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Big Tech is worth so much now that we forgot to be shocked by the numbers – TechCrunch


Welcome back to The TechCrunch Exchange, a weekly startup and market newsletter. It is largely based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. If you want it delivered to your inbox every Saturday morning, sign up here. Ready? Let’s talk about money, startups, and spicy IPO rumors.

TechCrunch is not a publication focused on the public market. We care about startups. But public technology companies can sometimes provide interesting information about the performance of the wider technology market. So we’re giving what we might call minimal viable attention to legacy startups that have reached their IPO.

Then there are the Big Tech companies. In the United States, the list is well known: Facebook, Alphabet, Microsoft, Apple and Amazon. And, in a slew of results that could indicate a hot market for startup growth, they had a very good first quarter of 2021. You can read our notes on their results here and here, but that’s just one part of the story.

Yes Big Tech’s financial results have been good – as they’ve been for some time – but lost in the usual deluge of earnings is how big Tech’s recent performance has proven their valuations.

Microsoft fell as low as the $ 135 per share range last March. Today it is worth $ 252 and is changing. Alphabet traded at around $ 1,070 per share. Today, the search giant is worth $ 2,410 per share.

The result of the huge share price appreciation is that Apple is now worth $ 2.21 trillion, Microsoft $ 1.88 trillion, Amazon $ 1.76 trillion, Alphabet $ 1.60 trillion and Facebook $ 0.93 trillion. That’s roughly $ 8.4 trillion for the five companies.

In July 2017, I wrote an article noting that their total value had reached the $ 3 trillion mark. It turned into $ 4 trillion in mid-2018. And then over the next three years it more than doubled again.

Why?

Myles Udland, a reporter for our sister publication Yahoo Finance, has at least part of the puzzle in an article he wrote this week. Here is Udland:

And while it seems like almost all earnings stories have somehow followed the same arc, the data also confirms that it’s not just our imagination – corporate earnings have never been so far removed from them. expectations.

Data from the Refinitiv team released Thursday showed the pace at which companies were beating estimates and the extent to which they were beating expectations through Thursday morning’s results were the best on record.

So are earnings exceeding street forecasts more frequently and at a higher differential than ever before? That makes the recent market appreciation less worrisome, I guess. And that helps explain why startups have been able to raise so much capital lately in the United States, as they have in Europe, and why private investors are investing so much capital in fintech startups. And that’s probably why Zomato is going public and why we’re still waiting for Robinhood to debut.

This is what a market looks like when the underlying companies are pulling all the stops, it seems. Remember that no business cycle is endless and no boom is everlasting.

An insurtech interlude

Extending the recent reports from The Exchange regarding fintech funding, and our summary of last week of insurtech startup rounds, some additional notes on this latest startup niche, which can broadly be considered part of the world. broader financial technology.

This time around, we’ll hear John Locke of Accel talk about his investments in The Zebra – which recently raised even more capital – and the insurtech space more broadly.

Asked why insurtech markets like The Zebra have been able to raise so much money over the past year, Locke said it was a mix of “insurance companies” […] finally embrace the markets and be willing to design integrated consumption experiences with the markets, ”as well as more“ shopping comparisons ”for consumers and, finally, income growth and quality.

The Zebra, Locke said, “continues to grow north of 100% at a revenue rate of about $ 120 million +.” This means that it can be made public whenever it wants.

But on this point, there has been some weakness in the stock market for some public insurtech companies. Is Locke worried about this? He is neutral to positive, saying his company “doesn’t think every business in the market will work, but still thinks ‘insurtechs’ will take market share from incumbents over the next decade.” Fair enough.

And Accel is still considering more deals in the space, like others. Locke said the venture capital market for insurtech investments is “significantly more aggressive” this year than last year.

Miscellaneous and miscellaneous

In closing today, a few notes on things we haven’t covered:

  • Productboard closed a $ 72 million Series C. First of all, it’s a huge round. Second, yes, Tiger led the case. Third, the product management software company now has about 4,000 customers. It’s a lot. Add this company to your IPO list in two years.
  • Chinese bike-sharing startup Hello goes public in the United States. We’ll come back to that on Monday, but his F-1 file is here. The company turned 2020 revenue of $ 926.3 million into $ 109.6 million in gross profit and a net loss of $ 173.7 million in net loss. Yowza.
  • Darktrace went public this week. I know this because he sponsors an F1 team that I love, but he is entering our world today as a recently listed company in the UK. And after Deliveroo goes kersplat, the smashing success of the Darktrace list could make the UK a more attractive place to list than it was a week ago.
  • And, finally, maybe drone delivery is finally coming? UK-listed venture capital group Draper Esprit led the $ 25 million round of funding against Manna, who wants to use unmanned drones in Ireland to deliver grub. “Manna sees a huge appetite for a greener, quieter, safer and faster delivery service,” UKTN reports.

A long, strange week. Be sure to follow the second inhabitant of The Exchange writing team: Anna heim. Okay! Chat next week!

Alex





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