Real estate tech company Porch adds five new directors to board ahead of public stock listing

Seattle-based Porch today named five directors that will join the company’s board when it goes public later this year.

The real estate technology venture and home improvement marketplace announced plans in July to become publicly traded through a merger that values the Seattle company at $523 million. Porch will combine with PropTech Acquisition Corp., a special purpose acquisition company, or SPAC.

The board members will join on Porch’s first day of public trading. They include:

Javier Saade, founder and managing partner of Impact Master Holdings; venture partner at Fenway Summer Ventures; former associate administrator of the U.S. Small Business Administration.Chris Terrill, former CEO of HomeAdvisor and Angie’s List; board member of Realogy Holdings Corp. and Infogroup.Regi Vengalil, CFO of Egencia (Expedia’s corporate travel division); former global head of corporate development and strategy at Expedia Group. He will serve as the chair of Porch’s M&A committee.Margaret Whelan, founder and CEO of Whelan Advisory. Her board experience includes time at PropTech Acquisition Corp, Mattamy Homes, John Burns Real Estate Consulting, Housing Innovation Alliance and TopBuild.Tom Hennessy, chairman, co-CEO, and president of PropTech Acquisition Corp; managing partner of Hennessy Capital Real Estate Strategies. He will serve as the chair of Porch’s compensation committee.

Dennie Haydon, Juan Sabater and Michael Baldwin will step down from the board as part of the transition.

The combined company, based in Seattle, will operate under the Porch name and trade on the Nasdaq under the ticker symbol “PRCH” after the expected completion of the deal in the fourth quarter. Porch co-founder Matt Ehrlichman will remain as CEO and chairman.

Los Angeles-based PropTech went public in November in a $172.5 million initial public offering. SPACs, or blank-check companies, have been surging in popularity as an alternative means for companies to go public, and lucrative transactions for Wall Street banks. SPACs have played a role in 35% of U.S. IPO filings so far this year, according to a recent report by Silicon Valley Bank. Axios reported Wednesday that around half of this year’s 42 announced SPAC deals are for companies that would have attempted an IPO in 2021.

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Salesforce cuts 1k jobs, including some at Tableau, vows to keep hiring while ‘reshaping’ company

Tableau CEO Adam Selipsky, left, and Salesforce CEO Marc Benioff, right, at the Tableau Conference in Las Vegas in 2019. (GeekWire Photo / Todd Bishop)

Salesforce is cutting jobs after reporting record earnings, creating “shocked disbelief” inside the company, one newly laid-off Seattle employee tells GeekWire. The cuts, announced internally on Tuesday and Wednesday, involve about 1,000 jobs, or 1.8% of Salesforce’s workforce, according to Bloomberg News and CNBC.

Current and former employees say the layoffs include an unknown number of employees at Seattle-based data visualization company Tableau Software, which was acquired by the San Francisco-based customer relationship management and cloud technology company a year ago for $15.7 billion.

“We’ve had to make tough decisions when it comes to allocating resources and reshaping the company around our strategic growth areas to continue our momentum into the second half and beyond,” wrote Marc Benioff, the Salesforce co-CEO and co-founder, in an internal memo to employees, without explicitly referencing the job cuts.

 It’s important to make sure that all of our resources are aimed at the most important opportunities for our customers.

In an interview with GeekWire on Tuesday afternoon, before word of the layoffs started to emerge, Tableau CEO Adam Selipsky said the company is continuing to hire in areas including sales, product development and marketing. The pandemic has accelerated the digital transformation at many large companies, fueling new demand for technology including data analytics and visualization.

At the same time, Selipsky said, the ongoing uncertainty in the global economy also calls for a prudent approach.

“It’s important to make sure that all of our resources are aimed at the most important opportunities for our customers,” Selipsky said. “We’re putting real time and focus into making sure of that. At the same time, we’ve continued to open up new headcount.”

Selipsky said Salesforce and Tableau remain committed to growing in the Seattle area. Benioff called the region the company’s “HQ2” when he announced the acquisition a year ago.

The job cuts were a surprise to some employees, particularly following Salesforce’s record quarterly earnings. The company’s stock soared 26% in trading on Wednesday following the financial report.

“Based on the near-record revenue numbers, and all of the other positives Marc Benioff spoke about, doing a layoff of this scale and scope, during a global pandemic seems abjectly unconscionable,” said Vanya Tucherov, a Tableau employee of more than 10 years whose role in testing and quality assurance engineering was eliminated as part of the layoffs.

Tucherov said via email, “Particularly since Salesforce so proudly professes a commitment to Trust and isn’t shy about culturally appropriating the Hawai’ian term ‘Ohana’ to describe the relationship it wants to have with its staff and customer base, the juxtaposition of layoffs under these circumstances seems to indicate that we’re valued as family as long as we’re not perceived to have an adverse impact upon the payable side of the ledger. This is not how one treats family, nor how a company builds trust with its employees.”

“Shocked disbelief seems to be the consensus reaction, both from the people whose positions are being terminated and those who remain,” Tucherov wrote.

Tucherov said the support he has received from his former colleagues has been “amazingly positive.” Tucherov acknowledged the industry trends toward automation in software testing but said many inside the company “understand the value of having experienced customer advocates to validate that the user experience is as close to the experience we’d want our customers to have as possibly.”

Salesforce declined to confirm the total number of people impacted by the cuts. The company employed 54,255 people as of July 31, which puts the 1,000 reported job cuts at 1.8% of its workforce.

A company spokesperson said in a statement, “We’re reallocating resources to position the company for continued growth. This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities. For affected employees, we are helping them find the next step in their careers, whether within our company or a new opportunity.”

Salesforce Chart

For the quarter ended July 31, Salesforce reported total revenue of $5.15 billion, up 29%, and profits of $2.6 billion.

Tableau is part of its “Platform and Other” category, which grew to $1.5 billion in quarterly revenue from $912 million the year before, up 66%. Tableau was responsible for 41 percentage points of that growth, said Mark Hawkins, the Salesforce president and chief financial officer, on the company’s earnings call.

Benioff had pledged that the company would make no major layoff for three months in March, amid the economic uncertainty of the initial spread of COVID-19. Tableau employed more than 4,200 people worldwide at the time of the acquisition announcement last year.

Layoff notices started going out Tuesday afternoon, and were expected to be completed this afternoon, prior to a Salesforce all-hands virtual company meeting.

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ZoomInfo stock dips after first earnings report as a public company; revenue of $110M up 62%

Vancouver, Wash.-based ZoomInfo posted its first earnings report as a public company Monday. Revenue increase year-over-year 62% to a record $110.9 million, beating analysts estimates. Non-GAAP earnings per share came in at $0.07, also beating expectations.

Shares were down more than 4% in after-hours trading.

ZoomInfo went public in June, raising $887 million as the 13-year-old company sold shares at $21 per share. Its stock spiked 62% on its first day of trading and is up more than 20% since then.

The 1,287-person company, originally known as DiscoverOrg, uses machine learning to help more than 16,000 customers drive sales and marketing programs.

ZoomInfo has a market capitalization of nearly $17 billion. It’s the second Washington state company to go public this year, along with healthcare tech firm Accolade.

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This Seattle company is targeting the TikTok crowd — and it’s not Microsoft

LitPic is a new social app that helps creators get paid. (LitPic Images)

A new Seattle startup is launching next month targeting the influencers and creatives who make TikTok and Instagram popular.

LitPic believes it can differentiate itself in a hotly competitive space with built-in tools that allow all creators to make money on the app. The platform has four revenue streams that allow fans of creators to send them money. LitPic provides a back-end talent agency that connects influencers with relevant brands looking to partner.

LitPic CEO Maurice Yi. (LitPic Photo)

Creators can earn money in the app through direct payments from followers, premium content subscriptions, and brand deals.

“Most social media platforms think only in terms of advertising,” LitPic marketing chief Andy Karuza said in a statement. “We’re taking a different approach, one that’s designed off a self-sustaining peer-driven economy, which we call a ‘creator economy.’”

LitPic is currently in an invite-only beta and has begun recruiting influencers, including residents of The ClubHouse, a creator mansion in Beverly Hills. The app will be available on iOS and Android starting in September. LitPic has raised $450,000 from angel investors and has about 20 employees, according to CEO Maurice Yi.

LitPic creators pay $10 a month to use the service and retain 100% of the money their followers pay them using a built-in currency called Lits. It’s similar to the model used in game streaming services like Twitch, Yi said.

“Consumer and e-commerce is merging together in the future,” Yi said. “A lot of these people want to get paid … right now on TikTok and Instagram the only way to get paid is if you’re a big influencer.”

Yi brings experience working in talent booking, product design, marketing, and event production to LitPic. But even for industry giants such as Facebook, attracting followers to a new social app is a difficult business.

Lasso, the app Facebook developed to compete with TikTok, failed to gain traction and shut down less than two years after launching. This week, Facebook debuted its second attempt to compete with TikTok using Reels, a feature built into the already-popular Instagram app. Meanwhile, Thriller, another TikTok rival, is nearing unicorn status.

Competitors are emerging at a vulnerable moment for TikTok, which faces a potential ban in the U.S. if it isn’t acquired in 45 days. President Donald Trump codified his plans to ban the app in an executive order Thursday, adding pressure to acquisition talks between Microsoft and the app’s parent company, ByteDance.

“I think we’re trending towards an economic cold war and these technology platforms are at the center of it,” said Karuza, a Seattle startup vet who also serves as CEO of the automobile hardware startup FenSens. “This opens up an opportunity for U.S.-based apps.”

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Avalara revenue up 28% to $116M; tax automation company to sell $500M of stock in new offering

Avalara beat analyst expectations for its second quarter earnings report, posting $116.5 million in revenue, up 28% year-over-year, and a non-GAAP earnings per share of $0.04.

June was the company’s best non-December total bookings month ever, CEO Scott McFarlane said, as the Seattle-based tax automation company sees demand grow amid the economic crisis.

“We are seeing a confluence of positive macro trends that are tailwinds for our business, from the accelerating growth of ecommerce to broader adoption of cloud-based and other efficiency improvement solutions to the increasing need for regulatory compliance enforcement,” McFarlane said in a statement. “As a result, global demand for compliance automation continues to grow and we are driving efficiency improvements across our business to capture the large opportunity in front of us.”

The company also announced Tuesday that it will sell $500 million in shares of its common stock.

Shares were down more than 5% in after-hours trading. Avalara’s stock has more than doubled since March.

GeekWire’s coverage this week is underwritten by BCRA

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Hear more about how to rethink your future workspace here

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Shares of RFID company Impinj drop as Q2 losses swell due to impact from COVID-19

Impinj missed analyst expectations for its second quarter earnings report as its stock dipped more than 14% on Thursday.

The Seattle-based RFID company reported a loss of $0.25 per share and revenue of $26.5 million. That compares to a profit of $0.03 per share on revenue of $38.2 million in the year-ago quarter.

“Covid-19 negatively impacted our second-quarter results, and the continuing uncertainty tempers our third-quarter outlook,” Chris Diorio, Impinj co-founder and CEO, said in a statement.

But Diorio expressed long-term optimism for the 20-year-old company, whose technology is heavily used by retailers to track inventory.

“With our strong balance sheet and staying power we will not only weather the impacts of COVID-19, but we will invest in these opportunities and exit the other side of COVID-19 stronger,” he said on an earnings call. “Looking to the long-term, we believe COVID-19 will accelerate our vision of connecting and giving digital life to everything.”

Impinj stock fell sharply in March but had rebounded back to near pre-COVID levels before Thursday’s drop.

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Porch to go public at $523M valuation in SPAC deal, marking new era for real estate tech company

Porch’s Seattle headquarters. (Porch Photo)

Porch, a real estate technology venture and home improvement marketplace that has spent four years quietly renovating its own business, plans to become publicly traded through a merger that values the Seattle company at $523 million.

The agreement, announced Friday morning, will combine Porch with PropTech Acquisition Corp., a special purpose acquisition company, or SPAC, as they’re known. The Los Angeles-based “blank check” company went public in November in a $172.5 million initial public offering with the intent of making such a deal.

Porch CEO Matt Ehrlichman. (Porch Photo)

The combined company, based in Seattle, will operate under the Porch name and trade on the Nasdaq under the ticker symbol “PRCH” after the expected completion of the deal in the fourth quarter. Porch co-founder Matt Ehrlichman will remain as CEO and chairman.

The agreement includes a $150 million investment led by Wellington Management Company, leaving the new Porch with no debt and an initial $205 million cash balance.

“For us, it’s a really good match because it accelerates our path to take this company public by a good year,” Ehrlichman said in an interview with GeekWire. “It gets us public faster, gets us really well-capitalized. It’s an exciting opportunity for both companies.”

Porch’s financial results and projections from its investor presentation about the PropTech Merger. (See full slide.)

The investor presentation for the deal discloses Porch’s financials for the first time, showing it growing revenue more than 55% from $36 million in 2018 to $57 million in 2019, with losses of $29 million and $30 million, respectively, based on adjusted earnings before interest, depreciation, taxes and amortization (EBITDA).

Porch expects $85 million in revenue for 2020, narrowing its EBITDA loss to $10 million. It projects $120 million in revenue in 2021, with a EBIDTA profit of $7 million.

SPACs, or blank-check companies, have been surging in popularity as an alternative means for companies to go public, and lucrative transactions for Wall Street banks. SPACs have played a role in 35% of U.S. IPO filings so far this year, according to a report this week by Silicon Valley Bank.

Special purpose acquisition companies, which raise funds based on acquisition goals, have become an increasingly popular mechanism for IPOs. (Silicon Valley Bank, State of the Markets, Q3 2023.)

PropTech Acquisition Corp. is led by co-CEOs Thomas Hennessy and Joseph Beck, two Los Angeles-based investors who worked together previously as senior investment managers at the Abu Dhabi Investment Authority.

“Porch aligns well with the objectives laid out in our property technology investment thesis,” Hennessy said in a news release announcing the deal. “It brings significant innovation to the residential real estate industry by delivering critical home services in a scalable, software-based platform.”

Key metrics from Porch’s investor presentation on the PropTech deal. (See full slide.)

The Seattle company has reinvented itself in recent years as a provider of enterprise software to home services companies in areas such as home inspections, moving, real estate, and insurance. Porch says 11,000 companies use its software, offered through Porch brands such as HireAHelper and Inspection Support Network.

Companies can pay recurring fees to use the software, or they can use the software for free if they agree to provide Porch with access to information about home buyers. The investor presentation for the merger describes this latter scenario as the company’s preferred option, saying customers than share data are six times more valuable to Porch than if they paid for the software.

Porch uses that information as a strategic advantage, offering to serve as a concierge to those homebuyers at a time when they are making major purchase decisions. Porch connects homebuyers to movers, insurance providers, TV/internet companies and others, and collects transaction fees on sales it facilitates.

“Utilizing our software companies to gain early access to homebuyers is certainly unique,” Ehrlichman said on a conference call with investors Friday morning, explaining that most service providers get this data later in the process, when homebuyers file change-of-address forms and get flooded with offers. “Porch gets access to these consumers approximately six weeks earlier, and that early access is a critical component of our competitive advantage.”

The company says more than 65% of U.S. residential properties bought or sold from August 2019 through January 2020 were processed through its system, and it had call and marketing rights for 27% of U.S. homebuyers.

Porch has been building market share in software and home services through a series of acquisitions in recent years. (One of those acquisitions, L.A.-based Kandela, sued Porch in May for $11.5 million, alleging that the deal was structured to prevent a promised earnout. Ehrlichman said at the time that the startup “oversold” its ability to achieve the milestones.)

Porch’s merger with PropTech is the latest chapter in a seven-year startup saga. Founded in 2012, Porch raised more than $120 million in venture capital over its lifetime as a privately held company from investors including SVAngel, Valor Equity Partners, Founders Fund, Battery Ventures, Moderne Ventures, and others.

In its early days as a company, Porch partnered with Lowe’s Home Improvement stores, which referred customer to Porch’s home services marketplace. (File Photo)

Another investor was Lowe’s Home Improvement, which was one of Porch’s key early partners, offering home improvement services to its customers via the Porch marketplace early in the company’s history. Ty Pennington, the former host of “Extreme Makeover: Home Edition,” took a small stake in the company at one point.

[Update, 11 a.m.: Porch’s latest funding round came in January, when the company raised $20.6 million. We’ve asked the company to comment on reports that it made job cuts around the same time. Porch told us earlier today that it won’t be making cuts in conjunction with the merger, and will be hiring and growing. The company also received a Paycheck Protection Program loan between $5 million and $10 million as part of the U.S. Small Business Administration’s COVID-19 relief initiative, according to federal records.]

Following the merger, Porch’s existing shareholders will own 53% of the company, rolling 92% of their equity into the deal, according to the investor presentation made public as part of the announcement.

Porch publicly launched its data-driven home services marketplace in 2013 with the ambition of becoming one of the next great Seattle companies, as Ehrlichman put it in an interview with GeekWire at the time. The company appeared to be well on its way to that goal, growing to nearly 500 people by 2015. That’s when the Porch reached the limits of its initial business model, laying off 90 people and going through a broader shakeup.

Ehrlichman said Porch had been focusing on building a “classic data driven home services marketplace” before realizing that it “was going to be very challenging to build into the type of scale and impact that we wanted to build this company into.”

After seeking to make a splash in its early phases as a company, Porch has flown largely under the radar in recent years as it rebuilt its business. As of June 30, according the investor presentation, Porch had about 370 full-time employees and 530 full-time contractors serving in support, operations and sales.

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Porch to go public at $523M valuation in SPAC deal, marking new era for real estate tech company

Porch’s Seattle headquarters. (Porch Photo)

Porch, a real estate technology venture and home improvement marketplace that has spent four years quietly renovating its own business, plans to become publicly traded through a merger that values the Seattle company at $523 million.

The agreement, announced Friday morning, will combine Porch with PropTech Acquisition Corp., a special purpose acquisition company, or SPAC, as they’re known. The Los Angeles-based “blank check” company went public in November in a $172.5 million initial public offering with the intent of making such a deal.

Porch CEO Matt Ehrlichman. (Porch Photo)

The combined company, based in Seattle, will operate under the Porch name and trade on the Nasdaq under the ticker symbol “PRCH” after the expected completion of the deal in the fourth quarter. Porch co-founder Matt Ehrlichman will remain as CEO and chairman.

The agreement includes a $150 million investment led by Wellington Management Company, leaving the new Porch with no debt and an initial $205 million cash balance.

“For us, it’s a really good match because it accelerates our path to take this company public by a good year,” Ehrlichman said in an interview with GeekWire. “It gets us public faster, gets us really well-capitalized. It’s an exciting opportunity for both companies.”

Porch’s financial results and projections from its investor presentation about the PropTech Merger. (See full slide.)

The investor presentation for the deal discloses Porch’s financials for the first time, showing it growing revenue more than 55% from $36 million in 2018 to $57 million in 2019, with losses of $29 million and $30 million, respectively, based on adjusted earnings before interest, depreciation, taxes and amortization (EBITDA).

Porch expects $85 million in revenue for 2020, narrowing its EBITDA loss to $10 million. It projects $120 million in revenue in 2021, with a EBIDTA profit of $7 million.

SPACs, or blank-check companies, have been surging in popularity as an alternative means for companies to go public, and lucrative transactions for Wall Street banks. SPACs have played a role in 35% of U.S. IPO filings so far this year, according to a report this week by Silicon Valley Bank.

Special purpose acquisition companies, which raise funds based on acquisition goals, have become an increasingly popular mechanism for IPOs. (Silicon Valley Bank, State of the Markets, Q3 2023.)

PropTech Acquisition Corp. is led by co-CEOs Thomas Hennessy and Joseph Beck, two Los Angeles-based investors who worked together previously as senior investment managers at the Abu Dhabi Investment Authority.

“Porch aligns well with the objectives laid out in our property technology investment thesis,” Hennessy said in a news release announcing the deal. “It brings significant innovation to the residential real estate industry by delivering critical home services in a scalable, software-based platform.”

Key metrics from Porch’s investor presentation on the PropTech deal. (See full slide.)

The Seattle company has reinvented itself in recent years as a provider of enterprise software to home services companies in areas such as home inspections, moving, real estate, and insurance. Porch says 11,000 companies use its software, offered through Porch brands such as HireAHelper and Inspection Support Network.

Companies can pay recurring fees to use the software, or they can use the software for free if they agree to provide Porch with access to information about home buyers. The investor presentation for the merger describes this latter scenario as the company’s preferred option, saying customers than share data are six times more valuable to Porch than if they paid for the software.

Porch uses that information as a strategic advantage, offering to serve as a concierge to those homebuyers at a time when they are making major purchase decisions. Porch connects homebuyers to movers, insurance providers, TV/internet companies and others, and collects transaction fees on sales it facilitates.

“Utilizing our software companies to gain early access to homebuyers is certainly unique,” Ehrlichman said on a conference call with investors Friday morning, explaining that most service providers get this data later in the process, when homebuyers file change-of-address forms and get flooded with offers. “Porch gets access to these consumers approximately six weeks earlier, and that early access is a critical component of our competitive advantage.”

The company says more than 65% of U.S. residential properties bought or sold from August 2019 through January 2020 were processed through its system, and it had call and marketing rights for 27% of U.S. homebuyers.

Porch has been building market share in software and home services through a series of acquisitions in recent years. (One of those acquisitions, L.A.-based Kandela, sued Porch in May for $11.5 million, alleging that the deal was structured to prevent a promised earnout. Ehrlichman said at the time that the startup “oversold” its ability to achieve the milestones.)

Porch’s merger with PropTech is the latest chapter in a seven-year startup saga. Founded in 2012, Porch raised more than $120 million in venture capital over its lifetime as a privately held company from investors including SVAngel, Valor Equity Partners, Founders Fund, Battery Ventures, Moderne Ventures, and others.

In its early days as a company, Porch partnered with Lowe’s Home Improvement stores, which referred customer to Porch’s home services marketplace. (File Photo)

Another investor was Lowe’s Home Improvement, which was one of Porch’s key early partners, offering home improvement services to its customers via the Porch marketplace early in the company’s history. Ty Pennington, the former host of “Extreme Makeover: Home Edition,” took a small stake in the company at one point.

[Update, 11 a.m.: Porch’s latest funding round came in January, when the company raised $20.6 million. We’ve asked the company to comment on reports that it made job cuts around the same time. Porch told us earlier today that it won’t be making cuts in conjunction with the merger, and will be hiring and growing. The company also received a Paycheck Protection Program loan between $5 million and $10 million as part of the U.S. Small Business Administration’s COVID-19 relief initiative, according to federal records.]

Following the merger, Porch’s existing shareholders will own 53% of the company, rolling 92% of their equity into the deal, according to the investor presentation made public as part of the announcement.

Porch publicly launched its data-driven home services marketplace in 2013 with the ambition of becoming one of the next great Seattle companies, as Ehrlichman put it in an interview with GeekWire at the time. The company appeared to be well on its way to that goal, growing to nearly 500 people by 2015. That’s when the Porch reached the limits of its initial business model, laying off 90 people and going through a broader shakeup.

Ehrlichman said Porch had been focusing on building a “classic data driven home services marketplace” before realizing that it “was going to be very challenging to build into the type of scale and impact that we wanted to build this company into.”

After seeking to make a splash in its early phases as a company, Porch has flown largely under the radar in recent years as it rebuilt its business. As of June 30, according the investor presentation, Porch had about 370 full-time employees and 530 full-time contractors serving in support, operations and sales.

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Shares of RFID company Impinj drop as Q2 losses swell due to impact from COVID-19

Impinj missed analyst expectations for its second quarter earnings report as its stock dipped more than 14% on Thursday.

The Seattle-based RFID company reported a loss of $0.25 per share and revenue of $26.5 million. That compares to a profit of $0.03 per share on revenue of $38.2 million in the year-ago quarter.

“Covid-19 negatively impacted our second-quarter results, and the continuing uncertainty tempers our third-quarter outlook,” Chris Diorio, Impinj co-founder and CEO, said in a statement.

But Diorio expressed long-term optimism for the 20-year-old company, whose technology is heavily used by retailers to track inventory.

“With our strong balance sheet and staying power we will not only weather the impacts of COVID-19, but we will invest in these opportunities and exit the other side of COVID-19 stronger,” he said on an earnings call. “Looking to the long-term, we believe COVID-19 will accelerate our vision of connecting and giving digital life to everything.”

Impinj stock fell sharply in March but had rebounded back to near pre-COVID levels before Thursday’s drop.

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SAP plans to spin out Qualtrics with an IPO, two years after acquiring software company for $8B

(GeekWire Photo / Kevin Lisota)

SAP announced Sunday that it will spin out its Qualtrics unit with an IPO, less than two years after acquiring the experience management company for $8 billion.

SAP plans to maintain majority ownership of Qualtrics, which is co-headquartered in Provo, Utah, and Seattle. Qualtrics’ leadership team intends to remain in place, including founder Ryan Smith, who will be the largest individual shareholder.

“SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations with 2019 cloud growth in excess of 40 percent, demonstrating very strong performance in the current setup,” SAP CEO Christian Klein said in a statement. “As Ryan Smith, [SAP President] Zig Serafin and I worked together, we decided that an IPO would provide the greatest opportunity for Qualtrics to grow the Experience Management category, serve its customers, explore its own acquisition strategy, and continue building the best talent.”

The move comes as several companies test the public markets after an initial slowdown due to the global pandemic, and despite the ongoing economic and health crisis. Earlier this month, healthcare company Accolade was the first Seattle-area company to go public in 2020.

SAP’s $8 billion acquisition in 2018 came just four days before Qualtrics was set to go public as a standalone company.

Founded in 2002, Qualtrics is in the customer-experience management business, helping companies measure, understand, and improve the ways customers and employees experience products, services, and their roles inside companies. It competes against Medallia; SurveyMonkey; and marketing research firms such as Aon Hewitt and Towers Watson.

The company first set down roots in Seattle five years ago and has been growing rapidly ever since. It grew so fast in Seattle that in 2017 it designated the office as its co-headquarters.

This past November, Qualtrics leased 275,000 square feet across 13 stories at the new “Qualtrics Tower” in Seattle, with plans to quadruple its workforce to more than 2,000 people in the region in the years ahead. The company was set to open the office this year; we’ve reached out for the latest updates.

Qualtrics Tower is also home to job search engine Indeed, Dropbox and co-working company Spaces.

SAP previously acquired Bellevue, Wash.-based expense management company Concur Technologies for $8.3 billion back in 2014.

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Microsoft unveils new sustainability steps in effort to remove all carbon produced in company history

Microsoft President Brad Smith, Chief Financial Officer Amy Hood, and CEO Satya Nadella preparing to announce Microsoft’s plan to be carbon negative by 2030. (Brian Smale / Microsoft Photo)

Microsoft unveiled a new suite of sustainability initiatives Tuesday as part of its effort to zero-out the carbon debt the company has accrued over its lifespan.

The latest announcements include the largest single renewable energy investment Microsoft has ever made. The company is investing in 500 megawatts of renewable energy from Sol Systems, equivalent to the energy needed to power more than 70,000 homes in the U.S. per year. The investment will fund solar energy projects in the U.S. in under-resourced communities, according to Microsoft. The company will provide $50 million in grants to community organizations working on education, habitat restoration, clean energy programs, and job training.

Microsoft is partnering with six corporations — Maersk, Danone, Mercedes-Benz, Natura & Co., Nike, Starbucks, Unilever, and Wipro — to create Transform to Net Zero, a coalition dedicated toward creating a net-zero carbon economy. The Environmental Defense Fund is also a founding member.

The coalition is pledging to achieve net-zero emissions by 2050. Each company will share what it learns in pursuit of carbon reduction goals with the coalition and broader business community.

“We’re actively investing and we’re actively purchasing at the same time, and being able to operate in the market as both an investor and a consumer is a really critical step,” said Lucas Joppa, Microsoft’s chief environmental officer, during a virtual climate change event hosted Tuesday by Bloomberg Green.

Microsoft is also unveiling a new Sustainability Calculator of cloud customers to help them understand the carbon emissions generated by their cloud usage. The calculator uses AI and analytics to advise users on ways to reduce their carbon footprint and predict future emissions.

Microsoft pledged in January to become carbon negative by 2030 and remove more carbon than the company has put into the atmosphere since it launched by 2050. As part of Tuesday’s announcement, Microsoft also pledged to stop using diesel fuel to power backup generators in data centers. In addition to those programs, Microsoft was one of the first companies to implement an internal fee on carbon emissions that managers must budget for.

Though Microsoft has launched one of corporate America’s most aggressive climate change initiates, other big tech companies are following suit. Apple said Tuesday that it will ensure every product it sells will have a net-zero impact on global warming within 10 years, Axios reports.

Microsoft plans to remove 1 million metric tons of carbon from the atmosphere this year, and on Tuesday the company opened a request for proposals “to source that carbon removal from a range of nature- and technology-based solutions.”

“It’s incumbent, I believe, on Microsoft and other players in this space to make sure that we don’t just engage in these markets by ourselves,” Joppa said. “We engage in these markets on behalf of the rest of the world.”

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Wireless pioneer Craig McCaw files IPO for new Seattle-area ‘blank check’ tech company Holicity

Craig McCaw

Craig McCaw, the low-key and mysterious billionaire known for his pioneering work in the telecom industry, is heading up a new Seattle-area “blank check” company that filed for an IPO last week.

Holicity is aiming to raise around $250 million as a blank check firm, also known as a special purpose acquisition company, or SPAC, which typically do not have an established business and are used to raise funds via public offering for a merger or acquisition. More companies, including DraftKings and Nikola Corp., are using the tactic amid the COVID-19 crisis as an alternative to the volatile IPO market, the Wall Street Journal reported.

Axios’ Dan Primack said the SPAC surge is driven in part by “public equity froth.”

“SPACs, not direct listings, are the 2020 challenge to IPOs and IPO bankers,” he reported earlier this month.

In its IPO prospectus filing, Holicity says it intends to “initially focus our search on identifying a prospective target business in the technology, media and telecommunications (“TMT”) industries in the United States and other developed countries.”

McCaw, 70, previously led McCaw Cellular Communications, Nextel Communications and Clearwire, helping lay the groundwork for much of today’s telecommunications technology. He sold McCaw to AT&T for $11.5 billion in 1994. Forbes estimates his net worth to be $1.8 billion.

He co-founded Holicity with Randy Russell, a former Deutsche Bank and Bank of America exec who leads Pendrell subsidiary Pendrell Financial Services.

Blank check firms “have historically been considered dodgy investment vehicles, but in recent years some well-respected names in finance have used them to raise capital that can be plowed into companies that may have trouble raising it on their own,” the Seattle Times noted in its report on the IPO filing.

Here are more details from the filing, outlining Holicity’s strategy:

“We will seek to capitalize on the experience of our co-Founders, Craig McCaw and Randy Russell, who together have nearly 70 years of combined operating, investing and financing experience. Mr. McCaw’s skills as a serial entrepreneur across public and private markets, and Mr. Russell’s experience as a senior investment banker and trusted advisor to a broad range of companies and c-suite executives in the Telecommunications, Media and Technology (“TMT”) industry and leading private equity firms, represent a compelling combination. We believe our Founders’ distinctive and complementary backgrounds can facilitate a positive, transformational outcome in an initial business combination.

Opportunities for a potential business combination will be developed through our multi-decade relationships and proprietary network of corporate executives, family offices, financial sponsors, investment bankers, private investors, and strategic advisors. We intend to be proactive and highly selective in sourcing potential targets. We will focus our efforts on opportunities where our founders’ strategic vision, operating expertise, deep relationships, and capital markets experience can be catalysts to enhance the growth, competitive position and financial upside in an initial business combination. We intend to identify and execute an initial business combination within the TMT industry in the United States and other developed countries, although we may pursue targets in any business, industry, sector or geographical location.”

McCaw is currently co-CEO and chairman of Seattle-area investment group Pendrell, and chairman and CEO of private equity firm Eagle River Inc. Former Clearwire exec and current Pendrell CFO Steve Ednie is CFO of Holicity. Another ex-Clearwire colleague, R. Gerard Salemme, is listed as a director.

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