Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It's inspired by the daily TechCrunch+ column where it gets its name. Welcome back to the working world, friends, I hope that you survived the return to the desk in good stead and are both warm and healthy. The current boom in COVID cases is a huge bummer, but perhaps this is the last year we'll have to drag ourselves back to productivity under the specter of lockdowns, mass death and a lack of hugs. I hope so. Regardless, today we have a lot of fun stuff that should keep your mind off the state of the world for a few minutes. Kicking off today, let's talk about Liquid Death. The excellently named company kills thirst with water, hence its name. That's really the company in a nutshell. Liquid Death sells water in a can, a business around which it has tailored an anti-plastic stance and a general heavy metal vibe. It's neat. But Liquid Death also raised $75 million this week, which has me wondering why everything is so expensive to build these days. Why does a water company need to raise a whole pre-seed fund in a single investment? What does it need the money for? Research? It's selling water! There was a general perspective a few years ago that it was cheaper than ever to build a startup. With off-the-shelf software, cloud computing and modern fintech back ends, putting together the building blocks of modern business was becoming faster and less expensive. Apart from the high costs of hiring software developers, it seemed that startups would be able to do more with less. And yet. Startups are raising more money than ever. The Exchange is diving into venture capital data next week, but it's clear that the venture and startup classes are still moving funds around with great relish. So much so that Liquid Death has raised over $130 million to date, per Crunchbase data. Square the circle of lower startup costs, and mega-rounds for me if you can. Are we seeing marketing spend raised through equity capital sources? If so, that makes me worry a bit! (Note that Liquid Death could be a kickass business with great margins and lovely economics; I don't know its numbers. But why does it need $75 million if it's in such good shape? What are we missing here?) |
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