Tech Brew Ride Home - Mon. 01/25 – Clubhouse Raises A New Round At $1B Valuation

Episode Date: January 25, 2021

Clubhouse has become a unicorn in, what… nine months? Google is making its facilities available as vaccine centers, while its workers are union organizing globally. Apple wants you to get up and walk. And why the SPAC frenzy could potentially transform the startup ecosystem over the coming months. Sponsors: Uber.com/techmeme Kiwico.com promocode: ride Links: Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz (TechCrunch) Big Revolution - Inside the Clubhouse (Big Revolution) Google will turn some of its offices into COVID-19 vaccination sites (Engadget) Google Maps and Search to show COVID-19 vaccination locations (LaptopMag) Exclusive: Google workers across the globe announce international union alliance to hold Alphabet accountable (The Verge) Apple officially launches new ‘Time to Walk’ feature for Apple Watch and Fitness+ (9to5Mac) Apple warns iPhone 12 and MagSafe accessories can interfere with medical devices (Silicon Angle) SPAC boom could finally provide an exit ramp for digital publishers like Buzzfeed and Vice Media (CNBC) When SPACs Attack! A New Force Is Invading Wall Street. (WSJ) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme ride home for Monday, January 25th, 2021. I'm Brian McCullough today. Clubhouse has become a unicorn in what, nine months?

Google is making its facilities available as vaccine centers, while its workers are union organizing globally. Apple wants you to get up and walk, and why the SPAC frenzy could potentially transform the startup ecosystem over the coming months. Here's what you miss today in the world of tech. I'd like to think that this news is a direct result of the fact that I spoke on stage at Josh Constine's weekly press club room on Clubhouse on Thursday night. Paul and the gang saw how successful that went. And we're like, quick, pull the trigger on this for sure.

I'm joking, of course. But in a blog post yesterday, Clubhouse announced a new funding round led by A16Z. Word on the street is that it's at a $1 billion valuation, which, if you'll recall, six months ago, people were saying it was crazy that A16Z led a $100 million valuation. Also, Clubhouse says it will soon begin work on an Android version of the app, and it is actively beginning tests around paying creators, or at least allowing creators to charge and earn, quoting TechCrunch. The plans around monetization routes for creators appear to be relatively open-ended at this point, with Clubhouse saying it'll be launching first tests

around each of the three areas it mentions, tipping, tickets, and subscriptions over the next few months. It sounds like these could be similar to something like a Patreon built right into the platform. Tickets are a unique option that would go well with clubhouses more formal roundtable discussions, and could also be a way that more organizations could make use of the platform for hosting virtual events. During a regular virtual town hall, the apps founders host on the platform, CEO Paul Davison revealed that Clubhouse now has 2 million weekly active users. It's also worth noting that Clubhouse says it now has over 180 investors in the company, which is a lot for a Series B, though many of those are likely small independent investors with very little steak, end quote.

I thought Martin Bryant had decent analysis of this in his Big Revolution newsletter this morning. Quote, people are excited about Clubhouse because it's like a grown-up first, version of Twitch. Clubhouse is the first opportunity for professionals to build a presence and an audience in a near zero barrier to entry live media app. At its worst, this means there's a lot of LinkedIn-style fake insight and people trying to be gurus, but it also means there are a lot of really interesting conversations featuring people you might not hear from on other platforms. The Twitch analogy seems to fit with Clubhouse's monetization strategy. The plan seems to be provide a platform and money-making opportunities, then sit back and take a cut. As we've seen with the stories format,

once something is a success in one place, you can't stop it popping up all over the place. So far, the only notable Clubhouse clone is Twitter Spaces, which is still in testing. But expect live audio chat to be tried in all sorts of slight variations across different apps you already use. For example, I suspect LinkedIn is already exploring what it could do with this format. The challenge for Clubhouse is maintaining its value as a destination if everyone else offers the same features. Helping creators get paid is one part of this, but ensuring those creators provide enough reasons for listeners to keep coming back will be a greater challenge. But then you can stream video game footage in a number of places, including Facebook, and people

keep coming back to Twitch, so the problem isn't insurmountable, end quote. By the way, several of you have been reaching out asking me for Clubhouse invites, but here's the problem with that. Right now, I can only invite people I know if I know their phone number, and they would also, of course, know mine because I'd have to send the invite via text. No offense, but I don't feel like giving my phone number out broadly. But Paul or anyone else at Clubhouse who might be listening, let me know if there's another way I could do that and share some invites to listeners of this podcast. Not that I think anyone really has to worry. I'm pretty sure the doors to Clubhouse will be swinging wide open in the coming weeks.

We thought Apple was going to do something like this, but if they are, Google has beaten them to it. Google has pledged $150 million in grants to promote COVID-19 vaccine distribution and has even converted some of its facilities into vaccination sites, starting in New York City, Los Angeles, the San Francisco Bay Area, and Kirkland, Washington, quoting Engadgett. partnering with one medical and public health authorities, Google will open, quote, buildings, parking lots, and open spaces to anyone eligible for the vaccine, wrote CEO Sundar Pachai in a blog post. The company will work with local officials to determine when their sites can be opened. Google also pledged $150 million to promote vaccine education and distribution, including $100 million in ad grants

and $50 million in partnership with health agencies. As part of that, it will add state and region-specific vaccine information to its source. search pages listing sites in Arizona, Louisiana, Mississippi, and Texas to search and maps over the next few weeks. We'll include details like whether an appointment or referral is required, if access is limited to specific groups, or if it has a drive-through, added Pichai. And more on this from Laptop Magazine, quote, Google Maps and Search won't just provide location details, as other features will include whether an appointment or referral is needed, if access is limited to specific groups, or if it has a drive-thru.

Google is working with vaccinefinder.org, government agencies, and retail pharmacies to gather information. Getting vaccines to billions of people won't be easy, but it's one of the most important problems we'll solve in our lifetimes. Google will continue to support in whatever way we can, said Pachai, end quote. Meanwhile, Google workers across the world have announced Alpha Global, an international union alliance comprising 13 unions representing Google workers in 10 countries, quoting the verge. Alpha Global is affiliated with the Uni Global Union, a federation of labor unions representing 20 million people worldwide, including workers at Amazon. Quote, we know that organizing for justice at a global company like Alphabet does not stop at national

boundaries, said Parul Kaul, chief executive of the Alphabet Workers Union and a Google Software Engineer in a statement. That is why it is so important to unite with workers in other countries. In a world where inequality is tearing apart, our societies and corporations are hoarding more influence than ever, reclaiming our power through our unions has never been more important, end quote. Minority unions like AWU get their power by building worker solidarity. The structure allows AWU to include Google contractors as well as full-time employees, but it also means the union isn't currently recognized by the National Labor Relations Board and can't force Google management to negotiate. Similarly, Alpha Global will have to gain power,

by uniting Google workers in different countries. The coalition won't have a legally binding agreement with the company, at least to start. Down the road, it may try to pressure Google to sign a neutrality agreement, a contract that forces Google to support attempts to unionize, although it's doubtful the company would agree to such terms, end quote. A couple of Apple stories here to cram into one segment if I can. First up, Apple has launched Time to Walk for Apple Watch and Fitness Plus, offering 25 to 40-minute episodes of original audio from influential people.

Influential people like Dolly Parton, Dramon Green, Sean Medes, and Uzo Aduba, quoting 9-to-5 Mac. Each original Time to Walk episode invites users to immerse themselves in a walk alongside influential and interesting people as they share thoughtful and meaningful stories, photos, and music. Time to Walk can be enjoyed anytime and anywhere with Apple Watch and AirPods or other Bluetooth headphones. Apple explains that each Time to Walk episode is shaped by the guest's personal life-shaping moments and is recorded while walking outside or in locations that are meaningful to them. Apple adds that new Time to Walk episodes will appear in the workout app on Apple Watch from a different guest each Monday through the end of April. All previous episodes will also be accessible.

The episodes range from 25 to 40 minutes and are available in the workout application on Apple Watch, end quote. So, heart-healthy exercise to not so much in the heart-healthy department. Forgive that awkward segue. But Apple has also warned that the magnets now in iPhone 12s and other MagSafe devices may affect pacemakers and should therefore be kept at least six inches away from pacemakers or more than 12 inches away when the devices or MagSafe are charging, quoting Mac rumors. Earlier this month, an article in the Heart Rhythm Journal indicated that iPhone 12 models can, quote, potentially inhibit life-saving therapy in a patient, end quote, due to magnetic interference

with implantable medical devices. Three doctors in Michigan tested this interaction by holding an iPhone 12 near a patient's implantable cardioverter defibrillator, which immediately went into a suspended state for the duration of the test, according to the article. Quote, we hereby bring an important public health issue concerning the newer generation iPhone 12, which can potentially inhibit life-saving therapy in a patient, particularly while carrying the phone in upper pockets, the doctors wrote. Medical device manufacturers and implanting physicians should remain vigilant in making patients aware of this significant interaction of the iPhone 12 and other smart wearables with their

cardiac implantable electronic devices, end quote. Finally today, we've been talking IPO bubbles in tech and also seemingly a bubble for SPACs. Spacks again are those blank check special purpose entities that are allowing companies to hit public markets without going through the whole rigmarole of doing an IPO. For example, Content Recommendation Company Tabula announced this morning it is agreed to go public via a SPAC, valuing the company at $2.6 billion and raising for itself $554 million in capital. Smart Lockmaker Latch says it will go public merging with a SPAC at a 1.5. billion dollar valuation, expecting to raise $450 million in cash for itself. So far, in 2021, an average of five SPACs have been launched every single day. If you're wondering why we care about this, well, right there, look at the amount of money raised in just those two examples from just this

morning. Easy access to capital can make a huge difference between what startups survive and which don't. And we care about that from a looking at the health of the tech and startup ecosystem generally perspective, because I mean half a billion dollars in cash can buy you years of runway. But also, this has the potential to give a final shakeout to the startup markets that we care about for an entire generation of startups. CNBC is reporting about how the SPAC boom could provide an exit ramp, which you should read as a lifeline to survival for, for example, digital publishers like BuzzFeed and Vice and Vox and Bustle and Group 9, quote, Bustle Digital Group, Group 9, Vox, Vice, and BuzzFeed have had recent conversations about going

public via special purpose acquisition vehicles this year, according to people familiar with the matter. Group 9 has taken a further step actually launching its own SPAC to facilitate the process of digital media companies going public. Before going public, the group of five will probably see some consolidation in coming months, according to Bustle Digital Group founder and CEO Brian Goldberg, who said he's in conversations with several SPACs. Quote, of the five of us, I wouldn't be surprised if five turns into three, Goldberg said in an interview, maybe it's five to four. I don't think five will turn into one or two. These companies do merge well. They capture a lot of synergy on cost and revenue when they merge,

end quote. The struggles of the media industry over the last five years have made digital companies relatively lean and mean, Goldberg said. Paradoxically, having a more mundane growth story to tell investors may work in favor of the industry for a class of investors who want to invest in profitable companies trading at six times revenue instead of companies like DoorDash or Snowflake, which are trading at multiples near 50x revenue, he said. Digital media companies have had to mature and grow up, maybe more than SaaS or fintech, who haven't had to focus on cutting costs or profitability, Goldberg said, and quote. So we care here because the SPAC boom could basically take a whole bunch of startups off the table in the coming months.

And by off the table, I mean in this sense. Having an exit or going public is the market success for a lot of startups and not just because the VCs and investors get paid. I could go down the list of startups that have basically been treading water for a decade or more but are still around because they got enough cash from hitting the public markets that basically that's why they're still here. Hitting public markets mean you'll live, you'll stick around. So that noise you hear is every startup that is remotely close to even being slightly sustainable long term rushing to find a spec to call their own before the music stops. And also you'll hear the trampling of capital also lining up to do these deals since they're so in vogue at the moment.

Basically, we could see a whole generation of startups guaranteed to achieve success, in quotes, by reaching public markets while the getting is good. Indeed, the Wall Street Journal is reporting hundreds of SPACs are looking to acquire tech startups in the coming months. If you don't have your own SPAC, you're nobody, said Peter Atwater, founder of research firm financial insights. These deals are generating a lot of interest because they produce big paydays for their creators, make it easier for startups in hot industries such as electric vehicles to capitalize on a frothy run-up in the stock market and offer everyday investors a new new path to a hot stock. When a SPAC buys a firm, it merges with it in a sort of accelerated

IPO process, a so-called reverse merger while bypassing the normal scrutiny in IPO receives. For now, there is no end in sight to the SPAC attack, which coincides with a vast run-up in risky investments that has everything from U.S. technology stocks to Bitcoin soaring. The SPACs are pulling in more than 70% of all money raised through initial public offerings this month, up from nearly half last year and about 20% the year before, according to Deal Logic data through Thursday. The 67 SPACs created this year have already raked in nearly $20 billion from investors. That is well above the total from all of 2019, which was a record before last year's historic haul of $82 billion. Many of the 287 SPACs currently hunting for targets are looking for

deals in hot sectors such as technology or electric vehicles, according to figures from data provider SPAC research. Blank check firms often seek deals valued at least five times as large as they are when including debt. That means deals adding up to several hundred billion dollars are likely to be completed in the coming months, analysts say, setting SPACs up to be a powerful force in markets. When a SPAC is launched, it has to merge with a target within two years, so the effects of this wave will continue for a while. In total, 26 companies tied to mobility and technology merged with SPACs in 2020 and recently had a combined market value of more than $100 billion, according to data provider pitchbook. Many of them have little to no revenue.

Nonetheless, an index of those companies posted a total return of nearly 80% in the second half of last year. Quote, when you have everybody talking about SPACs, it raises the issue as to whether or not there is an element of speculative mania, said Roy Barron, managing member at Westchester Capital Management and a SPAC investor, end quote. As Kevin McPartland tweeted, quote, It doesn't seem like this can end well for most in the long run, but the upshot is more companies in the public market, right? End quote.

Well, yeah, Grock this last paragraph from the journal piece I was just quoting from, quote, some still predict this frenzy will end badly. People will look at the proliferation of these vehicles very similarly to the way they look at the craziest ideas that were being thrown around at the peak of the dot-com bubble. said Mr. Atwater, the founder of Financial Insights, end quote. Be on the lookout for a major show announcement at the end of tomorrow's episode, or maybe the day after that. We're going to share more details on all the new content that we've promised to bring you this year.

We're putting the finishing touches on all of that this week, and we'll launch imminently. Talk to you tomorrow.