What the departure of Fidji Simo says about Facebook—and the broader economy
The departure of Fidji Simo from Facebook was a shock to the tech ecosystem.
Announcing plans to take over as the CEO of Instacart, the grocery delivery app fast approaching a potential IPO, Simo was a high-profile executive in the social media company with the potential to perhaps even take over one day as the chief executive of the company.
“Leaving behind the privilege of leading the Facebook app is very hard, and I would only do so for the chance to be part of building an epic company again,” the 35-year-old executive that oversaw everything from the news feed to the marketplace wrote on LinkedIn Thursday.
Instacart is no doubt a hard gig to pass on—the company has been supercharged by the pandemic and is one of the most valuable startups in the world as a result. But as Simo notes, so is the potential promise of moving up the ranks at a company that recently hit a $1 trillion valuation.
So what does the departure of Simo say about Facebook? Well, that in the company, Zuckerberg is king. According to journalist Casey Newton over at Platformer, Simo’s relationship with the CEO was beginning to sour over concerns of slowing growth, with the company co-founder increasingly popping up to announce the launch of products like its Clubhouse-audio clone. A New York Times article that coincidentally released Thursday also reported on fraying ties between COO Sheryl Sandberg and Zuckerberg, with Sandberg’s own influence in the company waning.
Zuckerberg is now the last founder-CEO in the big tech cohort. And he is not stepping back.
Simo’s exit comes at a time when the power dynamics within Facebook have been shifting dramatically. As my colleague, Emma Hinchliffe notes, Facebook’s former ad chief Carolyn Everson also left the company a month ago after a decade-long stint at the business.
Yesterday, this newsletter alluded to the shortage of workers in the country as a result of the economy going back to in-person (which is also sparking a debate on unemployment benefits). Companies like McDonald’s are increasing wages in response. But it’s not just the hospitality industry that is struggling to keep up with the Great Return to Normal. Startups are flush with cash, with an insane 136 unicorns created in the second quarter alone per CBInsights, are all expanding rapidly and battling for a limited pool of talent. A startup founder I spoke to recently noted that he’s had to up pay packages for incoming employees.
It is, so to speak, a seller’s market. Don’t be surprised to see more trading of talent in tech and startup land—even at the highest levels.
RED HOT: For most employees, cybersecurity is this annoying, back-of-the mind issue—until the company gets hacked by a Russia-funded group. But it is a massive risk which makes it a red-hot industry. On Friday, Netskope announced that it raised $300 million at a $7.5 billion valuation—more than doubling its price tag from a year ago. This round, the company tells me, will likely be its last before an IPO. Read more.
Jessica Mathews compiled the IPO section of the newsletter.
- Entrata, a Lehi, Ut.-based multifamily property tech provider, raised $507 million. Silver Lake, Qualtrics Founder Ryan Smith, and Vivint Smart Home Founder Todd Pedersen, led the round and were joined by investors including Dragoneer, Domo Founder and CEO Josh James.
- DealShare, an Indian social commerce company, raised $144 million. Tiger Global led the round.
Coda Project, a doc sharing startup, raised $100 million at a $1.4 billion valuation. Ontario Teachers’ Pension Plan Board led the round.
- mmhmm, a San Francisco-based video platform, raised $100 million in Series B funding. SoftBank led the round and was joined by investors including Sequoia, Mubadala, and Human Capital.
- Twelve, a Berkeley, Calif.-based carbon conversion startup, raised $57 million in Series A funding. Capricorn Technology Impact Fund and Carbon Direct Capital Management led the round and were joined by investors including DCVC, Munich Re Ventures, Microsoft Climate Innovation Fund, Breakout Ventures, and Evok Innovations.
- Didomi, a Paris-based user consent startup, raised $40 million in Series B funding. Elephant and Breega led the round.
- Made Renovation, a San Francisco-based bathroom renovation company, raised $23 million in Series A funding. Insight Partners led the round and was joined by investors including Base10 Partners, Founders Fund, and Felicis Ventures.
- Otter, a New York City-based marketplace for parents to find childcare, $23 million in Series A funding. Sequoia Capital led the round.
- Lula, a Miami-based insurance tech company, raised $18 million in Series A funding. Founders Fund and Khosla Ventures co-led the round, and werewas joined by investors including SoftBank, Bill Ackman, Shrug Capital, Steve Pagliuca (Bain Capital co-chairman and Boston Celtics owner), and Tiny Capital’s Andrew Wilkinson.
- Tise, a Norway-based second-hand items exchange, raised $11 million. VNW Global led the round.
- Talkshoplive, a Los Angeles-based livestream commerce company, raised $6 million in seed extension funding. Raine Ventures led the round and was joined by investors including Spero Ventures.
- Rootly, a maker of a Slack-based incident-response tech, raised $3.2 million in seed funding. XYZ Venture Capital led the round and was joined by investors including 8VC and Y Combinator,
- CodeBoxx, a company for learning coding, raised $2 million in seed funding. MadaLuxe Group invested.
- Ares Management acquired Resource Label Group, a Franklin, Tenn.-based manufacturer of pressure sensitive labels, shrink sleeves, from First Atlantic Capital and TPG Growth. Financial terms weren’t disclosed.
- Audax Private Equity acquired a controlling stake in Solve Industrial Motion Group, a Charlotte, N.C.-based provider of power transmission components and industrial-grade bearings, from Incline Equity Partners. Financial terms weren’t disclosed.
- Brentwood Associates invested in L-Nutra, a Plano, Tx.-based provider of nutrition programs. Financial terms weren’t disclosed.
- Intelerad Medical Systems, backed by Hg, acquired North Carolina-based Heart Imaging Technologies, a North Carolina-based provider of clinical workflow automation solutions. Financial terms weren’t disclosed.
- Sovos, backed by Hg and TA Associates, acquired Portugal-based companies PetaPilot, a e-accounting solutions supplier, and Saphety, a e-invoicing services provider to governments and companies. Financial terms weren't disclosed.
- Warburg Pincus and Tilia Holdings invested in Food Safety Net Services, a San Antonio, Tx.-based provider of laboratory testing services for customers in the food and beverage industry. Financial terms weren’t disclosed.
- Alphabet’s Google plans to acquire Pring, a Japanese payments startup for about $180 million to $270 million, per the Nikkei.
- Platinum Equity acquired Paramount Global Surfaces, a La Mirada, Calif.-based packaging company, from Linsalata Capital Partners. Financial terms weren’t disclosed.
- KKR acquired Neighborly, a Waco, Tx.-based network of home services franchises, from Harvest Partners. Financial terms weren’t disclosed.
- Novo Holdings invested in Availity, a health information network for payers and providers.
- Ottobock, a German artificial limb, is planning an IPO that could value it at €5 billion ($5.9 billion), per Reuters.
- Stripe, the San Francisco and Dublin-based digital payments company, has hired a law firm to make preparations for an IPO, according to Reuters.
- Orange County Bancorp, the holding company for Middletown, New York-based Orange Bank & Trust Company and investment management company Hudson Valley Investment Advisors, filed for an initial public offering.
- Redpoint Venture, a Woodside, Calif.-based venture capital firm, named Github CTO Jason Warner as a partner.
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