Venture capitalists including Sequoia and Y Combinator are warning that an economic downturn is to threaten future fundraising, meaning start-ups should look to raise cash right now or conserve it.
The pair are responding to rising inflation, ever-climbing interest rates, the continued conflict in Ukraine, the pandemic and other geopolitical tensions.
Sequoia held a Zoom conference with its founders and the presentation, seen by The Information, talked about avoiding a commercial death spiral in any coming downturn with fledgling businesses urged to start thinking about trimming costs and pulling in spending.
Y Combinator, which backs hundreds of small businesses, sent out a letter to start-ups in its portfoilio entitled “Economic Downturn” – reported by TechCrunch – saying they should focus on reaching a so-called Default Alive status. That means a startup business can reach profitability with its current funding. The opposite, Default Dead, is when a startup runs out of cash before profits arrive.
The letter urges start-ups to “plan for the worst” following a tumultuous time for tech stocks, with declines reported in the past seven weeks. It states:
No one can predict how bad the economy will get, but things don’t look good.
The safe move is to plan for the worst. If the current situation is as bad as the last two economic downturns, the best way to prepare is to cut costs and extend your runway within the next 30 days. Your goal should be to get to Default Alive.
If your plan is to raise money in the next 6-12 months, you might be raising at the peak of the downturn. Remember that your chances of success are extremely low even if your company is doing well. We recommend you change your plan.
The YC letter finishes by saying: “Remember that many of your competitors will not plan well, maintain high burn, and only figure out they are screwed when they try to raise their next round. You can often pick up significant market share in an economic downturn by just staying alive.”
Our thinking is that storage startups that could be feeling the heat include ones whose last round was in 2019/2020 and who are still burning cash.
Multiple technology vendors have filed financial results in recent weeks that highlight the challenges they are currently facing in the industry. Cisco, Nutanix, Arista, NetApp, Dell and more said underlying demand was strong but meeting demand in a troubled global supply chain is no easy task. Yet the apparent direction of travel in the stock markets is clearly causing investors some concern.
Landing pages are a multi-purpose tool that is important to have under your belt as a startup founder.
First, they are great for explaining your products, services, and overall business clearly to all possible stakeholders in your business. This is important for all kinds of companies, but for startups, it’s crucial because they are often innovative and their offering isn’t that straightforward to grasp.
Second, they are a great tool for testing the viability of your offering. Landing pages are the foundation of some of the best idea validation experiments because nowadays they are inexpensive to build.
The goal of a landing page isn’t always to incentivize a purchase, but it more often than not is to incentivize some kind of action - to let people subscribe to your content, generate leads, etc.
Since this is the case, the thing that distinguishes a bad landing page from a good one is how well it motivates visitors to take action, which is usually called a conversion rate.
Startup founder, investor, and marketer Julian Shapiro puts it succinctly in the following formula:
Purchase Rate = Desire - (Labor + Confusion)
So, to effectively motivate your users to act, you need to maximize desire and minimize labor and confusion.
Maximize Desire, Minimize Labor, And Confusion
Besides the monetary price which customers need to pay to use your product or service, there are other costs that influence this decision (product pricing is also a key factor for purchase decisions, but it is outside of the scope of this article).
In the equation from above, labor and confusion are the variables that represent the cost of acquiring accurate information about the offering and the cost of switching to your solution.
To minimize these costs, you need to remove any barriers to entry and soften the learning curve.
On a landing page, the best way to do that is to follow a familiar page structure and to use succinct, concrete copywriting.
Most of your potential users have seen plenty of landing pages. It would reduce the effort they must exert to find information if the information is placed in the place they expect it.
Playing with the landing page structure is dangerous because it can generate confusion. Instead, use your creativity on good design and copy.
The standard landing page structure consists of the following sections:
Navbar: logo and links
Hero section: This is where you need to explain as succinctly as possible what exactly you are offering. What problem you are solving and how?
Social proof: Why should the visitor believe you? Present evidence, social evidence being the best kind.
Call to action: Ask the users to do what you want them to do.
Features: give more details about your offering
Call to action: repeat the CTA
Footer: miscellaneous links
So, to decrease labor and confusion, you need to present your information as succinctly, concretely, and logically as possible.
To increase desire, though, you need to present good emotional and rational arguments within the sections mentioned above.
For example, on a rational level, the social proof section should tell your users that they are not taking the early-adopter risk and that other people are happy with your offering. On an emotional level, it should create a fear of missing out.
The features section, on a rational level, informs the landing page visitor that the exact features you are offering can solve their problems. On an emotional level, you can use the features page to build a very high perceived value by using competitor offerings as a relativity trap.
The same logic could be applied to the hero section - a beautiful visual could impact your users on an emotional level while at the same time conveying the rational message that your solution is very easy to use.
Of course, these are just examples - the point is that you need to convey as much rational and emotional information and meaning as possible in as little space as possible. This is the key to a successful landing page.
In summary, to build a good landing for your startup project, you need to:
Use a well-established, non-confusing structure and succinct and concrete copywriting to make it as easy as possible for your users to understand what you are offering and to whom
Impact your visitors on a rational and emotional level in order to increase their desire and incentivize an action
Aiming to tap into what it calls a ‘second wave gig economy’, the Utrecht-based startup that connects those with a camera to visitors at over a million identified public locations and attractions, Smiler has raised $8 million in a seed round. The funding round will be used to further develop its marketplace technology as well as press forward with global expansion plans.
Billed as an on-the-spot photography marketplace, Smiler is offering consumers a ‘photos better than a phone camera’ offer and creating an alternative income source for a wide range of photographic enthusiasts.
“It’s not only professional photographers who become Smilers,” says Smiler CEO and co-founder Kasper Middelkoop. “Many are young, talented photography enthusiasts who are looking to make money with their skills and passion. Photographers, like many creators, often don’t have the opportunity to turn that passion into profit, and so frequently turn to other side gigs.”
The startup has won contracts and tenders with venue and event partners across Europe, including Manchester City Football Club, Paris’s Montparnasse Tower, ARTIS Amsterdam Royal Zoo, and is the official guest photography provider for the Tower of London.
"Our goal is to unlock a completely new industry and opportunity for skilled photographers to offer this quality imagery. So far they had to be booked in advance. Smiler is unlocking the opportunity to enable consumers to do spontaneous photoshoots at beautiful locations. So Smiler is making the market bigger for photographers," added Middelkoop.
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Utrecht-based 'much better than a selfie' startup Smiler raises $8 million - Tech.eu
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Rising consumer class, educated workforce and surge in post-pandemic digital demand set tone of Vietnam's golden decade ahead
HANOI, Vietnam, May 30, 2022 /PRNewswire/ -- Golden Gate Ventures, a venture capital fund founded by Silicon Valley natives and based in Southeast Asia for over a decade, was joined by the Vietnam National Innovation Centre (NIC) and founders of leading Vietnamese startups to announce the opening of 2 new Golden Gate Ventures offices in Ho Chi Minh City and Hanoi. The group discussed opportunities in the SEA 'Startup Golden Triangle' of Vietnam, Singapore and Indonesia – and its influence on the region's next wave of growth.
Earlier this month Golden Gate Ventures' founding partner, Vinnie Lauria, settled in Ho Chi Minh City with his family to open the firms' new Vietnam offices. Today he signed an MoU (Memorandum of Understanding) today with the Vietnam National Innovation Centre to cement a long-term partnership to help Vietnam grow its startup ecosystem and support Vietnamese entrepreneurship. The MoU sees Golden Gate Ventures bringing investments into the market, fostering the exchange and growth of new ideas and innovations, and as a catalyzing force to help Vietnamese startups build regional businesses. Golden Gate Ventures now has offices across Singapore, Vietnam and Indonesia – mirroring the SEA 'Startup Golden Triangle'.
"We began our plans to establish offices in Vietnam in 2019 when Golden Gate Ventures co-hosted the very first Vietnam Venture Summit to help accelerate the growth of Vietnam's significance in the 'Startup Golden Triangle'. Despite the pandemic, we were committed to get boots on the ground and make our efforts truly local. We spent the last year working around COVID-19 restrictions so my family and I could move to Vietnam, understand and appreciate local culture, and ensure senior leadership was on the ground. We are very excited to be here," said Vinnie Lauria, Founding Partner at Golden Gate Ventures, who has since relocated to Vietnam.
Vietnam's Time to Shine
Following a tremendous decade of growth, the global investment community starts to pay more attention to Southeast Asia . Golden Gate Ventures has been firmly established in Southeast Asia for over 10 years with offices today across Singapore, Vietnam and Indonesia – mirroring the SEA 'Startup Golden Triangle' and is uniquely positioned to serve the region.
Vietnam is rising to the top to join the ranks of Singapore and Indonesia as another jewel of the region marked by a record high of USD1.4 billion Vietnamese startups in 2021[1], 1.6 times higher than the previous record of US$874 million in 2019.
"2021 was a very strong year for Vietnamese startups, netting our highest-ever investment of US$1.4 billion, and newly established enterprises in the first four months of 2022 have increased by 31.9% from two years ago. This coupled with the positive momentum of foreign investment, greater recognition of Vietnam's potential across the startup ecosystem, and Vietnamese startups reaching a new level of sophistication, we are expecting investments to double in the next three years," said Mr Vu Quoc Huy, Director at National Innovation Centre in Vietnam, a unit of the Ministry of Planning and Investment.
While Vietnam has been on the radar of founders and investors in the last decade, the next few years is where attention to this market is going to truly pay off because of the confluence of its rising consumer class, young and educated workforce, and accelerated digital demand post-pandemic.
Domestic consumption is forecast to increase at a rate of 20% per year[2]. In fact, the country looks set to be a significant driver of Asia's consumption story over the next decade, adding 36 million more to its consumer class. Its middle-class population is believed to be the fastest growing in Southeast Asia, and estimated to comprise about 40 per cent of the total population today, up from a mere 10 per cent in 2000. By 2030, this figure could reach 75 per cent[3].
Vietnam's young and educated workforce is another draw, with 70 per cent of the population under 35 of its population of over 98 million[4], and a literacy rate of about 95.4% – amongst the highest in Asia[5].
A third factor contributing to Vietnam's potential is the rising post-pandemic digital demand. Vietnam added 8 million new digital consumers, with 55% of them coming from non-metro areas between the start of the pandemic and the first half of 2021. Vietnam's 2021 Internet economy GMV was forecast at US$21 billion – a 31% YoY surge that was underpinned by a 53% growth in e-commerce. Looking ahead to 2025, the overall Internet economy will likely reach US$57 billion in value, growing at a 29% CAGR[6].
"In the next decade, we expect to see Vietnam grow at a rate that we have never experienced before. We are at the perfect position of having extremely high internet penetration, a very strong domestic market, founders with innovative ideas that can scale beyond Vietnam, and partners that are helping to grow Vietnam's startup ecosystem here on the ground in Vietnam. The Vietnam government has invested in the last decade to put many pillars in place – from education support to infrastructure build-out and ecosystem development. These investments are now paying off – it is clear from the tremendous investor interest and extremely high startup activity," said Kim Ngoc Thanh Nga, Head of Ecosystem Development Department, Vietnam National Innovation Center.
Singapore Continues its HQ Stronghold
Singapore continues to hold its position as the region's go-to market as a regional and global HQ, and the pandemic has further reinforced this positioning, with investment appetite remaining strong in digital services that surged as a result of COVID-19. In spite of its size, Singapore internet economy continues to grow at breakneck pace: the gross merchandise value (GMV) of its internet economy was estimated at US$15 billion in 2021, up a whopping 35% year-on-year[7]. This surge is underpinned by a 45% growth in e-commerce, e-grocery, and digital financial services. With 97% of Internet users also being digital service consumers, the city-state's penetration rate remains highest in the region. Its Internet economy will likely reach US$27 billion by 2025, growing at a 16% CAGR[8].
Indonesia's Tremendous Domestic Market and Strong Localised Innovation
Indonesia is the third arm of the SEA 'Startup Golden Triangle' not only because it is the region's most populous country and largest economy, but the pandemic has fuelled digital growth and localised innovation unlike any the country has seen before. Between the start of the pandemic and up till the first half of 2021, Indonesia has seen 21 million new digital consumers, of which 72% are from non-metro areas – a sign of accelerating penetration in the region's largest market. The country's Internet economy GMV was estimated at US$70 billion last year – surging 49% YoY, underpinned by a 52% growth in e-commerce. Looking ahead to 2025, the overall Internet economy will likely reach US$146 billion in value, growing at a 20% CAGR. As one of the most vibrant digital services markets in the region, Indonesia continues to attract strong global capital inflows, with the e-commerce, fintech, healthtech and edtech segments grabbing the spotlight[9].
"SEA has always been a region of tremendous opportunity, but scaling business models has been a challenge for many because of the unique dynamic of each market. Our research into the region's largest unicorns has shown that putting the unique strengths of Singapore, Indonesia and Vietnam together creates a winning combination to help them innovate and grow at lightspeed," said Vinnie Lauria, Founding Partner at Golden Gate Ventures.
"As a VC turned entrepreneur, I understand that the key markets of Southeast Asia are Vietnam, Singapore, and Indonesia, the 'startup golden triangle'. Founders in Vietnam need to understand business models that work in these markets in order to build the best product and to scale regionally," said Trung Huynh, Founder of Mio, a social commerce platform for groceries and fresh produce that recently bagged its Series A funding and beating out traditional commerce models.
Startup Golden Triangle Opportunity Areas
Although healthtech, fintech and supply chain analytics continue to be big bets in this 'Startup Golden Triangle', gaming and D2C are key sectors to watch. Southeast Asia, one of the fastest-growing games markets in the world, generates the largest revenues in the global gaming sector, with Indonesia, Vietnam and Singapore leading the pack for mobile gaming in the region. The region is expected to register a CAGR of 8.5% over the forecast period of 2022 to 2027, driven by a rapidly rising online population, increased mobile device usage, and with almost two-thirds of the gaming population engaged in eSports[10]. Gaming is a particularly huge opportunity area in Vietnam, with revenues of almost $530 million in 2020, double those of 2015[11].
D2C brands have nearly tripled the capital raised from investors in 20, which amounted to over US$2 billion across 105 deals. The segment had witnessed a dip in 2020 when it raised US$735 million, while in 2019, the total came close to US$1.5 billion through 120 deals, according to Venture Intelligence data.
For more information on the SEA Startup Golden Triangle, please refer to a brief prepared by Golden Gate Ventures available on this link: https://ggv.sg/startup-golden-triangle
About Golden Gate Ventures
Golden Gate Ventures is a VC fund in Southeast Asia (SEA) founded by Silicon Valley natives. Since 2011, Golden Gate Ventures has launched four funds and invested in over 60 companies. The firm focuses on investing in the rising consumer internet class in Southeast Asia. Breakout companies include Carousell (mobile classifieds), CodaPay (mobile payments), Appota (Vietnam mobile publishing platform), Loship (last mile logistics), Mio (social commerce), Carro (Auto Marketplace), Vui (early wage access) and Xendit (Payment Processing).
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May 31, 2022 at 10:19AM
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Southeast Asia 'Startup Golden Triangle' of Vietnam-Singapore-Indonesia Sparks Region's Next Wave of Growth; Golden Gate Ventures Doubles Down on Vietnam with Two Offices - Yahoo Finance
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Opinions expressed by Entrepreneur contributors are their own.
Zoom fatigue? That’s not a thing for me. Video meetings suit me just fine. On weekends, I can spend hours in roleplaying games, interacting with NPCs (non-playable characters) and trading gear and guns with my companions is pretty much all the social interaction I need. Real-live people, in the same room? I can take it or leave it. Running a remote company fits my personality just fine.
A lot of people aren’t like that. They need actual contact with human beings. And this can be a challenge if you’re looking to grow your team, without the headache and cost of leasing an office.
When I started up my public relations agency, I had a hunch that going fully remote was the way to go. It wasn’t like I was attempting to be ahead of my time (about six months before Covid-19 hit), or trying to change office culture. I just figured it would be a low-cost way of running a company. Cut overhead, full-stop.
It worked … sort of. But there were some complications, and I’ve learned a few things along the way about operating a fully-remote company (including not being such a stickler about making it fully remote).
Technology can only enable remote working if your people use it wisely
During the pandemic summer of 2020, a study out of the UK found that productivity had dropped 20% among remote workers. The main culprit? User error. When workers couldn’t get a handle on the tech, they felt flustered.
I recall one particular hire who just could not comprehend the software. Not just one application, but all of them. I understand that unfamiliarity with modern tools poses a challenge, but this person took five weeks just to register a password management app that was pretty critical to our operations and security. That was not a good thing.
There was a regular cadence of disorganization: "Where’s the agenda?" and "Where’s the Google Doc for this meeting?" But I remained patient. I understood it was the person’s first time using a certain tool, so I asked to share screens. The hire could not figure out how to share a screen, even after multiple video meetings where we walked them through the steps. Frustration on both sides ensued. This person was just accustomed to a more traditional, in-the-office mode of working.
In hindsight, I should have recognized the signs earlier, in the interview stage. When you know what’s coming, you can either reject it (i.e. not hire the person) or just make sure your training includes time spent on mastering the tools of the trade. On the other hand, you also want to make sure the employee understands there will be consequences for not getting on board with the technology the rest of the team is using. It’s part of the job. Give them the support they need to be productive — and then trust, but verify that they’re being productive.
In video meetings, physical cues can get lost. And when miscommunications happen over Zoom with clients, that can lead to some harsh consequences.
Recently, I wanted to candidly call attention to what seemed to be the main issue with a client: too many cooks in the kitchen. They had three or four specialists from their team looking at certain content where I figured one junior person would be able to handle it. So, we scheduled a call to sort it out, face-to-face over Zoom. My attempt at diplomacy and effective client management backfired and after the call, I had to take some extra time to figure out just how I’d gotten us in even deeper trouble.
Finding common ground or just making a genuine compliment at the outset can help build up a bit of credibility that can save you when you do misstep. Finally, if you’re on a video call, be strict with yourself about not getting distracted. Checking a teammate’s comment on Slack or clicking a spreadsheet tab mid-conversation means you’re not looking at the other person. It’s basically the same thing as texting while driving. A moment’s distraction can be a killer.
Find out how your people like to work (and do that)
Would some of my employees benefit from being in a room with clients and catching visual cues or physical interactions? Absolutely, some would. Beyond the efficiency of it, many find they’re just energized by being around other people. That’s what being an extrovert is — and there is no shortage of extroverts in public relations. My hunch is that marketing people in particular need more face-to-face interaction than your average software engineer tweaking a piece of code on screen all day long.
My current band of associates did express a desire to meet up once a week. So we do, in a shared office space, every Friday. It’s a bit of an additional cost and if it was just me, I’d see it as an extravagance. But it’s not just me. Meeting up allows for those “aha” moments around the proverbial watercooler and helps keep morale high, at least for this group. What I do know is that morale wins wars, and it keeps people on your team.
To borrow a thought from Elon Musk: Companies are just a collection of people united by a common purpose. So find those exceptional people, find those motivated people, and give them the tools and training they need to succeed. This eliminates frustration and manages expectations from the get-go. Echo your common purpose, and you can all do amazing things. Hire slow, fire fast, and do meaningful work. Remotely, or not.
UK-based startup Merge announced on Monday it has raised $9.5 million in seed funding in a round led by Octopus Ventures.
Founded by former PayPal executive Kebbie Sebastian late last year, Merge aims to provide access to banking, payments, risk management and compliance to web3 companies via an application programming interface (API). APIs are software bridges that allow businesses to more simply access each others' systems.
"Our target customers are web3 companies that need to interface and collect funds in fiat from their customers or institutions so we're talking crypto exchanges, wallets and DeFi gateways," Sebastian explained in an interview with The Block, noting that many traditional banks aren't willing to offer financial services to crypto companies.
Through Merge's API, the startup aims to offer such services including the enabling of collecting and holding funds for themselves and for their customers and the conversion of crypto to fiat and vice versa within a wallet. These services are offered without the business having to worry about issues of compliance as this is handled by Merge.
While starting in the UK, Sebastian says that the startup will aim to serve customers around the world — with much of the new funding going towards procuring licensing coverage and regulatory approvals globally. The extra cash will also go toward building out its team, which currently numbers just 12.
The bridge between fintech and crypto
For Sebastian, Octopus was a clear choice as a lead investor due to its strength in both fintech and crypto, industries with which Merge sees itself as intersecting.
"It was very important to us to have investors that both understood the fintech world and the crypto world because we are merging these two together," says Sebastian. "And Octopus has been a fantastic partner in that."
Along with Octopus, the round also features investors from crypto stalwarts such as Ethereal Ventures, Coinbase Ventures and Alameda Research.
The raise follows recent rounds from Multis, Coinbooks and Rain, three other startups that aim to bridge the crypto world with traditional banking services.
“Merge’s vision is to build the infrastructure necessary to allow crypto businesses to operate without fear of shutdown by regulators or third-party risk teams," said Octopus' Zihao Xu in a statement. "We’re excited to back them as they build that."
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Fintech infrastructure for web3 startup Merge raises $9.5 million - The Block Crypto
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ZeroAvia has raised $115 million from United Airlines, Alaska Airlines, British Airways and Amazon on a promise to fly a zero-emission hydrogen fuel cell regional passenger plane as soon as next year. Now the startup has set itself a slightly less high-flying goal: building a hybrid aircraft.
This new experimental plane, which is under construction in California, is a 19-seat Dornier 228 that will have “a hybrid engine configuration that incorporates both the company’s hydrogen-electric powertrain and a conventional engine,” according to a recent press release.
ZeroAvia declined to tell TechCrunch why it had altered its plans. A hybrid system could reassure regulators that the Dornier can fly safely for tests, while the company continues to develop the world’s largest aviation hydrogen fuel cells.
The decision to build a hybrid plane follows a previously unreported statementfrom the UK’s Air Accident Investigation Branch (AAIB) into the April 2021 crash of the moonshot project that caught the attention of investors: a smaller fuel-cell and battery-powered prototype near Cranfield Airport.
The AAIB found that the crash near Cranfield airport occurred after the five-seater Piper Malibu lost power when its battery was turned off, leaving the electrical motors powered by the hydrogen fuel cell. The subsequent forced landing severely damaged the plane, although its pilot and passenger escaped injury.
TechCrunch revealed last yearthat the Piper Malibu relied heavily on batteries, using them throughout what ZeroAvia called an historic first flight of the Malibu in September 2020. The company’s only other flying prototype, another Piper Malibu, was damaged during the installation of a hydrogen fuel tank at ZeroAvia’s U.S. base in Hollister, California in 2019, and has not flown since.
Following the crash at Cranfield, ZeroAvia relocated its UK operation to Kemble airfield in Gloucestershire, which provided financial incentives to the startup. ZeroAvia now has two Dornier 228 aircraft, one at Kemble and one at Hollister. ZeroAvia previously said it would power the Dorniers using a newly developed 600kW hydrogen fuel cell.
ZeroAvia has received over £14 million ($17 million) in grants from the UK government to build its aircraft there, as part of a flagship “Jet Zero” net zero carbon aviation pledge by 2050.
The crash of its smaller prototype ended any chance of ZeroAvia fulfilling a commitment to fly that specific aircraft 300 miles using hydrogen. ZeroAvia received £1.6 million ($2.02 million) to go towards that goal.
ZeroAvia’s latest £8.3 million projectin the UK, HyFlyer II, promises to operate a similar 300-mile zero-carbon flight by February next year, powered by the 600kW fuel cell. It is unclear whether the Kemble Dornier will now also be a hybrid.
ZeroAvia declined to answer detailed questions about its progress, and spokesperson Sarah Malpeli told TechCrunch that the company could not comment on the Cranfield crash until the final AAIB report is published later this summer.
The UK funding body, the Aerospace Technology Institute (ATI), provided this statement: “The ATI does not comment on the progress of live projects due to commercial confidentiality. We continue to work closely with ZeroAvia and look forward to the contribution of HyFlyer and HyFlyer II to the understanding and development of zero-carbon emission aircraft technologies in the UK.”
The construction of a hybrid aircraft with a conventional engine is a big change for the company, as ZeroAvia has always called its systems zero emission. As recently as last week, ZeroAvia’s CEO Val Miftakhovtold a U.S. House Transportation subcommitteethat even a hybrid powertrain using batteries was “too incremental.”
Other companies however, including Airbus, are pursuing hybrid solutions for hydrogen aviation.
There are many challenges to developing a purely hydrogen-powered aircraft, ranging from the storage of fuel, to cooling the system so that it does not overheat during flight. The most advanced hydrogen fuel cell aircraft to date is likely the H2Fly. This four-seat experimental aircraft completed a 124-kilometer flight last month between Stuttgart and Friedrichshafen, at an altitude of over 7,300 feet.
Earlier this year, ZeroAvia released a videoshowing a “complete propulsion system” mounted on a “HyperTruck” ground vehicle and powering a propeller. That configuration had two fuel cells and a number of batteries, and is likely around one third the size of the system needed for the Dornier to take off. It did not include a conventional engine.
The company’s ultimate aim is to build a fuel cell capable of generating between 2,000 and 5,000kW (2 to 5MW).
Earlier this year, ZeroAvia received a $350,000 economic development grantfrom the state of Washington to start work there on a 76-seat De Havilland Dash-8 Q400 aircraft from Alaska Airlines.
The company hasn’t always been successful in landing public money though. ZeroAvia is suing the U.S. government, in a previously unreported case filed at the U.S. Federal Claims court. Most filings in the case are sealed, but it appears to relate to a failed bid by ZeroAvia for a federal contract.
Fuel cell future
In the immediate aftermath of the crash, ZeroAvia’s path still seemed solely focused on fuel cells.
For instance, the company spent over 23 million Swedish kroner (about $2.2 million) on fuel cells since the accident, according to press releases from PowerCell Sweden AB, the manufacturer of the fuel cell used in the aircraft that crashed. This likely equates to between 10 and 13 100kW fuel cells. ZeroAvia is also evaluating a fuel cellfrom New York start-up Hyzon.
ZeroAvia does not have an operational aircraft powered by hydrogen. However, the company continues to forge new commercial partnerships and promise evermore ambitious projects and timelines.
Miftakhov, who is at the World Economic Forum in Davos this week, posted a blog that claims the UK-based Dornier plane is “on the verge of flying” and would go into service in 2024.
ZeroAvia claimed this week that the larger Dash would fly by 2026, and announced new plansto convert a regional jet to hydrogen fuel-cell operation “as early as the late 2020s.”
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Sequoia takes things seriously. The storied venture firm is known to react to macro-economic events with grand memos aimed at portfolio companies, and sometimes the entrepreneurship scene at large. Most recently, Sequoia created a 52-slide deck, first reported by The Information, titled Adapting to Endure; the document reads like a follow-up course to its infamously ill-timed “Coronavirus: The Black Swan of 2020” memo of March 2020.
The firm is not always right in its prognostications — which is maybe why it stuck to internal musings instead of a Medium post this time — but it does do a service in providing a snapshot of how one of the most weathered, and successful, firms of all time thinks about a looming downturn.
“Our intention in gathering today is not to be a beacon of gloom,” the deck reads. “But we also believe that winning in the years ahead is going to depend on making hard, decisive choices confronting uncomfortable challenges that may have been masked during the exuberance and distortions of free capital over the past two years.”
Sequoia’s advice largely followed the same script that other venture firms have been using: extend runway, focus on sustainable growth and recognize that an economic recovery may be a ways away. There were, however, some tidbits that stood out, such as a subtweet I’m guessing is for Tiger Global and a precise explanation of how founders should define fluff these days.
For my full take on this topic, read my TechCrunch+ column, “Sequoia is the latest VC firm that wants you to take the downturn seriously.” In the rest of this newsletter, we’ll bring in a founder’s perspective on this moment in tech, a pitch deck teardown and a deal that may have flown under your radar this week. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog.
Let’s have a Heart to Heart
On Equity this week, Heart to Heart CEO Josh Ogundu joined us to talk about his perspective on the market for early-stage founders. Ogundu told us what he’s rethinking, the importance of honesty and what to do before considering a layoff. It’s not too often that we have guests on the show, so when we do, you know it’s going to be a good one.
Here’s why it’s important: So much of the advice, as this newsletter’s intro shows, has come from investors. Yet, founders are the ones living the change and making the hard decisions, so consider this episode an overdue reality check.
Image Credits: Bryce Durbin/TechCrunch
Pitch Deck Teardown
Our own Haje Jan Kamps has started a weekly series in which he reviews a startup’s pitch deck in the shape of a witty column. Most recently, he reviewed Lumigo’s Series A pitch deck that helped the startup land a $29 million round.
Here’s why it’s important, in his words: “I’ve been coaching startups for a long time, and the No. 1 challenge we always run into is that there’s no shortage of advice for how to do a good pitch deck (hell, I wrote a book about it), but the thing that’s always been missing is a good library of actual, real pitch decks that were successful in raising money. When I rejoined TechCrunch and started talking to founders about fundraising rounds, I realized this might be my chance. In this week’s teardown, we talk about what worked about the deck and where the company could have made further improvements. This is info that isn’t available anywhere else, and it’s been such a fun project so far!”
Here’s why it’s important via reporter Christine Hall: “Time is of the essence in reducing emissions, with [CEO Julia Collins] noting that there are less than 100 months left to reach the 2030 global goal of cutting at least 40% of greenhouse gas emissions from 1990 levels. Household consumption of things like food, which impacts land, energy and water, account for 60% of global emissions, she added.”
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The Alibaba Cloud x KrASIA Global Startup Accelerator Vietnam Demo Day took place on May 25 in Ho Chi Minh City. Pitches made by ten finalists were evaluated by judges representing ThinkZone Ventures, Do Ventures, VSV Capital, TheVentures, Sunwah Innovations, and Alibaba Cloud.
Startups operating in logistics, real estate, e-commerce, and other sectors participated in the Demo Day. After each startup presented their problem statement and solution, one contestant was named the event’s winner: founded in 2020, Dutycast focuses on improving the cross-border shoppers’ experience by providing transparency for taxes, duties, and logistics-related expenses. The judges highlighted its existing functionality, particularly Dutycast’s solution for automated cross-border delivery chain processes, and its current traction as the startup’s key advantages.
Dutycast chief product officer Dat Tran pitching at the Alibaba Cloud x KrASIA Global Startup Accelerator Vietnam Demo Day. Photo by KrASIA.
Here are the other startups that took part in the Demo Day:
AirCity is a residential property management company that automates property maintenance management, communications with residents, and more.
BitVision provides full-stack financial reporting software for web3 business activities.
B2bmart.vn is an e-commerce portal for connecting product and service providers with domestic and foreign industrial clients.
Computer Vision Vietnam Technologies is creating a platform to help businesses automate their document-based processes to work more efficiently using OCR & AI technology.
HorizonLand is developing a metaverse that combines multiple e-sports games in one virtual environment.
LessonBox is a learning platform where students and teachers can find and share educational resources.
Libraxy is a web3 reading lifestyle app that connects readers and independent creators to prevent copyright infringement and reduce publishing costs.
SingM is a web3-based entertainment app that combines karaoke with GameFi and SocialFi elements.
Song Nhat Tinh JSC focuses on solving the pain points of Vietnam’s first- and middle-mile logistics industry by applying AI-powered solutions to transport and fleet management.
Alibaba Cloud and Sunwah Innovations form new partnership to support the development of Vietnam’s startup ecosystem
Sunwah Innovations and Alibaba Cloud announced their new partnership at the event, marking a significant milestone between the innovation arm of Sunwah Group and Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group. Jesse Choi, general director of Sunwah Vietnam and CEO of Sunwah Innovations, said that both parties will leverage their unique strengths and share resources to promote entrepreneurship among Vietnamese youth and provide more support for Vietnam’s startup ecosystem. Kenny Song, Vietnam general manager of Alibaba Cloud Intelligence, emphasized the company’s commitment to work with ecosystem partners and empower Vietnam’s startup community as well as provide support to local businesses.
Under this partnership, both parties will collaboratively organize various events aimed at strengthening international exposure for Vietnamese startups while supporting the expansion of overseas startups into Vietnam. Local startups will also gain opportunities to participate in extensive innovation and technology events hosted by Alibaba Cloud. Both Sunwah Innovations and Alibaba Cloud are committed to supporting academic institutions in Vietnam in information and technology training fields to nurture digital talents and developers.
Local venture capitalists and ecosystem players discuss the opportunities in Vietnam
Two panels were held to feature local thought leaders, who discussed the ecosystem’s latest developments and opportunities.
Vietnam has strong traits and advantages that make it a suitable home base for startups in Southeast Asia, panelists said. Photo by KrASIA.
The first panel discussion, “Opportunities in the Vietnamese Startup Ecosystem,” featured insights from Nguyen Quoc Thai, Alibaba Cloud Intelligence channel business development lead in Vietnam; Tra Hoang, managing partner of Vietnam Silicon Valley Capital; and Khiet Vuong, incubation manager of University of Economics Ho Chi Minh City Institute of Innovation. Van Nguyen, partnership manager of the Startup Vietnam Foundation, moderated the discussion.
All speakers agreed that Vietnam is a dynamic and promising market in Asia, with distinct advantages that make it an attractive home base for local and foreign startups. The unique strengths of Vietnam’s innovation ecosystem include abundant tech talent resources, developed infrastructure, public policies that support startup development, and increasing capital investment activity from domestic and international venture capital funds.
While the COVID-19 pandemic has hampered Vietnam’s startup ecosystem, local operators are recovering quickly, panelists said. Photo by KrASIA.
The second panel discussion, “Post-pandemic Vietnam Venture Capital Landscape and Implications for Vietnamese Startups,” involved representatives from leading venture capital firms in Southeast Asia, including Truc Tran, investment manager of Do Ventures; Chelsea Nguyen, principal of Thinkzone Ventures; and Cody Pham, head of investment at TheVentures. Alvin Koh, co-founder and CEO of Loop Smart Retail, moderated the session and offered his own views through the lens of someone who operates a startup.
Still recovering from the COVID-19 pandemic’s severe impact, Vietnam’s startup ecosystem has managed to reach new heights. There was a total investment capitalization of USD 1.3 billion in 2021. Notably, many startups in the fields of fintech, e-commerce, food and beverage, video games, and blockchain have rapidly gained traction and achieved initial success.
At the moment, a major development among Vietnam’s startups is to contribute to community development and sustainability by using clean energy, recycling, reducing energy consumption, and creating jobs for the disadvantaged.
The Alibaba Cloud x KrASIA Global Startup Accelerator Vietnam Demo Day was held in Ho Chi Minh City on May 25, 2022.
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The excitement around web3 and the metaverse have pulled plenty of entrepreneurs who defined the first generation of native mobile apps to begin questioning what’s next.
Foursquare founder Dennis Crowley is on the co-founding team of a new startup called LivingCities, alongside Matt Miesnieks, who sold his most recent startup 6D.ai to Niantic for an undisclosed sum, as well as designer John Gaeta, who best known for his work on the Matrix Trilogy. The trio say they have banked $4 million in early funding led by DCVC for their project. Other backers include Eniac Ventures, Anorak and Matthew Ball.
“The big opportunity in the early days of Foursquare was really like, ‘Okay, let’s make some software that changes the way that people use physical space,’ and the way that we executed that is we tried to turn life into a game, we tried to turn spaces into a game, we tried to make it easier to meet up with people, and a lot of that was successful. But that was like 13 or 14 years ago, and technology has changed,” Crowley tells TechCrunch. “I think that the core idea that software can change the way that people interact with the world is still meaningful and unsolved in many ways, and that’s what keeps drawing me back to the challenge.”
The founding team doesn’t have an awful lot to say about what exactly they’re building, except that it’s a “social layer” for consumers based around interacting with virtual spaces that capture the “spirit” of real-life geographies and cities. The “mirror-world” platform will integrate elements of web3, though the team says they hope to build without succumbing to the “rampant speculation” that many associate with crypto.
CEO Miesnieks says the team is largely interested in building out a network that exists only on the web and mobile web, potentially sidestepping app stores and their associated fees, but that he’s not looking to build out another augmented reality startup or compete with mapping players like Niantic or Snap.
“We think that if you’re going to build something for consumers, you need to build on technology that’s widely available today,” Miesnieks says.
Just under a year ago, Crowley stepped down from his full-time role at Foursquare after more than a decade at the company. He tells TechCrunch that starting his new company has been the product of him and his co-founders asking themselves questions about what role new technology can play in bringing people closer together.
“What are the things that we want to see exist in the world? What are experiences that are only now recently possible because of what’s changed in how people use their phones or other devices? It has always seemed like there’s an opportunity to do more, to bring the digital and real world together in an interesting way,” Crowley says.
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As an investor with 20-plus years of experience, I’ve lived through—and supported founders through—multiple downturns. For any founders and entrepreneurs who may feel stressed and overwhelmed by the turmoil in the public markets, I wanted to share three guiding principles that I hope can offer another perspective.
Founders are actually “momentum managers in chief”
If you’re a founder or a leader, you’re also what I like to call the “momentum manager in chief.” Startups by their very definition have to earn their right to live—they’re guilty until proven innocent. It can sometimes feel like the founder against the world, and founders need to build a team that can fight the fight.
To gain relevancy over time, you have to show momentum through:
Larger fundraises and increasing prices over time
Financial performance that matches or exceeds expectations
Customer belief in what you’re doing
Hiring and retaining great people with quality and experience, improving as you build your team
Press starting to pay attention and building a favorable impression of what you’re doing
Focus on the levers that you can control because if you lose momentum, you unfortunately may never recover.
Learn to live on the cash that you do have
As an entrepreneur, you probably already know that the one cardinal sin you can’t commit is running out of money. In a bull market, most entrepreneurs planned to raise money with frequency, which can lead to unsustainably high valuations. Through no fault of their own but rather due to market conditions, many companies are now upside down—this means that founders can’t raise money at or above their last round valuations. Don’t expect the market to recover or investors to forget the laws of gravity when you need to raise money again. The market may recover quickly, but hope is not a strategy.
If you haven’t already, it’s time to modulate your burn so that the cash you have is the cash that you can live on for a long time. The smartest founders will use what they’ve got, which may mean moderating growth and cutting some expenses.
Hitting rock bottom can be a blessing in disguise
History has shown that public investors can remain skeptical of many companies for long periods of time. Somewhat paradoxically for sentiment to shift, sometimes investors need to see companies hit rock bottom to be convinced. While it may be hard to accept right now, going through the depths of a bad macro cycle may be just what some companies need in order to convert skeptics into believers.
Today, many companies leverage management tools like Workday, BambooHR, Lattice, and Culture Amp to monitor employee performance. I’m reminded how SuccessFactors—the first company that helped automate the performance appraisal process—struggled after its 2007 IPO, dropping well below $10 per share despite strong financial performance. Investors just didn’t believe that SuccessFactors could withstand a downturn when companies stopped hiring people at a rapid rate. Skeptics predicted SuccessFactors’ customers would cease caring about performance reviews when firing people during a recession, and investors expected churn rates to spike as a result, ultimately reducing the value of SuccessFactors to zero.
Sure enough, the Great Financial Crisis (GFC) of ‘08/’09 hit shortly thereafter, driving SuccessFactors stock down to a low at about $4 per share. Like other companies during this period, SuccessFactors laid off some of its workforce, reducing its expense base. At the same time, SuccessFactors showed growth in revenues, albeit at a lower rate than its growth rate prior to the GFC. The company also retained its customers at a high rate—as it turns out, companies in a down market still want visibility into who they should let go and who they should keep.
Despite the slower growth, SuccessFactors’ stock price began to increase in value. To start believing, investors needed to see the company had enduring value to its customers, even in a downturn. Investors were richly rewarded—ultimately, SuccessFactors was acquired in 2012 by SAP for $40 per share, showing how sometimes you have to go through low points to prove that your business is going to stand the test of time.
As another generation of founders grapples with uncertainty and hard decisions, these principles still apply to today’s startups. Rebounding from these depths can also reaffirm what the most resilient founders have been saying all along: “Our business is not going to die. It’s going to survive and thrive.” In the case of SuccessFactors at least, sometimes what’s bad is actually good for you—and why the current market might be a blessing in disguise for some startups.
I was a board observer and led GGV’s investment in SuccessFactors in 2006 and 2007, where I helped advise the CEO and CFO through the IPO process and into life as a public company.
Cornell Tech awarded four student startup companies with pre-seed funding worth up to $100,000 in its ninth annual Startup Awards competition. A fifth company won a new startup award focused on public-interest technology.
The awards were announced at Cornell Tech’s Open Studio, the campus’s end-of-year celebration of startups and presentation of cutting-edge research, projects and companies founded at Cornell Tech. A panel of tech industry leaders and executives, along with Cornell and Cornell Tech faculty and staff, selected the winning student teams.
Participants shared their startup ideas as part of the open-house portion of Open Studio.
“This year’s Startup Awards finalists have all made major strides in solving problems in health care, data privacy, housing and other fields, and I am incredibly proud of all that they have accomplished in their time at Cornell Tech,” said Greg Morrisett, the Jack and Rilla Neafsey Dean and Vice Provost of Cornell Tech. “It has been a wonderful experience watching these students rise above the challenges of the past year to build some truly impressive companies.”
Startup Award winners receive co-working space at the Tata Innovation Center as part of the $100,000 investment.
The 2022 Startup Award Winners are:
Kaveat, which helps people understand their contracts by translating the legal jargon into plain English;
Abstractive Health, which helps doctors read and write clinical notes faster with an automated summary;
Canary Privacy, which helps businesses test, monitor and fix privacy issues on their websites and apps to protect user data and ensure compliance; and
Nobul, which empowers patients to take control over their medical care by providing patients tools to help them understand their medical bills, as well as identify and resolve errors.
In addition, MyLÚA Health – a digital maternal care platform that predicts risk of pregnancy complications via a patient app and clinician dashboard – won a new startup award, the Siegel Family Endowment PiTech (Public Interest Tech) Startup Award. The award is for the startup focused on creating the most positive societal impact with their efforts. This new award is made possible by the generosity of Cornell Tech Council Chair David Siegel and the Siegel Family Endowment.
The Startup Awards are a capstone of the Studio curriculum, a critical component of the master’s experience at Cornell Tech which brings together multidisciplinary teams to solve real-world problems. In their final semester, students can choose to form teams and enroll in Startup Studio, where they combine their diverse program disciplines — computer science, operations research and information engineering, business, health tech, urban tech, connective media, electrical and computer engineering, and law — to develop ideas and prototypes for their startup in an academic setting.
Since the inception of Startup Studio in 2014, nine companies have been acquired; the latest is Pilota, which uses machine learning to help the commercial airline industry predict the risk of disruption associated with each flight. Pilota was acquired earlier this year by Hopper.
In total, startups that have been founded and spun out on campus – including Startup Studio and the Runway Startup Postdocs at the Jacobs Technion-Cornell Institute – have raised more than $215 million in funding and employ more than 400 people.
Students who don’t enroll in Startup Studio can take either the BigCo Studio or PiTech Studio tracks. In BigCo Studio, students learn to innovate within larger companies, including navigating complex cultures, pitching to the people who control budgets, and building projects to scale. In PiTech Studio, students focus specifically on product development and business models that accelerate positive change in public, nonprofit, for-profit and hybrid sectors.
Jess Campitiello is thedigitalcommunicationsassistant at Cornell Tech.
NSF awards $1M to Cornell snack startup Antithesis Foods
It began as a Cornell classroom project and has blossomed into student startup company. Now, the National Science Foundation has awarded a nearly $1 million small-business grant to Antithesis Foods for its novel invention to make healthy snack foods and crunchy ingredients from chickpeas and other legumes – all low-calorie, high-fiber and high-protein.
The funding advances a nutrient-dense, crunchy ingredient to get healthier snacks such as graham crackers, cereals, chips, granola and cookies on supermarket shelves.
Through an earlier NSF small-business grant, Antithesis Foods developed Protos – a healthy snack food made from chickpeas – they started selling in January.
Founded by Ashton Yoon, MPS ’17, M.S. ’19 and Jason Goodman, Ph.D. ’21, the funding allows Antithesis Foods – supported by Cornell’s Center for Regional Economic Advancement programs and mentors – to continue scaling its legume-based dough innovation.
The company is rooted in a Cornell food science class, “Concepts of Food Product Development,” then taught by Ali Abbaspourrad, the Youngkeun Joh Assistant Professor of Food Chemistry and Ingredient Technology in the College of Agriculture and Life Science, who assigned the students to form groups and create a product based on a current food trend.
This team developed a chocolate-covered treat – very similar to malt balls – from chickpeas, which later became Grabanzos, the company’s first product.
Once the recipe was improved, Antithesis Foods joinedeLab, Cornell’s student business accelerator, to explore the market and create a business plan, and earned an NSF Small Business Innovation Research (SBIR) Phase I award.
During the Phase I project, Antithesis developed their technology into a legume ingredient platform. Their second consumer product,Protos, was developed from this research and launched in January 2022.
This recent $1 million NSF SBIR Phase II award, given in March, will help the company expand.
“As a startup, it’s difficult to take on too much risk, as you don’t get the luxury of failing too many times,” Yoon said. “This NSF award gives us the latitude to take on the high-risk process of expanding our production capacity to levels needed to get our healthier ingredients into the market in a big way.”
On the NSF Phase II grant, the Cornell food science faculty members advising Antithesis Foods are Olga Padilla-Zakour, professor of food processing, who now teaches the product development class; Syed Rizvi, professor of food engineering; and Abbaspourrad.
Guard Medical raises $11M in Series B investments
Guard Medical Inc. has raised a Series B investment of $11 million to support commercialization and clinical studies for its product NPseal, a negative pressure wound therapy dressing for closed incisions. The Series B completion was announced April 6.
NPseal is an easy-to-use and cost-effective negative pressure wound therapy surgical dressing with an integrated pump that establishes and maintains negative pressure with a few pinches. It was developed through the Minimally Invasive New Technologies (MINT) program, a collaboration between Weill Cornell Medicine and NewYork-Presbyterian Hospital in New York City.
The product is licensed through Cornell’s Center for Technology Licensing (CTL).
“The completion of the Series B demonstrates the confidence of the investors to support the next phase of our NPseal,” said Machiel van der Leest, chief executive officer of Guard Medical. “Securing additional funding will enable new clinical studies, increased commercialization and leveraging the NPseal technology into the high exuding and chronic wounds segments.”
In general, negative pressure wound therapy dressing has been shown to reduce surgical site infections, but other similar products have limited use due to high cost and complexity, van der Leest said.
NPseal delivers the same negative pressure wound dressing, he said, but in a simpler and less-expensive way.
C2i launches disease test in Europe
C2i Genomics, a cancer intelligence company using software licensed through CTL, launched its C2inform minimal residual disease test across Europe.
The C2inform test applies whole-genome sequencing and artificial intelligence to a 3 to 4 milliliter blood sample, which supports rapid and accurate detection of cancer, monitors disease progression and evaluates therapeutic efficacy, according to the company.
The test enables timely personalized treatment decisions and supports the creation of more effective cancer treatments through drug development partnerships. The test also reduces laboratory operation complexity, eliminates the need for a patient-specific assay and offers a rapid solution for cancer patients across the European Union, the company said.
“The last year has been incredibly exciting as we’ve solidified multiple global partnerships to expand our distributed diagnostic model,” said Asaf Zviran, CEO and co-founder of C2i Genomics, and a former lab member of Dr. Dan Landau, associate professor of medicine at Weill Cornell Medicine. “We’re eager to scale our C2inform test to bring whole genome cancer detection and monitoring across Europe.”
Bactana receives NSF business grant
The NSF has awardedBactana Corp., a company that graduated from Cornell’s Kevin M. McGovern Family Center for Venture Development in the Life Sciences business incubator three years ago, a Small Business Innovation Research (SBIR) Phase I grant to expand research and development for a bacteria-derived therapeutic drug.
“We are grateful to the NSF for acknowledging our discoveries and granting this award, which will allow us to expedite our research and development efforts and support Bactana in its upcoming financing efforts,” said John Kallassy, MBA ‘03, Bactana’s chief executive officer.
“We anticipate our initial commercial success to address diabetes and other metabolic conditions in companion animals, where product development timelines and costs are much lower than those for new human products,” Kallassy said. “We also plan to expand into other markets through collaboration with human pharma upon completion of the 2022 objectives described in this grant.”
FPZ-100 is a patent-pending technology, licensed through the CCTL, made from peptides and metabolites derived from F. prausnitzii, a naturally occurring bacterium commonly present in human and animal gut microbiomes.
Bactana’s initial research focused on bacteria derived additives to improve feed efficiency and reduce antibiotic usage during livestock production. However, recent trials have shown that oral dosing of FPZ-100 significantly reduces diabetic and prediabetic blood markers in mice, without causing undesirable hypoglycemic side effects, according to the company.
Bactana joined the McGovern Center in 2017 and graduated from the center in 2019. The award was given in February 2022.
Once a small business is awarded a Phase I SBIR grant, it becomes eligible to apply for a Phase II – up to $1 million in additional funding.
