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Tesla reported Sunday 405,278 vehicles delivered in the fourth quarter of 2022. While the automaker hit a record number of deliveries, it came in shy of Wall Streets expectations of around 420,000 to 425,000 units delivered.

The electric vehicle company also reported total production of 439,701 vehicles in the fourth quarter. This brings Tesla’s total annual deliveries to 1.31 million and total production in 2022 to 1.37 million.

While Tesla had an impressive 40% growth in deliveries, the company also missed its own guidance for the year, which projected a 50% growth in production and deliveries for the year. The automaker needed to sell 495,760 vehicles in Q4 to have achieved that guidance.

Tesla’s Q4 deliveries are up from the 343,830 vehicles sold in the third quarter. The automaker’s last minute discounts might have given Tesla a boost towards the end of the quarter. Partially in response to the Inflation Reduction Act’s EV tax credits, which would provide Tesla buyers with rebates of up to $7,500, Tesla slashed $3,250 in early December and $7,500 last week off the price of Model 3 and Model Ys delivered in the U.S. in December.

Tesla also provided discounts in Mexico and China last quarter, and it’s not yet clear how those drops in prices would have affected the automaker’s margins.

Tesla’s production and delivery report does not disclose numbers by region, but Tesla has said production at its two new factories, Austin and Berlin, have ramped in recent months. The company has also pumped up production at its Fremont factory, and in Shanghai, which bounced back from production delays due to COVID-19 control measures.

Some investors fear that the now lack of COVID-19 control measures in China will also affect Tesla sales in the event of widespread illness. Many are also worried about CEO Elon Musk’s antics on and distraction by his overhaul of Twitter.

The company’s share price, which has sunk 65% since January, was almost unaffected by the delivery numbers, rising 1.12% today.

Tesla delivers 405,278 vehicles in Q4, missing Wall Street expectations by Rebecca Bellan originally published on TechCrunch

Among public tech companies, “product-led growth (PLG) companies — those who educate and convert buyers with product rather than sales and marketing (SLG) — operate at about 5% to 10% less profitability than sales-led motions,” venture capitalist Tomasz Tunguz highlighted in a blog post.

This data point may be specific to the moment we are in: First, because public tech companies overall are less profitable than a mere year ago. Second, because not so long ago, PLG companies had higher net income margin than their sales-led peers. But just because this reversal might be temporary doesn’t mean it isn’t worth looking into.

Product-led growth these days is no longer the exception to the rule: Following the footsteps of Atlassian, Zoom and Snowflake, many private startups adopted this model. If it is inherently less profitable, founders will want to know — especially now that investors once again pay attention to a company’s path to profitability and no longer reward growth at all costs.

As usual, things aren’t clear-cut. There are some reasons why PLG companies would be less profitable now that could turn into reasons why they might be more profitable in the near future. To add perspective to what’s going on, we reached out to Kyle Poyar at OpenView Partners.

OpenView is a Boston-based VC firm known for advocating for product-led growth, so it definitely has several horses in the race. But this also means it’s invested in ensuring that PLG is a recipe for success and keen to look into what can make it happen. Here’s what Poyar had to say on the topic:

Product-led growth and profitability: What’s going on? by Anna Heim originally published on TechCrunch

It’s been quite an eventful year. Fintech has fallen a long way from the highs of 2021, and while 2022 was largely about the reset of the funding environment, 2023 is going to be a year of recalibration for fintech companies.

The great news is that large enterprise and midmarket companies care more than ever about bottom-line impact. As revenue growth slows down, cost savings and efficiency have become critical. Larger companies are more likely to cut back on internal innovation efforts and technology investments that are not core to the business.

This opens the door for fintechs that can deliver real improvements to the bottom line by eliminating manual processes and saving their customers money.

First, let’s take a look at the sectors likely to be most challenging: lenders, neobanks and fintechs that serve SMBs.

Online lenders

Lending is going to be hit hard. Lenders have to manage three big tailwinds in today’s market:

Rising delinquency rates and charge-offs.
Higher cost of capital for the debt they lend.
Decreasing demand from customers because of higher interest rates.

The rise in delinquency rates and charge-offs from non-paying customers will be tough to manage for newer fintechs that have been operating for less than five years. These younger companies don’t have the models fully built out to predict which customers are likelier to default.

Managing risk during a downturn can be brutal, and lenders will feel this most acutely.

Neobanks

Neobanks transformed the customer experience of traditional banks by offering better digital products and lower costs. While big players, like Chime, who raised large amounts of capital will be fine, expect to see consolidation among the smaller neobanks.

The reality is that many neobanks have customers with small average deposit balances, and deposits are critical to banking business models in the long term. Neobanks will also be downstream victims of layoffs — if any of their customers are laid off, the banks will see their direct deposit flows diminishing.

Fintechs serving SMBs

Small businesses are more likely to shut shop during a recession. In turn, fintechs that serve SMBs rather than larger midmarket and enterprise customers are more likely to lose their SMB customers. This is why you already see businesses like Brex moving away from serving SMBs.

What’s hot

The opportunities for fintechs in 2023 lie in the “boring” areas like fraud, compliance, payment operations, taxes and infrastructure. CFOs will be more focused than ever on bottom-line impact. Fintechs that are able to demonstrate a measurable improvement in payment authorization and reconciliation rates or a reduction in fraud will be able to weather the downturn and grow.

Fintech predictions and opportunities for 2023 by Ram Iyer originally published on TechCrunch

Ecobee started in 2007 when connected thermostats were an entirely different product and nothing like what’s available today. Ecobee released its Smart thermostat in 2008, bringing modern connectivity and usability to the device. I’m excited to host a special irl TechCrunch Live event at CES 2023. We’re filming in the LVCC Grand Concourse on the first day of CES, and hope you can stop by to watch.

Stuart Lombard is sitting down with me to talk about the growth and development of his startup, ecobee. He started the company in 2007 with fellow Canadians to improve household energy use. He raised $159 million to fund the effort and sold the company for $750 million.

At TechCrunch Live, we host conversations with successful founders who took an interesting path, and Lombard journey is filled with twists and turns. The company raised its $2.23 million Series A in 2007, released its first product in 2008, and then in 2011, had to fight for attention after the sleek Nest Learning Thermostat release. Ecobee kept at it. In 2021, Generac Power Systems bought ecobee for $750 million.

This TechCrunch Live will be filmed at CES 2023, and it’s free to attend. Watch the broadcast at booth #60488, located in the LVCC Grand Concourse, at 11:00 on Thursday, January 5. The event will also be streamed live on TechCrunch.com, YouTube, Facebook, and Twitter.

TechCrunch Live returns to its normal, weekly schedule starting on February with Benchmark’s Sarah Tavel and Cambly CEO and co-founder Sameer Shariff.

Hear from Ecobee CEO and Founder at a special, in-person TechCrunch Live at CES by Matt Burns originally published on TechCrunch

A new year is upon us, and with it comes uncertain, and uncomfortable, market conditions. Accompanying those conditions are equally uncomfortable decisions. For startup founders, determining which path is right for their business may require fundamentally rethinking the way they measure success.

The business climate in 2023 will be unfamiliar to many who founded a company in the past decade. Until now, a seemingly endless stream of relatively cheap capital has been at the disposal of any startup deemed by the VC world to have high growth potential. Everyone wanted a piece of “the next Facebook.” With interest rates near zero, the risks were relatively low and the prospective rewards were astronomical.

Burning money to chase growth became the norm; you’d just raise more money when you ran out. Debt? Who needs it! Existing investors were happy to play along, even if their share in the company was somewhat diluted — growing valuations kept everyone sated.

Over the years, this pattern of rapidly rising valuations and a pie growing fast enough to compensate for any dilution — fueled by “free money” that made almost any investment justifiable — crystallized into a mythology at the core of startup culture. It was a culture that nearly everyone, from founders and investors to the media, fed into.

Climbing valuations made for great headlines, which sent a signal, both to potential employees and the markets, that a company had momentum. High valuations quickly became one of the first things new investors looked to when it was time to raise additional capital, whether that was through a private round of funding or an IPO.

But tough economic conditions tend to dispel complacency with hard realities, and we’ll see reality checking in when it comes to funding this year. Amid rising interest rates and a generally negative macroeconomic outlook, the tap will run slowly –– or not at all. Equity financing is no longer cheap and plentiful, and as drought strikes, a sense of anxiety will grip founders. They can no longer burn cash without seriously contemplating where they’ll get more when it’s gone.

When that time comes, founders will be faced with a choice that could make or break their business. Do they turn to alternatives like convertible notes, or do they approach new investors for more equity funding? Tech stocks have been pummeled in the past year, which could mean their company’s value has taken a hit since the last time they raised capital, leaving them with the prospect of the dreaded “down round.”

It’s easy to see why down rounds seem out of the question for many startup founders. For starters, they’d face the flip side of the positive media mania, which risks eroding employee morale and investor confidence. In a culture where growing valuations are worn like a badge of honor, founders may fear that taking a down round would render them Silicon Valley pariahs.

Down rounds don’t spell the end of your business

The truth is, there’s no one-size-fits-all solution. The funding route you take has enormous consequences for the future of your company, and so it shouldn’t be clouded by ego or driven by media appetites.

We need to destigmatize down rounds in 2023 by Ram Iyer originally published on TechCrunch

Zomato said on Monday its co-founder and chief technology officer Gunjan Patidar has left the firm, the latest in a series of departures at the Indian food delivery firm whose shares have lost over 57% of its value in the past year.

Patidar is the fourth co-founder to leave the firm. His departure also follows exits by Mohit Gupta, another co-founder, and two other senior executives last month.

“Patidar was one of the first few employees of Zomato and built the core tech systems for the Company. Over the last ten plus years, he also nurtured a stellar tech leadership team that is capable of taking on the mantle of leading the tech function going forward. His contribution to building Zomato has been invaluable,” the Indian food delivery firm disclosed in a stock exchange filing.

The exits come at a time when Zomato chief executive Deepinder Goyal, also a co-founder, is attempting to share and delegate top responsibilities with other executives. The company appointed four chief executives in August last year and rebranded its internal, broader organization as “Eternal.”

Loss-making Zomato, backed by Ant Group, Temasek and Goldman Sachs, did not say why Patidar — or any of the other recently departed top executives — had left.

The company, which went public mid-2021, reported a net loss of $30.4 million for the quarter that ended in September last year.

“Luckily Zomato has no shortage of co-founders in its company. There’s Akriti Chopra, another executive who became co-founder last year. […] Earlier this year, it elevated an executive as co-founder of Blinkit (which Zomato owns) to replace one of Blinkit’s co-founders who left last year,” Indian news and analysis publication The Ken wrote in a newsletter last year.

“At this point, I’m starting to suspect there’s someone at Zomato’s corporate governance team whose full-time job is to periodically update the document that keeps track of who is their co-founder right now, in which company.”

Yet another Zomato co-founder leaves the firm by Manish Singh originally published on TechCrunch

Social media platforms and creator-focused startups haven’t looked too hot this year, as companies like Snapchat, Patreon, Cameoand Meta all waged layoffs along with the rest of the tech industry. YouTube ad revenue is declining, and creator funds for platforms like Pinterest have dried up.

It might seem like things are bad on the surface, but the creator economy is more than just a buzzword that’s losing interest among venture capitalists. Despite challenges on a platform level, creators are continuing to make a living outside of the bounds of traditional media and will only continue to grow in 2023.

Social media platforms will need to commit to creators (seriously, this time)

In my opinion, the biggest creator news in 2022 was YouTube’s announcement that it would include Shorts creators in the YouTube Partner Program, allowing shortform creators to earn ad revenue for the first time ever. Starting in early 2023, creators will be able to apply to the YouTube Partner Program if they meet a new Shorts-specific threshold of 1,000 subscribers and 10 million Shorts views over 90 days. As members of the Partner Program, these creators will earn 45% of ad revenue from their videos.

This is huge, because it’s an open secret that shortform video is hard to monetize. For example, TikTok pays creators through its Creator Fund, a pool of $200 million unveiled in summer 2020. At the time, TikTok said it planned to expand that pool to$1 billion in the U.S. over the next three years, and double that internationally. That might sound like a lot of money, but by comparison, YouTube paid creatorsover $30 billion in ad revenue over the last three years. As the pool of eligible creators becomes more saturated, creator funds are pretty useless — if you’re in TikTok’s creator program and have a video get 1 million views, you might be able to cash out for a small latte. So while these multi-million (or billion) dollar creator funds might seem like a beacon for creators, they don’t help too much. Most popular TikTokers make their money from sponsorships and off-platform opportunities, rather than from their videos.

TikTok has long been the dominant platform in short form video, while Snapchat, Instagram and YouTube largely copied the newcomer to keep up. But creators will finally be incentivized to flock to YouTube Shorts once they can actually earn ad money there. The best part? There has never been more pressure on TikTok to follow suit.

‘Creator Economy’ isn’t a buzzword

What’s a buzzword? You know it when you see it. It’s when Facebook rebrands to Meta and you suddenly get hundreds of emails about “the metaverse,” or when a crypto startup declares its commitment to fostering “community” just because it has a semi-active Discord server. You could also classify “creator economy” as a buzzword — I personally find myself cringe whenever I say it out loud, but I stand by the fact that it’s a much easier shorthand than saying “the industry in which talented people on the internet are leveraging social media audiences to develop careers as independent creatives.”

But all of these buzzwords actually represent real things. Yes, even the metaverse is a thing, though I’d argue we’re talking more about Club Penguin than whatever Mark Zuckerberg is into. The problem with buzzwords, though, is that they dilute real phenomena into fads that get further muddled by disconnected venture capitalists doubling down on the trend with over-enthusiastic investments.

On TechCrunch’s own Equity podcast last week, everyone’s favorite tweeter and brand new dad (!!) Alex Wilhelm reflected on a prediction he made last year.

“The passion economy isn’t sustainable,” he read, quoting his prediction from last year. “Nailed it! Who talks about creators these day? Nobody!”

I can forgive Alex because I do hate “passion economy” with the fire of an exploding supernova for each and every follower Khaby Lame has on TikTok. The term glorifies the relentless, soul-crushing hustle that people face while trying to “make it” in a field they love, while ignoring that industries that people pursue out of passion (art, non-profit work, politics) are often the most exploitative of all.

I think what Alex is getting at here, though, is that in 2021, venture capitalists poured money into the creator economy in the same way they pursued “trendy” tech like AI and web3. According to data retrieved from Crunchbase earlier this year, here’s the breakdown of creator economy funding for the first three quarters of 2022.

Q1: 58 rounds worth $343.2 million.
Q2: 42 rounds worth $336.0 million.
Q3: 19 rounds worth $110.2 million.

I don’t think this means that the creator economy is failing, though. It could just mean that the industry is correcting for over-investing in a bunch of creator-focused companies that creators didn’t actually want or need. Also, you know, the economy.

I’ve been saying for the entire past year that creator economy startups can only succeed if their foremost goal is truly to help creators. In 2021, a year when venture capital flowed like champagne at a Gatsby party, we joked that there were more creator economy startups than creators. But that’s a problem for investors, not creators, many of whom operate completely oblivious to the whims of a16z. It’s indicative of an environment that incentivizes tech moguls with no hands-on experience to try to solve problems of an industry that they don’t quite understand, and as a result, the space became deeply oversaturated. I cannot keep track of the number of companies I’ve encountered that attempt to automate the process of securing brand deals or help creators make white label products.

I’d go as far as to say that it’s bad for creators when there are too many startups angling for their partnership. We know that most startups are doomed to fail — what happens if you rely on a company to offer your business some sort of service, and then they fail within a few years? This is why I’ve made it a personal policy of mine to always ask creator-focused startup founders how they would plan to protect their creators from harm if their company fails.

No matter where the VC funds may fall in 2023, the playbook for creators’ success remains the same. Diversify your income streams, build trust with your audience, and make sure you don’t burn yourself out.

Venture capital will continue to intersect with creators, but not in the way you think

Investments into creator economy companies might be down, but creators are continuing to interface with VC money in a way that their audiences don’t often see. Charli D’Amelio and her family have become investors themselves. MrBeast is seeking funding at a unicorn-sized valuation, which isn’t surprising given that other especially successful creators have accomplished the same.

In less extreme cases, many creators are growing their businesses through startups like Creative Juice, Spotter and Jellysmack, which offer up-front cash in exchange for temporary ownership over a creator’s YouTube back catalog, which means the company gets all of the ad revenue from those videos. These companies operate similarly to venture capital firms. They invest in creators that they believe will turn that cash infusion into even more money, giving both parties a return.

Despite securing massive funding rounds and mammoth valuations, the model that these companies operate is still relatively new, and creators should exercise caution, as they should with any business deal.

What to expect from the creator economy in 2023 by Amanda Silberling originally published on TechCrunch

Late-stage startups are facing major fundraising headwinds, but early-stage investing is still a bright spot for startups until they hit Series B rounds.

Traditional venture capital dollars are harder to come by these days, but institutional investors are still looking for smart investments, and industry watchers are hungry for the good news a new round of financing suggests. While the market is uncertain, founders need to be ready to use their capital infusions as an asset that extends beyond the cash it represents.

In any market environment, a fundraising event can act as a vote of confidence or validation from investors, supporting your company’s growth via talent acquisition and brand awareness. No matter the size of the round, securing external investment is a key milestone in many companies’ journeys, and it often takes a tremendous amount of effort. However, after putting all that work in, many founders make the mistake of letting a funding moment pass by without extracting all the value they could have.

Over the course of my 20+ years as a marketing leader at startups, venture capital firms and large tech companies, I’ve helped dozens of companies announce funding news, ranging from $1 million pre-seed rounds to $50 million raises.

Here’s my playbook for founders looking to make their “big money” moments go farther:

Rethink assumptions about fundraising news

Founders may overlook the value of announcing funding news for several reasons, but the biggest one is assuming the round isn’t “big enough” to warrant attention. When you see other companies raising hundreds of millions of dollars, it can be easy to think no one will be interested in hearing about your startup’s much smaller round.

Fortunately, that isn’t true. While big numbers may draw splashy headlines, smaller rounds can still drive interest if the announcement is executed well and you can connect the news with some larger industry/technology/societal trend.

Another reason founders hesitate is if all or part of the new capital is through a debt investment. Though it’s becoming more common, especially as VC investors pump the breaks, there is still some stigma around debt funding, and founders may worry they’ll be penalized for adding debt to their balance sheets.

However, securing a debt investment often requires even more rigor than an equity investment, so highlighting a debt raise can actually indicate your business’ fundamentals and revenue numbers are strong enough to support repayment.

Founders may also worry about giving competitors too much information about their business and prefer to make progress while flying under the radar. There are benefits to keeping certain information under wraps, but it’s important not to get so focused on building behind closed doors that you miss the opportunity to get more visibility with the prospects and partners that will drive revenue.

Finally, funding announcements are sometimes just not at the top of a founder’s long to-do list, largely because they are either unsure of how to run an announcement or lack the marketing expertise to execute it effectively. This next section should help on that front.

Three steps to maximize the marketing value of your fundraise

The future is unknown, so when you have a funding round locked up and cash in the bank, you have the opportunity to make the biggest impact you can with the news you have in hand.

To leverage this moment and be successful you need to:

Step 1: Plan ahead

Preparing for a fundraising announcement takes time and strategic thinking. As soon as you’ve reached the point in your investor conversations where term sheets are a likely next step, you should assemble your marketing team to start working on a plan. This includes aligning with your investors early about their ability to participate in a news announcement.

Some key questions your marketing lead should consider include:

Who can offer public quotes or commentary on the investment?
What are the key messages you would like to communicate about this round and what messages would you like your investors to amplify?
When is the investor available to review announcement materials and participate in potential media interviews?

How to make the most of your startup’s big fundraising moment by Ram Iyer originally published on TechCrunch