Equity Shot: Pinterest zooms into the public markets (and yet another tech company files for an IPO)

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This is a relaxed, Friday, Equity Shot. That means Kate and Alex were on deck to chew through the latest from the IPO front. We’ll keep doing extra episodes as long as we have to, though we’re slightly sorry if we’re becoming a bit much.

That’s a joke, we’re not sorry at all.

So, three things this week. First, Fastly filed an S-1 (Alex’s notes here), second, Zoom completed its highly-anticipated IPO (Kate’s post here, Alex has notes too), third. Pinterest went public too (More from TechCrunch here). Ultimately, Pinterest’s stock offering valued the company at $12.6 billion (higher than its latest private valuation) but we’ve got some notes on the ‘undercorn’ phenomenon anyway (here and here).

Fastly is going public after raising more than $200 million at a valuation greater than $900 million. Founded in 2011, the content-delivery company surpassed the $100 million revenue mark in 2017, growing a little under 40 percent in 2018. It’s an unprofitable shop, but it has a clear path to profitability. And given how Zoom’s IPO went, it’s probably drafting a bit off of market momentum.

As mentioned, Zoom had a wildly successful first day of trading. The company ended up pricing its shares above range at $36 apiece only to debut on the Nasdaq at $65 apiece. Yes, that’s an 81 percent pop and yes, we were a bit floored.

Finally, Pinterest’s debut was solid, leading to a more than 25 percent gain over its above-range IPO price. What’s not to like about that? It’s hard to find fault with the offering. Pinterest got past the negative press and questions about private market valuations, went public, raised a truckload of money and now just has to execute. We’ll be watching.

If you’re looking for more Uber IPO content, don’t worry, there’s plenty more of that to come. See ya next week.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

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Prosper is the latest Silicon Valley company to get dinged by, and settle charges with, the SEC

Another Silicon Valley company is settling with the SEC: the online lending company Prosper, which the SEC had accused of “miscalculating and materially overstating annualized net returns to retail and other investors.” Prosper has agreed to pay $3 million as part of the settlement, in which it has neither admitted nor denied the agency’s allegations.

According to a new release from the SEC: “For almost two years, Prosper told tens of thousands of investors that their returns were higher than they actually were despite warning signs that should have alerted Prosper that it was miscalculating those returns.” The 14-year-old, San Francisco-based company “excluded certain non-performing charged off loans from its calculation of annualized net returns” that it communicated to investors from around July 2015 through May 2017.

The mistake owed to a coding error that excluded the defaulted loans from its computations, the SEC said, causing Prosper to overstate its annualized net returns to more than 30,000 investors on individual account pages on its site and in emails soliciting additional investments from investors.

The SEC added that “many” investors decided to make additional investments based on the overstated annualized net returns and the “Prosper failed to identify and correct the error despite [its] knowledge that it no longer understood how annualized net returns were calculated and despite investor complaints about the calculation.”

The settlement is the second for the SEC in two week’s time. On April 2, the SEC announced that the founder and former chief executive of Jumio has agreed to pay the agency $17.4 million to settle charges that he defrauded investors in the mobile payments and identity verification startup before it went bankrupt.

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Apply now to be a TC Top Pick at Disrupt San Francisco 2019

Psst! We’re looking at you, early-stage startup founders. How would you like your startup to be a media and investor darling at Disrupt San Francisco 2019? If you think your startup has what it takes to make the cut, apply to be a TC Top Pick. The application process is super easy, free and potentially — dare we say — life changing. Yup, we dare.

Our TC Top Picks program is competitive and highly selective. TechCrunch editors are a notoriously picky bunch, and they’ll review every application thoroughly before choosing up to five top startups in each of these categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, SaaS and Social Impact & Education.

Every startup selected as a TC Top Pick receives a free Startup Alley Exhibition package, invitations to special events at Disrupt SF — like the investor reception — and prime real estate in the Startup Alley exhibition hall.

It’s one thing for us to tell you that being a TC Top Pick can change your startup’s trajectory, but it’s more effective to hear first-hand experiences from previous Top Picks — like this one.

Israeli-based CAARESYS earned a TC Top Pick designation in the mobility category at Disrupt SF 2018. The startup’s vehicle monitoring system uses low-emission radio frequency radar and contactless biometrics to track the body location and physical state — respiration rate, heart rate and heart-rate variability — of each passenger in the car.

According to Konstantin Berezin, the company’s COO and co-founder, the connections they made as a TC Top Pick at Disrupt SF resulted in projects with three OEM and Tier 1 companies. The company is currently in the integration phase with auto manufacturers to get the systems into cars by 2021.

“We also followed up with a potential customer we met at Disrupt and, as a result of that meeting, we signed a memorandum of understanding to partner on a mutual project,” said Berezin. “I can’t disclose the name just yet, but we’re very excited. Being a TC Top Pick really put us on the map.”

Another perk that comes with being a TC Top Pick is the interview with a TechCrunch editor on the Showcase stage in Startup Alley. That video interview, which we promote across our social media platforms, provides valuable media exposure long after the conference ends.

“The interview was terrific, and TechCrunch did a very professional job shooting and editing the video,” said Berezin. “Sending our video to current and potential customers gives us prestige and a certain cool factor. We love it!”

Of course, there’s more than one way to grab the spotlight at Disrupt SF. While you’re applying to be a TC Top Pick, why not apply to compete in Startup Battlefield, too? Our epic startup pitch competition carries a $100,000 equity-free cash prize. Yowza!

Disrupt San Francisco 2019 takes place October 2-4. Take a life-changing step to get the most out of your time at Disrupt and apply to the TC Top Pick program today.

Is your company interested in sponsoring or exhibiting at Disrupt SF? Contact our sponsorship sales team by filling out this form.

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Alphabet’s Sidewalk Labs is developing visual cues to indicate when their tech is monitoring you

Alphabet’s subsidiary focused on urban tech development, Sidewalk Labs, is now trying to reinvent signage for smart cities. These signs aren’t to direct the flow of traffic, or to point the way to urban landmarks — they’re designed to let citizens know when they’re being monitored.

The proposal is part of a push by the company to acclimate people to the technologies that it’s deploying in cities like New York and Toronto.

Globally, competition for contracts to deploy sensors, data management and predictive technologies in cities can run into the tens of millions, if not billions of dollars, and Sidewalk Labs knows this better than most. Because its projects are among the most ambitious deployments of sensing and networking technologies for smart cities, the company has also faced the most public criticism.

So at least partially in an attempt to blunt attacks from critics, the company is proposing to make its surveillance and monitoring efforts more transparent.

“Digital technology is all around us, but often invisible. Consider: on any one urban excursion (your commute, perhaps), you could encounter CCTVs, traffic cameras, transit card readers, bike lane counters, Wi-Fi access points, occupancy sensors that open doors — potentially all on the same block,” writes Jacqueline Lu, whose title is “assistant director of the public realm” at Sidewalk Labs.

Lu notes that while the technologies can be useful, there’s little transparency around the data these technologies are collecting, who the data is being collected by and what the data is collected for.

Cities like Boston and London already indicate when technology is being used in the urban environment, but Sidewalk Labs convened a group of designers and urban planners to come up with a system for signage that would make the technology being used even more public for citizens going about their day.

Image courtesy of Sidewalk Labs

Back in 2013, the U.S. Federal Trade Commission called for the development of these types of indicators when it issued a call for mobile privacy disclosures. But that seems to have resulted in companies just drafting reams of jargon-filled disclosures that obscured more than they revealed.

At Sidewalk, the goal is transparency, say the authors of the company’s suggested plan.

“We strongly believe that people should know how and why data is being collected and used in the public realm, and we also believe that design and technology can meaningfully facilitate this understanding. For these reasons, we embarked on a collaborative project to imagine what digital transparency in the public realm could be like,” writes Lu and her co-authors Principal Designer Patrick Keenan and Legal Associate Chelsey Colbert.

As an example, Sidewalk showed off potential designs for signage that would alert people to the presence of the company’s Numina technology.

That tech monitors traffic patterns by recording, anonymizing and transmitting data from sensors using digital recording and algorithmically enhanced software to track movement in an area. These sensors are installed on light poles and transmit data wirelessly.

At the very least, the technology can’t be any worse than the innocuously intended cameras that are monitoring public spaces already (and can be turned into surveillance tools easily).

The hexagonal designs indicate the purpose of the technology, the company deploying it, the reason for its use, whether or not the tech is collecting sensitive information and a QR code that can be scanned to find out more information.

The issue with experiments like these in the public sphere is that there’s no easy way to opt out of them. Sidewalk Lab’s Toronto project is both an astounding feat of design and the apotheosis of surveillance capitalism.

Once these decisions are made to cede public space to the private sector, or sacrifice privacy for security (or simply better information about a location for the sake of convenience), they’re somewhat difficult to unwind. As with most of the salient issues with technology today, it’s about unintended consequences.

Information about a technology’s deployment isn’t enough if the relevant parties haven’t thought through the ramifications of that technology’s use.

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Verified Expert Brand Designer: Ramotion

Ramotion is a remote branding and product design agency that has worked with Bay Area tech startups since 2014. While they typically do branding for funded, fast-growing startups, Ramotion has helped companies ranging from Bitmoji’s early brand identity to Mozilla’s rebrand. We spoke to Ramotion’s CEO Denis Pakhaliuk about their iterative approach, his favorite branding projects, and more.  


Ramotion’s branding philosophy:

“We are a big fan of starting small: designing a small package, releasing it, and then iterating on top of that. So, founders need to be focused on what’s really necessary right now for their next round of investment or product releases.”

On common founder mistakes:

“I think some founders think they need everything, but they actually need an MVP and product design. The same goes for brand identity. They need to have some key elements like colors, typeface, and the logo. There is no need to do everything in the beginning, because the logo and brand identity becomes meaningful after it’s used. It’ll eventually improve.”

“They’re the reason we have such an amazing logo today.” Kevin Sproles, Austin, Founder & CEO at Volusion

Below, you’ll find the rest of the founder reviews, the full interview, and more details like pricing and fee structures. This profile is part of our ongoing series covering startup brand designers and agencies with whom founders love to work, based on this survey and our own research. The survey is open indefinitely, so please fill it out if you haven’t already.


Interview with Ramotion’s CEO Denis Pakhaliuk

Yvonne Leow: Can you tell me about your journey and how you came to create Ramotion?

Denis Pakhaliuk: Yea, I started as a CG designer more than 10 years ago. I was doing computer graphics, CG modeling, digitalization of architectural design and automotive design. I was initially very focused on German cars and industrial design. Once iPhone 3G came out, I switched to doing UI design for mobile apps, which was a very hot topic at the time.

From that point I met a guy who just said, “Hey, I’m thinking of building an agency,” and so we decided to do it together. It started with a few people and now we have up to 30. We focus on different products, from small companies to more established brands, like Salesforce, among others. So yeah, it’s been a fun journey.

Yvonne Leow: At what point did Ramotion start working with startups?

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