Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
This week on Equity, we chatted about why the metaverse is inevitably coming for “Squid Game.” More specifically, we explored how the world of gaming is changing through the lens of startups and Big Tech.
For example, Netflix recently scooped up its first gaming studio. While I had some questions about streaming quality, I became convinced of the synergies after realizing Netflix could turn its original content — ahem, Squid Game — into highly produced video games. We also addressed how Apple is the biggest gaming giant among them all and a 30% app store cut may have something to do with that. Finally, in the world of startups, we riffed on the rise of the metaverse and how Andressen Horowitz has a new gaming-focused fund, sans a partner to lead it but plus a lot of fascinating early investments.
I’m not a gamer. And that’s partially why this episode was fun to record. I learned how an industry has evolved from scrappy, indie games with momentary popularity to full-on productions that sneak in recurring ways to stay fresh (and make money).
The sector is de-risking itself for creators and venture capitalists, which means more funding will kick-start a wave of new studios and services. Expect to see the industry collaborate with other trends in tech right now, from NFTs to edtech to cloud infrastructure plays.
In the rest of this newsletter, I’ll tell you about my startup of the week, S-1s and community as a buzzword.
And the startup of the week is …
Chalo! Other than having an adorable name that means “let’s go” in Hindi, Chalo is a startup that wants to tackle bus inefficiencies in India. The startup, which deploys GPS machines on buses and offers a nifty app, raised a $40 million Series C this week.
Here’s what to know: Sometimes actions matter more than numbers. As part of the new financing round, the startup said it will use $10 million of the proceeds to buy back stock options to reward its current and former employees as well as some early angel investors. This founder move is a flex and is proof that India is maturing as a startup ecosystem.
My other nominees:
Rivian’s IPO filing
We love a late Friday regulatory filing, and that’s exactly what Rivian did last week when it filed its S-1. Through numbers and strategy, the EV company helped us understand just how expensive it is to build its business, why market size estimates are BS and if Tesla and Amazon are main characters or side baes.
There are 81 mentions of Amazon in the Rivian S-1 filing. The number is high as Amazon is both an investor in the company and a customer. Per the filing, Amazon owns at least 5% of Rivian, though the final number is not yet available. Ford also has a stake greater than 5%, along with a number of investors.
A bet on Rivian’s IPO, then, is in great part a wager that Amazon does in fact buy the 100,000 vehicles that it is expected to, and we’d add on a timeline and price point that work for Rivian. There’s a lot of room for things to go pear-shaped between 10 vehicles in December of 2021 and the delivery of the remaining 99,990 vehicles that Rivian expects to deliver to one of its key shareholders.
And the wheels go round:
Is it community, or is it customers?
There’s a fine line between cultivating a nuanced and diverse community and creating a fancy term to describe your most loyal customers. We spoke about the watering down of the term “community” on Equity this week. The whole conversation was triggered because Contrary Capital, which funds student entrepreneurs and star employees within companies, closed its second fund.
Here’s what to know: Contrary brought together a 350-person community of students, aka investment partners, that it wants to help advise (and eventually invest in). About 45% of the cohort identifies as female and 65% identifies as non-white. But, as Contrary founder Eric Tarczynski said, he’s not bummed if none of those students found the next Stripe. He wants the community to be full of talented individuals; and even if they don’t start their own projects, he’s bringing together a database of some useful potential hires for his own portfolio to poach.
Clique, clique, clique:
TechCrunch Sessions is back, and we’re starting with SaaS! Join us on October 27 as we explore, debate and question the competitive field of software as a service development. My colleagues have brought together some of the biggest names in the industry, from Sarah Guo at Greylock to Kathy Baxter at Salesforce to Daniel Dines at UiPath.
Here’s the entire final agenda for TC Sessions: SaaS. As a kicker, those who are interested can still scoop up $75 early-bird tickets. Book yours and save $100 bucks before prices go up!
Across the week
Seen on TechCrunch
Twitch streamers respond after huge leak of creator payout data
Elon Musk announces Tesla to move headquarters to Austin
Instacart is acquiring catering software company FoodStorm
Why generic marketing approaches don’t work on software developers
Telegram says it added 70M users during day of Facebook and WhatsApp outage
Seen on TechCrunch+
Coinbase CEO Brian Armstrong might not be having fun at work, you guys
SaaS subscriptions may be short-serving your customers
The Athletic’s numbers look fine actually?
Why Techstars is doubling down on Europe
VCs say there are more startup opportunities to chase in Latin America