zSpace, an AR/VR edtech platform for K-12 schools, will merge with the SPAC EdtechX Holdings Acquisition Corp. II. The deal’s terms imply a pro forma enterprise value of $195M, with up to $117M in cash for zSpace. More: - This is one of the first SPAC deals to emerge in a long time, but with a substantial caveat: zSpace accepted a $165M valuation cut to get the deal through.
- Boosted by the pandemic lockdown procedures in the U.S., zSpace claims to be currently deployed in 94 of the top 100 school districts in the U.S. It has a user base of over 2,400 U.S. school customers and over 1 million students.
- The firm expects to grow its revenue at 47%, with ARR growing at 62%.
The wider lens: - In the global education market, spending on AR/VR is expected to grow from $1.8B in 2018 to $12.6B in 2025, representing a compound annual growth rate of 32%.
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A.Team emerged from stealth with $60M in funding for its gig work platform. The funding comes partially from a $55M Series A round co-led by Tiger Global Management, Insight Partners, and Spruce Capital Partners. The rest is in the form of a previously undisclosed $5M seed round led by NFX, joined by Box Group, Village Global, firstminute Capital, and others. More: - Founded in 2020, A.Team enables companies to assemble vetted experts to bring products and designs to market.
- As such, it targets a different set of gig workers, namely those for whom traditional work is unappealing but who are too qualified for the simple, task-based work of the usual gig economy.
- Despite only having just left stealth, A.Team can boast a members-only network of over 250 clients and 4,000 builders.
- The company has 25 new clients joining the platform per month.
- Revenue grew 7.4x in 2021, while gross merchandise value recently surpassed $42M thanks to its expanding customer base that includes McGraw Hill and The Economist.
- A.Team currently employs 75 people and expects to grow that number to 170 by 2022.
The wider lens: - A 2019 study by Mastercard estimated that the global gig economy now generates $204 billion in gross volume. It expects that volume to grow 17% by 2023.
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 With a down market looming (or already having arrived), a16z’s Justin Kahl and David George have published a guide for founders. This diagnostic guide can be broken down into three segments: reevaluate valuations, understand burn multiples, and build scenario plans. More: - Reevaluating Your Valuation: While the impact of public markets on private venture markets will not be clear for some time (six+ months), founders should look at relevant public companies in their sector to see where they stand.
- Specifically, this means comparing the ARR valuation multiple to the revenue valuation multiples because of its availability as a GAAP accounting metric.
- Following that, companies should recalibrate their revenue targets given one year or more of runway, an important signal for companies to send to potential investors down the line.
- Control Your Burn [Multiples]: Burn multiples are defined as cash burned divided by net ARR added and need to decrease over time.
- Higher multiples are acceptable for younger companies with less leverage but not for later-stage startups.
- For example, a company needed to add $100M of ARR with $50M of burn should build a plan to make sure the burn multiple is less than 0.5x.
- Scenario Plans: It is advisable to have three basic scenarios lined up in case of macro contingencies and more expensive capital
- Base case: This is an 80% confidence plan that can be hit with good burn multiple efficiency. It should see increased efficiency and decreased cash burn while accepting lower revenue growth.
- Best case: In this scenario, ARR growth and burn rate are likely at or better than the operating plan from six months ago.
- Worst case: This requires significantly reducing burn via cutting sales/marketing spend, as well as opex, which includes headcount.
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Toronto-based Form.ai, a sales compensation platform provider, raised $45M (CA$57.8M) Series B, led by ACME Capital. Crosslink Capital, Gaingels, and return investors Golden Ventures, Uncork Capital, and Xfund participated in the round. More: - Form.ai declined to disclose the round’s valuation and its equity-to-debt ratio.
- Its data-based sales platform is intended to take the guesswork out of the sales compensation experience to establish the correct levels of incentivization.
- The company claims to facilitate $1B in annual managed commissions for companies including Autodesk, TrustPilot, OpenTable, CareerBuilder, and more.
- Founded in 2016, Form.ai launched from stealth in 2020 and has subsequently grown revenue by 400% in the last year.
- Active in both the U.S. and Canada, the company has a headcount of 120, which it hopes to expand to over 200 by the end of the year.
The wide lens: - The sales performance management solutions market is projected to grow from $1.5B in 2020 to $3.4B by 2026.
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 Today’s Funding 💸 Biotech/Health - Vyriad (Rochester, Minn.), oncolytic virus therapies to treat a wide range of cancers: $29.5M B led by Mr. Harry Stine, participation from Mayo Clinic, Mirae Asset, Regeneron Pharmaceuticals, Southeast Minnesota Capital Fund.
- Greater Good Health (Manhattan Beach, Calif.), primary care model centered around nurse practitioners: $13M led by LRVHealth, participation from Martin Ventures, Health Velocity Capital, et al.
Blockchain - QuestBook (Hyderabad, India), efficient blockchain investment platform: $8.3M A led by Lemniscap, participation from Coinbase Ventures, Alameda Research, Dragonfly, Hashed, Polygon, Balaji Srinivasan, Raj Gokalm, et al.
Data/Analytics - Heartex (San Francisco, Calif.), open-source platform for data labeling: ...
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 |  | Inside VC's writer/curator Stephen currently lives in Berlin and is pursuing a Master's degree in philosophy. He otherwise spends his time trying his hand at recipes from India and Southeast Asia, escaping it all at the kickboxing gym, and offending aural sensibilities with his band. |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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