Welcome to the TechCrunch Exchange, the weekly newsletter on startups and markets. It is inspired by TechCrunch + Daily Column where he got his name. Want it in your inbox every Saturday? Participation here.
Welcome back to the world of work, friends, I hope you survived your return to the office in good shape and warm and healthy. The current boom in COVID cases is a major predicament, but this may be the last year we will have to get ourselves back to productivity under the specter of lockdown, mass death and a lack of hugs. I hope that.
Regardless, today we have a lot of fun stuff that should keep your mind off the state of the world for a few minutes.
To begin today, let’s talk about “liquid death.” Excellently named company Kill with thirst waterHence its name. This is really the company in a nutshell. Liquid Death sells water in a can, a company around which they have built an anti-plastic stand and an overall heavy metal vibe. It is elegant.
But Liquid Death also raised $75 million this week, which made me wonder why everything is so expensive to build these days. Why does a water company need to raise the entire seed funding in one investment? What do you need for money? Search? She sells water!
There was a general perception a few years ago that starting a startup was cheaper than ever. With off-the-shelf software, cloud computing, and a modern financial technology background, it is faster and less expensive to assemble the building blocks of modern businesses. Aside from the high costs of hiring software developers, it seems that startups will be able to do more with less.
And after. Startups are raising more money than ever before. The exchange is diving into venture capital data next week, but it’s clear that the venture and startup classes are still moving money around with great taste. So much so, that Liquid Death has raised over $130 million to date, per Crunchbase data.
Circle low startup costs, and mega tours for me if you can. Are we seeing an increase in marketing spending through our equity capital sources? If so, it makes me a little worried!
(Note that Liquid Death can be a rogue business with big margins and nice economics; I don’t know its numbers. But why would it need $75 million if it’s in good shape? What are we missing here?)
From deep in the notes docs, a brief note on the level. Level is a company I covered back in February of 2021. The company had just closed a $1.5 million round of work that we described as bringing “credit to workers who might not be able to tap into it from traditional sources, using their existing income from independent business to support progress”.
It was a neat model, as asset-based lending on cash flow is a bit silly in a world where so many people work but don’t live asset-heavy lifestyles. (This is a polite way to turn down NIMBY Boomers, of course.)
Anyway, Level raised another round as 2021 closed, and this time led Anthos Capital’s $7 million funding, with NextView Ventures and other former inventors as well. The capital came after the company grew in size by “10x,” according to its own data.
What I find most notable in the level news item is not that the company raised more money – more that its set of goals is too large. According to the company, it wants to create a “small business financial operating system”.
I dig that because small businesses are not the type of company that gets a lot of attention from traditional financial institutions. Fintech, in my view, should be a way to apply technology to break down walls and bring more value to more people. Level seems to be working along these lines, while also building an adventure-ready project. salary!
PsyMed collects biotech fund
In the wake of the news that a16z has raised $9 billion in new venture, growth and biotech investment funds, it’s easy to forget that there are smaller funds in the market, too. Some of them are actually quite new.
On the biotech front, PsyMed Ventures is busy raising $25 million, its first closing ($8 million) in the bank. I chatted with the group on Friday to dig deeper into their model.
First, the basics. PsyMed has three investment partners: Dina Burkitbayeva, Greg Cobain And Matthias Serebrinski. Since you can operate from the first fund size target, the former side of things will be invested in the psychedelic medical space, along with a few related areas. The group is not new to working together, they previously formed an investment group using AngelList tech to invest around $15 million so far.
Some thoughts on PsyMed. First, I’m raising the hype as we push the boundaries of what we test for medical use. The wisdom of my native country has hampered this kind of action, to our detriment. Second, the field of biotechnology investing is interesting to me as established companies are becoming public much earlier than we see in the enterprise software market, for example. So, you can learn more about companies, more quickly and frequently.
For enterprising investors in biotech companies, this could also mean more early liquidity possibilities than we often see in today’s rhino age.
Talking with Burkitbayeva, Kubin and Serebrinsky gave me the impression that we are approaching a convergence point in terms of regulatory, scientific and medical advances that could open up a lot of elegant new treatments for some sticky human issues. Things like PTSD, treatment-resistant depression, and my favorite substance use disorder.
All of this means I’ll be watching where the group puts its new fund to work and how quickly it can promote early-stage drug startups into the public markets. Here’s to read more biotech S-1s this year and next, I think!
And that’s what I have for now – don’t forget Equity will be back to its usual tempo three times a week next week, so I’ll be talking to you on your podcast app of choice in no time! Hug!