The Daily Crunch: Peloton share price falls 14% after product recall and data breach; CEO apologizes – TechCrunch


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Hello friends and welcome to Daily Crunch, bringing you the most important startup, tech and venture capital news in a single package.

Todays entry marks the third time the new crew and I have put this note together for you. Frankly, its been a blast. We also want to improve the missive over time. So! Shoot me a note directly with your feedback.

Turning to today: I got to help write a long-form piece digging into what drove 2020s disappointing startup fundraising gender equality numbers. With that in mind, lets get into the rest of the news. — Alex

Peloton treads backward

Leading the site today was news that former unicorn and now public company Peloton admitted that its treadmill products are dangerous. The company is recalling them. And TechCrunch broke the news that the company has a pretty serious cybersecurity leak. Big ups to Zack for leading our reporting there.

Investors were incensed about the recall. For both its cost, I reckon, but also because the company was arguing in public that consumer safeguard groups were wrong just weeks ago. Imagine if you were an investor, content that Peloton knew better. And then it wound up not knowing better. And now your shares are off 13% to 14% in a single day. (Brian has been great on this story, in case youre looking for someone new to follow on Twitter. If thats you, could I also interest you in a 45-minute Power Zone Endurance ride? Ill be doing one with Matt later. Feel free to join.)

On a more serious note, Peloton faces a grip of competition from Tonal (read our EC-1 here), to Mirror (which exited last year), all the way back to the recently funded Ergatta, which wants you to row at home. With smart tech! All thats to say that there are lots of startups and venture capital bets aiming at Peloton, and this was a very, very bad day for Big Bike.

Lets talk about some seed deals

But enough about public companies and their inability to make safe products. Lets get into some recent venture capital deals that you need to know about. Here are my favorites from the day, and one that I wrote:

Closing up, a note on the amount of money that is still sloshing around the venture capital world. Early Zoom investor Emergence Capital is out with two new funds worth nearly $1 billion. The main vehicle is a sixth early-stage fund worth $575 million. Looking back in time, the companys fifth fund was worth $435 million. Its fourth was worth just $335 million, Connie reports.

Inflation! Venture style, I suppose. Also having been to dinner at an Emergence partners house in a better part of San Francisco than the one I used to live in, I can confirm that some of the companys funds have done well for both it and its backers. That or he was already rich.

Advice and analysis from Extra Crunch

One CMOs honest take on the modern chief marketing role

Every C-level executive faces unique challenges, but the chief marketing officer may be the most vulnerable.

Marketing is more art than science, which means everyone from the CEO to the person who waters the office plants can have an opinion about a PR blitz or the latest white paper.

That pressure takes a toll. According to management consultants Korn Ferry, the average tenure of a CMO is 3.5 years, the shortest of all C-suite roles.

In an expos drawn from his own experience, Daniel Incandela, chief marketing officer of Terminus, shares his thoughts about what startups really expect from their lead storytellers. If you’re looking for a senior marketing role or know someone who is, read and share.

4 strategies for building a digital health unicorn

Two startups in Merck Global Health Innovation Fund’s portfolio Preventice Holdings and Livongo exited as unicorns last year.

“And we are expecting two more unicorn exits in 2021,” says GHI Fund President Bill Taranto.

Growing a health tech startup into a billion-dollar company isn’t easy, but it is somewhat straightforward, he says. For example, a CFO should be one of a digital health company’s first employees:

“Hiring just a bookkeeper or an accountant will create headaches for you later as you look to raise capital and support business development.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Apple goes Google, naturally

At this point youve either decided to tune into the Apple-Epic spat, or you have decided not to. If you have, heres some more on the matter. If you arent into it, we can move on.

But not from Apple, which is following Google into trying to juice more ad dollars from its existing properties and expanding the ad density of its app store search feature. Heres Sarah:

Apple is introducing a new way for developers to advertise on the App Store. Previously, developers could promote their apps after users initiated a search on the App Store by targeting specific keywords. For example, if you typed in taxi, you might then see an ad by Uber in the top slot above the search results. The new ad slot, however, will reach users before they search.

If this is what Apple is doing to its products now, imagine what comes next. Happily I dont like apps, so I will largely avoid these ads.

Turning to the rest of Big Tech, weve seen better-than-expected earnings from Lyft this week, with Uber set to report after the bell today. Kirsten and I are cooking up something longer on both sets of results soon.

Also in the Big Tech bucket are a new clone from Facebook, this time of Nextdoor, Twitter trying to get you to post better tweets, and a new cloud framework that Ron reports is getting a nod of approval from Microsoft and Google and IBM.

Finally, the Equity crew spoke to two CFOs about the efficacy and morality of going public earlier. Honestly, it was a blast.





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