VC

Open for Business?

Venture capital is the peanut butter to the startup ecosystem's jelly. But because the Great Lockdown has likely brought us the worst economic downturn since the Great Depression, the PB&J sandwich is getting a frugal makeover.  

According to the PitchBook-NVCA Venture Monitor report released yesterday, venture shops invested $34.2 billion globally across 2,298 deals in Q1 2020. The less-good news: COVID-19's disruption of the disruptors isn't entirely evident in this data. The WHO declared COVID-19 a pandemic on March 11; most Q1 deals were already completed or in the pipeline by then. 

Q1 trends to note

• Corporate VCs participated in nearly 30% of all deals, the highest rate to date. 
• Venture funds raised $21 billion across 62 investment vehicles. "There is ample dry powder in the market ready to be put to work in promising startups," PitchBook and NVCA say.
• Late-stage median deal sizes are dropping, but early-stage valuations are still growing. 
• "The IPO market has rapidly fizzled out, and it's possible that the M&A market could see hits as well," the report suggests.

One particularly helpful vertical?

PitchBook/NVCA

If you're a startup working on vaccines or drug development, chances are 1) you're an essential business and 2) investors are emailing you. The life sciences sector was already gaining momentum before the pandemic. Median and average valuations were both higher in Q1 2020 than all of 2019. 

And because this is Emerging Tech Brew: AI startup funding stayed strong in Q1, with a nearly 40% increase in median valuations over 2019. 

The new normal

The next Venture Monitor will look completely different, since the VC spigot is morphing from firehose to water flosser. Many established funds have capital to ride out the storm, but as the new investment pie shrinks, startups will have less flexibility and fewer fundraising options. Startups' marching orders = extend runway and cut burn rates, which often means layoffs.

+ Want more VC? Yesterday, Forbes dropped its 2020 Midas list of the top 100 venture capitalists in the world.

HARDWARE

Made in Google

Google wants to be the master of its own smartphone destiny. The search engine turned smartphone purveyor is creating a processor for its Pixel phone, Axios reports. 

Whitechapel is the codename, aligning hardware and software is the game. Google's chip is based on ARM blueprints and will be manufactured using Samsung tech.  

• Google received prototypes of the chip in the past few weeks. 
• The hardware reportedly won't be ready for Pixel phones until next year. 

Google is weaving ambient computing—always-on AI background services—into its product lineup. With a bespoke Pixel chip, Google's configuring hardware specifically for use in its voice assistant, object recognition, and machine learning applications. 

 Google is taking a page from Apple's playbook. As part of its mission to control the underlying tech in its products, Apple creates its own processors for the iPhone, AirPods, and Apple Watch. 

Zoom out: Google developing its own Pixel processors is a loss for Qualcomm, which makes the processors powering most high-end non-iPhones. 

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Former Presidents and Former NBA Stars Don’t Have the Same Hips

But the orthopedics industry has been using the same implant and instrument ideology for the past 50 years. Crazy, huh? Dr. Douglas Unis thought so too, thus Monogram was born. 

It’s the joint replacement company working to improve the current standard of orthopedic care through high precision, patient-specific implants with state-of-the-art robotics.

Frustrated with outdated legacy technology, Dr. Unis (aka the guy that’s making orthopedics way smarter) founded Monogram to create 3D-printed, robotically-inserted implants that are up to 270% more stable than generic equivalents. Now you can support the orthopedic technology revolution by investing in Monogram’s technologies.

We admit, investing in the joint replacement market might not sound sound sexy, but the industry is worth more than $27 billion, and over 1.65 million hip and knee replacement procedures occur in the United States every year. 

Be a part of the only orthopedic company to offer robotic technology. 

Invest in Monogram today.

PUBLIC HEALTH

More Details on Contact Tracing

When they're not developing competing products, Apple and Google are jointly building the software architecture for coronavirus contact tracing apps. A few updates from Monday's story: 

Anti-troll measures: The two companies are implementing verification measures so a user's self-reported positive COVID-19 diagnosis can be cross-referenced with public health data. This could address concerns that bad apples (or hypochondriacs) could log fake COVID-19 diagnoses. 

Proximity: Per social distancing protocol, smartphones will trade beacons over Bluetooth if they're within six feet of each other. 

Phase 2: The companies plan to eventually roll out OS-level contact tracing in the coming months. If you opt in, you'll be notified of potential exposure to COVID-19 even without downloading the app. 

Implementation: Only public health authorities can build apps on top of the Apple/Google software. We're at least a few weeks out from that. But once the ball is in their court, health agencies will face their next big challenge: making sure people download the app.

BITS & BYTES

Stat: SoftBank expects its Vision Fund to have lost $17 billion in the last fiscal year.

Quote: "It's philanthropy and business and nonprofits coming together with government to have a national response. That is the only way we're going to be able to care for all Americans"—Melinda Gates to Business Insider. 

See: Apple published aggregated data about COVID-19 and mobility in different cities, regions, and countries. For more related info, check out the Brew's COVID-19 Traffic Report.

SPONSORED BY FORMSTACK

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WHAT ELSE IS BREWING

• PC shipments dropped 10% annually in Q1 2020, according to IDC. 
• ByteDance is currently recruiting for 10,000 positions and aims to hire 40,000 new employees by end of year, Bloomberg reports. 
• Facebook's R&D team launched Kit, an experimental app that lets Messenger users communicate, share locations, and send emojis over Apple Watch.
• Quest, Oculus's all-in-one VR headset, is available for purchase again. It was sold out on Oculus's storefront in March. 
• DoNotPay launched a feature to help users automate filing for unemployment in all 50 states.

FROM THE CREW

Black Mirror IRL, a Wednesday regular, is off today. Here are two recommendations in its place...

• I joined The Human Element, Carat's podcast, to discuss the Brew's COVID-19 Traffic Report, changing online/offline behavior, and virtual crystal balls. Listen on Spotify / Apple / SoundCloud
• Morning Brew launched The Essentials, a guide to staying active, healthy, and happy during lockdown. It's fantastic. Sign up here.

TECH THINGAMABOBS

Sweet Farm

For animal lovers: Nonprofit Sweet Farm has launched an innovative new service: Goat 2 Meeting. With a modest donation, you can patch llamas, goats, or other farm animals into your corporate Zoom meetings. This is the best pivot ever. 

For the wonks: Facebook added fake bot accounts on its platform to model their interactions (h/t Jack Clark). These accounts did not interact with real users. Here's Facebook Research's paper on the Web-Enabled Simulation (WES) world.