U.S. markets shrug off record unemployment numbers as tech shares rise


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Despite reports of historic unemployment with roughly 6.6 million Americans filing for unemployment, domestic stocks rose during regular trading today.

One day after grim estimates on the potential death toll from the COVID-19 epidemic in the US sent stocks tumbling and amid a continuing economic fallout from the government’s response to slow the spread of the disease, all three major US indices gained. Meanwhile, the federal government in the US continues to work on the specifics of how to funnel nearly $2 trillion into the American economy as part of the CARES Act stimulus package. And pharmaceutical and medical device companies are working day and night to develop better diagnostics tools and novel therapies to treat the virus while potential vaccines slowly make their way through the regulatory approval process.
Here’s the tale of the tape:

SaaS growth appears to slow as churn concerns rise


This post is by Alex Wilhelm from SaaS – TechCrunch


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Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Yesterday we explored what the SaaS world thinks about churn. A cohort of SaaS executives surveyed by Gainsight are expecting medium-bad churn (our take on their reported forecasts); select software companies will see booming demand; and the impact of churn won’t be felt evenly around the world, leaving some markets stronger than others, offering SaaS startups and their public brethren a chance to grow. What mattered (read the piece if you have time) is that there is a general expectation that churn will rise as the world’s economy slips in the face of a historic pandemic and its constituent city- and country-wide shutterings. In time, we should see the impact of rising churn in public earnings reports, lower startup valuations, slower growth curves, and changing go-to-market motions. But, Continue reading "SaaS growth appears to slow as churn concerns rise"

Stocks fall sharply as U.S. government warns of hard weeks ahead


This post is by Kirsten Korosec from SaaS – TechCrunch


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A recent redbound in domestic equity prices faded further into the distance today, as American stocks fell for a second consecutive day following modest Tuesday declines.

After rising from new 52 week lows, all domestic indices after the American president warned of difficult weeks ahead as the country reels from the economic and social impacts of COVID-19. The day’s trading left stocks down heading into Thursday, when a new unemployment claim number is expected. Some are anticipating a worse number than last weeks 3.3 million claims, a result that was historic in size. If tomorrow’s report is as bad as some expect it would underscore the scale of economic damage the country endures as it seeks to stem the spread of COVID-19 after an initially slow national response that has since splintered into a patchwork of state-led efforts. Many Americans are staying home, a condition that could persist for Continue reading "Stocks fall sharply as U.S. government warns of hard weeks ahead"

How bad will SaaS churn get in the downturn?


This post is by Alex Wilhelm from SaaS – TechCrunch


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Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re talking about churn — the bane of software-as-a-service (SaaS) companies big and small — in the new world we find ourselves in. SaaS companies, from startups to huge public firms, have built their businesses under strong economic conditions. So what happens to the industry now that the global economy has hit pause, layoffs are piling up across national economies and venture capital is slowing? It’s easy to say that churn will go up; some customers will close, cancelling contracts (boosting gross churn) while other customers will slow software budget growth (limiting net retention). But how bad will things really get? To get a handle on what’s next for churn, I spoke to the CEO of CrowdStrike, a public SaaS company; the CEO Gainsight, a quickly-growing Continue reading "How bad will SaaS churn get in the downturn?"

Stocks post worst quarter since 2008 financial crisis


This post is by Kirsten Korosec from SaaS – TechCrunch


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The first quarter of 2020 ended with a whimper  — with the Dow Jones Industrial Average, S&P 500 and NASDAQ posting their worst quarter in decades — as the COVID-19 pandemic continues to cause uncertainty and volatility across all major stock market indices.

At the beginning of the quarter, we were still basking in a decade-long bull market. The global pandemic, and the economic havoc it caused, put an end to those halcyon days. All major American indices dropped into bear-market territory March 12, after shedding the requisite 20% from recent highs. The rollercoaster continued, with equities bumping along the bottom, periodically popping up, only to fall again as the epicenter of the pandemic shifted from China to Europe and now the United States. The number of cases in the U.S. has prompted states to issue stay at home orders, putting the brakes on business as usual. As Continue reading "Stocks post worst quarter since 2008 financial crisis"

How to value a startup in a downturn


This post is by Alex Wilhelm from SaaS – TechCrunch


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The value of technology companies has fallen as the broader public markets have repriced themselves in light of COVID-19-related market and economic disruptions.

And as the public markets sort out the new value of a huge piece of global business, private companies are being shaken as well. What happens in the public markets trickles into the private markets, so if we’re seeing the value of public tech companies fall, startups are going to take a hit. To understand that dynamic, we spoke with Mary D’Onofrio, an investor with Bessemer Venture Partners. She’s the right person to chat with about the links between private valuations and public share prices as she not only helps put capital into growing startups, she also helps run the Bessemer cloud index (now a partnership with Nasdaq, and trackable on a day-to-day basis). As she’s versed on both sides of the public-private divide, Continue reading "How to value a startup in a downturn"

Slack’s slowing growth turns around as remote work booms


This post is by Alex Wilhelm from SaaS – TechCrunch


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Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re taking a look at Slack’s customer growth in the current moment compared to what we know about it historically. What we’d like to know is whether Slack’s current boom in customer growth is unprecedented for its business or if the company is merely returning to prior levels of logo growth. As with any modern software (SaaS) business, Slack’s revenue growth doesn’t only come from net-new customer adds; Slack also grows its top line by selling more of its service to folks who already have a paid account. Think of it like this: Slack can add revenue by selling new customer Alex And Friends Ltd. a ten seat license or it can add revenue by selling Alex Actually Has No Friends Inc. another 5,000 seats to its existing Continue reading "Slack’s slowing growth turns around as remote work booms"

Startups valuations drop as exits are delayed and the stock market reprices tech


This post is by Alex Wilhelm from SaaS – TechCrunch


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Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

The public markets are in turmoil as the economic impact of COVID-19 comes into focus; however, it is less clear what the impact of the changing value of public companies today will have on the valuations of private firms. Startup valuations are impacted by a host of factors, one of which is the value of their public comparables (comps); if public comps lose value, private startup comps tend to earn lower valuations. This leads us to a key question: Are the stock market’s recent declines impacting the value of private startups? To get an answer, TechCrunch spoke with Phil Haslett, the chief revenue officer at EquityZen. Haslett is a founder at the company, which helps owners of stock in private startups sell their shares to interested buyers. We were Continue reading "Startups valuations drop as exits are delayed and the stock market reprices tech"

$100M rounds are down but not out in 2020


This post is by Alex Wilhelm from SaaS – TechCrunch


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Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re taking a look at mega-rounds: funding events of $100 million or more. What’s fun about these rounds is that they experience less temporal lag than other venture financings. Generally speaking, the larger a venture round is, the faster it becomes public knowledge. This is why seed rounds are the laggiest of all startup rounds and as you progress up the Series ladder (from A to B to C to D), the rounds that you hear about are increasingly fresh. If we wanted to take a look at 2020’s largest rounds to date, for example, instead of staring at an incomplete picture that might tell us nothing at all, we could get a reasonable handle on what’s going on in the very late-stages of private equity financings. This morning Continue reading "$100M rounds are down but not out in 2020"

Equity Monday: What’s going on with $100M rounds?


This post is by Alex Wilhelm from SaaS – TechCrunch


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Good morning friends, and welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week. Equity was busy last week, so catch up if you missed anything. We interviewed the CEO of Y Combinator, hosted a call with the TechCrunch staff digging into our favorite Demo Day companies, hosted Equity Monday on a Tuesday, held a call with Niko from General Catalyst, and hosted a guest — remotely! — on the regular Equity episode. It’s been busy.
This morning, however, was very nearly a repeat. The things that were bad last week are still bad this week. Still, there were a few things to go over: