

Source: https://news.crunchbase.com/news/cryptocurrency-experts-say-these-4-factors-are-driving-change-in-the-industry/

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