Subscribe to the Crunchbase Daily

Marcy Venture Partners, which was founded last year and is based in San Francisco, focuses on consumer brands. Its name is a nod to Brooklyn’s Marcy Houses where Jay-Z grew up.

The firm has already made a number of deals. It’s invested in six companies so far, leading the rounds for three, according to Crunchbase. Its most recent investment was in electric mobility startup in October 2019, and the largest round it’s led so far was a $70 million round for singer Rihanna’s lingerie line . The firm’s first investment since it was founded in March 2019 was ’s $8 million in April 2019.

It’s a quick pace of investing for the first seven months of a VC firm’s existence, but the co-founders are no strangers to the world of venture capital.

Jay Brown, who co-founded with Jay-Z and served as its CEO until late last year, has invested in companies like and . Jay-Z, , is also known for backing high-profile companies like and . And Larry Marcus is a seasoned venture capitalist. He’s the director of , which invested in companies like and , and he backed companies like and as an angel investor, according to Walden VC’s .

Illustration Credit:

Subscribe to the Crunchbase Daily

Case in point: Music creation platform has received a $75 million investment from audio company two years after it was notoriously just “.”��

SoundCloud is a platform for individual audio creators to upload content, attracting the attention of average listeners like you and me, lesser-known artists and celebrities such as The Weeknd, Kehlani, and Lil Yachty (even before they got famous).��

The company is a home for independent, unsigned artists, and like many social media platforms it creates the opportunity for one-time nobodies the possibility of going viral and making it big.

SoundCloud was founded in 2007 and claims it has over 200 million tracks from 25 million creators heard in 190 countries. The startup has over $500 million in funding to date, ��

Sirius XM’s investment in the company will be used to work on “product development and enhance the services that fuel its global community of creators and listeners,” .��

SoundCloud’s CEO Kerri Trainor also claims that, “three consecutive years of strong financial performance directly reflect the success of our creator-led growth strategy.”��

SoundCloud’s growth is notable. According to the company, it has a $200 million revenue run-rate based on the financials of fourth-quarter 2019. For those that don’t know, run-rate is a metric that helps forecast the year-end revenue by multiplying the performance of one quarter. That said, it is often employed by younger companies, and SoundCloud is over 13 years old at this point.

To unpack how this company went from almost closing to its recent news, a look as today’s investor is telling. According to the company, an ad and sales partnership with Sirius XM subsidiary �� made the platforms the “largest digital audio advertising marketplace.”

“The agreement enables advertisers and brands to purchase SoundCloud’s U.S. ad inventory directly through Pandora, leveraging the company’s direct sales capabilities, targeting data, and audio programmatic platform,” per the release. The combined audience is more than 100 million unique active listeners, a spokesperson for the company told Crunchbase News this morning. For context–streaming platform has 271 million monthly active unique users according to its latest earnings report.

Beyond partnerships, there’s definitely other factors at play that propelled the company past its layoffs and shutdowns–including support and public rallying from Chance The Rapper, .

But it was likely from and in 2017 that helped SoundCloud stay afloat. It also led Alexander Ljung, the founder and chairman of the company, to step down as CEO. This kicked off a companywide restructuring.��

Per Ljung, the 2017 investment promised a musical future.

“This financing means SoundCloud remains strong & independent. As I said, SoundCloud is here to stay,” at the time.

Today’s minority investment will allow two board seats for Sirius XM.��

Illustration:

Back in the days of the dot-com bubble, the city of Oakland posted ads atop San Francisco taxis claiming that “Oakland is closer to San Francisco than San Francisco is to San Francisco.”

Subscribe to the Crunchbase Daily

It’s one of those statements that’s both demonstrably false and rather accurate. It is actually faster to get to downtown San Fransico via transit from Oakland than from outer neighborhoods of San Francisco. The cities are only 8 miles apart, as the crow flies.

Proximity to the center of the unicorn boom, coupled with a transit-friendly downtown and slightly lower cost of living and business operating costs, makes Oakland an increasingly popular choice for scaling startups. This , including many who thought they were fleeing tech saturation in San Francisco. But so it goes.

Here’s How Much Money Oakland Startups Are Raising

So far this year, 47 Oakland-based companies have closed funding rounds with a combined value of $583 million. That’s the highest total in years, and part of what’s a mostly upward trend of funding in recent years:

Still,Oakland is not rich in unicorns. Per Crunchbase data, there’s just one private, venture-backed Oakland company that’s crossed the $1 billion valuation threshold. , a fintech unicorn, has raised nearly $400 million for its configurable payment card technology.

Marqeta was by far the biggest funding funding recipient this year, closing on a $260 million Series E. Other large rounds went , a developer of data replication technology, and , a software feature management platform, which both raised $44 million. And , maker of marijuana brethaylizers, pulled in $35 million. (For more info, we put together a funding rounds this year.)

Exits And Flops

Oakland-based companies have generated a few big exits in the past few years, as well as some flops.

This year’s biggest deal involved , a�� provider of plagiarism-detection tools that sold to media company Advance in a deal valued at $1.74 billion. But Turnitin was no startup, having launched back in 1996.

Nor was last year’s biggest M&A target, the music service . The company, previously publicly traded, sold to SiriusXM for $3.5 billion.

Other big local outcomes include , known for its exceptionally strong brews, which sold to Nestle two years ago for a reported $425 million. , a developer of therapies for rare genetic diseases, sold to fellow pharma Zogenix this year for $250 million.

The city has seen its share of flops too. Home solar provider was once a high-flyer that . , a heavily funded smart pen developer, wound up selling its assets a few years ago for a fraction of its invested capital. And , a renewables provider that was probably the city’s most heavily funded startup, has whittled down its presence in Oakland as it focuses on overseas projects.

Seems Like A Place That Would Have More Startups

Notably, the funding numbers for Oakland over the past three years – $1.28 billion – are lower than many other nearby cities with lower buzz and smaller populations that we profiled.

Oakland, however, seems to generate more talk in part because it has attributes we associate with a startup hub: a dense downtown, a vibe that’s a mix of gritty and hip, and the kind of urban lifestyle popular with younger tech workers. Plus, it’s really close to San Francisco.

“I think we’ll see Oakland emerging as tech moves a bit to the East,” says Jeff Bellisario, interim executive director for the Bay Area Council Economic Institute, which studies economic issues affecting the region’s livability and business competitiveness. “It’s becoming that cool hip place to go.”

Photo by via Unsplash.

Follow Crunchbase News on &

In the midst of its growth, of Spotify going public have swirled for months. Instead of a traditional initial public offering (IPO), Spotify is either later this year or in early 2018.

Unlike a traditional IPO, a , another way of going public, lets investors buy shares on the open market and does not set the share price beforehand.

Consulting our friends at , there two key reasons that may have contributed to Spotify choosing direct listing over a traditional IPO:

1. Direct listing allows a company to , skipping the underwriting process, while enduring fewer regulations, and throwing the “lock-up” period (a certain amount of time after IPO during which shareholders are restricted from selling their shares) out the window. Spotify can then create liquidity faster for its employees and investors. On the downside, Spotify misses the opportunity to raise capital at IPO.
2. In traditional IPOs, many companies struggle to maintain the initial share price, as in the case of . Based on its , Spotify does not have to reprice and avoids fluctuations in share prices through a direct listing.

Meanwhile, the already-public streaming service Pandora is wallowing in Spotify’s wake.

Despite Pandora’s Q2 2017 earnings showing growth (YoY), dependence on the metric as indicative of Pandora’s current state is overly optimistic.

Just last month, Pandora appeared to be short on cash. It responded by , which it acquired in October of 2015, to Eventbrite for $200 million. Also, thanks to a timely investment by Sirius XM in the same month, Pandora was able to keep its business running. Chaos continued through the end of June when Pandora’s co-founder and CEO Tim Westergren . President Mike Herring and CMO Nick Bartle also announced their from the company around the same time.

Yesterday, Pandora officially its services in Australia and New Zealand, its only two international operations. The move makes sense, allowing the company to conserve cash for tackling its home market and its domestic competition.

How Spotify Gains the Upper Hand

Spotify, though still a private company, has taken the lead over its public rivals. Available in approximately , Spotify is than Pandora in terms of subscribers. Making that point: Spotify’s recent 60 million paid subscribers Apple Music’s 27 million (as of June). Granted, Apple Music launched seven years later than Spotify, but time of founding may not be the best metric since Spotify came out eight years later than Pandora.

Adding to its momentum, Spotify is striking new deals with record companies. In April, Crunchbase News covered Spotify’s new agreement with Universal Music Group, which allows premium-tier users to listen to new albums two weeks ahead of nonsubscribers; simultaneously, Spotify picked up an exclusive . This July, Spotify signed and is with Warner Music. These deals are crucial to keeping Spotify afloat in the expensive world of licensing fees, while also, in some cases, providing an incentive for free users to upgrade.

Even though Spotify suffered almost this Q2 compared to last year’s, the percentage of operating loss as part of its revenue over time. Perhaps, with the growing number of paid subscribers and music label deals, Spotify will finally pull off an IPO.

From the :

Reddit raises $200M at $1.8B value

• has raised $200 million in a new venture round backed by Andreessen Horowitz, Sequoia Capital, Coatue Management, and others. The financing reportedly values the San Francisco-based online discussion platform at $1.8 billion.

Facebook buys AI startup Ozlo

• Facebook has acquired , a four-year-old developer of artificial intelligence technology for virtual assistants, in an effort to build out conversational AI for the Messenger platform. Silicon Valley-based Ozlo previously raised $14 million in venture funding. Also, in other chatbot M&A news, LogMeIn that it is acquiring , an Israeli startup that develops AI-based chatbots, for up to $50 million.

A look back in IPO: Google

• For a bit of nostalgia, Crunchbase News sends our time machine back to 2003, when Google launched the most anticipated IPO of the year. We then zoom forward to take an updated look at how some more recent offerings are doing and at who’s next on deck. (For more stories, follow on Twitter and check us out on .)