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TechCrunch+ roundup: 2021 edtech report, UBS-Wealthfront deal, falling startup revenue

I could spend hours discussing early-stage startup operations and community-based marketing, but deal flow is my blind spot.

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I could spend hours discussing early-stage startup operations and community-based marketing, but deal flow is my blind spot.

But when investment banking firm UBS picked up financial robot-advisor Wealthfront for $1.4 billion in an all-cash deal this week, I noticed.

“At those prices, the company’s exit price is a win in that it represents a 2x or greater multiple on its final private valuations,” wrote Alex Wilhelm in The Exchange. “But its exit value is also parsable from a number of alternative perspectives: AUM, customers and revenue,” he added.

Examining each of those factors in turn, Alex found that the deal is more than just a “next-gen push” intended “to reach rich young Americans,” as some headlines suggested.

This exit will help other fintechs set expectations, but it should give a mental boost to anyone who thinks they’re too late to start up in this space.


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Just over 56% of Americans own stock, but that figure is still several points lower than it was before the Great Recession more than a decade ago. With more consumers buying crypto and fractional shares today, I’d say the robo-advisor race is still doing a parade lap.

Alex, who swims through deal flow like a carefree dolphin, agrees with me — to a point:

The recent declines in active users on platforms like Robinhood, and the success of fintechs like M1 in the last few years could point to a market more open to robo-advising, but the question is whether their lower-cost model can prove sufficiently interesting to investors.

Wealthfront, for example, takes a 0.25% cut of consumer funds. Robinhood I think was doing a bit better when we considered its PFOF incomes against lower-value customer accounts that were actively trading.

Can the robos present a financial picture that is similarly strong? If they can, they will likely prove less volatile than Robinhood has to date.

We’re essentially in agreement: it’s never too late for a good idea.

Thanks very much for reading TechCrunch+ this week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

European and North American edtech startups see funding triple in 2021

Image Credits: Bet_Noire (opens in a new window) / Getty Images

Pre-pandemic, VCs were notoriously reluctant to invest in education-related companies. Today, edtech startups are seeing higher average deal sizes, more seed and pre-seed funding from non-VC investors, and an influx of generalists.

According to Rhys Spence, head of research at Brighteye Ventures, funding for edtech startups based in Europe and North America trebled over the last year.

“Exciting companies are spawning across geographies and verticals, and even generalist investors are building conviction that the sector is capable of producing the same kind of outsized returns generated in fintech, healthtech and other sectors,” writes Spence.

Here’s how far VCs have lowered revenue expectations for seed through Series B

A front view on multiple spreadsheets containing binary computer data, financial figures and graph lines.

Image Credits: Matejmo (opens in a new window) / Getty Images

Valuations are soaring, but revenue averages for SaaS startups “have seen a recent and rapid decline,” according to a Kruze Consulting report Alex Wilhelm studied yesterday.

The revenue growth goalposts for early-stage startups wanting to fundraise have moved closer in the past couple of years, which means investors are now willing to pour money into companies with slower growth than they were earlier, Alex wrote.

“In all, startups are getting paid better, faster for less work than before. It’s a great time to raise, but a pretty awful time for venture capitalists trained in an era when they got more equity for their dollar.”

Dear Sophie: 3 questions about immigration and naturalization

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

My F-1 OPT will run out this June. My employer has agreed to register me in the H-1B lottery in March.

What are my options if I’m not selected in the lottery?

—Gritty Grad

I’m in the U.S. with an L-1A visa that will max out later this year. My wife has been with me during the whole period on an L-2. Can my wife apply for H-1B this year?

Would she need to leave the country to activate it?

—Helpful Hubby

I have a 10-year green card that will expire later this year. I’ve been married to a U.S. citizen for 11 years, but we are in the process of divorcing.

Can I apply for U.S. citizenship even after my divorce?

—New Year, New Life

IBM shrugs off investor EPS concerns, sells growth story

Madrid headquarters of IBM International Business Machine, the American multinational of informatics and technology consulting services in Madrid, Spain

Madrid headquarters of IBM International Business Machine, the American multinational of informatics and technology consulting services, Spain, November 2012. Image Credits: Cristina Arias/Cover/Getty Images

IBM’s earnings report was received positively, but when CFO Jim Kavanaugh declined to share the company’s earnings per share expectations on a post-earnings conference call, the stock quickly tanked.

The stock recovered the following day, but the blip was newsworthy, since a narrow focus on offloading some assets, expanding growth and free cash flow puts IBM on track for further growth, analysts told Alex Wilhelm and Ron Miller.

“Good to see IBM finding back the growth that has eluded the vendor for longer than any investor would have liked,” said Holger Mueller, an analyst at Constellation Research.

“But a small ship can sail faster, and with Kyndryl and Watson Health assets being offloaded, it will help make IBM sail faster.”

In blow to unicorns, the global IPO market continues to soften

It’s still a great time to be a startup founder. Specifically — an early-stage startup founder.

WeTransfer’s parent, WeRock, delayed its IPO earlier this week, becoming the latest major software firm to shelve its plans to go public after JustWorks.

Before that, a bevy of SPAC IPOs that many hoped would shoot to the moon instead drifted off course after launching.

These signals, taken with several others, suggest that this might not be the best time to go public, wrote Alex Wilhelm and Anna Heim in The Exchange.

“Are the good times ending?”

Edtech startups flock to the promise and potential of personalized learning

Image Credits: Getty Images/smartboy10/DigitalVision

Everyone learns differently, but parents, teachers and schools tend to forget that vital fact in the classroom.

The enforced changes brought by the pandemic, however, have led some teachers and parents to realize that personalized learning is key to education, especially in the case of neurodiverse students.

As a result, a new wave of startups have appeared that promise to deliver curricula that adapts to a student’s emotional or educational state, reports Natasha Mascarenhas.

“The pandemic’s extended stay has caused edtech entrepreneurs – and society – to view learning outcomes as broader than job placement and exam scores,” she wrote.

3 views: How should startups prepare for a post-pandemic dip?

An illustration of a descending jet airplane with a unicorn logo on its tail

Image Credits: Bryce Durbin/TechCrunch

If the public markets were a swimming pool, it would still be open for business, but there’d be signs warning newcomers that the water has gotten a bit chilly.

Natasha Mascarenhas, Mary Ann Azevedo and Alex Wilhelm, the trio behind the Equity podcast, shared their predictions about what’s in store for startup funding and due diligence in 2022:

  • Natasha Mascarenhas: ‘The Lean Startup’ has aged with an asterisk
  • Alex Wilhelm: Money over bulls**t
  • Mary Ann Azevedo: Don’t try to be all the things

Crypto pioneer David Chaum says web3 is ‘computing with a conscience’

In 1982, computer scientist David Chaum wrote a dissertation that described a blockchain protocol, along with the code for implementing it.

Since then, his cryptologic research has led to developments like digital cash and anonymous communication networks. This week, he launched xxmessenger, which the company describes as the first “quantum-resistant” messaging app.

When we asked him what has changed in the past few years, Chaum said, “Seems to me that Bitcoin and the like have created something that could no longer be ignored. Now the question is: How can it be brought to the general public in a way that they can readily adopt this next generation of information technology?”

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Crypto job market holding up despite tech industry cutbacks

Crypto-specialist recruiters say they have not witnessed a downturn in crypto-related job opportunities, despite a myriad of staff lay-offs in the wider…

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Crypto-specialist recruiters say they have not witnessed a downturn in crypto-related job opportunities, despite a myriad of staff lay-offs in the wider tech industry.

The crypto job market shows few signs of slowing down despite high-profile cases of staff layoffs and hiring freezes across big tech companies. 

In recent weeks, several major tech companies have announced a paring back of staff, citing a downturn in the traditional market and narrowing demand for products that had boomed during the pandemic. Recently announced hiring cuts include Twitter, Uber, Amazon and Robinhood.

On Tuesday, movie streaming service Netflix terminated the roles of 150 mostly United States-based employees amid a slowdown in revenue growth. Earlier this month, Facebook parent company Meta instituted a hiring freeze for most of its mid- and senior-level positions after failing to meet revenue targets.

A Netflix employee post on LinkedIn

The crypto industry has not been totally immune. On Tuesday, Coinbase announced it was slowing down its hiring, after posting a $430 million loss in Q1. Coinbase chief operating officer Emelie Choi told employees in an internal memo that plans to triple the headcount in 2022 were on hold due to market conditions that require the company to start “slow hiring and reassess our headcount needs against our highest-priority business goals.” 

So, are we at the beginning of a major slow down in crypto industry hiring? Crypto recruiters Cointelegraph spoke to don’t think so.

“We have not seen a slowdown in crypto hiring. We are as busy as ever,” said Neil Dundon, founder of Crypto Recruit.

Dundon’s firm specializes in recruiting exclusively within the blockchain and cryptocurrency space:

“We have a team based globally across the US, Asia/Pac and European regions and demand is equally as high across the region.”

Kevin Gibson, founder of Proof of Search, told Cointelegraph that lay-offs in the tech sector have had little to no impact on his crypto industry clients so far. 

“I’ve only heard of two companies letting people go,” said Gibson. “This may change in the next month, but any slack will immediately be taken up by well-funded quality projects. As a candidate, you won’t notice any difference. if you do lose your job, you will also have multiple offers pretty quickly.”

VC funding runways

Gibson said that most crypto projects are still in the startup and early stages of their life cycle, and are still operating off venture capital (VC) funding secured last year:

“The vast majority of quality projects were funded last year, so they will continue to build and hire. There was such an imbalance of talent to role that any pull back from pre-funded projects will not be noticed.”

CB Insights’ “State of Blockchain Q1 22” report stated that blockchain and crypto start-ups saw a record-breaking funding quarter, with venture funding reaching an all-time high in the three-month period, raising $9.2 billion and beating the preceding quarter of $8.8 billion in Q4 2021. It was the seventh-consecutive quarter of record blockchain funding.

Dundon said he has seen more traditional tech companies and employees venturing into the crypto space, further enriching the crypto job market:

“At a minimum, most forward thinking tech companies are allocating some budget to look at how they might incorporate blockchain into their existing models. Not only are more companies venturing into this space but candidates are flocking over as traditional tech downsizes.”

A study from LinkedIn released in January this year found that crypto-related job postings surged 395 percent in the U.S. from 2020 to 2021, compared to only a 98 percent increase in the tech industry in the same period. The most common job titles demanded included blockchain developers and engineers.

According to Glassdoor, the average annual blockchain developer salary is $109,766. The average annual blockchain engineer salary sits slightly lower at $105,180.

Related: Analysts note parallels with March 2020: Will this time be different?

When asked whether the current crypto bear market may translate to more crypto company lay-offs, Dundon said that he doesn’t expect a similar situation to play out as it did in 2018.

“Crypto hiring in the past has tended to slow right down when the Bitcoin price tumbles. It was almost directly correlated to its price,” explained Dundon:

“This time, it’s different, though, as crypto companies now manage their treasuries in a much more responsible manner. This all translates to a much more stable hiring market.”

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Crypto jobs market holding up despite tech industry cutbacks

Crypto-specialist recruiters say they have not witnessed a downturn in crypto-related job opportunities, despite a myriad of staff lay-offs in the wider…

Published

on

Crypto-specialist recruiters say they have not witnessed a downturn in crypto-related job opportunities, despite a myriad of staff lay-offs in the wider tech industry.

The crypto job market shows few signs of slowing down despite high profile cases of staff layoffs and hiring freezes across big tech companies. 

In recent weeks, several major tech companies have announced a paring back of staff, citing a downturn in the traditional market and narrowing demand for products that had boomed during the pandemic. Recently announced hiring cuts include Twitter, Uber, Amazon and Robinhood.

On Tuesday, movie streaming service Netflix terminated the roles of 150 mostly U.S.-based employees, amidst a slowdown in revenue growth. Earlier this month, Facebook parent company Meta instituted a hiring freeze for most of its mid and senior level positions after failing to meet revenue targets.

A Netflix employee post on LinkedIn

The crypto industry has not been totally immune. On Tuesday Coinbase announced it was slowing down its hiring, after posting a $430 million loss in Q1. Coinbase chief operating officer Emelie Choi told employees in an internal memo that plans to triple the headcount in 2022 were on hold due to market conditions that require the company to “slow hiring and reassess our headcount needs against our highest-priority business goals.” 

So are we at the beginning of a major slow down in crypto industry hiring? Crypto recruiters Cointelegraph spoke to don’t think so.

“We have not seen a slowdown in crypto hiring. We are as busy as ever,” said Neil Dundon, founder of Crypto Recruit..

Dundon’s firm specializes in recruiting exclusively within the blockchain and cryptocurrency space.

“We have a team based globally across the US, Asia/Pac and European regions and demand is equally as high across the region.”

Kevin Gibson, founder of Proof of Search told Cointelegraph that lay-offs in the tech sector have had little to no impact on his crypto industry clients so far. 

“[I’ve] only heard of two companies letting people go,” said Gibson. “This may change in the next month but any slack will immediately be taken up by well funded quality projects. As such as a candidate you won’t notice any difference… if you do lose your job you will also have multiple offers pretty quickly.”

VC funding runways

Gibson said that most crypto projects are still in the start-up and early stages of their life cycle, and are still operating off venture capital (VC) funding secured last year.

“The vast majority of quality projects were funded last year so [they will] continue to build & hire. There was such an imbalance of talent to role that any pull back from pre-funded projects will not be noticed.”

CB Insights’ State of Blockchain Q1 22 report stated that blockchain and crypto start-ups saw a record-breaking funding quarter, with venture funding reaching an all time high in the three-month period, raising $9.2 billion and beating the preceding quarter of $400 million in Q4 2021. It was the seventh consecutive quarter of record blockchain funding.

Dundon said he has seen more traditional tech companies and employees venturing into the crypto space, further enriching the crypto job market.

“At a minimum most forward thinking tech companies are allocating some budget to […] look at how they might incorporate blockchain into their existing models […] Not only are more companies venturing into this space but candidates are flocking over as traditional tech downsizes.”

A study from Linkedin released in January this year found that crypto-related job postings surged 395 percent in the U.S. from 2020 to 2021, compared to only a 98 percent increase in the tech industry in the same period. The most common job titles demanded included blockchain developers and engineers.

According to Glassdoor, the average annual blockchain developer salary is US$109,766. The average annual blockchain engineer salary sits slightly lower at US$105,180.

Related: Analysts note parallels with March 2020: Will this time be different?

Asked whether the current crypto bear market may translate to more crypto company lay-offs, Dundon said that he doesn’t expect a similar situation to play out as it did in 2018.

“Crypto hiring in the past has tended to slow right down when the Bitcoin price tumbles. It was almost directly correlated to its price,” explained Dundon.

“This time it’s different though as crypto companies now manage their treasuries in a much more responsible manner […] This all translates to a much more stable hiring market.”

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Candidate supported by Bankman-Fried-linked PAC loses Oregon primary

Record spending in a Democratic House primary could not give a political newcomer the boost he needed to overcome a local politician with a long career….

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Record spending in a Democratic House primary could not give a political newcomer the boost he needed to overcome a local politician with a long career.

Andrea Salinas has won the Democratic primary election for the newly created Oregon 6th District seat in the United States House of Representatives. Practically since it started, the election race was the object of intensive media attention that most often centered around Salinas’ opponent Carrick Flynn, whose campaign was generously funded by the Protect Our Future political action committee (PAC) backed by billionaire FTX CEO Sam Bankman-Fried. The PAC paid for a flood of advertising supporting Flynn. 

Salinas won the seat with 38% of the vote, while Flynn came in second at 19%, with the remaining votes split among seven other candidates.

Salinas had a solid political background, serving three terms representing Portland’s upscale Lake Oswego suburb in the state House of Representatives. Before that, she was a legislative aide in Washington and worked for an Oregon environmental group. Flynn, an Oregon native who left the state after he graduated from college in 2008 and returned in 2020, was lifted from obscurity through the support of the PAC.

Flynn was also the recipient of $1 million in support from the House Majority PAC, which is closely associated with House speaker Nancy Pelosi. Sen. Elizabeth Warren countered that move by endorsing Salinas. Flynn appeared to be a serious contender in a poll released May 7. Protect Our Future changed its advertising tactics a few days after that, shifting from ads predominantly featuring Flynn’s difficult rural childhood to attack ads on Salinas, accusing her of being under the sway of the pharmaceuticals industry.

Protect Our Future’s stated goal is “to help elect candidates who take a long term view on policy planning […] guided by a series of key principles” that include pandemic prevention and a belief in science. These themes echo a philosophical trend called effective altruism, which both Flynn and Bankman-Fried are known to admire. Estimates of the amount spent by Protect Our Future on Flynn’s campaign are in the range of $8 million to $10 million.

“This is, by all accounts, about three times higher than any other Super PAC efforts in any congressional primaries in the country,” Jim Moore, director of political outreach at the McCall Center for Civic Engagement, told Cointelegraph in an email:

“The ads bought Flynn name recognition, but not victory. They created a backlash among the other candidates and apparently a number of voters about outside money trying to buy a congressional seat.”

Flynn’s election opponents formed a united front in condemning him, and local media made much of Flynn’s loose ties to the state, his spotty voting record and the possibly questionable motives of the PAC backing him. The controversy soon attracted national coverage as well.

“Flynn’s political future in Oregon will depend on whether he becomes an active player in state or local political efforts,” Moore said. “If not, he will end up being a trivia question about the time a cryptocurrency billionaire and the House Majority PAC tried to snatch Oregon’s new district for reasons that were never made clear in the campaign.”

Related: Coinbase forms a second PAC to support crypto-friendly candidates

Protect Our Future’s abundant financial support has proven to be controversial in other election races as well. The PAC’s donations were used in ads by an opponent of Jasmine Crockett in Texas District 30. Crockett has received about $1 million from the PAC. Protect Our Future is also among the PACs choosing between Democratic candidates Carolyn Bourdeaux and Lucy McBath in the contentious battle for Georgia’s 7th District.

Flynn, Andreas and Protect Our Future president Michael Sadowsky have not responded to Cointelegraph's requests for comment at time of publication.

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