Weekly Update #174: Another flat round, social commerce, and the anti-VC
Nov 22nd, 2016
What's that? Another flat round?
The popular late-stage fundraising news of the last few days was the social news and entertainment company BuzzFeed's $200 million Series G funding round, covered by Business Insider, Fortune, Recode, and TechCrunch, among others. For those who prefer bullet points:
- BuzzFeed raised another $200 million from NBCUniversal, doubling the latter's investment
- The round valued BuzzFeed at $1.5 billion (pre-money), the same valuation it had last year
- The round gives Series G investors a guarantee to be "made whole" if the company goes public at a price below what they paid, with this protection declining incrementally after two years and three months (see EquityZen's blog post "Of Ratchets and Unicorn Valuations" about this term that has become more common in later-stage financings)
- Insiders at BuzzFeed say [the ratchet] won’t matter, since the company wouldn’t consider going public if it felt it couldn’t go well above its current valuation, Recode reports
- Also per Recode, Buzzfeed is currently looking at 2018 for a possible IPO, according to a source
Though much of the above-referenced articles focus on the valuation and terms of the round, I'm excited to see how Buzzfeed expands its video offerings - see Tasty, which has changed the way food recipes are presented (not recommended viewing when hungry!) - and their apparent plans for "social commerce". See Here's how BuzzFeed plans to use NBCUniversal's $200 million and BuzzFeed wants to sell you stuff for more.
In other news...
I attended the TNW NYC conference in Brooklyn, NY last week. Besides the above photo op with 500 Startups founder Dave McClure (who Wired just dubbed the "anti-VC"), other takeaways included:
- Reddit has company values (two of which are "Remember The Human" and "Everyone Does the Dishes")
- Birchbox's co-founder thinks optimism is a subcategory of resilience
- Duolingo tried giving customers what they wanted - video call functionality with native speakers - which didn't work, and switched to giving customers what they needed - chatbots, to learn languages without the social anxiety
- 2017 IPO Outlook: Which companies will take the plunge? (PrivCo)
- How do investors find value amid the crowd of private companies? (EY)
Kaylock Yam, CAIA | Distribution Lead | EquityZen