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Catching Up On Tintri’s Collapse

Morning Report: Tintri went from bad to worse. 

Tintri, which limped across the finish and became a public company last year, has filed for bankruptcy (here’s a CNBC tick-tock) and will sell most of what’s left of itself to DataDirect Networks.

According to the Silicon Valley Business Journal, Tintri is in default of its loans, laid off “80 percent” of its staff in June, and will return nothing to shareholders if the DataDirect deal is approved. There will be some money to pay staff in the meantime.

So that’s a wrap on Tintri, and its collapse isn’t surprising.

I did a little work pulling out some archive material on Tintri this morning to show that the company’s weaknesses appeared material even back when it was going public. Our goal isn’t to give ourselves points for being negative about a lackluster company, but instead to show that in today’s market even the crap can get out.

Here’s some of our coverage of Tintri’s march to IPO, and the aftermath presented in three parts. First, skepticism about its financials:

  • Tintri: Red Ink And A Shrinking Valuation (June 27, 2017): “Why is Tintri worth less than twice the capital it has raised to date? Likely because it only grew 45.45 percent in its last fiscal year — from $86.0 million to $125.1 million — while its losses grew from $100.98 million to $105.80 million.” We went on, noting that “And there’s the little matter of its odd, and likely irksome, quarter ending April 30, 2016, in which it shrunk sequentially to its smallest size in a half year. Regardless, Tintri appears to be testing the lower-end of the enterprise IPO market. How investors treat it its debut will be a rich data point.”

Next, its rough path to the public markets, including a nigh-comical valuation cut (where else have we seen that?):

  • The company’s weak shape was noticed by the market, forcing the company to cut its value and price its IPO under its expected range. Here’s your friendly News team from June 30, 2017: “[A]fter a last-minute delay, and price reduction, Tintri went public this morning. Off its reduced price point, shares in the Cloud-ish Cloud-y Cloud Cloud company are up 4.7 percent to $7.33, after pricing at $7. Tintri originally aimed to debut between $10.50 and $12.50. That range was later lowered to $7 to $8, with $7 being the final choice.”

We went on at that juncture to note that “Tintri’s last listed valuation was $1.25 billion, according to Crunchbase. It’s worth a few hundred million today, a fraction of that sum.” The worst was yet to come, however.

Our final act comes with an amuse-bouche, and something more substantial:

  • For taste: Tintri made our list of “2017’s Worst Performing Tech IPOs (So Far).”
  • And then there were the lawsuits, which we covered in September of 2017. After Tintri’s value fell under the $100 million mark, we wrote that “Tintri raised over a quarter billion dollars in capital before it went public […] Tintri has not only never managed to generate more revenue in a 12 month period than it has raised (at least since the time periods reported in its S-1 to date), it is also worth far less today than it raised, even discounting its IPO proceeds. That’s brutal.”
  • The company was sued a few times over the mess.

So Tintri looked weak, had to delay its IPO, priced under its target range, and now, the next calendar year, is kaput.

Beware the tech company that loses too much money to generate substandard growth and also has debt and high cash consumption and a cost structure that indicates that profitability is still years out. You don’t have to give your money to the lower-tier of tech.

And that goes for everyone, 401k folks and VCs alike.

From The Crunchbase Daily:

North American venture funding and exits rise again in Q2

Venture funding for North American startups hit its highest point in years in the just-ended quarter, according to Crunchbase data. A surge in late-stage investment, rising deal counts, and a heavily capitalized investor base boosted the Q2 numbers. Exits were pretty good too, including both IPOs and acquisitions.

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Hong Kong’s GoGoVan, a provider of on demand van-hailing services, raised $250 million in a new round led by InnoVision Capital. The financing follows GoGoVan’s merger last year with 58 Suyun, a big intra-city logistics platform in China.

Meero raises $45M for photo platform

Meero, the Paris-based developer of an AI-driven platform for enhancing images, has raised $45 million in a Series B round led by Alven Capital and Idinvest Partners.

AWIP To Boost Female Presence In Product Management

Advancing Women in Product, an organization that aims to open up opportunities for existing and potential product managers, is announcing an expansion into new cities with the backing of major tech companies and a new partnership with the Wharton School of Business.

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