Tuesday, February 12, 2019

Startups on sale! 🛍

February 12, 2019

Venture Capital Valuations are Feeling the Bears

According to Jalak Jobanputra, founding partner of Future Perfect Ventures, venture capital valuations are being slashed amid the harsh crypto winter.

"Given how much the volumes have decreased in the last year, I wouldn't be surprised if we are seeing valuations come down on the secondary markets for some of these companies."

…and they have.

Circle down 75%

A report from The Block found that private shares of crypto startup Circle were selling for $3.80. That's a 75% drop from their Series E fundraise in May when the shares were selling for $16.23 at a $3 billion valuation.

While that discount may not be a popular selling price for all Circle's investors, it does show that some want out.

As for reasons why, one analyst said it's a combination of the following issues that are hurting the startup:

Private company liquidity discount
Crypto market price drop
Lower volume

Turning to VC

But despite the lower valuations, new crypto startups are reportedly turning to venture capital money.

That's because the initial coin offering (ICO) market has done little to fund firms in the past year as regulations heat up and investors cool down.

Jobanputra hinted that it might not be a matter of finding funding to grow, it's actually matter of survival.

REPORT

Ripple Lured Top Tech Talent with XRP Bonuses

Engineers at Ripple are bringing in some heavy XRP bonuses for joining the startup.

According to a CoinDesk report, the XRP bonus packages are very generous, often ranging from $1 million to $6 million in value.

One engineer commented on the unusual offerings:

"[Ripple] is a very unpopular entity in the crypto sphere among technologists. [It is] forced to go above and beyond to attract engineer."

Your coin or not?

According to engineers who received the recruiting emails, the startup was boasting XRP's valuation and said "its [Ripple's] coin" was worth a market cap of $48 billion. Meanwhile, that same day showed XRP only had a market cap of $13.3 billion.

Since CoinDesk published the report, it has since been updated to note that the recruiting emails came from an external head hunter working on Ripple's behalf.

Regardless, despite denying the claims that Ripple is involved with XRP, it certainly is okay using its reserves to attract talent.

ANALYSIS

Bitcoin Fees Fall to New Lows Near 2015 Levels

For the first time in years Bitcoin is reaching transaction fee levels that were thought to be long gone.

According to research from Diar, the median fee has dropped to mere cents after seeing numbers as high as $35 just over one year ago.

Transaction climbing again

At the same time fees are dropping, transaction count is actually climbing to yearly highs - a trend that would usually make fees more expensive.

However, Bitcoin's upgrade to Segregated Witness (SegWit), a development that allows for more efficient transactions, has helped to pressure fees lower.

BITS

But wait, there's more...

👀 Two public pensions are dipping their toes into crypto venture capital as they back Morgan Creek's new $40 million fund.
🚀 Binance's decentralized exchange is just about to launch for public testing.
🚘 General Motors finance arm joins blockchain startup Spring Labs' partner project to enhance security.

MEME