Startups

Startups Weekly: VCs are drunk on beverage startups

Comment

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s most noteworthy venture deals, fundraises, M&A transactions and trends. Let’s take a quick moment to catch up. Last week, I wrote about an alternative to venture capital called revenue-based financing and before that, I jotted down some notes on one of VCs’ favorite spaces: cannabis tech. Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets.

This week, I want to share some thoughts — questions, rather — on beverages. Just as my inbox has been full of cannabis-related pitches, it’s also been packed with descriptions of new…drinks. Perhaps the most noted so far is Liquid Death, canned water for the punk rock crowd, because why not? Liquid Death has attracted nearly $2 million in funding from angel investors like Away co-founder Jen Rubio and Twitter co-founder Biz Stone. Before I tell you about a few other up-and-coming beverage makers, I must beg the question: Does the beverage industry need disrupting?

Founders say yes. Why? For one, because millennials, according to various studies, are consuming less alcohol than previous generations and are therefore seeking non-alcoholic beverage alternatives. Enter Seedlip, a non-alcoholic spirits company, for example. Or Haus, launching this summer, an all-natural apéritif distilled from grapes that has a lower alcohol content than most hard liquors. Haus, like any good consumer startup in 2019, is shipped directly to your door.

https://twitter.com/KateClarkTweets/status/1130890865776373760

Bev, a canned wine business that recently raised $7 million in seed funding from Founders Fund, thinks marketing in the alcohol industry is the problem. Founder Alix Peabody designed a line of female-focused canned rosé. If you’re wondering why alcohol needs to be gendered in such a way, you’re not alone. Peabody explained most alcohol brands cater to men, and that’s a problem.

“The joke I like to make is there’s a go-to type of alcohol for every type of bro and we just don’t have that for women,” Peabody told TechCrunch earlier this year.

Finally, the wellness movement is taking over, driving VCs toward some odd upstarts. From wellness chat and journaling apps to therapy substitutes to fitness companies, stick wellness in a pitch and investors will take a second look. More Labs, for example, is backed with $8 million in VC funding. The company is readying the launch of Liquid Focus, a biohacking-beverage that claims to “solve modern-day stressors without the negative side effects.” Finally, Elements, “an elevated functional wellness beverage formulated with clinical levels of adaptogens to give your body exactly what it needs in four categories (focus, vitality, calm, and rest) for specific cognitive functions” (damn, what copy), recently launched. It doesn’t appear to be funded yet, but let’s just give it a few months.

There’s more where that came from, but I’m done for now. On to other news.

IPO Corner

I almost skipped IPO corner this week because no big-name companies dropped or amended their S-1s or completed a highly anticipated IPO, as has been the case basically every week of 2019. But I decided I better give a quick update on Luckin Coffee’s tough second week on the stock market. Luckin Coffee, if you aren’t familiar, is Starbucks’ Chinese rival. The company raised more than $550 million after pricing at $17 per share a little over a week ago. Immediately the stock skyrocketed 20 percent to a roughly $5 billion market cap; then came concerns of the company’s lofty valuation, major cash burn and uncertain path to profitability.  Luckin has dropped around 25 percent since closing its debut trading day. It closed Friday down 3 percent.

More changes at Y Combinator

Y Combinator, the popular accelerator program and investment firm announced this week that it has promoted longtime partner Geoff Ralston to president. This comes two months after former president Sam Altman stepped down to focus his efforts full-time on OpenAI. The promotion of Ralston is an unsurprising choice for YC, an organization that employs roughly 60 people, many of whom have been affiliated with it in one way or another for years.

M&A

Automattic acquires subscription payment company Prospress

Shopify quietly acquires Handshake, an e-commerce platform for B2B wholesale purchasing 

Streem buys Selerio in an effort to boost its AR conferencing tech

As Amex scoops up Resy, a look at its acquisition history 

Fundraising

The Los Angeles ecosystem is $76 million stronger this week as Fika Ventures, a seed-stage venture capital firm, announced its sophomore investment fund. Fika invests roughly half of its capital exclusively in startups headquartered in LA, with a particular fondness for B2B, enterprise and fintech companies. The firm was launched in 2017 by general partners Eva Ho and TX Zhuo, formerly of Susa Ventures and Karlin Ventures, respectively. The pair raised $41 million for the debut effort, opting to nearly double that number the second time around as a means to participate in more follow-on fundings.

Startup capital

DoorDash raises $600M at a $12.7B valuation
TransferWise completes $292M secondary round at a $3.5B valuation
Auth0 raises $103M, pushes its valuation over $1B
Canva gets $70M at a $2.5B valuation
Payment card startup Marqeta confirms $260M round at close to $2B valuation
Modsy scores $37M to virtually design your home
Sun Basket whips up $30M Series E
Zero raises $20M from NEA for a credit card that works like debit
Nigeria’s Gokada raises $5.3M for its motorcycle ride-hail biz

Extra Crunch

Our premium subscription service had another great week of interesting deep dives. This week, TechCrunch’s Lucas Matney went deep on Getaround’s acquisition of Drivy for his latest installment of The Exit, a new series at TechCrunch where we chat with VCs who were in the right place at the right time and made the right call on an investment that paid off. Here are some of the other Extra Crunch pieces that stood out this week:

Equity

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss how startups are avoiding IPOs and VC’s insatiable interest in food delivery startups.

More TechCrunch

Silo, a Bay Area food supply chain startup, has hit a rough patch. TechCrunch has learned that the company on Tuesday laid off roughly 30% of its staff, or north…

Food supply chain software maker Silo lays off ~30% of staff amid M&A discussions

Featured Article

Meta’s new AI council is composed entirely of white men

Meanwhile, women and people of color are disproportionately impacted by irresponsible AI.

5 hours ago
Meta’s new AI council is composed entirely of white men

If you’ve ever wanted to apply to Y Combinator, here’s some inside scoop on how the iconic accelerator goes about choosing companies.

Garry Tan has revealed his ‘secret sauce’ for getting into Y Combinator

Indian ride-hailing startup BluSmart has started operating in Dubai, TechCrunch has exclusively learned and confirmed with its executive. The move to Dubai, which has been rumored for months, could help…

India’s BluSmart is testing its ride-hailing service in Dubai

Under the envisioned framework, both candidate and issue ads would be required to include an on-air and filed disclosure that AI-generated content was used.

FCC proposes all AI-generated content in political ads must be disclosed

Want to make a founder’s day, week, month, and possibly career? Refer them to Startup Battlefield 200 at Disrupt 2024! Applications close June 10 at 11:59 p.m. PT. TechCrunch’s Startup…

Refer a founder to Startup Battlefield 200 at Disrupt 2024

Social networking startup and X competitor Bluesky is officially launching DMs (direct messages), the company announced on Wednesday. Later, Bluesky plans to “fully support end-to-end encrypted messaging down the line,”…

Bluesky now has DMs

The perception in Silicon Valley is that every investor would love to be in business with Peter Thiel. But the venture capital fundraising environment has become so difficult that even…

Peter Thiel-founded Valar Ventures raised a $300 million fund, half the size of its last one

Featured Article

Spyware found on US hotel check-in computers

Several hotel check-in computers are running a remote access app, which is leaking screenshots of guest information to the internet.

8 hours ago
Spyware found on US hotel check-in computers

Gavet has had a rocky tenure at Techstars and her leadership was the subject of much controversy.

Techstars CEO Maëlle Gavet is out

The struggle isn’t universal, however.

Connected fitness is adrift post-pandemic

Featured Article

A comprehensive list of 2024 tech layoffs

The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023, this year has already seen 60,000 job cuts across 254 companies, according to independent layoffs tracker Layoffs.fyi. Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in the first months of 2024. Smaller-sized…

10 hours ago
A comprehensive list of 2024 tech layoffs

HoundDog actually looks at the code a developer is writing, using both traditional pattern matching and large language models to find potential issues.

HoundDog.ai helps developers prevent personal information from leaking

The changes are designed to enhance the consumer experience of using Google Pay and make it a more competitive option against other payment methods.

Google Pay will now display card perks, BNPL options and more

Few figures in the tech industry have earned the storied reputation of Vinod Khosla, founder and partner at Khosla Ventures. For over 40 years, he has been at the center…

Vinod Khosla is coming to Disrupt to discuss how AI might change the future

AI has already started replacing voice agents’ jobs. Now, companies are exploring ways to replace the existing computer-generated voice models with synthetic versions of human voices. Truecaller, the widely known…

Truecaller partners with Microsoft to let its AI respond to calls in your own voice

Meta is updating its Ray-Ban smart glasses with new hands-free functionality, the company announced on Wednesday. Most notably, users can now share an image from their smart glasses directly to…

Meta’s Ray-Ban smart glasses now let you share images directly to your Instagram Story

Spotify launched its own font, the company announced on Wednesday. The music streaming service hopes that its new typeface, “Spotify Mix,” will help Spotify distinguish its own unique visual identity. …

Why Spotify is launching its own font, Spotify Mix

In 2008, Marty Kagan, who’d previously worked at Cisco and Akamai, co-founded Cedexis, a (now-Cisco-owned) firm developing observability tech for content delivery networks. Fellow Cisco veteran Hasan Alayli joined Kagan…

Hydrolix seeks to make storing log data faster and cheaper

A dodgy email containing a link that looks “legit” but is actually malicious remains one of the most dangerous, yet successful, tricks in a cybercriminal’s handbook. Now, an AI startup…

Bolster, creator of the CheckPhish phishing tracker, raises $14M led by Microsoft’s M12

If you’ve been looking forward to seeing Boeing’s Starliner capsule carry two astronauts to the International Space Station for the first time, you’ll have to wait a bit longer. The…

Boeing, NASA indefinitely delay crewed Starliner launch

TikTok is the latest tech company to incorporate generative AI into its ads business, as the company announced on Tuesday that it’s launching a new “TikTok Symphony” AI suite for…

TikTok turns to generative AI to boost its ads business

Gone are the days when space and defense were considered fundamentally antithetical to venture investment. Now, the country’s largest venture capital firms are throwing larger portions of their money behind…

Space VC closes $20M Fund II to back frontier tech founders from day zero

These days every company is trying to figure out if their large language models are compliant with whichever rules they deem important, and with legal or regulatory requirements. If you’re…

Patronus AI is off to a magical start as LLM governance tool gains traction

Link-in-bio startup Linktree has crossed 50 million users and is rolling out the beta of its social commerce program.

Linktree surpasses 50M users, rolls out its social commerce program to more creators

For a $5.99 per month, immigrants have a bank account and debit card with fee-free international money transfers and discounted international calling.

Immigrant banking platform Majority secures $20M following 3x revenue growth

When developers have a particular job that AI can solve, it’s not typically as simple as just pointing an LLM at the data. There are other considerations such as cost,…

Unify helps developers find the best LLM for the job

Response time is Aerodome’s immediate value prop for potential clients.

Aerodome is sending drones to the scene of the crime

Granola takes a more collaborative approach to working with AI.

Granola debuts an AI notepad for meetings