Morning Report: As Uber’s Drama Continues, The Exit Market For Tech Companies Remains Disappointing

Morning Report: This week’s fresh Uber drama puts the weak exit market for tech companies into sharper relief.

This week, an early Uber investor sued the company’s previous CEO, Travis Kalanick, for fraud. The lawsuit is a big news not only due to how uncommon such a suit is, but also that it involves Uber, a company that set valuation records for private, venture-backed startups.

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Uber’s continued staggering losses were likely enough to imply that it would not go public in the near future. The lawsuit seems to extend that time horizon and could also slow its hunt for a new CEO.

While Uber flounders and other decacorns hang back for now, it’s worth keeping two things in mind.

First, that the tech IPO wave always seems to be coming soon but never now. Just yesterday, on the Equity podcast, another venture capitalist noted that IPOs would pick up in the near future. With kindness, we’ve heard that before.

And a quick scan of the Nasdaq’s upcoming IPO calendar shows nothing from tech companies. So much for that, at least for now. Crunchbase News also recently reported that M&A among venture-backed companies has been quite lacking this year.

There’s trouble at the top-end of the private company market, and there is little liquidity from either public investors or public companies.

I’d ask how long this can last, but last year the lack of IPOs seemed untenable for unicorns. And yet here we remain. Happy Friday!

From the Crunchbase Daily:

Uber VC sues Kalanick

  • Venture firm Benchmark Capital sued Uber founder Travis Kalanick for fraud, claiming he concealed management problems at the company to gain directors’ approval to add three new seats to the board. Benchmark, which has a 13 percent stake in Uber, says Kalanick sought to pack the board with allies to keep him as a director after he resigned as CEO.

Coinbase raises $100M

  • There’s a new Bitcoin unicorn in town. Coinbase, which operates a platform for buying and selling digital currencies, has raised $100 million in a Series D funding round led by IVP. The new financing reportedly values the five-year-old, San Francisco-based company at $1.6 billion.

Alternative protein startups bulk up

  • Investors have plowed hundreds of millions of dollars into startups developing meatless foods offering high protein and, in some cases, a beefy taste. Much of the innovation in what Crunchbase News calls the alternative protein space is centered around figuring out whether vegetables can be mixed up or engineered to taste more like meat.

Snap shares dive on earnings miss

  • Snap reported quarterly earnings that missed Wall Street expectations, sending the stock plummeting. Prior to the report, Snap shares had already been trading near record lows.
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