Protocol Index: Fundraising data keeps coming. Yes, it’s still bad.

Protocol Index


Good morning, and welcome to Protocol Index, your daily pop-up report about the financial movements that matter to tech during the COVID-19 crisis. Want Index in your inbox each morning? Subscribe here.

Today: More bad fundraising data, Airbnb's reportedly raised another billion, and the morals of tech bailouts.

What Matters Today

  • 5:30 a.m. PDT: U.S. retail sales data for March is released. Morgan Stanley expects an 8.3% month-on-month decline.
  • 6:15 a.m. PDT: Manufacturing production data for March is expected to show a 3.2% monthly decline. The Empire State manufacturing index for April, released at 5:30 a.m., will give a sense of whether things are set to worsen.
  • 9:00 a.m. PDT: President Trump will hold a phone call with healthcare, tech, and telecom industry groups, presumably to discuss his Great American Economic Revival plans.

Layoff Watch

  • WeWork reportedly told staff it would cut more jobs by the end of May. The size of the cuts is to be determined, CEO Sandeep Mathrani is claimed to have said.
  • Camera app VSCO laid off 45 employees.
  • ByteDance reportedly wants to hire 40,000 people this year, with 10,000 open positions already.

Today's News

As of 4:10 a.m. PDT: Nasdaq Futures: -1.08% | Euro 600: -1.84% | Nikkei: -0.45% | Hang Seng: -1.19%




  • Airbnb has reportedly raised another $1 billion in debt, from Apollo, Owl Rock, Silver Lake, and Sixth Street. The new loan is senior to last week's raise and has a lower interest rate of 7.5 percentage points over the risk-free rate.
  • Glade Brook is reportedly raising a $100 million fund focused on private technology company debt. Reuters reports it will invest in the loan offering I just described.
  • Lightspeed raised $4 billion across three funds, including a $1.5 billion fund for existing portfolio investments.
  • Andreessen Horowitz reportedly wants to raise $450 million for a new cryptocurrency fund.
  • Qualcomm agreed a deal with electronics manufacturer BOE to embed its fingerprint sensors in BOE's displays.

Diving Deeper

More VC data. And yes, it's bad.

Hot on the heels of yesterday's PitchBook report, a bunch more data offers some new insights into what exactly is happening in the fundraising market.

  • U.S. deal activity plunged 22% year-on-year in March, according to the new MoneyTree report by PWC and CB Insights. That signals that COVID-19 has caused a significant deceleration.
  • Asia suffered most in Q1 as a whole: Deal activity there was down 20%, compared to 17% in North America and 10% in Europe. Globally, funding was down 10% from Q1 2019.

And a new survey of investors interested in the European market, carried out by Yannick Roux and Stefano Bernardi, offers some insight into what VCs are feeling right now.

  • 41% of investors said they've not made any new commitments since March 1, with that number growing to above 70% among non-fund investors such as family offices and corporates.
  • The majority of investors expect valuations to drop around 10-30%, and around half said they expect to do fewer deals than they had anticipated in the coming months.
  • Over half of those surveyed expect a recovery — defined as the first quarter of positive year-on-year GDP growth — to come in 2021, not 2020.

Meanwhile in China, Reuters reports that secondary market transactions are valuing unicorns, including SenseTime and DJI, 10% lower than their last funding rounds. HelloBike, a bike-sharing service backed by Ant Financial, has seen a 20% drop in valuation to $3.2 billion.


  • "To the extent that people are still spending, it will be even more concentrated with Google and Facebook. They are likely going to end up in a stronger position after all this is over." — eMarketer's Nicole Perrin on how the ad slump might affect the tech industry.
  • "Looking at news stories coming out of Wuhan China, where consumers are reluctant to go into malls even as the city opens up, gives us increased confidence that a fair amount of the lift in ecommerce is going to be durable." — Deutsche Bank's Lloyd Walmsley thinks new Prime subscribers might stick around.
  • "Thoughts of a rational environment in 2020 are now out the window ... This pushes out improvements to profitability further, and it likely re-raises the conversation around consolidation once the dust settles." — Wedbush thinks heavy discounting among food delivery companies will hit earnings and force mergers.
  • "Last year we saw several cases where an insider extorted a company with data they had stolen." — FireEye's Jon Ford told Protocol that layoffs can create cybersecurity threats if not handled properly.
  • "Amid coronavirus-related upheaval to the car industry, we believe Tesla increasingly has a leg up vs. other automakers." — Credit Suisse upgraded Tesla's stock from underperform to neutral. The stock jumped 9% yesterday.

Everyone's Talking About

Is it wrong to take free money?

We've talked before about some people's disapproval of startups getting bailout money. Today on Protocol, Charles Levinson reports on a whole bunch of people in the industry who aren't hot on the idea.

  • "The vast majority of the stimulus is going to support asset prices for the top 1%, and the stimulus for the working class is relatively tiny," Chris Hulls, CEO of family tracking and networking app Life360, told Charles.
  • But Hulls doesn't blame startups for applying: The problem is the structure of the bailout, he thinks. "It's set up these perverse incentives where companies that don't really need the money will be getting it."
  • "It's this weird situation where if you don't apply, you're doing something bad for shareholders from a fiduciary perspective," Hulls said.

Charles also heard from Mark Cuban, another tech investor heavyweight adding to the chorus of those calling for equity-backed bailouts.

  • "If I gave a company money, I would want equity, preferential [shares], warrants, whatever we negotiate. If they don't like my deal they can go elsewhere. The same should apply for taxpayer money," Cuban said.

Above all, founders now have to reckon with the morals of all this. "There's some level of guilt about doing well when others are suffering," Hulls told Charles. "If you win a game on a level playing field, that's one thing, but if you win in a rigged system, that doesn't feel as good."

Closing Bell

Crisis? What crisis?

I can't stop hearing from people bemoaning the fate of their retirement accounts (I'm too scared to check my own). But it's not bad for everyone. Bloomberg reports that Elon Musk's wealth has gone up $10.4 billion so far this year, second only to Jeff Bezos's eyewatering $24 billion gain. I wonder if that makes self-isolation any more palatable?

Thoughts/feedback/tips? Email me — — or anonymously contact Protocol. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

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