Welcome to a recap of Equity, TechCrunch's flagship podcast about the business of startups. In today's episode, we're talking M&A, how one YouTuber made it in the creator economy, why Twitch is still in the red, and a self-driving car company making a comeback.
First, senior reporter Rebecca Beran covered fintech giant Stripe's acquisition of four-year-old competitor Lemon Squeegee. Stripe CEO Patrick Collison said the acquisition will strengthen Stripe's ability to calculate and pay global sales tax for its customers. Terms of the deal were not disclosed. Lemon Squeegee famously turned down other investments, including a $50 million Series A. The company's founders said they were waiting for the right partner to take the business to the next level, and it appears Stripe was that partner.
This comment prompted Rebecca to explore the idea of M&A as an exit strategy. Does this practice create perverse incentives in venture capital where investors become more risk averse and seek more surefire ways to get their capital back in the long run at the expense of competition? Other startups turn down these opportunities because they can go it alone. Look at Wiz's decision not to be acquired by Google for $23 billion, which we covered in last Friday's episode.
Rebecca then mentioned MatPat, the first big YouTuber to successfully exit his company, Theorist Media. Matthew Patrick turned his hit video series, The Game Theorists, into a full-fledged media business called Theorist, with 40 million subscribers across his channels. But he grew tired of constantly uploading content, and convinced investors to find a way for the business to continue without him. Now he sits on Capitol Hill educating politicians on what it takes for creators to succeed as small businesses.
Speaking of creators and acquisitions, Rebecca pulled up a Wall Street Journal article stating that after 10 years, Twitch is still losing money on Amazon. Amazon acquired Twitch for $1 billion in 2014, but the company has yet to turn a profit. And can it ever turn a profit? Twitch generated about $667 million in advertising revenue and $1.3 billion in commerce revenue in 2023, which represents less than 0.5% of Amazon's total revenue in 2023. Amazon defended the acquisition, saying Twitch has a path to profitability in the long term. But the trend toward short-form videos over watching someone play an entire video game live suggests otherwise.
Finally, while we're on the subject of comebacks, autonomous delivery startup Nuro is gearing up for one too. Nuro has been quiet for the past year or so after two major layoffs. Once a darling of the autonomous industry with over $2 billion in funding from prominent investors, Nuro saw its funding rapidly dwindle as it tried to fast-track scale and commercialize. Now, Nuro is back with better AI and a new vehicle, the R3, which it plans to test in the Bay Area and Houston later this year.
Equity is TechCrunch's flagship podcast produced by Theresa Loconsolo and posted every Monday, Wednesday, and Friday.
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