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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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Rakuten TV expands to 42 European countries, gets direct button on Samsung, LG, Philips and Hisense remotes

Posted by on Mar 14, 2019 in Entertainment, Europe, Media, rakuten, video streaming | 0 comments

Rakuten TV, the Japanese e-commerce giant’s effort to take on Netflix and Amazon in the world of video streaming, has been a minor player when it comes to market share for online entertainment, with a mere 7 million users of its service. But today, it’s unveiling two key pieces of news that it hopes will help reverse that. The company is adding 30 new countries in Europe where the service will operate, bringing the total across the region and Japan to 42. And it’s inked a deal with big names in connected TV entertainment systems — specifically Samsung, LG, Philips and Hisense — to embed a dedicated “Rakuten TV” button on their remotes.

The two moves together underscore how Rakuten may not have been among those riding the wave as video streaming has exploded in popularity — compare its 7 million users with the 139 million users Netflix reported in its most recent earnings — but it does not seem ready to throw in the towel on it, either.

“We are here to continue running the marathon,” Jacinto Roca, the CEO of Rakuten TV, said in an interview this week. “This is another step for us to become a global player in this industry.”

It’s about time that Netflix and Amazon had some competition in the over-the-top video market — that is, video entertainment delivered to consumers over their existing broadband connections to compete with costly cable or satellite packages — but if they are perhaps some of the most obvious competition, they’re not the only ones. Apple, Google, a number of content owners themselves, and device makers all believe they have a shot at muscling in and becoming the go-to destination for consumers’ video entertainment needs.

Rakuten TV in some ways looks directly like the Japanese e-commerce company’s answer to Amazon’s video service: both have moved into the area as a natural extension of their e-commerce businesses, which sell consumer electronics and already have extensive operations around content — namely books and e-books, and both would have already build a lot of the infrastructure needed to run these services as a by-product of those e-commerce operations. And, alongside other Rakuten-owned assets like Viber and Ebates, this is one more move by the company to diversify not just its revenues and services, but the ecosystem in which customers are interacting with its brand.

But Rakuten TV has taken a different approach in at least three important ways. The first of these is in how it prices the service. There are no monthly subscriptions, and people watch and pay for movies on an a la carte basis. Roca said that this is unlikely to change anytime in the future. 

“We think that the simplicity of our offer is one of the key value propositions for us so we have no plans to introduce monthly bundles,” he said. He added that in the case of Rakuten TV the company has found that customers watch more than one movie per month, and when you look at the average prices of its films — promotions might come in (in the UK) at 99 pence for one film, but a top release like the Crimes of Grindlewald costs £13.99 to view — “that is definitely a healthy ARPU for us,” he said. “The focus today is making sure that we have people enjoying at least one movie per month on our platform.”

He notes that the economics are ironically trickier in bundles for popular providers where multiple views are happening under one price, which can impact the margins on the overall service. (Something that has been argued with music streaming, too.)

The second area where Rakuten TV is trying to stand apart from others in the streaming video space is its decision not to create original content, or at least not on any scale. The company last year put out a film that it produced, Hurricane, which Roca described to me as an “experiment.”

“We will do three or four more films this year, to start learning about production, but we have no big strategy behind this right now,” he said, noting that content providers have some regulatory requirements in Europe to also contribute investment to grow the content production industry locally in the face of over-domination from the US. “It’s more an experiment, with but no strategic initiative.”

Content efforts can run into the hundreds of millions or even billions in terms of investment, as they collectively had for Rakuten TV’s competitors, and while there is clearly some glory and cred that comes with that, for a smaller player it may not be a tenable option given the challenges of distribution. It also puts Rakuten into a better bargaining position with other content rightsholders, who will not eye it as a rival for eyeballs who might also use their own might as a bargaining chip when agreeing on licensing.

That brings us to the third area where Rakuten is trying to be a bit different, and one excuse of Roca’s for why the company has taken so long to expand to more countries: localization. He says that Rakuten TV will stand out from the field by offering a wider and better selection of content for each local market, using data to see not just what locals like to watch on TV, but what were popular cinematic releases that Rakuten should definitely try to get for those markets. This takes time, he said.

I have to admit there is something to this: if you have ever travelled to various far-flung places and attempted to watch Netflix or Amazon Prime Video, you might notice that not only do you get a much more limited choice of titles, but they are nearly the same from country to country and put a heavy emphasis on the services’ original content — likely one other reason why they have created it in the first place, to populate their services without having to do lots of tricky licensing deals.

In any case, Rakuten is putting investment in another, more basic area first before it can start to double down more on original content. The company is not disclosing how much it had to pay the smart TV makers to create a button on their remotes, but said that it made the investment based on strong results on existing handsets from Roku and Hisense.

“We’ve had buttons on those for a couple of years, and we can see that we are bringing in new users from those buttons,” Roca said. “So after two years with those, we decided it was the right moment to invest and go into brands that have big market shares in Europe.” He says this will give Rakuten TV potentially access to buttons on TVs from providers that collectively have a 35 percent market share in the region. Of course, getting people handsets with those Rakuten buttons is predicated on consumers actually buying new TVs, so this is a bet that very much has yet to pay off.

The investment in smart TV placement is notable also because at the same time, Rakuten is not expanding its presence in any notable way on mobile. That also is down to data, Roca said: today, some 60 percent of its content is consumed on smart TVs. The company also touts that it has the largest catalog of 4K HDR movies in Europe and is about to start trialling 8K.

Looking forward, Roca said that Rakuten TV’s plan is to enter completely different markets now that it has largely covered Europe. That will include, most likely, Latin America, which has a cultural and linguistic synergy with Spain, the home market of Rakuten TV (the Japanese giant spearheaded its TV strategy around its 2012 acquisition of Wuaki.tv, founded by Roca, which it eventually rebranded). And it is also looking at which markets it might target in Asia. Another Rakuten acquisition, of Viki, which provides crowdsourced subtitles for online videos, could play a key part of its strategy in Asia, where Viki has a large usage base.

 


Source: The Tech Crunch

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Glovo gets $134M to beef up its on-demand delivery business

Posted by on Jul 18, 2018 in Apps, Collaborative Consumption, employment law, Europe, food delivery, Fundings & Exits, gig economy, Glovo, Latin America, rakuten | 0 comments

Spanish startup Glovo, whose platform lets app users summon a gig economy worker to shop on their behalf, be it for a takeaway burger or a multi-bag supermarket shop, has bagged a €115 million (~$134M) Series C round of funding. Spanish press are reporting the round values Glovo’s business at more than €300M.

The lead investors in the Series C are Rakuten, Seaya and Cathay, which had also invested in its Series B.

Also investing is AmRest — a publicly listed restaurant operator in Central Europe — as well as European funds Idinvest Partners and GR Capital, plus some other minor investments.

AmRest controls more than 1,650 restaurants in more than 16 countries — with brands such as KFC, La Tagliatella, Pizza Hut, Starbucks and Burger King, Blue Frog and KABB under its belt. So the strategic opportunities it’s spying to ply fast food fans with on-demand food at the tap of an app button are clear.

Glovo raised a €30M Series B last October. The startup was founded in Barcelona in 2015, and its delivery riders — with the distinctive yellow box bags strapped to their backs — are a common sight around the city, often to be spotted clustering in expectant groups at the entrance to McDonald’s and other fast food outlets.

The startup says the new funding will be put towards optimizing its platform and tech resources to improve the service to riders, users and associated stores.

Specifically, it’s planning to increase its tech team by adding more than 100 engineers in the coming months — saying it wants to become what it dubs “the most relevant technology hub in Southern Europe”.

It also plans to use the funds to fuel its momentum, noting it’s opened up six countries and 20 cities around the world in just three months. Its regions of focus are Latin America and EMEA areas (Europe, the Middle East and Africa), and its app is available in 61 cities in 17 countries in all at this stage.

While Europe is a core region, and Spain alone accounts for a major chunk of its business — where it’s now operating in 21 cities — the legal risk for gig economy companies operating there is rising as political pressure grows to reform employment law to bolster workers’ rights against erosions by app platforms that are in turn reliant on huge armies of so-called ‘self-employed’ workers to power their businesses.  

In the UK, for example, the government is consulting on a package of labor market reforms, saying in February that it wanted to be “accountable for good quality work as well as quantity of jobs” — and putting gig economy platforms on watch for changes.

Glovo’s other regional focus — of Latin America — suggests the startup is hedging its bets where this type of employment law legal risk is concerned.

And indeed where competitive risk is concerned, given the space it’s playing it is a very crowded one on the food delivery front (with the likes of Deliveroo, UberEats and JustEast competing to conveniently serve consumers’ stomaches in Europe), and the likes of Postmates having established a shop-on-your-behalf business in the US.

Also today Glovo announced the nomination of Niall Wass as chairman. It said that Wass, a former Uber SVP for the EMEA & APAC region, has been working for it as advisor for the past year and helping with its expansion strategy.


Source: The Tech Crunch

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“Everyone is talking to everyone” — rideshare investor bypasses Uber-Careem rumor

Posted by on Jul 4, 2018 in africa, Apps, Automotive, careem, carsharing, Dubai, Europe, India, Middle East, rakuten, ridesharing, Transportation, Uber | 0 comments

Ride-hailing giant Uber is in talks over a possible merger with Middle East rival Careem, according to Bloomberg — citing three people familiar with the matter.

The report suggests various deal structures have been discussed, although it also says that no deal has been reached — nor may ever be reached, as discussions are ongoing and may not come to anything.

Bloomberg’s sources told it that Uber has said it would need to own more than half of the combined company, if not buy Careem outright.

Among the possible arrangements that have been discussed are for Careem’s current leaders to manage a new combined business, day to day, with potentially both brands being retained in local markets.

Another proposal would have Uber outright acquire Careem.

Bloomberg also reports that Dubai-based Careem is in talks with investors to raise $500 million, which it says could value the ride-hailing company at about $1.5BN. Careem is said to have held early talks with banks about a potential IPO in January.

Neither company has publicly confirmed any talks.

An Uber spokesman declined to comment when asked to confirm or deny talks with Careem.

While a Careem spokeswoman, Maha Abouelenein, told us: “We do not comment on rumors. Our focus remains to build the leading internet platform for the region, from the region. That means expanding to new markets and doubling down on our existing markets by adding new products and services to the platform. We are only getting started.”

Uber has been reconfiguring its global business for several years now, pulling out of South East Asia earlier this year after agreeing to sell its business to local rival Grab — while also taking a minority stake in the competitor.

And Uber did a similar exit deal with another rival — Didi — in China back in 2016.

Last year it also threw its lot in with Yandex.Taxi in Russia, with the pair combining efforts via a joint venture — albeit one which gave Yandex the majority share.

But Uber has been talking up its position and potential in the Middle East — with CEO Dara Khosrowshahi telling a conference in May that he believes it can be the “winning player” in the market, as well as in India and Africa, and vowing it would “control our own destiny” in those markets.

That does not necessary take a Careem-Uber deal off the table, of course, though the (public) claim from Uber is that it’s not willing to settle for a minority stake in the region, as it has elsewhere.

Responding in April to a question from CNBC about whether it might acquire Careem, Uber’s COO Barney Harford ruled out doing any more transactions for minority stakes, saying: “It would be crazy for us as a hypergrowth company to not engage in conversations about potential partnerships. But we’ve been very clear, the markets that we remain in today are core markets for us.”

Harford also claimed Uber was positioned to be able to invest in its chosen growth markets on “an indefinite basis”, thanks to having reached profitability in other markets. It’s also targeting 2019 for an IPO.

In March the Financial Times reported that Uber was in talks with Indian rival Ola over another possible merger — and the newspaper’s sources poured cold water on the notion of Uber taking a minority stake there too.

Of course Uber may not want to have to shrink its already retrenched global ambitions. But it may have to if it gets out-competed in its chosen plum markets.

Hence Careem’s chest-puffing talk about just getting started — provided it can convince its investors to screw their courage to the sticking place and stay on board for the ride.

Investors in Careem, which closed a $500M Series E round a year ago at a $1BN+ valuation, include Saudi-based VC Kingdom Holding, German automaker Daimler, and Japanese tech giant Rakuten — which reportedly led the Series E.

Oskar Mielczarek de la Miel, a managing partner at Rakuten Capital who leads on its mobility investments and is also a Careem board member, declined to comment on the rumors of Uber-Careem merger talks when we asked to chat.

But he was happy to talk up the broader opportunity that investors seen coming down the road for ridesharing, telling us: “If you look at the industry everyone is talking to everyone, and while consolidation is an obvious trend, it won’t be limited to the ridesharing players but draw other tech companies, OEMs and payment companies, to name a few.”

According to Careem’s website, the ride-hailing firm operates in 15 countries, mostly (but not only) across the Middle East, offering its services in around 80 cities in all.

While Uber’s website lists it being active in 15 cities in the Middle East and 15 in Africa.


Source: The Tech Crunch

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