Tech Stock IPOs: Investors Double Down on DoorDash, Airbnb, C3.ai

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Speculation regarding a stock market bubble, or at least a bubble specifically within technology stocks, is increasing. It’s also possible that companies like DoorDash, Airbnb, and C3.ai, along with the investment banks involved, could have initially set higher pricing to capitalize on the existing market excitement. These thoughts are difficult to dismiss, particularly considering DoorDash’s initial public offering on Wednesday, where the share price doubled from its final private valuation to $102, and then continued to rise to $175 by the week’s end.

Alternatively, these immediate market reactions may prove insignificant, as the potential for future growth is substantial and these companies are projected to achieve success regardless. Saar Gur shares this perspective with Connie Loizos this week, reflecting on his long-term investment in DoorDash:

Below is a detailed account of the most active week for tech IPOs in recent decades, continuing from last Friday’s report:

DoorDash increases IPO price range prior to significant IPO launch (EC)

The IPO landscape appears strong as Airbnb and C3.ai adjust price targets upward (EC)

Wish aims to become the Amazon for a broader consumer base; will individual investors participate?

DoorDash announces IPO pricing of $102 per share, representing a doubling of its previous private valuation

Airbnb anticipates IPO pricing between $67 and $68

As numerous marketplace unicorns prepare for IPOs, a venture capitalist analyzes relevant data (EC)

DoorDash and C3.ai experience substantial gains in their public market debuts

Strategies for DoorDash and C3.ai to maintain their currently high IPO valuations (EC)

Airbnb’s strong first-day performance concludes an exceptional week for tech IPOs (EC)

Both public and private markets demonstrate increased activity in cloud earnings and valuations (EC)

Introducing Natasha Mascarenhas, the New Author of Startups Weekly

As my time contributing to this newsletter draws to a close, I will be returning to my full-time role within the editorial team at Extra Crunch and other operations at TechCrunch. Starting next week, my colleague Natasha Mascarenhas will be assuming responsibility for this publication.

You will be well-served by this transition. Many of you are likely already familiar with her work, having read her articles and seen her regular insights on Equity. Since joining us earlier this year from Crunchbase News, she has focused her reporting on companies in their early stages and the broader technology landscape of the San Francisco area, particularly within the education technology sector. We have numerous initiatives planned across Equity, Extra Crunch, and other platforms, and she is well-positioned to connect these through her consistent reporting. Be sure to look forward to an exciting 2021, and you can follow her updates on Twitter in the interim.

How to bootstrap to $200m+ in revenue

Alex Wilhelm recently spoke with a startup founder who employed a somewhat unconventional strategy when establishing their SaaS business. Here are the details:

What motivates TechCrunch’s frequent coverage of initial funding events?

Here’s the perspective of Natasha, taken from a recent clarification piece we published in response to discussions on Twitter:

Based on personal experience both as a founder who received TechCrunch coverage for funding and as an author of numerous articles detailing funding rounds, I concur with the sentiment. Securing funding that receives attention is frequently the primary method for demonstrating progress and attracting further interest.

The Klarna founding story

Klarna, a Swedish financial technology company valued at over $10 billion, revolutionized the online shopping experience by introducing innovative payment methods that didn't rely on traditional credit cards. Today, the company faces competition from numerous players, both established and emerging, on a global scale. But how did Klarna come to be? Steve O’Hear recently conducted an extensive and exclusive interview with the company’s founder, Sebastian Siemiatkowski, which has been highly popular among Extra Crunch subscribers this week. Here is a recounting of his account:

The following is a particularly compelling passage as described by Siemiatkowski:

Those Facebook antitrust lawsuits

The United States government appears to have reached a point of concern regarding Facebook’s assertive growth and strategy of acquiring other companies. Following a period of minimal oversight, both the Federal Trade Commission and the attorneys general from 49 states have initiated legal action aimed at dismantling the social media corporation. Numerous analyses of the specifics can be located on TechCrunch and other news platforms.

However, here’s a perspective to keep in mind as coverage of these cases continues throughout the coming year: Facebook proactively anticipated this possibility. During my extensive coverage of the company in its formative stages, it was already articulating a vision of becoming the foundational platform for the internet, much like Microsoft Windows functioned for personal computers. The underlying, often unstated, objective was to achieve substantial scale before regulatory measures were implemented, mirroring the approach taken by Microsoft. Now, Facebook holds a dominant position in the market, supported by a substantial legal team that has been preparing for this eventuality for a considerable time. Setting aside further discussion of the lawsuits themselves or the political context surrounding them… I do not foresee the company being broken up. However, it’s possible that new limitations on future acquisitions, or similar measures, could constrain its potential for expansion. A significant portion of its success over the past ten years has stemmed from strategic acquisitions.

A rather overlooked possibility is that its services will continue to serve as a primary directory for a large segment of the global population. Subject to varying degrees of regulation in different regions and even complete prohibition in some areas—it could still remain a substantial and thriving entity.

Around TechCrunch

The TC Sessions: Space event for 2020 will begin in the coming week.

The complete schedule for TC Sessions: Space 2020 has been released.

Be sure to attend the presentation of university-level research at TC Sessions: Space 2020.

Learn about recent developments from Kayhan Space and Firehawk Aerospace during TC Sessions: Space.

A 25% discount is currently available on Extra Crunch gift subscriptions.

Extra Crunch subscribers can benefit from a partnership offer with Aura, an application designed for mindfulness and improved sleep.

Across the week

TechCrunch

Poll results indicate a more favorable public perception of major technology companies than previously thought.

Even with the challenges presented by the recent health crisis, a positive outlook among small business owners remains.

The Mixtape podcast focuses on efforts to broaden access to and understanding of technology for all individuals.

President Macron discussed the development of a thriving technology sector within Europe during a conversation with Zennström.

Equity Monday covered topics including Airbnb’s pricing strategies, Sequoia’s financial performance, and funding activity in early-stage companies.

Extra Crunch

An analysis of what founders can anticipate during the fundraising process in the current year.

The pandemic is driving significant changes in how organizations allocate resources to technology.

Jai Das of Sapphire Ventures explains the potential for success in the agreement between Salesforce and Slack.

China is closely observing and drawing insights from the United States in the area of augmented and virtual reality development.

An examination of whether 2020 has seen an unprecedented increase in investment rounds for educational technology companies, or if this is merely a perceived trend.

#EquityPod

From Alex:

Greetings and welcome to another episode of Equity, TechCrunch’s podcast dedicated to the world of venture capital (and now available on Twitter!), where we analyze the data behind the latest news.

It’s been quite a week, hasn’t it? Rather than a slowdown as the end of the year approaches, activity remains exceptionally high. We’ve seen both large and smaller funding events, initial public offerings, impressive first-day performances, and much more.

Fortunately, the entire team was present – Chris, Danny, Natasha, and myself. Here’s a summary of what we covered:

• Career Karma secured $10 million in funding, prompting discussion and raising some points of consideration.
• Skyflow obtained $17.5 million to help explain the complexities of various encryption methods to the Equity team.
• Calm received $75 million, a figure that aligned well with previous reports and its track record of fundraising.
• Squire saw its company valuation increase threefold in a new funding round, which included $45 million in equity alongside debt financing.
• We also discussed the significant initial gains for DoorDash and C3.ai following their IPOs, Airbnb’s pricing strategy, and potential upcoming IPOs.
• Finally, we explored the trend of TikTok influencers investing in technology companies, a practice Danny expressed disapproval of.

And with that, we conclude! If you’re not feeling overwhelmed, were you even listening?

Equity is released every Monday at 7:00 a.m. PST and on Thursday afternoons as quickly as possible after recording, so be sure to subscribe via Apple Podcasts, Overcast, Spotify and your preferred podcast platform.