Fear, loathing, and corporate giveaways – TechCrunch

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Three themes this weekend, my dear friends. The first is fear, namely market concern. The second is disgust, or my knee-jerk reaction to particular information about the company. And finally, corporate gifts, a dive into a fascinating startup war. Let’s go!

Fear

DocuSign took a punch this week, with the electronic signature company’s stock price falling more than 40% on Friday as I write to you. This is one of the worst post-profit stock price moves I’ve ever seen, aside from cases of fraud or other corporate shenanigans.

What happened? DocuSign exceeded revenue expectations in its final quarter (Q3 FY2022). But the company’s billing – an indicator of future revenue – is significantly lower than expected. And the CEO of the company, Dan Springer, said this in his letter to investors:

After six quarters of accelerated growth, we saw customers return to more normalized buying habits, which resulted in billing growth of 28% year over year.

Springer believes the market is overreacting and intends to buy DocuSign shares next week. Are the markets taking too much advantage of what appears to be a return to more steady growth at DocuSign?

Maybe not? I’ve told people about it since it happened – including my dear friend Ron miller, which keeps me sane at work – trying to figure out if we’re seeing Wall Street impatience or something. I lean for the latter.

According to data from Yahoo Finance, DocuSign is worth around $ 27 billion after its huge declines. This is approximately 12.4 times its current execution rate. For an already publicly traded tech company showing strong signs of future revenue deceleration, who among us will stand up and say it’s too low?

Lots of people, but that’s because the general climate for multiple SaaS has been so hot for so long. Not too much A long time ago, DocuSign at 12.4 times its current execution rate after posting 28% billing growth would have been good, if not good. So could a return to previous standards be in the air?

Fear. This is what I expect to taste if we see multiple cutbacks among software companies. Thus, a large number of bets in the private market were placed on the hope that public valuations of comps would remain high. But after a few horrible days for tech stocks more generally this week, the tech climate may finally shift from a 100% risk weight to something more balanced.

Repugnance

Better.com withdrew three quarters of a billion dollars from its PSPC debut, giving it access to sufficient funding for its operations. Then he laid off some of his staff. The CEO said 15% during a call with the laid-off employees. Better insist that the number is actually 9%. The gap is huge, given the CEO was reading memos and claiming he called to execute the layoffs. If he made the decision, how did he get the wrong number?

Either way, here’s a master class on how not to lay off a huge stack of your workers:

(We have of course kept a copy of the video, in case that version is withdrawn.)

Remember: you are not family at your workplace. You are an asset that he wants to take advantage of and profit from!

Corporate gifts

Go back in time to early 2020. In February of that year, just before the pandemic turned, I covered Sendoso’s $ 40 million Series B. The company is in the business of corporate gifts and has since amassed a Series C of $ 100 million. .

Separately, an investor I know connected me to another market player in Sendoso, Postal.io, or just Postal. The two compete for market share in the send tips to current and potential customers market, which is, it turns out, huge.

Regular Exchange readers will already be wondering if we haven’t touched on this topic recently. We were doing! In September, let’s take a look at Postal and its progress just before Disrupt.

But I’ve since pulled out growth metrics from Postal and Sendoso that I wanted to add to our continued coverage of the space. Why should you care? Because similar to the OKR software space, or the instant grocery delivery marketplace, there is an interesting startup cluster to follow.

Sendoso and Postal compete with Alyce and Reachdesk, for example, among others. That’s a lot of start-up activity for the online to offline marketplace channel. And the market is big enough – Sendoso told The Exchange that “the US corporate gifts market is expected to reach $ 242 billion by the end of this year,” citing Coresight – for several players to grow at the same time. times.

Postal was the most free with metrics, sharing that it has seen a 70% growth in subscription revenue over the past five consecutive quarters. The startup also saw GMV grow at 3,765% from the third quarter of 2020 to the third quarter of 2021, as the number of clients rose from 35 to 286. This is why it was able to raise capital in September, we believe. .

Sendoso was more timid with the numbers for his recent performance. The startup grew by 330% in 2019, let us remember, but regarding its recent results did not deign to share an updated figure. Instead, Sendoso said it has 900 customers (north of 20,000 seats at these companies, for more details), and that its warehouses “in North America, Europe and Asia [have] processed more than 3 million shipments in more than 165 countries.

We haven’t received any new numbers from Alyce or Reachdesk in time for publication, but if they share the results, we’ll bring them to you next week.

Much like the OKR startup market, there are variations within the larger theme. In the case of corporate gifts, Postal is building a more digital offering, connecting goods businesses to buyers, while Sendoso has a larger IRL footprint, including its own physical item aggregation points. We love that business cases fight in real time.

Remember, however, that intense competition does not leave all parties unscathed. In the OKR market, Koan failed to hit his next fundraising milestone, and Microsoft has taken over one of the startup cohorts. In the instant grocery space, 1520 has just been kaput. Not that Sendoso or Postal might run out of liquidity, but if and when their market finds a point of consolidation it will be interesting to see.

Alexis



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