TechCrunch+ roundup: Midwest VC boom, advice for CISOs, Facebook’s next chapter

Healthcare spending accounts for almost 18% of U.S. GDP, so it’s no surprise that digital health is attracting record levels of investment. This year, VCs have flowed $14.7 billion to health tech startups, compared to $14.6 billion in all of 2020.

Given the high cost of care in the United States compared to other nations, pairing fintech with health tech is just good business.

Simon Wu, an investment director with Cathay Innovation, says he’s paying particularly close attention to these areas of convergence:

• Data and the transition to value-based care.
• Gamifying consumer wellness to stave off chronic illnesses.
• Fintech for affordability and reducing friction.

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Since the U.S. Congress passed a $1.9 trillion COVID-19 stimulus package this year that increased funding for affordable healthcare, Wu says opportunities are expanding for startups in this space.

“We’re only in the early innings of a digital-first revolution in healthcare, but the convergence of health and fintech will be an important catalyst to address some of the most pressing issues facing healthcare today,” according to Wu.

“A modern financial consumer experience can help build relationships and trust between patients, providers and payers.”

Thanks very much for reading,

Walter Thompson

Senior Editor, TechCrunch+
@yourprotagonist

From the American heartland, a startup boom

The rising tide of venture capital that has lifted startups around the world also splashed over America’s Midwest this year.

Regions like Denver and Chicago “are crushing their 2020 venture capital tallies, results that were at times already at or near record highs,” report Anna Heim and Alex Wilhelm in today’s edition of The Exchange.

Zillow may be pulling up the welcome mat, but rival OpenDoor is expanding into new markets

Soon after the pandemic hit, the U.S. residential housing market became feverish as well.

Overbidding and speedy closings became the norm, often facilitated by the speed and convenience offered by proptech companies that helped sellers cash out quickly so they could get into their next homes.

But shares in Zillow fell 10% last week after the company said it would pause buying houses for the rest of the year. Not long after, one of its chief rivals clapped back by announcing that “OpenDoor is open for business and continues to scale and grow,” reports Ryan Lawler.

He interviewed OpenDoor CTO Ian Wong and Chief Customer Officer Megan Meyer Toolson to learn more about their plans to grow in a market that’s facing acute labor and supply constraints.

“The last 18 months have been a very dynamic time for the housing market, to say the very least. So we’ve had to be very competitive since things are so dynamic and price appreciation has been very strong,” Wong said.

Bridging the gap: What CISOs must do to get the C-suite on their side

On a good day, most people forget the chief information security officer even exists. But if something should go wrong, everyone will demand answers.

Keeping a company’s security measures up to the mark while getting all stakeholders to implement safe security practices is a tall order, complicated by the fact that many CISOs aren’t inside the executive decision-making loop.

According to Sean McDermott, founder and CEO of RedMonocle, CISOs should meet executives where they are.

“You already know why cybersecurity investment is essential to your role. Now step into your leadership’s shoes to explain why it’s crucial to theirs,” he writes.

How Lunchclub landed a preemptive term sheet from Lightspeed

When Lunchclub, a social platform that helps people find new connections in specific industries, launched its fireside chats service last year, it immediately found itself the subject of a lot of interest.

So much so, Lightspeed Ventures handed the startup a term sheet even though its founders weren’t looking to raise.

In the latest TechCrunch Live episode, Lunchclub co-founder Vlad Novakovski and Lightspeed’s Nicole Quinn broke down its Series A deck, Lightspeed’s investment thesis and how having a strong investor network makes the difference between a successful raise and a dud.

“Consumer feedback is everything to us,” said Quinn. “It is the number one most important thing that I’m looking for in a slide deck and a conversation. I want to know, do customers love this?”

Facebook’s next chapter just might make sense

Snap Inc.’s Q3 results last week sent its stock tumbling, but it wasn’t alone: Apple’s iOS 15 privacy implementation disrupted ad tracking and measurement for social media and advertising platforms across the board.

This potential volatility in ad revenue might have something to do with Facebook’s metaverse focus, notes Alex Wilhelm. Is Zuckerberg planning to shore up losses with a leap into VR?

“Something else will have to fill the void,” writes Alex. “The company’s rebrand fits neatly into that sort of push.”

Braze set to put points on the board for New York’s startup scene in impending IPO

While it was not a unicorn when it last raised capital, NYC-based customer engagement software startup Braze may just crash through the $1 billion valuation mark when it finally goes public.

As per Alex Wilhelm’s initial read of the startup’s fresh, new S-1 filing, Braze seems to have a decent business with growing revenue (albeit with costs rising faster than profits), good retention with a focus on larger clients and a strong subscription business.

“To sum up: Braze is growing nicely at scale with modest net losses and no smokescreen-y, fake profit numbers on display,” Alex writes.