Raise now, pay later: $800M funding round slashes Klarna's valuation by 85%

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TechCrunch Master Template TechCrunch Newsletter

Monday, July 11, 2022

Hello! We love you! Wonât you tell us your name? Not literally. Or perhaps yes literally â come say hi to us on Twitter. We may not always be able to respond, but itâd be nice to know youâre out there. Tell us your favorite little-known fact, for example. Clicking on that link gets you started. â Christine and Haje

Image Credits: Klarna

The TechCrunch Top 3

Klarna, Klarna, Klarna, Klarna, Klarna chameleon: Sorry, we had to bring this header back â itâs just too good and makes us happy. This time around, we confirm the rumors were true: European Klarna bagged a hefty piece of venture capital real estate â $800 million â but did it at a lower valuation, so 85% less to land at $6.7 billion, Paul writes. Everybody wants you: And by âyou,â we mean Gen Z. They arenât really old enough to remember the absolute horror of watching stocks and investments tank during the 2007â2010 economic downturn, but 2022âs environment is giving them a taste of that. Not to worry, Christine writes about Uprise, a new app in private beta that is building an investment tool with Gen Z in mind so they can know when to take that 401(k) match or how much is too much to have in a checking account. Somehow we manage: However, managing a fleet of migrant workers can be an administrative headache. In another story by Paul, he writes that Kadmos is out to provide some medicine for that headache in the form of a salary payments platform specifically for migrant workers so that, among other things, they can avoid paying some of the exorbitant fees for transferring money to their respective homes.

Guide: What is SOC 2 and Why Do Startups Need It

Startups and VC

Unacademy, one of Indiaâs high-flying startups, is going through a round of cost-cutting measures, including salary reduction for founders and shutting down âcertain businessesâ as it tightens its belt and pledges an IPO in the next 2 years, Manish reports.

Apropos layoffs, Natasha M took a closer look at the data about who has been hit the hardest in the great tech layoff wave. Spoiler alert: Itâs fintech leading the discharge. Thereâs also a bunch of other really interesting pieces of news from the past week, in Natasha’s Startups Weekly newsletter. You can subscribe to that, and a bunch of our other awesome newsletters, on this handy one-stop-shop subscription page.

Itâs been a busy weekend on TechCrunch. Hereâs the cream of the crop!

Once, twice, three times a decimation: In the midst of events going back to in-person, and the interest for virtual events waning, Hopin â once the worldâs fastest growing startups â just laid off a third of its workforce, just months after its last round of layoffs, Natasha M reports. Hey, Google, send some money to my BFF: Thereâs been surprisingly few voice-powered payment solutions, but Kyle did a deep-dive into PayTalk and its promises to handle all sorts of payments with voice. Itâs a great read of a promising company off to a wobbly start. We raised, maybe? Byju announced an $800 million funding back in March, but Manish reports that the startup is $250 million short of hitting that goal. âThe delays are because of macroeconomic reasons,â a spokesperson told TechCrunch. Like SmileDirect, but Spanish: Impress is raising a $125 million Series B round in an effort to bring digital orthodontics to European markets, Mike reports. The tiger gets caged for a bit: Tiger Global has been on a hell of a run, but Manish reports that itâs going to hit the brakes for a couple of quarters and is planning to raise a new fund later this year. A Penny for your thoughts: Itâs hard not to be a penny-pincher these days with the economy the way it is, so Googleâs Gradient Venture is backing Penny with $4.8 million so workers in the U.K. donât have to spend a pretty penny to merge or manage their pensions, Paul reports. Itâs like a soap opera: Elon Musk has had a week and a half, as Greg so elegantly summarizes in his Week in Review newsletter.

“Fun” fact we stumbled across when Googling stuff for this newsletter: Wikipedia tells me that to “decimate” actually means “to reduce by 10%” and stems from the Roman army, where, as punishment, every tenth man in a group was executed by members of his cohort. That means two things: Getting fired from a startup sucks, but at least youâre not getting murdered. Also, Hopin, which started this rabbit hole, was not just decimated, but decimated three times over. Yowzers.

Turn your startupâs pricing strategy into a powerful growth lever

Early-stage startups must revisit their pricing models regularly: The competitive landscape is in a constant state of flux, and each time they release a new product or service, their revenue streams should be recalibrated.

In his latest TC+ post, Michael Perez, director of growth and data at VC firm M13, shares five questions he uses to devise pricing strategy frameworks, along with three value metrics and a detailed measurement plan for GTM strategy.

“Pricing models that scale proportionally with value tend to capture more value as revenue and contribution margin,” he writes. “Contribution margin can then be reinvested in sales and marketing or operations to create more value.”

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Image Credits: happyphoton / Getty Images

Big Tech Inc.

First, we need to give a shout-out to the team who took on the late Friday news that Elon Musk decided not to buy Twitter. Taylor got the news up quickly, while Darrell covered Twitterâs initial reaction and Kirsten “delivered” (pun intended) one of the best headlines in her article on Tesla shares.

Meta is going after âfake newsâ in a new way with Sphere, an artificial intelligence tool based on content from the open web, and Wikipedia is its first user, Ingrid writes.

Meanwhile, London lost its hold on Australia-based Atlassian, which said it will be moving its headquarters to Delaware, Mike reports. Please, please announce yourself to the neighbor with this gif.

Sometimes robotics doesnât always work, and unfortunately, that is the case with salad robot startup Chowbotics, which 17 months ago was bought by DoorDash and is now shutting down, Brian writes.

Hereâs what else we have for you today:

Social media schmeer: Sarah writes about how TikTok is going after small businesses with a new “Follow Me” education program. You can step up your emoji game on WhatsApp now and use any emoji as a reaction, Ivan reports. People are going to be getting a lot of :poop: And Instagram is testing a new âLive Producerâ tool that lets users go live from a desktop, Aisha writes. Weâre just going around in circles: First Microsoft wasnât, then it was. Carlyâs story â and clever headline â focus on Microsoft reversing its stance on an earlier reversal related to blocking Office macros by default. She tells it better. Here ye, here ye: Appleâs iOS 16 is now out in its first public beta, and Ivan walks you through what all that means. Come together: Pix Moving and TIS are joining together to bring robovans to Japan, Rita writes.