12/15/2023 0 Comments Notion crunchbaseFor remote workforces, or even for office-based teams spread out across the country, reducing switching costs is a likely boon to productivity while also reducing administrative management (think password sharing, getting licenses for various products, bill keeping, training, etc.). Notion, with its merging of to-dos, calendars, notes, and team collaboration, reduces the need to switch between multiple apps throughout the day. So what exactly is all that appealing about Notion? For one, work trends are changing. (Notion could have secured a higher valuation, but declined as to avoid hype the move failed.) A sum of money so small compared to its valuation that the firm effectively suffered from zero dilution. The firm raised a tiny $10 million against an $800 million pre-money valuation. Or you’re good at scaring them into thinking that they are about to miss out on the future and a lifetime of bragging rights.īut perhaps most notable of all is the recent Notion round. Your metrics have to be pretty amazing to engender that amount of confidence in private investors. What Airtable gets out of the deal is lots of capital at a low dilution cost investors get a long-term wager on a company that they expect to exit for billions, if not tens of billions. That’s a bonkers pace of value creation, at least on paper. Airtable’s valuation shot from $152 million to $1.1 billion between its Series B and its Series C. We can see this play out in the history of Airtable. This means that companies that venture capitalists all want to put money into aren’t valued on fundamentals (always a risky concept in the venture world), but instead on an expectation of outsized returns despite paying sky-high dollars for every user, paying customer, or current ARR base. In 2019, it seems that there’s very little upper bound for capital and resulting valuations bestowed upon the hottest of tech startups. “There will be a lot of companies that will struggle to raise this year that will be easy targets for companies looking to acquire.Related To Keep Teams On Task, Raises $50M Series C “There are over 7,000 venture-backed companies and a record number of seed deals,” Stanford said. This has created a perfect storm for an increase in startups acquiring other VC-backed companies, Kyle Stanford, a senior analyst at PitchBook, said. Now that the funding fever has come to a screeching halt, the market is filled with late-stage companies with oodles of cash on hand - and no real exit opportunities - and a plethora of early-stage startups. Last year simultaneously saw a record number of startups crossing the billion-dollar valuation threshold while seed-stage funding broke its own record. Why is this happening now, during a downturn? The venture funding bull market of the last decade has created a barbell of startups. So far this year, 663 startups have been acquired by other VC-backed companies, with more than half of 2022 left to go. In 2021, 1,283 transactions involving startups on both sides of the table took place, according to data from Crunchbase. Now, they are getting smaller and more frequent. But up until the last few years, these transactions were mainly large and infrequent. Meta bought venture-backed Instagram a month before Facebook’s May 2012 IPO food delivery company GrubHub merged with Seamless in 2013 when they were both still operating off venture funding. The notion of startups acquiring other VC-backed companies is nothing new. Amid a venture funding decline and dearth of IPO activity, startups have found a new way to occupy their time: buying other startups.
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