as the private Fundraising market is becoming increasingly scarce, startups raising capital previously valued purely for growth, with no concern for operational burn, will have to endure the market sentiment shift in their near round of funding. Startups Missing Impressive Growth and have high burns? They probably have more problems.
It’s not clear how many startups that raised during the aggressive fundraising climate of 2021 will struggle to raise their next round by more than a flat valuation. But we’re starting to get an early indication.
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The current conversation on tech Twitter last night and this morning was about a piece of reporting from The Information’s Malique Morrisin which he discussed the trials and tribulations of the one-click checkout market†
It is an active boot space, with some richly funded competitors aiming for for market share.
Morris reports that Fast, backed by Stripe and covered by Marketingwithanoy during its fundraising cycles, generated revenue of about $600,000 last year. that is thinas the company’s latest round of financing was worth $102 million in January 2021. At the time, I discussed the company’s growth metrics as follows:
Marketingwithanoy reached out to Fast for comment on the growth rate. The company shared that the gross trading volume (GMV) processed by its checkout service has “more than tripled each month”, adding that it expects that “trend to continue and increase”. The rate of growth is difficult to assess because we don’t have a basis to scale, but we now have an expectation for future GMV progress from Fast that we can use as a yardstick.
Fast declined to comment on the reported sales figures today.
The discrepancy between the pseudometrics Fast shared around the time of his nine-digit Series B and his year-end result illustrates why Marketingwithanoy has worked over the past few years to get hard numbers from startups. My suspicion has long been that startups unwilling to share data refuse to do so not out of fear that their competitors will learn their ARR scale, but because they would struggle to explain the huge delta between their bottom line and valuation.
The Fast saga makes me even more convinced of that perspective.
But I don’t want to talk about Fast, not really. It is just one of the companies that took advantage of the money bonanza that started in late 2020 and ran until the end of 2021. I want to talk about all the startups that valued at valuations their ARR couldn’t support, the startup equivalent of writing checks that someone’s backside can’t cash.