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Google today announced that BeyondCorp Enterprise, the zero trust security platform modeled after how Google itself keeps its network safe without relying on a VPN, is now generally available. BeyondCorp Enterprise builds out Google’s existing BeyondCorp Remote Access offering with additional enterprise features. Google describes it as “a zero trust solution that enables secure access with integrated threat and data protection.”
Over the course of the last few years, Google — and especially its Cloud unit — has evangelized the zero trust model and built a large partner network around this idea. Those partners include the likes of Check Point, Citrix, CrowdStrike, Symantec and VMWare.
As part of BeyondCorp Enterprise, businesses get an end-to-end zero trust solution that includes everything from DDoS protection and phishing-resistant authentication, to the new security features in the Chrome browser and the core continuous authorization features that protect every interaction between users and resources protected by BeyondCorp.
“The rapid move to the cloud and remote work are creating dynamic work environments that promise to drive new levels of productivity and innovation. But they have also opened the door to a host of new security concerns and sparked a significant increase in cyberattacks,” said Fermin Serna, chief information security officer at Citrix. “To defend against them, enterprises must take an intelligent approach to workspace security that protects employees without getting in the way of their experience following the zero trust model.”
TikTok has a vaping problem. Although a 2019 U.S. law made it illegal to sell or market e-cigarettes to anyone under the age of 21, TikTok videos featuring top brands of disposable e-cigarettes and vapes for sale have been relatively easy to find on the app. These videos, set to popular and upbeat music, clearly target a teenage customer base with offers of now-unauthorized cartridge flavors like fruit and mint in the form of a disposable vape. Some sellers even promote their “discreet” packaging services, where the vapes they ship to customers can be hidden from parents’ prying eyes by being placed under the package’s stuffing or tucked inside other products, like makeup bags or fuzzy slippers.
Interest in flavored, disposable vapes that appeal to teens and young adults, in particular, has been growing in the wake of the FDA’s Juul crackdown.
In February 2020, the FDA first began to take enforcement action against illegally marketed e-cigarette devices, including those offering flavors besides tobacco or menthol, as well as those targeted towards minors — an action that was designed to target Juul.
As a result, disposable vapes like Puff Bar were adopted by some young people who were still in search of flavors like bubblegum, peach, strawberry and others. These cheaper disposables were easy to find, and continued to be available at convenience stores and gas stations.
But they’re also all over TikTok, ready to be shipped with anyone with a way to pay.
What’s more, when this content is reported to TikTok, it’s not always taken down.
TechCrunch found vape sellers marketing on TikTok who have been using the app to communicate with customers through both videos and comments. They also direct viewers to what appear to be illegally operating websites. Their TikTok videos often show off the seller’s current inventory of vapes, including disposables like Puff Bar in teen-friendly flavors.
Essentially, the sellers are using TikTok as a way to create vape advertisements they don’t have to pay for that are capable of reaching young consumers — an audience whose interest in vaping hasn’t necessarily declined because of the FDA’s action.
According to nonprofit tobacco control organization Truth Initiative’s latest study, use of Juul decreased between 2019 and 2020, but it remains the most popular e-cigarette brand among 10th and 12th graders who were current vapers at 41%. The report also found that disposable products such as Puff Bar (8%) and Smok (13.1%) have gained during this time.
“Taken together, the 2020 National Youth Tobacco Survey (NYTS) and the new e-cigarette sales data report illustrate how the current federal policy enabled youth to quickly migrate to menthol e-cigarettes (especially Juul menthol pods) when mint-flavored products were removed from the marketplace, and for inexpensive, flavored disposable e-cigarettes such as Puff Bar to soar in popularity,” Truth stated in September 2020.
“With kid magnet names like cotton candy and banana ice, the market share of disposable products nearly doubled in just 10 months from August 2019 to May 2020,” it said.
The scale of the problem on TikTok is also significant.
Today, U.S. teens account for an estimated 32.5% of TikTok’s U.S. active users, according to third-party estimates published by Statista. The company has around 100 million monthly active users in the U.S., it said last year.
Meanwhile, videos tagged with popular vape and e-cigarette brands and keywords have racked up hundreds of millions of views.
For example, the hashtag for leading vape brand Juul (#juul) has 623.9 million views on TikTok, as of the time of writing.
Puff Bar, the maker of a single-use vaping product with Chinese origins, has 449.8 million views for the hashtag #puffbar. Other brands have some traction, as well. #NJOY has 55.3 million views, #smok has 40.1 million views, and British Tobacco’s #Vuse has 5 million views.
These are just the views associated with the hashtag itself. For every search, there are multiple variations. For instance, #puffbars, #puffbarplus and #puffbardealer have 66.8 million views, 9.6 million views and 8.9 million views, respectively. Tags like #juulgang (590.4 million views) have become popular enough that anti-vaping content creators have adopted them as a means of counter-programming against vaping content.
These trends are particularly concerning given the large, young demographic that uses TikTok. A third of its U.S. users may be 14 or under, in fact.
In the U.S. App Store, TikTok is rated for ages 12 and up and on Google Play, its content rating is “Teen.” But while TikTok has modified the default privacy settings for young people’s accounts and has been quick to block other controversial hashtags in the past (like those around U.S. election conspiracies), it has allowed vaping-related content to remain easy to find.
In addition to the popular vaping hashtags prevalent on TikTok, we uncovered numerous vape sellers operating under obvious account names such as “@puffsonthelow,” “@PuffUniverse” and “@Puffbarcafe,” for example. Their pages were filled with vape videos boldly marketing their current selections, hashtagged with vape-related terms like #puffbarchallenge, #puffplus, #vapetricks and others.
In some cases, we found vape sellers had even tagged their videos with #kids and other trending tags.
Knowing that their target market is often teenage vapers, many videos depicted how the seller could package the vape inside another product or hide it in the stuffing so parents wouldn’t find out. We saw videos of vapes packaged underneath candy, inside makeup bags, inside socks, underneath other lager products, and more.
Through links published to the account’s profile or referenced in the videos, TikTok users are redirected to the sellers’ websites or even Discord channels where they would only sometimes be presented with an age verification pop-up.
Often, they could just add items to a basket and check out. Many sellers also directed their customers to pay using PayPal, Venmo and/or Cash App, instead of accepting standard credit card payments.
None of this is legal, according to the Campaign for Tobacco Free Kids, a leading American nonprofit focused on reducing tobacco consumption, particularly among youth.
“It’s illegal to market these products or to engage in marketing that appeals directly to anybody under the age of 21,” Matt Myers, the president of the Campaign for Tobacco Free Kids, told TechCrunch. “And it’s illegal to actually conduct a sales transaction without age verification.”
Image Credits: TikTok screenshot
Plus, he adds, clicking a box on a website that says “I’m over 21,” does not qualify as a legal age verification for making these sales.
The FDA hasn’t issued specific guidance around online retail, but the law is clear that checking IDs is required to ensure retailers aren’t selling to underage users. That’s not happening with a pop-up box, and often there’s no box at all.
In addition, the FDA reminded TechCrunch that Congress recently established new limits on the mailing and delivery of e-cigarettes and other tobacco products through the United States Postal Service and through other carriers, which should limit access to these sorts of products through online retail purchases.
Myers, however, points out that the current FDA guidelines have made enforcement of this sort of “social” vape marketing more difficult than necessary.
“The images you’re seeing, the use of influencers, and the kinds of offers you’re seeing are governed by a federal standard by the FDA, which is very broad and very general,” Myers says. “The FDA’s failure to articulate clear, specific guidelines means that everyone is in a constant what I call ‘whack-a-mole.'”
Enforcement, then, often depends on the FDA stepping in, which Myers says happens “on a very sporadic basis.”
“In many respects, the behaviors, the actions and the things you’re seeing do violate the law. But the mechanisms for implementing it that were put in place under this past administration are woefully weak and inadequate,” he says.
Image Credits: screenshots of TikTok
Another complicating factor is that public health groups — like the Campaign for Tobacco Free Kids, for instance — don’t have a relationship with TikTok, as they do with other social networks.
Over the last couple of years, over 100 public health groups came together to ask leading social networks like Facebook, Instagram, Twitter and Snapchat to clamp down on tobacco-related content and the use of influencers in marketing. As a result of these efforts, Facebook and Instagram implemented new rules to prohibit social media influencers from promoting tobacco-related products and developed algorithms to pick up on that sort of content.
Overall, the health organizations have reported seeing a reduction in tobacco and vape content on top social platforms, but these efforts have not yet included TikTok.
The Campaign for Tobacco Free Kids has not given TikTok a comprehensive review, Myers admits, due to the app still being relatively new. But from what the organization has seen so far, TikTok is of growing concern.
“We’ve seen some of the most egregious marketing, use of influencers, direct offers of sale to young people [which] appear to be gravitating over to TikTok,” Myers says. “And we don’t see any evidence that TikTok has actually done anything.”
TikTok can’t claim ignorance of the problem, either.
Image Credits: TikTok screenshot
When a vape seller who unabashedly advertised “no ID check” was reported to TikTok through its built-in reporting mechanism, TikTok’s content moderation team said the content didn’t violate its guidelines. This same response was given when other vape sellers were reported, as well. (See below.)
TikTok claims this shouldn’t be happening. The company told us that it will remove accounts dedicated to posting vaping or e-cigarette content as soon as it becomes aware of them, and will reset account bios that link to off-platform tobacco or vaping sites.
It also says its Community Guidelines prohibit content that suggests, depicts, imitates, or promotes the possession or consumption of tobacco by a minor, and content that offers instruction targeting minors on how to buy, sell, or trade tobacco.
Image Credits: screenshots of TikTok reports
Reached for comment over whether it was aware of the problems on TikTok, an FDA spokesperson said it does not discuss specific compliance and enforcement activities.
However, an FDA spokesperson said the agency will closely monitor retailer, manufacturer, importer, and distributor compliance with federal tobacco laws and regulations and take corrective action when violations occur. In addition, the FDA said it conducts routine monitoring and surveillance of tobacco labeling, advertising and other promotional activities, including activities on the internet.
What’s been making matters more confusing is that the FDA has been accepting premarket applications for flavored vape devices, but has so far refused to list which companies — Puff Bar or otherwise — may have filed for these. That means health organizations don’t know which products the FDA has under review.
However, the agency told TechCrunch that regardless of whether a premarket application has been submitted, it’s enforcing lack of marketing authorization for any product where the manufacturer “is not taking adequate measures to prevent youth access to these products.”
That statement would then include these online Puff Bar retailers and their TikTok marketing efforts.
The FDA added that it has taken action against Puff Bar, specifically, in recent days.
It sent a warning letter to Cool Clouds Distribution, Inc. d/b/a Puff Bar, last July, notifying the company that it was marketing new tobacco products that lacked marketing authorization and that such products, as a result, were adulterated and misbranded.
Earlier this month, as part of an ongoing joint operation with the FDA, U.S. Customs and Border Protection seized 33,681 units of e-cigarettes, which included disposable flavored e-cigarette cartridges resembling the Puff Bar brand, including Puff XXL and Puff Flow, we’re told.
TikTok confirmed the activity we’re documenting is in violation of its guidelines and policies, but could not explain why there’s been such a disconnect between that policy and its enforcement actions.
“We are committed to the safety and well-being of our TikTok community, and we strictly prohibit content that depicts or promotes the possession or consumption of tobacco and drugs by minors,” a TikTok spokesperson told TechCrunch. “We will remove accounts that are identified as being dedicated to promoting vaping, and we do not allow ads for vaping products.”
Source: https://techcrunch.com/2021/01/26/tiktok-is-being-used-by-vape-sellers-marketing-to-teens/
One big theme in tech right now is the rise of services to help us keep working through lockdowns, office closures, and other Covid-19 restrictions. The “future of work” — cloud services, communications, productivity apps — has become “the way we work now.” And companies that have identified ways to help with this are seeing a boom.
Today comes news from a startup that has been a part of that trend: Calendly, a popular cloud-based service that people use to set up and confirm meeting times with others, has closed an investment of $350 million from OpenView Venture Partners and Iconiq.
The funding round includes both primary and secondary money (slightly more of the latter than the former, from what I understand) and values the Atlanta-based startup at over $3 billion.
Not bad for a company that before now had raised just $550,000, including the life savings of the founder and CEO, Tope Awotona, to initially get off the ground.
Calendly is a freemium software-as-a-service, built around what is essentially a very simple piece of functionality.
It’s a platform that provides a quick way to manage open spaces in your calendar for people to book appointments with you in those spaces, which then also books out the time in calendars like Google’s or Microsoft Outlook — with a growing number of tools to enhance that experience, including the ability to pay for a service in the event that your appointment is not a business meeting but, say, a yoga class. Pricing ranges from free (one calendar/one user/one event) to premium ($8/month) and pro ($12/month) for more calendars, events, integrations and features, with bigger packages for enterprises also available.
Its growth, meanwhile, has to date been based mostly around a very organic strategy: Calendly invites become links to Calendly itself, so people who use it and like it can (and do) start to use it, too.
The wide range of its use cases, and the virality of that growth strategy, have been winners. Calendly is already profitable, and it has been for years. And more recently, it has seen a boost, specifically in the last twelve months, as new Calendly users have emerged, as a result of how we are living.
We may not be doing more traditional “business meetings” per week, but the number of meetings we now need to set up, has gone up.
All of the serendipitous and impromptu encounters we used to have around an office, or a neighborhood coffee shop, or the park? Those are now scheduled. Teachers and students meeting for a remote lesson? Those also need invitations for online meetings.
And so do sessions with therapists, virtual dinner parties, and even (where they can still happen) in-person meetings, which are often now happening with more timed precision and more record-keeping, to keep social distancing and potential contact tracing in better order.
Currently, some 10 million of us are using Calendly for all of this on a monthly basis, with that number growing 1,180% last year. The army of business users from companies like Twilio, Zoom, and UCSF has been joined by teachers, contractors, entrepreneurs, and freelancers, the company says.
The company last year made about $70 million annually in subscription revenues from its SaaS-based business model and seems confident that its aggregated revenues will not long from now get to $1 billion.
So while the secondary funding is going towards giving liquidity to existing investors and early employees, Awotona said the plan will be to use the primary capital to invest in the company’s business.
That will include building out its platform with more tools and integrations — it started with and still has a substantial R&D operation in Kiev, Ukraine — expanding its operations with more talent (it currently has around 200 employees and plans to double headcount), further business development and more.
Two notable moves on that front are also being announced with the funding: Jeff Diana is coming on as chief people officer with a mission to double the company’s employee base. And Patrick Moran — formerly of Quip and New Relic — is joing as Calendly’s first chief revenue officer. Notably, both are based in San Francisco — not Atlanta.
That focus for building in San Francisco is already a big change for Calendly. The startup, which is going on eight years old, has been somewhat off the radar for years.
That is in part due to the fact that it raised very little money up to now (just $550,000 from a handful of investors that include OpenView, Atlanta Ventures, IncWell and Greenspring Associates).
It’s also based in Atlanta, an increasingly notable city for technology startups and other companies but more often than not short on being credited for its heft in that department (SalesLoft, Amex-acquired Kabbage, OneTrust, Bakkt, and many others are based there, with others like Mailchimp also not too far away).
And perhaps most of all, proactively courting publicity did not appear to be part of Calendly’s growth playbook.
In fact, Calendly might have closed this big round quietly and continued to get on with business, were it not for a short Tweet last autumn that signaled the company raising money and shaping up to be a quiet giant.
“The company’s capital efficiency and what @TopeAwotona has built deserve way more credit than they get,” it read. “Perhaps this will start to change that recognition.”
After that short note on Twitter — flagged on TechCrunch’s internal message board — I made a guess at Awotona’s email, sent a note introducing myself, and waited to see if I would get a reply.
I eventually did get a response, in the form of a short note agreeing to chat, with a Calendly link (naturally) to choose a time.
(Thanks, unnamed TC writer, for never writing about Calendly when Tope originally pitched you years ago: you may have whet his appetite to respond to me.)
In that first chat over Zoom, Awotona was nothing short of wary.
After years of little or no attention, he was getting cold-contacted by me and it seems others, all of us suddenly interested in him and his company.
“It’s been the bane of my life,” he said to me with a laugh about the calls he’s been getting.
Part of me thinks it’s because it can be hard and distracting to balance responding to people, but it’s also because he works hard, and has always worked hard, so doesn’t understand what the new fuss is about.
A lot of those calls have been from would-be investors.
“It’s been exorbitant, the amount of interest Calendly has been getting, from backers of all shapes and sizes,” Blake Bartlett, a partner at OpenView, said to me in an interview.
From what I understand, it’s had inbound interest from a number of strategic tech companies, as well as a long list of financial investors. That process eventually whittled down to just two backers, OpenView and Iconiq.
From Lagos to fixing cash registers
Yet even putting the rumors of the funding to one side, Calendly and Awotona himself have been a remarkable story up to now, one that champions immigrants as well as startup grit.
Tope comes from Lagos, Nigeria, part of a large, middle class household. His mother had been the chief pharmacist for the Nigerian Central Bank, his father worked for Unilever.
The family may have been comfortable, but growing up in Lagos, a city riven by economic disparity and crime, brought its share of tragedies. When he was 12, Awotona’s father was murdered in front of him during a carjacking. The family moved to the U.S. some time after that, and since then his mother has also passed away.
A bright student who actually finished high school at 15, Awotona cut his teeth in the world of business first by studying it — his major at the University of Georgia was management information systems — and then working in it, with jobs after college including periods at IBM and EMC.
But it seems Awotona was also an entrepreneur at heart — if one that initially was not prepared for the steps he needed to take to get something off the ground.
He told me a story about what he describes as his “first foray into business” at age 18, which involved devising and patenting a new feature for cash registers, so that they could use optical character recognition recognize which bills and change were being used for, and dispense the right amount a customer might need in return after paying.
At the time, he was working at a pharmacy while studying and saw how often the change in the cash registers didn’t add up correctly, and his was his idea for how to fix it.
He cold-contacted the leading cash register company at the time, NCR, with his idea. NCR was interested, offering to send him up to Ohio, where it was headquartered then, to pitch the idea to the company directly, and maybe sell the patent in the process. Awotona, however, froze.
“I was blown away,” he said, but also too surprised at how quickly things escalated. He turned down the offer, and ultimately let his patent application lapse. (Computer-vision-based scanning systems and automatic dispensers are, of course, a basic part nowadays of self-checkout systems, for those times when people pay in cash.)
There were several other entrepreneurial attempts, none particularly successful and at times quite frustrating because of the grunt work involved just to speak to people, before his businesses themselves could even be considered.
Eventually, it was the grunt work that then started to catch Awotona’s attention.
“What led me to create a scheduling product” — Awotona said, clear not to describe it as a calendaring service — “was my personal need. At the time wasn’t looking to start a business. I just was trying to schedule a meeting, but it took way too many emails to get it done, and I became frustrated.
“I decided that I was going to look for scheduling products that existed on the market that I could sign up for,” he continued, “but the problem I was facing at the time was I was trying to arrange a meeting with, you know, 10 or 20 people. I was just looking for an easy way for us to easily share our availability and, you know, easily find a time that works for everybody.”
He said he couldn’t really see anything that worked the way he wanted — the products either needed you to commit to a subscription right away (Calendly is freemium) or were geared at specific verticals such as beauty salons. All that eventually led to a recognition, he said, “that there was a big opportunity to solve that problem.”
The building of the startup was partly done with engineers in Kiev — a drama in itself that pivoted at times on the political situation at times in Ukraine (you can read a great unfolding of that story here).
Awotona says that he admired the new guard of cloud-based services like Dropbox and decided that he wanted Calendly to be built using “the Dropbox approach” — something that could be adopted and adapted by different kinds of users and usages.
Simplicity in the frontend, strategy at the backend
On the surface, there is a simplicity to the company’s product: it’s basically about finding a time for two parties to meet. Awotona notes that behind the scenes the scheduling help Calendly provides is the key to what it might develop next.
For example, there are now tools to help people prepare for meetings — specifically features like being able to, say, pay for something that’s been scheduled on Calendly in order to register. A future focus could well be more tools for following up on those meetings, and more ways to help people plan recurring individual or group events.
One area where it seems Calendly does not want to dabble are those meetings themselves — that is, hosting meetings and videoconferencing itself.
“What you don’t want is to start a world war three with Zoom,” Awotona joked. (In addition to becoming the very verb-ified definition of video conferencing, Zoom is also a customer of Calendly’s.)
“We really see ourselves as a leading orchestration platform. What that means is that we really want to remain extensible and flexible. We want our users to bring their own best in class products,” he said. “We think about this in an agnostic way.”
But in a technology world that usually defaults back to the power of platforms, that position is not without its challenges.
“Calendly has a vision increasingly to be a central part of the meeting life cycle. What happens before, during and after the meeting. Historically, the obvious was before the meeting, but now it’s looking at integrations, automations and other things, so that it all magically happens. But moving into the rest of the lifecycle is a lot of opportunity but also many players,” admitted Bartlett, with others including older startups like X.ai and Doodle (owned by Swiss-based Tamedia) or newer entrants like Undock but also biggies like Google and Microsoft.
“It will be an interesting task to see where there are opportunities to partner or build or buy to build out its competitive position.”
You’ll notice that throughout this story I didn’t refer to Awotona’s position as a black founder — still very much a rarity among startups, and especially those valued at over $1 billion.
That is partly because in my conversations with him, it emerged that he saw it as just another detail. Still, it is one that is brought up a lot, he said, and so he understands it is important for others.
“I don’t spend a lot of time thinking about being black or not black,” he said. “It doesn’t change how I approach or built Calendly. I’m not incredibly conscious of my race or color, except for the last few years through he growth of Calendly. I find that more people approach me as a black tech founder, and that there is young black people who are inspired by the story.”
That is something he hopes to build on in the near future, including in his home country.
Pending pandemic chaos, he has plans to try to visit Nigeria later this year and to get more involved in the ecosystem in that country, I’m guessing as a mentor if not more.
“I just know the country that produced me,” he said. “There are a million Topes in Nigeria. The difference for me was my parents. But I’m not a diamond in the rough, and I want to get involved in some way to help with that full potential.”
GitLab, the increasingly popular DevOps platform, today announced a major update to its subscription model. The company is doing away with its $4/month Bronze/Starter package. Current users will be able to renew one more time at the existing price or move to a higher tier (and receive a significant discount for the first three years after they do so).
The company’s free tier, it is worth noting, is not going away and GitLab argues that it includes “89% of the features in Bronze/Starter.”
As GitLab founder and CEO Sid Sijbrandij told me, this was a difficult decision for the team. He acknowledged that this is a big change for those on the Bronze plan. “I hope that they see that we we did our homework and that we have great legacy pricing,” Sijbrandij said, and added that the company will listen to feedback from its users.
To ease the pain, Bronze users will be able to renew their existing subscription before January 26, 2022 for an additional year at the existing price. They can also opt to move to the Premium tier at a discounted price for the next three years, starting at $6/user/month in Year 1, but that price then goes up to $9/user/month and $15/user/month in Year 2 and 3 respectively. For new users, the Bronze package is no longer available, starting now.
Image Credits: GitLab
In the end, this was a purely financial decision for GitLab. As Sijbrandij told me, the company was losing money on every Bronze-tier customer. “The Bronze tier, we were selling at a loss,” he said. “We were just losing money every time we sold it — just on hosting and support. To be a sustainable business, this was a move we had to make. It’s a big transition for our customers but we want to make sure we’re a sustainable company and we can keep investing.”
Sijbrandij told me the team looked at increasing the price of the Bronze tier to make it profitable. “We looked at all options, but in the end, you’re going to have an offering that is very similar to Premium. It would be too much overlap between the two,” he explained.
With this change, GitLab now offers three tiers: Free, Premium and Ultimate (it’s also doing away with the “Silver/Premium” and “Gold/Ultimate” naming).
The free tier, which in terms of total users is the most popular plan on GitLab, will remain in place. While it is surely a loss-leader for GitLab, it only comes with limited CI/CD credits and doesn’t include any support options, so the overall loss here must have been worth it for the company. Sijbrandij also noted that, as an open core company, having a free and open offering is simply a must.
Source: https://techcrunch.com/2021/01/26/gitlab-reshuffles-its-paid-subscription-plans/
Late last week, independent journalist Eric Newcomer reported that Databricks is raising new capital at a valuation of “about $27 billion.” A few days later, another publication chimed in, saying that they had heard that the round could be worth $29 billion at a slightly higher valuation.
Well, well!
Last year, The Exchange covered Databricks’ financial progress as a private company. Databricks, as a refresher, provides its customers with analytics and data science tooling and crossed a $350 million run rate at the end of Q3 2020.
That figure was up from $200 million in the year-ago period. As we wrote at the time, Databricks was “an obvious IPO candidate” and a company with “broad private-market options.” Reports that it has raised more capital underscore our previous notes.
But we took it all one step further after news surfaced that Databricks could go public in the first half of 2021, noodling around with all the financial information we could scrape together for the company to come up with a valuation range. Our resulting figures were a bit low compared to recent news, which forms the crux of our work today: Can we come up with a set of numbers that help make sense of Databricks at $27 billion?
Databricks declined to comment. But that won’t stop us from having fun. So, let’s remind ourselves of what we know about Databricks’ growth history, economics and scale.
From there we will be able to check our estimates against its purported new valuation range and come up with some implied multiples. Then, we’ll contrast those with some high-flying public companies.
Do the numbers somewhat fit? Can we see Databricks making sense at more than $25 billion, more than four times its 2019-era private valuation of $6.2 billion? Let’s find out.
What’s it worth?
In our previous work, we ran a number of growth scenarios to come up with different estimates for Databricks’ current scale. Sparing you several hundred words, given how the company grew from $200 million in annual run rate to $350 million between Q3 2019 and Q3 2020, we estimated that the company would close Q1 2021 with between $425 million and $486.5 million in annualized revenue.
Looking at different data points from the Bessemer Cloud Index at the time while using some flexible-but-not-conservative estimates for Databricks’ revenue quality, we came up with market comps that would have given it a sales multiple of between 20x and 38x. At the high end of our revenue run rate guess for Q1 2021, and top multiple, you get a valuation of $18.5 billion.
Source: https://techcrunch.com/2021/01/26/does-a-27-or-29-billion-valuation-make-sense-for-databricks/
