Yahoo’s Renaissance 🌼

PLUS: Startups closing Startups ⚰️

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Here's what we're serving up today:

  • Yahoo’s Renaissance 🌼

  • Startups closing Startups ⚰️

Yahoo’s Renaissance 🌼

Remember Yahoo? Yeah, that same ‘90s giant most have forgotten about.

After a very tumultuous life, the company is undergoing an era of renaissance.

The company was more or less dead when it was sold to the PE firm, Apollo Global Management by Verizon in 2021, under whom it is reinventing itself.

A Life of Adventure

Yahoo for sure has had one of the most thrilling and adventurous trajectories with a bad ending unfortunately.

The company was the Google of the world before Google actually took over and was valued at a whopping $125B at the peak of the dotcom bubble.

However, a series of bad decisions ultimately led to the demise of its greatness and the company was eventually sold to Verizon for $4.5B, making it a mere shadow of its former glory.

Rebirth of the Digital Dino

After Verizon had failed to make anything out of the company, they sold Yahoo and AOL to Apollo for a combined $5B.

Yahoo is considered by most people to be a digital dinosaur but under Apollo, it seems like the company is thriving.

Yahoo recently also acquired the newsletter StrictlyVC for its news site, TechCrunch.

This marks the company’s fourth acquisition in the last year. Here’s a quick look at their acquisitions.

  1. They acquired the social investing platform CommonStock to make Yahoo Finance a premiere destination for retail investors.

  2. It purchased Wagr to bring gaming opportunities to Yahoo Sports.

  3. Last year, it bought Factual to add news credibility ratings to news content.

Also, despite all the digital dinosaur memes on Yahoo, you have to remember that Yahoo still prints money. And a lot of it.

Reports indicate that the company generated $8B with significant profit margins. Its legacy business such as AOL still makes millions of dollars of cash flow every year.

What’s your take on this? Do you think Yahoo can turn around and become a modern tech company again?

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Startups closing Startups ⚰️

If you’re a founder or an investor, you know that raising money in the post ZIRP era is hard. Unless you’re an AI startup or wait for it - you’re a startup specializing in shutting down other startups.

In one of the VC world’s greatest ironies, investors have lately been clamoring to back startups that are helping other startups close shop. 

Whether a startup is soaring to new heights or sinking faster than a lead balloon, investors are finding a way to cash in. 

Let’s face it, the startup journey is not all unicorns and rainbows. With a failure rate that’s through the roof, especially in 2024, the need for a graceful exit is more pressing than ever. 

Enter the rise of the “wind-down” startups.

1/ Sunset announced a $1.4M seed round.

2/ SimpleClosure raised a $4M seed round just 6 months after raising a pre-seed round.

3/ Cap Table Management firm, Carta is coming up with their own offering called Carta Conclusions.

Closing down a company - especially a venture backed one is not as easy as putting the shutters down one day and calling it quits. 

There’s a laundry list of to-dos such as:

  1. Paying vendors.

  2. Sunsetting insurance and benefits.

  3. Employee severance.

And many more such things. 

Failure to do any of these steps can result in the IRS knocking at your door asking for taxes and fines for a business that’s not even running anymore. 

In a sign of the times, such wind-down startups are growing rapidly. Sunset saw 9x QoQ revenue growth and 65% monthly customer growth between Nov 23-Jan 24.

SimpleClosure has passed the $1M ARR mark and has grown over 50% in the same period. Since its public launch in September, the startup’s revenue has increased more than 14x.

So, whether you're leading a startup to the promised land or guiding it through its final curtain call, there's a silver lining: there's money to be made in both success and failure. 

Who knew the end could be so lucrative.

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