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For longtime readers of Startups Weekly, remember edtech was my primary beat. Like the beat of the first day. Most of my coverage has focused on the rise of edtech in the early innings of the pandemic, the unicorn-crazy rush, and even some IPOs. Duolingo remains the company I know the most about, mostly because I’ve written thousands of words about its clever owl and wild founding story.
Although I am more focused on fintech these days, I was curious if edtech is still a big deal or if the sector – like most during the downturn – is facing a reset. This week I interviewed seven leading venture capitalists focusing on education technology to better understand how the industry is doing during the recession.
The big takeaway? Edtech stands for a reality check in the form of discipline. Investors explained that the entire startup ecosystem is slower this year; edtech is no different. If anything, as USV’s Rebecca Kaden put it, “The boom in the category over the past few years means that most of our education-focused portfolio is fairly well funded. [ … ] rounds would be opportunistic rather than necessity, and most are focused on building their business for years to come.”
As Kaden describes, it’s time to focus and luckily edtech has the capital to do it. It makes me think a bit about the advice my boyfriend often gives to our group of friends: we’re not that special, and that’s a good thing. He means it in the kindest way, and the lesson is that feelings of change, stress, or anxiety are not as deep as we might think when we first feel them. What we’re experiencing is shared by other people in their mid-20s, or, well, other sectors in startup land right now. All that matters is whether you’ve invested in yourself long enough before the spotlight comes on and when the lights go out, you’re still there. Just calmer and maybe a little more focused on backstage.
Anyway, for the full study, read my londonbusinessblog.com+ piece: “7 Investors Discuss Why Edtech Startups Need To Go Back To Basics To Survive.” You can also check out my accompanying analysis: “Edtech isn’t special anymore, and that’s a good thing.”
In the rest of this newsletter, we’ll cover Haus’ closed doors, the SoftBank execution fund, and a pitch deck teardown you won’t want to miss. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter
Bring the house down
I wrote about Haus, a bubbly VC-backed aperitif company put up for sale in the face of a collapsed Series A. CEO and co-founder Helena Price Hambrecht spoke to londonbusinessblog.com about what happened between the company and its potential lead investor, the reasoning they stood behind the fallen deal and what next.
Here’s what’s important: I’ve never seen an entrepreneur so transparent about the challenges and unfortunate outcomes that arise within startups. Here is an excerpt from my interview with her.
“It is always dangerous to have little money. We got there, and it’s a shame, but I know there are a lot of companies in this position right now,” says Hambrecht. “I have been sharing my work online for over 20 years. It’s definitely in my DNA. If sharing this process is helpful to another founder who is in a difficult situation and considering their options, then it makes all of this a little more rewarding.”
As for the future for the Silicon Valley veteran entrepreneur, there are no immediate plans to jump into a new startup.
“My goal right now is to be as helpful as possible to make this ABC process have the best possible outcome. Then I’m going to take some time to process the past four years; it was so extraordinary, but also brutal and traumatic; I’m going to rest and process that.”
So, when will the SoftBank Execution Fund III fall?
This week on Equity, your favorite trio has delved into the numbers and nuances behind the headlines. It meant SoftBank, Coinbase and deals from ByteDance, Haus and Axios.
Here’s why it’s important: Part of the conversation was about SoftBank’s losses on losses, which was really the highlight of the show. Do we see a redemption arc emerging for one of the biggest, most talked-about investors of recent years? And what does Tiger Global think? So many questions, and it’s always nice to get Mary Ann and Alex’s opinion.
Pitch Deck Teardown: Five Flute’s $1.2 Million Pre-Seed Deck
TC’s Haje Jan Kamps is back with another pitch deck breakdown, this time looking at the deck that saw Five Flute rake in a $1.2 million pre-seed round.
Here’s why it’s important: If you haven’t been following this series, you’re missing out – and I mean this in the kindest way. Haje goes slide by slide, and in this case it taught me a lot about why more can be more in terms of deck length and why a “chockablock of words” is a top mistake founders make. Read the story here and pitch Haje for the series if you dare.
Read it here: “Founder Venture Investors: Rejecting for What?” We also have an accompanying podcast, which you can listen to here: “Founders, Whales and the Sea is Turning into Entrepreneurial Energy.”
Seen on londonbusinessblog.com
Coinbase’s earnings fall short of expectations as the crypto winter rages on
Finix raises $30 million as fintech’s spotlight takes its side
Mark Cuban, Mavericks in Hot Water on Voyager’s ‘Ponzi Scheme’
Cloud Security Startup Wiz Reaches $100 Million ARR in Just 18 Months
Seen on londonbusinessblog.com+
The best cloud unicorns aren’t as overrated as you might think
Honest advice for open source startups looking for a product-market fit
How digital healthcare startups navigate the post-Roe legal landscape
Same time, same place, next week? Talking soon,