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Zoom, housing affordability, Mailchimp, Yext, and Uber

Posted by on May 15, 2019 in housing, Luckin Coffee, Lyft, Mailchimp, The Extra Crunch Daily, Uber, yext, zoom | 0 comments

Conference call with CEO Eric Yuan of newly-IPOd Zoom

Since we first started Extra Crunch three months ago (my, time flies), we’ve been offering members live conference calls with our reporters. This week, we are trying something new and bringing a guest aboard.

TechCrunch’s SF-based startup and venture capital reporter Kate Clark is going to talk today with Eric Yuan, who founded video conferencing startup Zoom that just went public last month, making Yuan a very happy man.

Come armed with your questions or send them in to Arman Tabatabai. Instructions for joining the call will be mailed to members about an hour in advance, so check your inboxes.

Housing affordability market map

Dan Wu, a regtech and legaltech evangelist, published a great series of market maps on the housing affordability space this week on Extra Crunch, covering more than 200+ companies and organizations. He looks at spaces as diverse as property management, land acquisition, group developers, and new financial asset classes.


Source: The Tech Crunch

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Equity Shot: Judging Uber’s less-than-grand opening day

Posted by on May 10, 2019 in alex wilhelm, carsharing, China, Commuting, Equity podcast, initial public offering, Kate Clark, Lyft, Postmates, Startups, TC, TechCrunch, transport, Uber, unicorn, United States, Venture Capital | 0 comments

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

We are back, as promised. Kate Clark and Alex Wilhelm re-convened today to discuss the latest from the Uber IPO. Namely that it opened down, and then kept falling.

A few questions spring to mind. Why did Uber lose ground? Was it the company’s fault? Was it simply the macro market? Was it something else altogether? What we do know is that Uber’s pricing wasn’t what we were expecting and its first day was not smooth.

There are a whole bunch of reasons why Uber went out the way it did. Firstly, the stock market has had a rough week. That, coupled with rising U.S.-China tensions made this week one of the worst of the year for Uber’s monstrous IPO.

But, to make all that clear, we ran back through some history, recalled some key Lyft stats, and more.

We don’t know what’s next but we will be keeping a close watch, specifically on the next cohort of unicorn companies ready to IPO (Postmates, hi!).

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.


Source: The Tech Crunch

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A brief history of Uber’s bumpy road to an IPO

Posted by on May 10, 2019 in Alphabet, Anthony Levandowski, Arizona, California, carsharing, Colorado, Commuting, driver, Emil Michael, equal employment opportunity commission, executive, Federal Bureau of Investigation, Federal Trade Commission, Google, Lyft, pandodaily, Sarah Lacy, self-driving car, TC, transport, Travis Kalanick, Uber, Uber Startup, waymo | 0 comments

It’s been nine years since UberCab made its first appearance on the WordPress pages of this website. In the ensuing years, the startup has grown from an upstart looking to upend the taxi cab cartels, to a juggernaut that has its hands in every form of transportation and logistics service it can think of.

In the process, Uber has done some things that might give (and in fact has given) some shareholders pause.

From its first pitch deck to this historic public offering, TechCrunch has covered the über startup that has defined the post-financial-crisis era of consumer venture investing.

Here are some of the things that shouldn’t get swept into the dustbin of Uber’s history as the company makes its debut as a public company.

  • In 2014 Uber used a tool called “God View” to track the movements of passengers and shared those details publicly.At the time, the company was worth a cool $18.2 billion, and was already on the road to success (an almost pre-ordained journey given the company’s investors and capitalization), but even then, it could not get out of the way of its darker impulses.
  • A former executive of the company, Emil Michael, suggested that Uber should investigate journalists who were critical of the company and its business practices (including PandoDaily editor Sarah Lacy).
  • As it expanded internationally, Uber came under fire for lax hiring practices for its drivers. In India, the company was banned in New Delhi, after a convicted sex offender was arrested on suspicion of raping a female passenger.
  • Last year, the Equal Employment Opportunity Commission opened an investigation into the company for gender discrimination around hiring and salaries for women at the company. Uber’s problems with harassment were famously documented by former employee Susan Fowler in a blog post that helped spur a reckoning for the tech sector.
  • Uber has been forced to pay fines for its inability to keep passenger and driver information private. The company has agreed to 20 years of privacy audits and has paid a fine to settle a case that was opened by the Federal Trade Commission dating back to 2017.
  • While Uber was not found to be criminally liable in the death of an Arizona pedestrian that was struck and killed by a self-driving car from the company’s fleet, it remains the only company with an autonomous vehicle involved in the death of a pedestrian.
  • Beyond its problems with federal regulators, Uber has also had problems adhering to local laws. In Colorado, Uber was fined nearly $10 million for not adhering to the state’s requirements regarding background checks of its drivers.
  • Uber was also sued by other companies. Notably, it was involved in a lengthy and messy trade secret dispute with Alphabet’s onetime self-driving car unit, Waymo. That was for picking up former Waymo employee Anthony Levandowski and some know-how that the former Alphabet exec allegedly acquired improperly before heading out the door.
  • Uber even had dueling lawsuits going between and among its executives and major shareholders. When Travis Kalanick was ousted by the Uber board, the decision reverberated through its boardroom. As part of that battle for control, Benchmark, an early investor in Uber sued the company’s founder and former chief executive,  Travis Kalanick for fraud, breach of contract and breach of fiduciary duty.
  • Uber’s chief people officer, Liane Hornsey was forced to resign following a previously unreported investigation into her alleged systematic dismissals of racial discrimination complaints within Uber.
  • Lawsuits against the company not only dealt with its treatment of gender and race issues, but also for accessibility problems with the ride-hailing service. The company was sued for allegedly violating Title II of the Americans with Disabilities Act and the California Disabled Persons Act.
  • The ride-hailing service also isn’t free from legal woes in international markets. Earlier this year, the company paid around $3 million to settle charges that Uber had violated local laws by operating in the country illegally.
  • Finally, the company’s lax driver screening policies have led to multiple reports of assault by drivers of Uber passengers. Uber recently ended the policy of forcing those women to engage in mandatory arbitration proceedings to adjudicate those claims.
  • Not even the drivers who form the core of Uber’s service are happy with the company. On the eve of its public offering, a strike in cities across the country brought their complaints squarely in front of the company’s executive team right before the public offering, which was set to make them millions.


Source: The Tech Crunch

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Aptiv takes its self-driving car ambitions (and tech) to China

Posted by on Apr 17, 2019 in Aptiv, Automation, Automotive, automotive industry, boston, China, Co-founder, Delphi, Emerging-Technologies, Karl Iagnemma, Las Vegas, Lyft, manufacturing, NuTonomy, pittsburgh, president, Robotics, self driving cars, shanghai, Singapore, transport, Transportation, United States | 0 comments

Aptiv, the U.S. auto supplier and self-driving software company, is opening an autonomous mobility center in Shanghai to focus on the development and eventual deployment of its technology on public roads.

The expansion marks the fifth market where Aptiv has set up R&D, testing or operational facilities. Aptiv has autonomous driving operations in Boston, Las Vegas, Pittsburgh and Singapore. But China is perhaps its most ambitious endeavor yet.

Aptiv has never had any AV operations in China, but it does have a long history in the country including manufacturing and engineering facilities. The company, in its earlier forms as Delphi and Delco has been in China since 1993 — experience that will be invaluable as it tries to bring its autonomous vehicle efforts into a new market, Aptiv Autonomous Mobility President Karl Iagnemma told TechCrunch in a recent interview.

“The long-term opportunity in China is off the charts,” Iagnemma said, noting a recent McKinsey study that claims the country will host two-thirds of the world’s autonomous driven miles by 2040 and be trillion-dollar mobility service opportunity.

“For Aptiv, it’s always been a question of not ‘if’, but when we’re going to enter the Chinese market,” he added.

Aptiv will have self-driving cars testing on public roads by the second half of 2019.

“Our experience in other markets has shown that in this industry, you learn by doing,” Iagnemma explained.

And it’s remark that Iagnemma can stand by. Iagnemma is the co-founder of self-driving car startup nuTonomy, one of the first to launch a robotaxi service in 2016 in Singapore that the public—along with human safety drivers — could use.

NuTonomy was acquired by Delphi in 2017 for $450 million. NuTonomy became part of Aptiv after its spinoff from Delphi was complete.

Aptiv is also in discussions with potential partners for mapping and commercial deployment of Aptiv’s vehicles in China.

Some of those partnerships will likely mimic the types of relationships Aptiv has created here in the U.S., notably with Lyft . Aptiv’s self-driving vehicles operate on Lyft’s ride-hailing platform in Las Vegas and have provided more than 40,000 paid autonomous rides in Las Vegas via the Lyft app.

Aptiv will also have to create new kinds of partnerships unlike those it has in the U.S. due to restrictions and rules in China around data collection, intellectual property and creating high resolution map data.


Source: The Tech Crunch

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Lyft prices IPO at top of range

Posted by on Mar 28, 2019 in Fundings & Exits, initial public offering, IPO, Lyft, Startups, Transportation, Venture Capital | 0 comments

Lyft raised more than $2 billion Thursday afternoon after pricing its shares at $72 apiece, the top of the expected range of $70 to $72 per share. This gives Lyft a fully diluted market value of $24 billion.

The company will debut on the Nasdaq stock exchange Friday morning, trading under the ticker symbol “LYFT.”

The initial public offering is the first-ever for a ride-hailing business and represents a landmark liquidity event for private market investors, which had invested billions of dollars in the San Francisco-based company. In total, Lyft had raised $5.1 billion in debt and equity funding, reaching a valuation of $15.1 billion last year.

Lyft’s blockbuster IPO is unique for a number of reasons, in addition to being amongst transportation-as-a-service companies to transition from private to public. Lyft has the largest net losses of any pre-IPO business, posting losses of $911 million on revenues of $2.2 billion in 2018. However, the company is also raking in the largest revenues, behind only Google and Facebook, for a pre-IPO company. The latter has made it popular on Wall Street, garnering buy ratings from analysts prior to pricing.

Uber is the next tech unicorn, or company valued north of $1 billion, expected out of the IPO gate. It will trade on the New York Stock Exchange in what is one of the most anticipated IPOs in history. The company, which reported $3 billion in Q4 2018 revenues with net losses of $865 million, is reportedly planning to unveil its IPO prospectus next month.

Next in the pipeline is Pinterest, which dropped its S-1 last week and revealed a path to profitability that is sure to garner support from Wall Street investors. The visual search engine will trade on the NYSE under the symbol “PINS.” It posted revenue of $755.9 million last year, up from $472.8 million in 2017. The company’s net loss, meanwhile, shrank to $62.9 million last year from $130 million in 2017.

Other notable companies planning 2019 stock offerings include Slack, Zoom — a rare, profitable pre-IPO unicorn — and, potentially, Airbnb.

Updating.


Source: The Tech Crunch

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Unicorns aren’t profitable, and Wall Street doesn’t care

Posted by on Mar 26, 2019 in Amazon, Exit, Facebook, Fundings & Exits, Groupon, jeff bezos, Lyft, Pinterest, Snap, snap inc, Startups, TC, Uber, unicorns, Venture Capital, WeWork, Zimride | 0 comments

In Silicon Valley, investors don’t expect their portfolio companies to be profitable. “Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies,” a bible for founders, instead calls for heavy spending on growth to scale in an Amazon -like fashion.

As for Wall Street, it’s shown an affinity for stock in Jeff Bezos’ business, despite the many years it spent navigating a path to profitability, as well as other money-losing endeavors. Why? Because it too is far less concerned with profitability than market opportunity.

Lyft, a ride-hailing company expected to go public this week, is not profitable. It posted losses of $911 million in 2018, a statistic that will make it the biggest loser amongst U.S. startups to have gone public, according to data collected by The Wall Street Journal. On the other hand, Lyft’s $2.2 billion in 2018 revenue places it atop the list of largest annual revenues for a pre-IPO business, trailing behind only Facebook and Google in that category.

Wall Street, in short, is betting on Lyft’s revenue growth, assuming it will narrow its loses and reach profitability… eventually.

Wall Street’s hungry for unicorns

Lyft, losses notwithstanding, is growing rapidly and Wall Street is paying attention. On the second day of its road show, reports emerged that its IPO was already oversubscribed. As a result, Lyft is said to have upped the cost of its stock, with new plans to raise more than $2 billion at a valuation upwards of $25 billion. That represents a revenue multiple of more than 11x, a step up multiple of more than 1.6x from its most recent private valuation of $15.1 billion and, of course, Wall Street’s insatiable desire for unicorns, profitable or not.

New data from PitchBook exploring the performance of billion-dollar-plus VC exits confirms Wall Street’s leniency toward unprofitable tech companies. Sixty-four percent of the 100+ companies valued at more than $1 billion to complete a VC-backed IPO since 2010 were unprofitable, and in 2018, money-losing startups actually fared better on the stock exchange than money-earning businesses. Moreover, U.S. tech companies that had raised more than $20 million traded up nearly 25 percent of 2018, while the S&P 500 technology sector posted flat returns.

Wall Street is still adapting to the rapid growth of the tech industry; public markets investors, therefore, are willing to deal with negative to minimal cash flows for, well, a very long time.

A tolerance for outsized exits

There’s no doubt Lyft and its much larger competitor, Uber, will go public at monstrous valuations. The two IPOs, set to create a whole bunch of millionaires and return a number of venture capital funds, will provide Silicon Valley a lesson in Wall Street’s tolerance for outsized exits.

Much like a seed-stage investor must bet on a founder’s vision, Wall Street, given a choice of several unprofitable businesses, has to bet on potential market value. Fortunately, this strategy can work quite well. Take Floodgate, for example. The seed fund invested a small amount of capital in Lyft when it was still a quirky idea for ridesharing called Zimride. Now, it boasts shares worth more than $100 million. I’m sure early shareholders in Amazon — which went public as a money-losing company in 1997 — are pretty happy, too.

Ultimately, Wall Street’s appetite for unicorns like Lyft is a result of the shortage of VC-backed IPOs. In 2006, it was the norm for a company to make its stock market debut at 7.9 years old, per PitchBook. In 2018, companies waited until the ripe age of 10.9 years, causing a significant slowdown in big liquidity events and stock sales.

Fund sizes, however, have grown larger and the proliferation of unicorns continues at unforeseen rates. That may mean, eventually, an influx of publicly shared unicorn stock. If that’s the case, might Wall Street start asking more of these startups? At the very least, public market investors, please don’t be swayed by WeWork‘s eventual stock offering and its “community adjusted EBITDA.” Silicon Valley’s pixie dust can’t be that potent.


Source: The Tech Crunch

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Equity Shot: Pinterest and Zoom file to go public

Posted by on Mar 22, 2019 in alex wilhelm, Bessemer Venture Partners, ceo, Cisco, economy, Equity podcast, Eric Yuan, Finance, FirstMark Capital, Kate Clark, katy perry, Lyft, money, photo sharing, Pinterest, Startups, TC, TechCrunch, Uber, unicorn, Venture Capital, video conferencing, web conferencing, WebEX, zoom | 0 comments

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

What a Friday. This afternoon (mere hours after we released our regularly scheduled episode no less!), both Pinterest and Zoom dropped their public S-1 filings. So we rolled up our proverbial sleeves and ran through the numbers. If you want to follow along, the Pinterest S-1 is here, and the Zoom document is here.

Got it? Great. Pinterest’s long-awaited IPO filing paints a picture of a company cutting its losses while expanding its revenue. That’s the correct direction for both its top and bottom lines.

As Kate points out, it’s not in the same league as Lyft when it comes to scale, but it’s still quite large.

More than big enough to go public, whether it’s big enough to meet, let alone surpass its final private valuation ($12.3 billion) isn’t clear yet. Peeking through the numbers, Pinterest has been improving margins and accelerating growth, a surprisingly winsome brace of metrics for the decacorn.

Pinterest has raised a boatload of venture capital, about $1.5 billion since it was founded in 2010. Its IPO filing lists both early and late-stage investors, like Bessemer Venture Partners, FirstMark Capital, Andreessen Horowitz, Fidelity and Valiant Capital Partners as key stakeholders. Interestingly, it doesn’t state the percent ownership of each of these entities, which isn’t something we’ve ever seen before.

Next, Zoom’s S-1 filing was more dark horse entrance than Katy Perry album drop, but the firm has a history of rapid growth (over 100 percent, yearly) and more recently, profit. Yes, the enterprise-facing video conferencing unicorn actually makes money!

In 2019, the year in which the market is bated on Uber’s debut, profit almost feels out of place. We know Zoom’s CEO Eric Yuan, which helps. As Kate explains, this isn’t his first time as a founder. Nor is it his first major success. Yuan sold his last company, WebEx, for $3.2 billion to Cisco years ago then vowed never to sell Zoom (he wasn’t thrilled with how that WebEx acquisition turned out).

Should we have been that surprised to see a VC-backed tech company post a profit — no. But that tells you a little something about this bubble we live in, doesn’t it?

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.


Source: The Tech Crunch

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Lyft sets $62-68 price range for its IPO to raise $2B, will trade as LYFT on Nasdaq

Posted by on Mar 18, 2019 in Finance, IPO, Lyft, NASDAQ, ride-sharing, TC, Transportation | 0 comments

Ride-sharing startup Lyft this morning announced that it is kicking off the roadshow for its IPO — setting the clock ticking for its IPO likely in around two weeks. Around that, it also filled in some more details. The stock will trade as “LYFT” on Nasdaq and the IPO range is currently set for between $62 and $68 per share to raise $2 billion from 30,770,000 shares of Class A common stock.

Lyft also said in its updated S-1 that at the high end of the range, the maximum offering aggregate price — the maximum that it would raise at that range — will be $2,406,214,000 when considering the full range of Class A stock that will be registered, 35,385,500 shares.

In addition to the 30,770,000 shares of Class A common stock, the company said it has an additional 4,615,500 shares in options for the underwriters, adding up to the 35 million share figure. 

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Jefferies LLC, UBS Securities LLC, Stifel, Nicolaus & Company, Incorporated, RBC Capital Markets, LLC and KeyBanc Capital Markets Inc. are book-running managers for the offering, the company added.

The news kicks off the timer on Lyft’s public listing at a time when all eyes are on how ride-sharing companies will progress to the next stage of their growth, with Uber expected to file and also go public this year. Lyft’s revenues are growing fast — Lyft took $8.1 billion in bookings and made $2.1 billion in revenues in 2018, covering 30.7 million riders and 1.9 million drivers — but the company remains unprofitable. The company posted a net loss of $911.3 million in 2018, a figure that has grown in line with revenues, but notably shrunk proportionately. In 2016, revenues were $343.3 million while net loss was $682 million.

This public listing provides a road map for how Lyft can continue to fund its operations and growth while providing liquidity for investors as it continues working on getting into the black.

More to come.


Source: The Tech Crunch

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Lyft’s imminent IPO could value the company at $23B

Posted by on Mar 18, 2019 in Alphabet, Andreessen Horowitz, Companies, Floodgate Fund, General Motors, initial public offering, Lyft, online marketplaces, rakuten, San Francisco, TC, the wall street journal, transport, Uber, Wall Street Journal | 0 comments

Ridehailing firm Lyft will make its Nasdaq debut as early as next week at a valuation of up to $23 billion, The Wall Street Journal reports. The business will reportedly price its shares at between $62 and $68 apiece, raising roughly $2 billion in the process.

With a $600 million financing, Lyft was valued at $15.1 billion in June.

Lyft filed paperwork for an initial public offering in December, mere hours before its competitor Uber did the same. The car-sharing behemoths have been in a race to the public markets, igniting a pricing war ahead of their respected IPOs in a big to impress investors.

Uber’s IPO may top $120 billion, though others have more modestly pegged its initial market cap at around $90 billion. Uber has not made its S-1 paperwork public but is expected to launch its IPO in April.

Lyft has not officially priced its shares. Its S-1 filing indicated a $100 million IPO fundraise, which is typically a placeholder amount for companies preparing for a float. Lyft’s IPO roadshow, or the final stage ahead of an IPO, begins Monday.

San Francisco-based Lyft has raised a total of $5.1 billion in venture capital funding from key stakeholders including the Japanese e-commerce giant Rakuten, which boasts a 13 percent pre-IPO stake, plus General Motors (7.76 percent), Fidelity (7.1 percent), Andreessen Horowitz (6.25 percent) and Alphabet (5.3 percent). Early investors, like seed-stage venture capital firm Floodgate, also stand to reap big returns.

Lyft will trade under the ticker symbol “LYFT.” JPMorgan Chase & Co., Credit Suisse Group AG and Jefferies Financial Group Inc. are leading the IPO.

Lyft recorded $2.2 billion in revenue in 2018 — more than double 2017’s revenue — on a net loss of $911 million.

Lyft declined to comment.


Source: The Tech Crunch

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Uber reportedly raising $1B in deal that values self-driving car unit at up to $10B

Posted by on Mar 13, 2019 in AV, economy, funding, General Motors, Google, Lyft, Softbank, Softbank Vision Fund, t.rowe price, TC, the wall street journal, Toyota, TPG Growth, transport, Transportation, Uber, United States, Venture Capital, waymo | 0 comments

Uber is in negotiations with investors, including the SoftBank Vision Fund, to secure an investment as large as $1 billion for its autonomous vehicles unit. The deal would value the business at between $5 billion and $10 billion, according to a Tuesday report from The Wall Street Journal.

Uber declined to comment.

The news comes shortly after TechCrunch’s Mark Harris revealed the ridehailing firm was burning through $20 million a month on developing self-driving technologies, which means, according to our calculations, that Uber could have spent more than $900 million on automated vehicle research since early 2015.

According to the WSJ, the deal could close as soon as next month, shortly before Uber is expected to complete a highly-anticipated initial public offering. Uber, in December, filed the necessary paperwork with the US Securities and Exchange Commission to go public in 2019. The documents were submitted only hours after its competitor Lyft did the same; Lyft, for its part, unveiled its S-1 earlier this month and will debut on the Nasdaq shortly.

Uber, to date, has raised nearly $20 billion in a combination of debt and equity funding, reaching a valuation north of $70 billion. The business is said to be seeking funding for its self-driving business in order to tout the unit’s growth and valuation. After all, a $10 billion sticker price on its AV efforts may bandage its reputation, damaged by continued reports questioning its progress.

Alphabet-owned Waymo, meanwhile, is reportedly looking to raise capital, too. This would be the first infusion of outside funding for the autonomous vehicle business, rolled out of Alphabet’s Google X. According to The Information, which broke this news on Monday, Waymo would raise capital at a valuation “several times” that of Cruise, the AV company owned by General Motors.

Raising capital from outside investors would help limit costs and would allow Alphabet the opportunity to display Waymo’s valuation for the first time in several years. Alphabet, however, does not want to relinquish too much equity in the business, justifiably. Waymo, years ago, was valued at $4.5 billion, though analysts claim it could surpass a valuation as high as $175 billion based on future revenue estimates.

Waymo didn’t respond to a request for comment.

Other investors in Uber’s purported round include an “unnamed automaker,” per the WSJ. Uber’s existing backers include Toyota, SoftBank, T. Rowe Price, Fidelity and TPG Growth.

Uber’s net losses were up 32 percent quarter-over-quarter as of late last year to $939 million on a pro forma basis. On an EBITDA basis, Uber’s losses were $527 million, up about 21 percent. The company said revenue was up five percent QoQ sitting at $2.95 billion and up 38 percent year-over-year.