Daily Crunch - Tech stocks hammered after US Treasury Secretary speculates on hiking interest rates

TechCrunch Newsletter [TechCrunch logo]( [The Daily Crunch logo]( Tuesday, May 04, 2021 • By [Alex Wilhelm]( Are startup valuations about to fall? Hello, friends! [Alex]( here to talk to you for a hot second about money. Then we’ll get into startups, venture capital, what Big Tech is up to and more. I promise. But hang with me for a moment. Tech stocks got hammered today: The tech-heavy Nasdaq fell by more than 2%. Cloud stocks endured twice the damage. What happened? The U.S. government said that it might raise interest rates. So what? Well, when rates were low, lots of money that might have been invested elsewhere was instead [funneled into tech stocks]( and [VC funds that invest in startups](. Now, with the government saying that it might shake up the current state of affairs, investors are responding by selling tech stocks. Bessemer Venture Partners investor Byron Deeter noted the drop, [tweeting]( that after a “brutal few days in the clouds,” with software stocks off “~5% today and ~10% on the week,” he was curious if valuations are “just taking a breather after a massive 2020” or starting “a broader reset.” That’s a great question. More on the underlying economics of the situation [here]( and [here](. Now, into startup-land. [Are startup valuations about to fall? image] Image Credits: Andriy Onufriyenko / Getty Images Twitter doubles down on subscriptions If you were curious about how Twitter was going to pursue its subscription strategy, the answer, to a degree, is buying startups. Today Big Tweet [announced that it is buying Scroll](, a startup that charges its users a fee, providing them with an ad-free experience on various media sites. Scroll then split its user fee with those sites. A neat model, yeah? It’s a bit like the startup called Contenture that TechCrunch [covered a few times back in 2009](. Only Scroll made more progress than Contenture did. And your humble servant was not a co-founder at Scroll. Regardless, the Scroll-Twitter deal matters because the social media company is busy rolling up startups and products into its ecosystem to better craft a set of services that may help it monetize more effectively over the long haul. [Sarah]( reports: [Scroll] will become a part of Twitter’s larger plans to invest in subscriptions, the company says, and will later be offered as one of the premium features Twitter will provide to subscribers. Premium subscribers will be able to use Scroll to easily read their articles from news outlets and from Twitter’s own newsletters product, Revue, another recent acquisition that’s already been integrated into Twitter’s service. When subscribers use Scroll through Twitter, a portion of their subscription revenue will go to support the publishers and the writers creating the content, explains Twitter in an announcement. [Twitter vs. Substack](? Yep. [Twitter vs. Clubhouse](? Yep. And if Twitter can help media companies better monetize and thus not die? Well, then it’s Twitter versus [the a16z media operation](. I didn’t really expect a Jack versus Marc 2021 but am here for it all the same. [Start Writing Unignorable Sales Emails]( Sponsored by [Gong]( [Sales emails are a science. We’ve just never had the data to prove it. Until now. Gong analyzed 300,000 sales emails to uncover the secrets top sellers use to write sales copy that, well, sells. Turn your inbox into a revenue magnet with the 7 Laws of Highly Effective Sales Emails.]( [Download Now]( A typical day in today’s startup funding market There was a cornucopia of startup news today on the site, so I’ve narrowed it a bit to get you what you need in a hurry. Also, shoutout to [Mary Ann]( for covering half of it all by herself. Here’s the rundown: - [HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses]( — Tiger participated in this particular Series D led by Durable Capital. Financial control software is hot! - [Persona lands $50M for identity verification after seeing 10x YoY revenue growth]( — You might recall that Persona [raised $17.5 million last January](. That’s one hell of a COVID-era growth cycle. - [WorkBoard raises $75M as the OKR-focused startup bets on a growing economy, changes to business culture]( — The great OKR startup software boom continues. More on the upstart cohort [here](. - [Acronis raises $250M at a $2.5B+ valuation to double down on cyber protection services]( — You might know Acronis as a [Williams F1 sponsor](, but it’s also now a multicorn with a quarter billion of capital on its books. Perhaps F1 is that expensive. To round out our startup and venture capital notes, here are two more bits of news: Austin-based Multicoin Capital has raised a $100 million fund to “further capitalize on rampant excitement in the crypto world,” [per our own reporting](. Oh, and London-based seed investment fund Stride VC [has raised a £100 million fund](. [Advice and analysis from Extra Crunch]( How to break into Silicon Valley as an outsider There is no magic spell that will induce an investor to meet with you. As with most things in life, it all comes down to who you know and what you have to offer. “Nothing beats building human networks,” says Domm Holland, CEO and co-founder of Fast. “That’s the way that you’re going to get this done in terms of fundraising.” Since its founding in 2019, Fast has raised $124 million across three rounds as it lands new users and partners like Stripe for its one-click checkout product. In this interview, Holland, a native Australian, shares actionable advice for other outsiders with startup dreams. “Raising money isn’t the only thing,” Holland says. “You’ve got to hire people, you’ve got to build a team, you’ve got to build customers and suppliers, and you’ve got to build entire ecosystems. (Extra Crunch is our membership program, which helps founders and startup teams get ahead.[You can sign up here](.) [Read More]( [Advice and analysis from Extra Crunch image] Image Credits: Klaus Vedfelt / Getty Images The enterprise strikes back Before we get into the enterprise news, here’s what you want to read about: Tesla spent $3 (not a typo) to [purchase patents relating to battery tech]( that we think could really matter. On the enterprise front, [Ron]( has two stories today from tech giants that matter. The first is [an interview with SAP CEO Christian Klein](. SAP, you will recall, spun out Qualtrics a little bit ago. What’s ahead for the software giant? Ron is on the case! From the same pen, Box’s time in the barrel continues as [some of its largest public shareholders are agitating]( to “inject [Box’s] board with still more new blood, taking a swipe at the Box leadership team while it was at it.” This is a fight worth watching as it could encourage, or discourage, more unicorns from going public. Finally from Big Tech, some good news. Namely that Instagram is [working on improving its caption tech](, which could help with accessibility. And our own Twitter-free Devin reports that [Microsoft wants to help kids read](. Community We asked everyone on Twitter about their experience trying to learn a foreign language, and you can [weigh in here.]( Some of you have tried using Duolingo (with success!) and some shockingly got through German class in junior high without learning a single sentence of the language. Regardless of your personal experience, [give the Duolingo EC-1 a read]( and learn about [how the company started](, how they figured out how to [make money]( and [what’s up next for them](. Speaking of starting a company … if you’re building your own, join us for [this week’s Extra Crunch Live](. [Register here](. It’s free! See you there. 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