Gm. Was just thinking back to the pandemic when Airbnb turned off all paid marketing and their search traffic didn’t change at all.

Makes you wonder…

FRESH POWDER

Looking at three funds that recently topped up their coffers.

ACQUISITION

The price was right for Adobe and Figma

The downside to being the biggest player in your industry is that every startup is coming for your throne. 

The upside to being the biggest player in your industry is that you can buy those startups. 

It’s the circle of life in the startup world and yesterday, that circle continued to turn when Adobe snapped up Figma for a cool $20 billion. 

It paid a hefty price

Adobe was trading at a $173.9 billion market cap before it bought Figma which means that the deal represents well over 10% of Adobe’s pre-transaction worth. That alone demonstrates the size of the price tag. But even crazier is the price that Adobe paid for Figma relative to Figma’s TAM. 

• Adobe noted in its investor presentation that Figma’s total addressable market was expected to be $16.5 billion by 2025. That means it paid more than what it thinks Figma’s TAM is to own it.  

So what’s Adobe getting?

As TechCrunch+’s Alex Wilheim wrote, “a whip-ass software company.” Figma expects to grow its ARR from $200 million to more than $400 million by the end of the fiscal year 2022. That’s 100% YoY growth while making 9 figures in revenue. That sort of growth is truly wild for a company at Figma’s scale and helps explain the premium Adobe paid. 

Still, on paper, a 50x multiple sounds steep especially given the current economic environment. But Figma was only going to command a higher price tag the longer Adobe waited so $20 billion to bring a major competitor under its umbrella starts to sound okay. 

Bottom line: It’s always a little disappointing when a startup that could have eventually surpassed its bigger competitor gets bought. But with the IPO market still more clogged up than your sinuses during allergy season, the acquisition was the best route towards liquidity for Figma and its investors.

CRYPTO 

The merge is done, long live the merge

After months of anticipation, the Ethereum merge was just as boring as everyone hoped it would be. It came and went Thursday morning around 2:45 am setting Ethereum on a much more energy-efficient path forward.

Here are three storylines to keep an eye on in a post-Merge world:

• How sticky will miners be? Proof-of-work required miners to validate transactions. Now that Ethereum transitioned to proof-of-stake, those miners are stuck twiddling their thumbs. Some are fully invested in keeping the old Ethereum blockchain alive so it will be interesting to see how many stay committed to the old chain. 

• Be prepared for more updates: We kid you not, every future update that Ethereum has planned rhymes with Merge—back in July Vitalik Buterin said the next changes to the network will be called the Surge, Verge, Purge, and Splurge. These all target different things from efficiency to transaction speed. 

• Price: No one was quite sure how the price of Ethereum would react, but as of writing last night, Ethereum was down around 9% since the Merge took place. Another price to keep an eye on is secondary sales of the GPUs that used to be essential to mining Ethereum. Third-party sales of GPUs on eBay declined an average of 6.9% post-merge according to an analysis from Tom’s Hardware. 

QUICK HITS

Seed Round

Stat: BeReal has finally been knocked off its number one spot atop the App Store’s free apps list. The new contender: An iOS16 Lock Screen customization app called Top Widgets. The app has actually been around since 2020 but after Monday’s software update introduced lock screen widgets, it exploded in popularity gaining 1,812% more installs than the week prior. 

Story we’re watching: Just when it seemed like we had left the supply chain crises back in 2020, a new threat has arisen. This time, it's railroads at the center. In July, major railroad unions voted to strike over national contract negotiations. Should the strike cause railroad traffic to snarl, it would place even more pressure on the trucking industry in the US which already handles up to 80% of all US freight. The domino effect of a railroad strike would be even more devastating than a ship getting stuck in the Suez Canal. 

Rabbit hole: The spectacular collapse of cryptokitties, the first big blockchain game (IEEE)

WHAT ELSE IS GOING ON

• TikTok launched a BeReal clone called TikTok Now.

• SoftBank founder Masayoshi Son is considering launching a third Vision Fund.

• Amazon is making a Blade Runner TV show. 

• Patagonia’s founder gave up his ownership of the company to a group of non-profits…and saved $700 million in taxes in the process.

GUESSTIMATE

Below is a chart showing the yearly energy usage of various cryptos and companies (note the difference between ETH pre- and post-merge). 

Can you guess what the top two energy users 

FUNDRAISING FRIDAY

Always a helpful reminder. Don’t let your deck become a crutch.

LAYOFFS TRACKER

Notable layoffs this week

Twillio: 850 people (11%)

Pitch: 59 people (30%)

FOUNDERS CORNER

The best resources we came across this week that will help you become a better founder, builder, or investor.

🏃‍♂️ Wikipedia Speedruns are fun as heck 

🧠 The problem with intelligence 

💸 Why colleges still succeed despite failing students

GUESSTIMATE ANSWER

The first red bar is YouTube. 

The second gold bar is Gold mining.