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Mere days after we discussed Coinbase at $77 billion and Stripe at $115 billion in the private markets, those same semi-liquid exchanges have provided a new valuation for the cryptocurrency company. It’s now $100 billion, per Axios’ reporting.
Good thing we argued last week that there could be some merit to Coinbase’s $77 billion secondary market valuation from a particular perspective. We’d look silly today if we’d mocked the $77 billion figure only for it to go up by about a third in just a few days.
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Luckily for us, Axios also got its hands on a few numbers regarding Coinbase’s 2019 and 2020 financial performance, so we can get into all sorts of trouble this morning. We’ll look at the data, which stretches to the end of Q3 2020, and then do some creative extrapolating into Q1 2021 to decide whether Coinbase at $100 billion makes no sense, a little sense or perfect sense.
As always, we’re riffing, not giving investment advice. So read on if you want to noodle on Coinbase with me; its impending direct listing will be one of the year’s most-watched financial events.
We’ll drag Stripe back in at the end. Given that the companies now nearly share private-market valuations, we’d be remiss to not unfairly stack them against one another. Into the breach!
Coinbase @ $100B
Axios’ Dan Primack, a good egg in my experience, got the goods on Coinbase’s historical performance. Summarizing the bits we need, here’s what the crypto exchange got up to recently:
- Coinbase 2019: $530 million in revenues, $30 million in net losses
- Coinbase 2020 Q1-Q3: $691 million in revenues, $141 million in net income
It’s simple to take the 2020 data that we have and extrapolate it into full-year data. Indeed, you get revenues of $921.33 million and net income of $188 million. Compared to its 2019 data, Coinbase would have managed around 74% growth while swinging steeply into the profitable domain.
That’s a killer year. But it’s actually a bit better than we are giving Coinbase credit for. Poking around volume data compiled by Bitcoinity.org, Coinbase had its biggest period of 2020 in terms of bitcoin trading volume in the fourth quarter. Thinking about Coinbase’s 2020 from a trading perspective using the same dataset, it had a great Q1, more staid Qs 2 and 3, and a blockbuster Q4 that ramped to record highs at the end.
As part of its news announced at its live event today, Spotify announced a set of new creator tools and resources, including the expansion of Marquee, the launch of a tool called “Discovery Mode” into beta testing, the opening of the Canvas looping visual feature to all artists, and its plans to expand its Spotify for Artists platform to be available in 25 additional languages.
Marquee, launched in 2020, is a tool that allows artists and their teams to promote their new releases through full-screen, sponsored recommendations to both free and paid subscribers. Spotify says that users who see a Marquee pop-up are twice as likely to save the music.
Now, Marquee will be available as a self-serve buying experience for artists, allowing their teams to book campaigns at any time, as easily as they update their artist profile.
This self-serve feature will launch in the U.S., and this summer will expand outside North America, to the U.K. Ireland, Australia and New Zealand, before rolling out more broadly.
Spotify is also launching a beta of its audience development tool, Discovery Mode, a feature that lets artist teams select the music they want to prioritize for discovery, including through Spotify’s recommendations. During its pilot testing, this feature helped labels achieve higher royalty payments through the expanded discovery, the company claimed.
It will also require zero upfront budget to get started.
Finally, Canvas, the artwork feature that shows looping visuals as the music plays, will also now be available to all artists.
Image Credits: Spotify
Along with the news of Spotify’s global expansion to 85 new markets, Spotify’s dashboard for artists will also expand to include support for 25 more languages.
“From providing new ways for artists to express themselves, to creating more chances to be discovered, to giving artists the ability to pitch their music for playlist consideration, we continue to iterate based on artist feedback, building new ways to surface artists to new fans,” said Spotify’s Head of Marketplace, Charlie Hellman, about the expansions. “We’re seeing greater adoption of our tools by artists and labels of all sizes, and we’ve just scratched the surface of what’s to come,” he added.
Splice, the New York-based, AI-infused, beat-making software service for music producers created by the founder of GroupMe, has managed to sample another $55 million in financing from investors for its wildly popular service.
The github for music producers ranging from Hook N Sling, Mr Hudson, SLY, and Steve Solomon to TechCrunch’s own Megan Rose Dickey, Splice gained a following for its ability to help electronic dance music creators save, share, collaborate and remix music.
The company’s popularity has made it from bedroom djs to the Goldman Sachs boardroom as the financial services giant joined MUSIC, a joint venture between the music executive Matt Pincus and boutique financial services firm, Liontree, in leading the company’s latest $55 million round. The company’s previous investors include USV, True Ventures, DFJ Growth, and Flybridge.
“The music creation process is going through a digital transformation. Artists are flocking to solutions that offer a user-friendly, collaborative, and affordable platform for music creation,” said Stephen Kerns, a VP with Goldman Sachs’ GS Growth, in a statement. “With 4 million users, Splice is at the forefront of this transformation and is beloved by the creator community. We’re thrilled to be partnering with Steve Martocci and his team at Splice.”
Splice’s financing follows an incredibly acquisitive 2020 for the company, which saw it acquiring music technology companies Audiaire and Superpowered.
In addition to the financing, Splice also nabbed Kakul Srivastava, the vice president of Adobe Creative Cloud Experience and Engagement as a director for its board.
The funding news comes on the heels of Splice’s recent acquisitions of music-tech companies Audiaire and Superpowered, creating more ways to improve and inspire the audio and music-making process. Splice is also pleased to announce that Kakul Srivastava has joined the company’s board.
Steve Martocci at TechCrunch Disrupt in 2016. Image Credits: Getty Images
Splice’s beefed up balance sheet comes as new entrants have started vying for a slice of Splice’s music-making market. These are companies like hardware maker Native Instruments, which launched the Sounds.com marketplace last year, and there’s also Arcade by Output that’s pitching a similar service.
Meanwhile Splice continues to invest in new technology to make producers’ lives easier. In November 2019 it unveiled its artificial intelligence product that lets producers match samples from different genres using machine learning techniques to find the matches.
“My job is to keep as many people inspired to create as possible” Splice founder and chief executive, Steve Martocci told TechCrunch.
It’s another win for the serial entrepreneur who famously sold his TechCrunch Disrupt Hackathon chat app Group.Me to Skype for $85 million just a year after launching.
A new market forecast predicts app spending will reach $270 billion by the year 2025, including paid downloads, in-app purchases, and subscriptions. According to data from Sensor Tower, in-app spending will return to pre-pandemic levels of stable growth over the next few years, downloads will continue to grow, and, perhaps most notably, it’s predicting app store spending in non-game apps will overtake mobile game spending by 2024.
This is a big bet, given that, today, consumers spend twice as much on mobile games than on non-games. The firm, however, believes the subscription model now being adopted by a range of mobile apps will cause a shift in the market. By 2024, it expects non-game spending to reach $86 billion compared with $73 billion in game spending. And by 2025, that gap will widen, with non-games reaching $107 billion while mobile games reach $78 billion.
Image Credits: Sensor Tower
Last year, global consumer spending in the top 100 subscription apps was up by 34%, year-over-year, to give you an idea of the current state of the market. But there were already some indications that subscription growth was being impacted by larger apps, like Netflix and Tinder, which found workarounds to in-app purchases.
What Sensor Tower also can’t predict is how the regulatory environment of the next several years will play out across the app stores. Today, companies like Apple and Google require apps to charge customers for subscriptions via Google and Apple’s own payment mechanisms. But new anti-competition laws could be enacted that would allow publishers to market their own subscriptions inside their apps, which then redirect users to their own channels to make those purchases. Such a change would have an outsized impact on app store subscription growth trends, and, therefore, this forecast.
Though the pandemic pushed in-app spending up by 30% year-over-year to a record $111 billion in 2020, the new forecast predicts general in-app spending will return to pre-COVID levels over the next five years. It says gross revenue across both app stores will climb each year with a 19.5% compound annual growth rate (CAGR) to reach $270 billion by 2025. Of that figure, $185 billion will be App Store spending, versus $85 billion on Google Play.
Image Credits: Sensor Tower
The U.S. will grow slightly slower than the rest of the global market, with a CAGR of 17.7% to reach $74 billion by 2025.
European markets will drive growth in app store spending from 2020 through 2025, led by the U.K. This not the equivalent to which markets see the most spending in total, but rather is about where growth is taking place — in other words, opportunity for app makers. By 2025, 11 European countries will pass the $1 billion in consumer spending milestone, to collectively reach $42 billion in consumer spend.
Image Credits: Sensor Tower
Downloads, meanwhile, will continue to grow over the next several years, to reach 230 billion by 2025, the forecast predicts, with Google Play accounting for a majority of that figure, with 187 billion global downloads. In the U.S., however, App Store downloads in 2025 (10.6B) will top those from Google Play (6.3B), the report concludes.
Image Credits: Sensor Tower
Source: https://techcrunch.com/2021/02/22/app-spending-to-reach-270b-by-2025-new-forecast-predicts/
TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.
Our survey of VCs in Oslo and Norway will capture how the country is faring, and what changes are being wrought amongst investors by the coronavirus pandemic.
We’d like to know how Norway’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.
Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey. (Please note, if you have filled the survey out already, there is no need to do it again).
The shortlist of questions will require only brief responses, but the more you can add, the better.
You can fill out the survey here.
Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.
What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?
This survey is part of a broader series of surveys we’re doing to help founders find the right investors.
https://techcrunch.com/extra-crunch/investor-surveys/
For example, here is the recent survey of London.
You are not in Norway, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your country next anyway! And we will use the data for future surveys on vertical topics.
The survey is covering almost every country on in the Union for the Mediterranean, so just look for your country and city on the survey and please participate (if you’re a venture capital investor).
Thank you for participating. If you have questions you can email mike@techcrunch.com
(Please note: Filling out the survey is not a guarantee of inclusion in the final published piece).
