The humble business card is being resurrected. Why going public is good. BNPL is everywhere.
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Happy weekend, friends. After consuming a lot of grilled cheese, I am writing you this Friday afternoon. We can skip the food comas and get to work because I have an enormous iced cup of coffee. Today we were discussing a very interesting venture round and talking with a founder about verticalization. We also riffed on Marqetas earnings reports. We have fintech, SaaS, and public company notes available for your enjoyment. Lets do it!
HiHellos ambitious Series A
Manu Kumar may be a familiar face to you. K9 Ventures is his venture capitalist. He is also a venture capitalist at K9 Ventures. We are interested in the latter endeavor.
HiHello announced that it raised $7.5 million in Series A funding. Foundry was the investor, Lux Capital participated, and several angels contributed checks. So far, so ordinary. The round isn't the most interesting part of HiHello's story. It is what the company builds.
A question: When was the last time you ordered business cards? I don't remember if I ordered new cards between my last job and when I returned to TechCrunch. It wasn't just because of COVID, or the fact I live far away from San Francisco. They didn't seem very useful to me so I didn't think about it.
HiHello is creating something similar to the future business cards for the web. Per Kumar, people still need a way to identify themselves and present themselves online. You can prepare for planned gatherings, he said. For meeting people in an unplanned way, however, it is helpful to have a way of sharing your identity.
HiHello allows you to create virtual business cards for yourself. You can have more than one. Kumar suggested that I could have one to use for Equity, one for TechCrunch and so on. They can also be used in your personal life.
It was obvious that my business cards were gone. We didn't have to rebuild them. Kumar doesnt agree. Kumar doesn't agree. He envisions a future in which HiHello could create personal social networks that are contextually oriented. It's bold and it's counterintuitive. It's good startup fodder.
HiHello is currently monetizing consumer revenue and also has a product for business. Let's see how fast the startup grows. We are about to get excited about a new social product.
Going vertical
Skyflow has been a topic of my writings a few times. Anshu Sharma, the co-founder of Skyflow, is someone I have known for years. He was working at Storm Ventures when we met. He has been an angel investor and co-founded several companies, including Skyflow. This software startup sells a digital vault which allows PII and other important information to be protected on behalf of customers and accessed in a secure manner. This is a great option for companies who are not concerned about security and want to avoid data breaches.
Skyflow is raising capital at an aggressive pace, and the model seems to be working. Sharma appears happy with the customer progress so far. (Sharma also gave me notes which helped me write an essay the other night.
Skyflow recently announced a new product line for the healthcare market. Since its inception, I have been following the company closely. I was therefore curious. Sharma called me back to discuss his verticalization strategy. I was interested in how he chose markets and where his company might go next.
Sharma stated that Sharma's company plans to demonstrate its technology in complex markets and then expand its reach over time. Skyflows is a company that stores financial data. This is why the healthcare push was necessary. Skyflow will be able to sell its technology to the market by solving difficult problems and selling to complex customers, he stated.
We need to rewire internet from scratch, with privacy in mind. This is the CEO's view. Sharma, citing a Marc Andreeseen quote about how it was an error not to build payments technology into the internet at the beginning, argued that two important things were overlooked in the early days. These were privacy and payments.
Skyflow's verticalization strategy is to first tackle the most difficult problems. Healthcare data is subject to many regulations and rules. Then, it will broaden its scope until PII becomes safer for all. This is a very optimistic view of where the internet might go. It's not a Facebookian world in which privacy is abstract and adtech is permanent, but one where your data is yours, and it is safe, stored, and out of reach.
Skyflow will be in a tougher competitive environment. However, as long as some startups on the market who want to give privacy back to individuals win, I'm content.
Marqetas First Earnings Call
Marqetas debut was a fintech unicorn that works in the card issuing sector. It got lost among the IPOs we saw this year. It made its first public earnings report this week. I called Jason Gardner, its CEO, to chat about the results.
Marqeta's second quarter growth was rapid and exceeded all expectations. However, the company lost more money that was anticipated by the markets and its shares were able to lose all of their gains post-IPO.
Here are some notes from the call. First, Gardner appears content to move on from the public offering. Gardner said that he has had the opportunity to rekindle his love for running the company after the completion of the 18-month IPO market. He said it was enjoyable to swap out yearly board-level planning in favor of quarterly reports, because there is a greater sense of urgency for the company's work.
It was refreshing to hear a public CEO praise their company, as we often hear them worry about distractions in earnings calls. This reminded us of Brent Bellm, CEO of BigCommerce, commenting on the same subject.
Marqeta's comments on the BNPL market were more important in our understanding of startups. After Klarnas rise and Square's acquisition of Afterpay, Marqeta noted the need to buy now. Our attention was drawn to the pay later space as a potential growth market for its work. Why did BNPL help a card issuing platform
It turns out that the virtual cards Marqeta can spin up for customers often serve as part of the software sinew that allows for BNPL transactions. Fintech is more interconnected than people think. When we think of BNPL as a type, it is important to keep an eye on the growth of other boats. This increases the potential number of startups riding the BNPL wave.
Let's start with a tip. Asking a CEO to explain a market dynamic to you is the fastest way to understand it. This educational method has a downside. If you are close to understanding the concept but have missed one key element, you'll feel silly when the CEO explains it to you in simple words.
But, since I am actually very dumb, I refuse not to be embarrassed about my ignorance. That's all for today. Today's Equity episode is extended, and The Exchange will be back Monday morning!
Hugs and get vaccinated. Your friend.
Alex
