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Recent roars from an investment firm, credited to put Indian startups on the global map in the past decade and a half, are turning local young firms into unicorns at a pace never seen before in the world’s second largest internet market.

Tiger Global has written — or is in late stages of writing — more than 25 checks, spanning from a few million dollars to over $100 million, this year alone. About 10 of its investments have been unveiled so far with the rest still in the pipeline for the coming weeks and months.

The New York-headquartered firm, which recently closed a $6.7 billion fund, last week led investments in social network ShareChat, business messaging platform Gupshup, and investment app Groww, and participated in fintech app CRED’s round, helping all of these startups attain the much sought after unicorn status.

(A report in India speculated that Tiger Global plans to invest $3 billion of its new fund in Indian startups. TechCrunch understands the $3 billion figure is way off the mark.)

Tiger Global also invested in Infra.Market and Innovaccer, two other Indian startups that turned unicorn earlier this year. (India has delivered 10 unicorns this year already, up from seven last year and six in 2019.)

Tiger Global is currently in advanced stages to back epharmacy firm PharmEasy, which also turned into a unicorn last week, fintech firm ClearTax (at possibly $1 billion valuation), crypto exchange CoinSwitch, insurer Plum, B2B marketplace Moglix (at over $1 billion valuation), social firms Kutumb and Koo (at over $100 million valuation, per the CapTable), healthtech firm Pristyn Care, and Reshamandi, according to people familiar with the matter.

No other investment firm has written checks of this magnitude to Indian firms this year, and the frenzy has reached a point where dozens of startup founders are scrambling to get an intro with Tiger Global partners.

Tiger Global’s confidence in young Indian firms isn’t newly found. Its investment in Flipkart in 2009 and Ola in 2012 showed the opportunities and level of risk-appetite the U.S. firm was prepared to operate with in India, at a time when both the firms were struggling to raise money from some Indian investors.

Under its former partner Lee Fixel, the investment firm backed several young firms including online grocer Grofers, logistics startup Delivery, fashion e-commerce Myntra, news aggregator InShorts, electric scooter maker Ather Energy, music streaming service Saavn, fintech Razorpay, and web producer TVF.

A handful of startup founders, on the condition of anonymity, recalled their investments from Tiger Global, which they all said concluded within two to three weeks after the first call from the investment firm.

But the firm slowed down its investment pace when Fixel departed in 2019, and for nearly a year focused largely on backing SaaS startups.

Things have changed in recent quarters and Tiger Global has become more aggressive than ever before, said a venture capitalist, who has invested alongside Tiger Global in a few startups, on the condition of anonymity to be able to speak candidly.

The firm is now also exploring investment opportunities in months-old startups. Reshamandi, for instance, is still in its ideation phase.

The investor quoted above pointed to Infra.Market as another example of Tiger Global’s new strategy. It wrote its first check to Infra.Market in 2019, when the B2B startup was just two years old.

“Tiger then wanted to see if the startup can grow and convince other investors to back them. So in December, Infra.Market raised money at about $250 million valuation. Two months later, Tiger Global closed the new round at $1 billion valuation,” the investor said.

While great for startups, it creates a challenge for some investors, another investor said.

When Tiger Global values a startup at a level that much of the industry can’t match, and tends to not lead the subsequent round, there are very few firms that can invest in the following financing round, the investor said.

On private forums and in recent weeks, Clubhouse, a number of investors have cautioned that the recent optimism shared by some investors could prove challenging to materialize. “Tiger Global has traditionally got very optimistic in India every two to three years. The problem is that when it’s not optimistic, we are supposed to pick the tab,” one investor said.

“Under Scott Shleifer [MD at Tiger Global and pictured above], things may be different,” the investor added. Looking at Tiger Global’s recent activities elsewhere in the world, things sure look consistent — and India is positioned to be a key global playground for the firm — and several others — in the next few years.

India, the world’s third largest startup hub, is poised to produce 100 unicorns in the coming years, analysts at Credit Suisse wrote in a report for clients last month. “India’s corporate landscape is undergoing a radical change due to a remarkable confluence of changes in the funding, regulatory and business environment in the country over the past two decades. An unprecedented pace of new-company formation and innovation in a variety of sectors has meant a surge in the number of highly-valued, as-yet unlisted companies,” they wrote.

“The growth in highly valued companies has been enabled by a range of factors: (1) the natural shortage of risk capital in an economy with low per capita wealth has been addressed by a surge in (mostly foreign) private equity: these flows have exceeded public market transactions in each year of the last decade; (2) increase in teledensity and smartphone and internet penetration. Till 2005 less than 15% of Indians had a phone, versus 85% now; 700 mn-plus people have internet access now due to cheap data and falling smartphone prices (40% penetration now).”

“(3) deep-rooted physical infrastructure changes: nearly all habitations are now connected by all-weather roads compared to only half in 2000, and all households are electrified now vs. just 54% in 2001; (4) financial innovation is accelerating, courtesy the world-leading “India stack”, which has innovative applications like UPI built on a base of universal bank account access, mobiles, and the biometric-ID (Aadhaar), helped by greater data availability; and (5) development of ecosystems in several sectors that now provides a competitive advantage versus global peers; for example in technology (4.5 mn IT professionals) and pharma/biotech (several Indian firms can now afford US$200-300 mn of annual R&D).”

Hello friends, and welcome back to Week in Review!

Last week, I talked about Clubhouse’s slowing user growth. Well, this week news broke that they had been in talks with Twitter for a $4 billion acquisition, so it looks like they’re still pretty desirable. This week, I’m talking about a story I published a couple days ago that highlights pretty much everything that’s wild about the alternative asset world right now.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

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The big thing

If you successfully avoided all mentions of NFTs until now, I congratulate you, because it certainly does seem like the broader NFT market is seeing some major pullback after a very frothy February and March. You’ll still be seeing plenty of late-to-the-game C-list celebrities debuting NFT art in the coming weeks, but a more sober pullback in prices will probably give some of the NFT platforms that are serious about longevity a better chance to focus on the future and find out how they truly matter.

I spent the last couple weeks, chatting with a bunch of people in one particular community — one of the oldest active NFT communities on the web called CryptoPunks. It’s a platform with 10,000 unique 24×24 pixel portraits and they trade at truly wild prices.

This picture sold for a $1.05 million.

I talked to a dozen or so people (including the guy who sold that one ^^) that had spent between tens of thousands and millions of dollars on these pixelated portraits, my goal being to tap into the psyche of what the hell is happening here. The takeaway is that these folks don’t see these assets as any more non-sensical than what’s going on in more traditional “old world” markets like public stock exchanges.

A telling quote from my reporting:

“Obviously this is a very speculative market… but it’s almost more honest than the stock market,” user Max Orgeldinger tells TechCrunch. “Kudos to Elon Musk — and I’m a big Tesla fan — but there are no fundamentals that support that stock price. It’s the same when you look at GameStop. With the whole NFT community, it’s almost more honest because nobody’s getting tricked into thinking there’s some very complicated math that no one can figure out. This is just people making up prices and if you want to pay it, that’s the price and if you don’t want to pay it, that’s not the price.”

Shortly after I published my piece, Christie’s announced that they were auctioning off nine of the CryptoPunks in an auction likely to fetch at least $10 million at current prices. The market surged in the aftermath and many millions worth of volume quickly moved through the marketplace minting more NFT millionaires.

Is this all just absolutely nuts? Sure.

Is it also a poignant picture of where alternative asset investing is at in 2021? You bet.

Read the full thing.

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Other things

Here are the TechCrunch news stories that especially caught my eye this week:

Amazon workers vote down union organization attempt
Amazon is breathing a sigh of relief after workers at their Bessemer, Alabama warehouse opted out of joining a union, lending a crushing defeat to labor activists who hoped that the high-profile moment would lead more Amazon workers to organize. The vote has been challenged, but the margin of victory seems fairly decisive.

Supreme court sides with Google in Oracle case
If any singular event impacted the web the most this week, it was the Supreme Court siding with Google in a very controversial lawsuit by Oracle that could’ve fundamentally shifted the future of software development.

Coinbase is making waves
The Coinbase direct listing is just around the corner and they’re showing off some of their financials. Turns out crypto has been kind of hot lately and they’re raking in the dough, with revenue of $1.8 billion this past quarter.

Apple share more about the future of user tracking
Apple is about to upend the ad-tracking market and they published some more details on what exactly their App Tracking Transparency feature is going to look like. Hint: more user control.

Consumers are spending lots of time in apps
A new report from mobile analytics firm App Annie suggests that we’re dumping more of our time into smartphone apps, with the average users spending 4.2 hours a day doing so, a 30 percent increase over two years.

Sonos perfects the bluetooth speaker
I’m a bit of an audio lover, which made my colleague Darrell’s review of the new Sonos Roam bluetooth speaker a must-read for me. He’s pretty psyched about it, even though it comes in at the higher-end of pricing for these devices, still I’m looking forward to hearing one with my own ears.

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Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:
The StockX EC-1
“StockX is a unique company at the nexus of two radical transitions that isn’t just redefining markets, but our culture as well. E-commerce upended markets, diminishing the physical experience by intermediating and aggregating buyers and sellers through digital platforms. At the same time, the internet created rapid new communication channels, allowing euphoria and desire to ricochet across society in a matter of seconds. In a world of plenty, some things are rare, and the hype around that rarity has never been greater. Together, these two trends demanded a stock market of hype, an opportunity that StockX has aggressively pursued.”

Building the right team for a billion-dollar startup
“I would really encourage you to take some time to think about what kind of company you want to make first before you go out and start interviewing people. So that really is going to be about understanding and defining your culture. And then the second thing I’d be thinking about when you’re scaling from, you know, five people up to, you know, 50 and beyond is that managers really are the key to your success as a company. It’s hard to overstate how important managers, great managers, are to the success of your company.

So you want to raise a Series A
“More companies will raise seed rounds than Series A rounds, simply due to the fact that many startups fail, and venture only makes sense for a small fraction of businesses out there. Every check is a new cycle of convincing and proving that you, as a startup, will have venture-scale returns. Moore explained that startups looking to move to their next round need to explain to investors why now is their moment.”

Until next week,
Lucas M.

And again, if you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. 

Ready? Let’s talk money, startups and spicy IPO rumors.

The startup world could be in for a busy summer.

Today the economy is improving. Unemployment is falling, while interest rates are staying low. There’s lots of new capital on offer, and some expectation that we’ll get back to Q1’s IPO wave in Q3. Throw in widespread vaccinations and a return to something akin to our old lives, and the world of business could be ready to accelerate further in short order. 

There are caveats, of course. Lots of folks are being left behind in the recovery. And vaccine hesitancy is as lethally stupid as it is surprisingly common. But anticipated summer economic conditions, strong markets and a general belief that the digital transformation’s acceleration will continue point to a coming hot(ter) period for tech. 

That is good news for startups.

We’re already starting to see anticipatory reporting on the matter. Wired’s recent piece on venture capitalists telling startups to invest rapidly is worth reading. I’ll back it up by saying that it seems that most startups that I am chatting with every week had a solid-as-heck first quarter and aren’t worried about the second. If I am not accidentally speaking with only founders who are doing well and somehow missing legion startups that are struggling, it seems to be a pretty darn good time to build a tech company. 

Plaid’s round from earlier this week underscores what I’m talking about. The API-powered consumer fintech company’s CEO Zach Perret told TechCrunch how much the digitization of the world of financial services had accelerated in the last year. Yep. Startups that would have done well in more normal times are often seeing their market move in their direction. Often rapidly. That’s why Plaid is worth north of $13 billion today, nearly triple what it was worth in early 2020.

For the startups doing well, there’s ample cash on offer. Ramp’s latest round, a two-in-one, makes that point plain. So, if the broader economy and its technological sector do accelerate, expect wallets to open even further. As the temperature heats up, so too could the business climate.

I mean, how else can you explain the Clubhouse news? Or the Topps news? TechCrunch had to cover the middle ground between baseball cards, NFTs and candy, for the love of all that is holy.

Next week The Exchange is digging into Q1 2021 venture capital numbers from around the world. We’ll see soon enough how big the start to the year was, but we have a guess.

Kudo, Coinbase and Canva

Sticking to our theme of growth and a hot and warming climate for tech startups, a few more data points from the last week.

I caught up with the CEO of Kudo this week, a few days after his company announced a $21 million Series A round of funding. I covered the translation-as-a-service company last year when it raised a seed round. Per its chief executive Fardad Zabetian, the company had 14 employees last March. It now has 150 and has more than 50 open positions. That’s not the sort of growth you see off of merely a few capital raises. That’s growth. 

Coinbase’s monster quarter highlights how some technology work from the past decade is maturing in a lucrative manner. The company’s epic revenue growth and nearly hilarious profitability are going to make its impending direct listing an even bigger event than I had expected. Get ready for that on the 14th. (More from the original Coinbase listing here.)

And then there’s Canva, which just repriced itself through a $71 million secondary transaction. The cloud design company is now worth $15 billion, up from around $6 billion last June, per Crunchbase data. Even more, the company announced a few growth metrics worth sharing:

• That Canva has crossed the $500 million annualized revenue mark 
• That Canva grew 130% in the last year, and was profitable (though we don’t know of what sort)
• That Canva now has 55 million monthly active users

And it’s not going public. Yes, you can laugh. I got the company to ask its CEO Melanie Perkins why that’s the case, and here’s what we got back:

There’s no rush for us. We’re profitable and we’re very fortunate that we can still find investors that align to our vision and values. I often say that we’re just one percent of the way there with Canva. We have a huge vision to empower every team to achieve its goals through visual communication. We’ve still got a whole lot more to achieve and so no immediate plans for any public listing- there’s simply no rush for us right now.

Let me just say that you don’t only have to go public when there’s a rush to do so! You can do so merely to make us, the reporting class, excited about going to work, as there are new numbers to read!

Various and sundry

I was off for a bit of this week to recharge, so some news and notes you might have expected in the above missive may be missing. Rest assured that The Exchange is going to get bigger and better and more number-y and full of jokes when I get back. Someone is joining the little team, so we have big plans.

Hugs, 

Alex

 

“Most of the startups I give advice to about how to raise venture capital shouldn’t be raising venture capital,” an investor recently told me. While the idea that every startup isn’t venture-backable might run counter to the narrative to the barrage of funding news each week, I think it’s important to double click on the topic. Plus, it keeps coming up, off the record, on phone calls with investors!

As venture grows as an asset class, the access to capital has broadened from a dollar perspective, but I do think the difficulties that remain is an important dynamic to call out (and something no one talks about during an upmarket). Beyond the fact that only a small subset of startups truly can pull off scaling to the point of venture-level returns, it is still hard for even qualified founders to raise venture capital. Venture capital is still a heavily white, male-led industry, and as a result contains bias that disproportionately limits access for underrepresented founders.

• So, you want to raise a Series A
• Understanding how fundraising terms can affect early-stage startups
• Four strategies for getting attention from investors
• Investors discuss alt-financing and the role of venture capital
• Building the right team for a billion-dollar startup

Eniac founding partner Hadley Harris applied this dynamic to the current market boom in a recent tweet: A lot of people are misunderstanding this VC funding market. More money is flowing into the market but the increase is not evenly distributed. The market believes winners can be much bigger but not necessary that there will be more winners. It’s still very hard for most to raise a VC.

To say otherwise is to gaslight the early-stage or first-time founders that have spent months and months trying to raise their first institutional dollars and failed. So ask yourself: Seed rounds have indeed grown bigger, but for who? What comes at the cost of the $30 million seed round? Are the founders that can raise overnight from diverse backgrounds? Are investors backing first-time founders as much as they are backing second- or third-time entrepreneurs?

The answers might leave you debating about the boundaries, and limitations, of the upcoming hot-deal summer.

A few weeks ago, I wrote about the disconnect between due diligence and fundraising right now. Now we’ve moved onto the disconnect, and bifurcation, within first-check fundraising itself. There is so much more we can get into about the fallacy of “democratization” in venture capital, from who gets to start a rolling fund to the lack of assurance within equity crowdfunding campaigns.

We’ll get through it all together, and in the meantime make sure to follow me on Twitter @nmasc_ for more hot takes throughout the week.

In the rest of this newsletter, we will talk about fintech politics, the Affirm model with a twist, and sneakers-as-a-service.

Ex-Coinbase talks politics

The inimitable Mary Ann Azevedo has been dominating the fintech beat for us, covering everything from the latest Uruguayan unicorn to Acorn’s scoop of a debt management startup. But the story I want to focus on this week is her interview with ex-Coinbase counsel & former Treasury official, Brian Brooks.

Here’s what to know: Coinbase CEO Brian Armstrong notoriously released a memo last year denouncing political activism at work, calling it a distraction. In this exclusive interview, Brooks spoke about how blockchain is the answer to financial inclusion, and argued why politics needs to be taken out of tech.

We don’t want bank CEOs making those decisions for us as a society, in terms of who they choose to lend money to, or not. We need to take the politics out of tech. All of us do a lot of different things, and we have no idea on a given day, whether what we’re doing is popular with our neighbors or popular with our bank president or not. I don’t want the fact that I sometimes feel Republican to be a reason why my local bank president can deny me a mortgage.

• Coinbase’s monster Q1 in context
• Crypto trading on Robinhood spiked to 9.5M customers in first quarter
• The Cult of CryptoPunks

The Affirm for X model

While Affirm may have popularized the “buy now, pay later” model, the consumer-friendly business strategy still has room to be niched down into specific subsectors. I ran into one such startup when covering Plaid’s inaugural cohort of startups in its accelerator program.

Here’s what to know: Walnut is a new seed-stage startup that is a point-of-sale loan company with a healthcare twist. Unlike Affirm, it doesn’t make money off of fees charged to consumers.

• Walnut wants to crack open flexibility for healthcare bills
• Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration
• As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings

Everything you could ever want to know about StockX

In our latest EC-1, reporter Rae Witte has covered a startup that leads one of the most complex and culturally relevant marketplaces in the world: sneakers.

Here’s what to know: StockX, in her words, has built a stock market of hype, and her series goes into its origin story, authentication processes and a market map.

• How StockX became the stock market of hype
• Authentication and StockX’s global arms race against fraudsters
• Where StockX fits in the business of sneakers
• The consequences of scaling up sneaker culture

Around TechCrunch

Found, a new podcast joining the TechCrunch network, has officially launched! The Equity team got a behind-the-scenes look at what triggered the new podcast, the first guests and goals of the show. Make sure to tune into the first episode.

Also, if you run into any paywalls while browsing today’s newsletter, make sure to use discount code STARTUPSWEEKLY to get 25% off an annual or two-year Extra Crunch subscription.

Across the week

Seen on TechCrunch

Okta launches a new free developer plan

New Jersey announces $10M seed fund aimed at Black and Latinx founders

Education nonprofit Edraak ignored a student data leak for two months

6 VCs talk the future of Austin’s exploding startup ecosystem

Dear Sophie: Help! My H-1B wasn’t chosen!

Seen on Extra Crunch

5 machine learning essentials nontechnical leaders need to understand

How we dodged risks and raised millions for our open-source machine language startup

Giving EV batteries a second life for sustainability and profit

And that’s a wrap! Thanks for making it this far, and now I dare you to go make the most out of the rest of your day. And by make the most, I mean listen to Taylor’s Version.

Warmly,

N