- Big data company Palantir raises $679.8 million: Palantir Technologies, the data firm best known for helping the U.S. government track down al Qaeda leader Osama bin Laden, has raised $679.8 million, according to a filing on Wednesday. The cash injection, which further expands the $500 million the company originally said it was raising in July, shows that despite shifting market conditions for privately held companies investors still hold confidence in the strongest of them, particularly those geared toward enterprises. Palantir is currently valued at $20 billion, making it the richest venture-backed company in the United States after ride service Uber and accommodation service Airbnb. It works closely with the U.S. government, whose steady business provides part of the reason investors like the Palo Alto, California-based company.
- Atlassian, the Profitable Aussie Unicorn Going Public Tomorrow: Atlassian is Australian management and workplace software maker. It’s set to begin trading on the Nasdaq tomorrow under the ticker symbol TEAM. Atlassian is looking to raise $440 million at a $4.2 billion valuation, up from the $370 million at under $4 billion it was shopping around last week. The bootstrapped Sydney, Australia-based startup has never taken any VC funding, and says it has been profitable for the last 10 years. The service it offers that people are most likely to have heard of is HipChat, an office chat and workflow management service that’s squaring off against Silicon Valley-adored Slack. CNBC has a detailed rundown on what Atlassian’s IPO prospectus says about its business. Atlassian is an outlier to all this. A decade of profitability buys a lot of credibility with investors, and having never taken venture dollars, it doesn’t have to worry about activating a ratchet if something goes wrong tomorrow.
- Who won, who lost in Square's IPO? Square’s recent $2.9 billion IPO is either a huge win for its investors or a sign of very bad days to come, depending on whether you believe the “high-five” tweets from prominent venture capitalists (VCs) or the slew of hand-wringing articles — from sources like NPR, The Verge and the Wall Street Journal — essentially saying it marks the end of free-flowing startup capital.The wildly contradictory responses to Square’s Nov. 19 debut on the New York Stock Exchange, when the payments-processing company’s stock was priced below its previous funding round in the private markets, has left a lot of people in the startup community (and beyond) wondering what’s going on. My take is that the IPO is further evidence that the new rules of the hunt for “unicorns” — startups valued at more than one billion dollars — are creating a small class of “haves” and a much larger class of “have-nots.” The lucky ones are the earliest-stage investors that find tomorrow’s unicorns. The less lucky are often the late-stage investors — generally the providers of the bulk of the capital — and the talent that signs on as these companies grow to fighting strength and scale. I think this is likely to cause a rebalancing of late-stage valuations and an increase in transparency in private markets.
- AT&T is out-building Google Fiber: Consider this: The number of cities where Google Fiber has actually been switched on can be counted on your fingers, whereas AT&T GigaPower is already up and running in some 20 metropolitan areas. Where many of Google's prospective expansions are still in the discussion phase, AT&T has made concrete — though critics might say "limited" — investments in many more markets. In short, AT&T is out-building Google Fiber. That's a sign of a broader shift in the industry. What we're seeing now is Google's early lead in the fiber race being eaten away by AT&T's traditional advantage in building networks. Though Google deserves much of the credit for jump-starting the competition in the first place, not to mention blazing a trail for AT&T in important ways, AT&T is on pace to beat Google to many cities in America. And this is why. AT&T is benefiting tremendously from a chain reaction that Google initially began. By now, it's a familiar story: Google went around to cities and basically got them to compete for Google Fiber, handing out a standardized checklist to municipalities laying out all the things they could do to make themselves more attractive to the search giant. In so doing, Google drew attention to many local regulatory processes that otherwise slow down investments in infrastructure. Now, mayors everywhere are scrambling over each other to attract Google. And that has had knock-on benefits for AT&T. In plain English, when Google gets a good deal, so can AT&T. But getting the rights to dig up streets or string fiber along telephone poles is only part of the equation. Then there's the matter of actually doing it. And it can take a long time — in Google's case, as many as 18 months in Kansas City, according to Hunter Newby, chief executive of the company Allied Fiber. And in Austin, Texas, AT&T says it beat Google to market by roughly two years, even though the two companies announced their projects within days of each other. Google declined to comment. Part of what's going on is that AT&T is leaning on decades of expertise in building networks. Many analysts say that Google aims to invest just enough into fiber to encourage more traditional providers to build out their own networks. Then, when consumers subscribe to the better service and take heavier advantage of Google services, Google's core business benefits. In that respect, Google isn't so much going toe-to-toe with AT&T as nudging it to expand.
- Investors hover as e-tailers boost demand for Indian warehouses: E-commerce in India is booming: the market is expected to grow to $220 billion in terms of value of goods sold by 2025, up from an expected $11 billion this year, according to Bank of America Merrill Lynch. With more Indian consumers shopping online, the country's $110 billion logistics and warehousing sector is stretched. e-tailers need to move goods around swiftly with minimal damage. They demand fire sprinkler systems, climate control, levelled loading bays and paved roads to warehouses. Simply adding this in can lift rents by up to 20 percent, according to real estate firm JLL. Existing spaces, known as "godowns" - low-rise sheds with poor ventilation and only a shutter to ward off heat and dust - are too old and cramped for firms like retail giant Amazon.com and Indian rival Flipkart. Amazon India has leased 20 fulfilment centres - warehouses where it stores goods and packs and sorts orders - in the last 18 months from multiple landlords. Still, it needs bigger, modern spaces closer to customers; the average size it leases today is 200,000 square feet. To satisfy that, supply of modern warehouses in India is set to more than double by 2020 to 200 million square feet, JLL estimates, fuelled by online retailers. They took up over 20 percent of the space added in the first half of 2015. Overseas firms including Dutch pension fund manager APG and U.S. buyout group Warburg Pincus are looking to invest in India's warehouses, hoping to cash in on demand for modern and efficient storage space from booming online retailers. "We have got enough people running around with bags of money, and not that many assets," said Ben Salmon, head of Singapore-based Assetz Property Group that has raised $50 million from Asian investors to buy warehouses in India.
Tiger Global Adds to China’s JD.com Before Tumble, Buys Amazon: Tiger Global Management more than doubled its stake in JD.com before the stock tumbled this month on worries about increased competition for the online retailer and a slowing Chinese economy. Tiger Global became the third-biggest holder of JD.com American depositary receipts, with a position valued at $2.4 billion as of June 30, according to a quarterly filing with the U.S. Securities and Exchange Commission. The shares have dropped 18 percent since the end of the quarter. The money manager added to its position in Netflix, acquiring 16.9 million shares. The stake of 18 million shares was valued at $1.7 billion at the end of the quarter. The firm took new positions in Amazon.com Inc., worth $324.3 million, and TripAdvisor Inc., valued at $106.5 million. Money managers who oversee more than $100 million in equities in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.
AT&T Helped U.S. Spy on Internet on a Vast Scale: The National Security Agency’s ability to spy on vast quantities of Internet traffic passing through the United States has relied on its extraordinary, decades-long partnership with a single company: the telecom giant AT&T.While it has been long known that American telecommunications companies worked closely with the spy agency, newly disclosed N.S.A. documents show that the relationship with AT&T has been considered unique and especially productive. One document described it as “highly collaborative,” while another lauded the company’s “extreme willingness to help.” The N.S.A.’s top-secret budget in 2013 for the AT&T partnership was more than twice that of the next-largest such program, according to the documents. The company installed surveillance equipment in at least 17 of its Internet hubs on American soil, far more than its similarly sized competitor, Verizon. And its engineers were the first to try out new surveillance technologies invented by the eavesdropping agency. One document reminds N.S.A. officials to be polite when visiting AT&T facilities, noting, “This is a partnership, not a contractual relationship.”
Inside Amazon: Wrestling Big Ideas in a Bruising Workplace: At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others. (The tool offers sample texts, including this: “I felt concerned about his inflexibility and openly complaining about minor tasks.”) While the Amazon campus appears similar to those of some tech giants — with its dog-friendly offices, work force that skews young and male, on-site farmers’ market and upbeat posters — the company is considered a place apart. Google and Facebook motivate employees with gyms, meals and benefits, like cash handouts for new parents, “designed to take care of the whole you,” as Google puts it. Amazon, though, offers no pretense that catering to employees is a priority. Compensation is considered competitive — successful midlevel managers can collect the equivalent of an extra salary from grants of a stock that has increased more than tenfold since 2008. But workers are expected to embrace “frugality” (No. 9), from the bare-bones desks to the cellphones and travel expenses that they often pay themselves. (No daily free food buffets or regular snack supplies, either.) The focus is on relentless striving to please customers, or “customer obsession” (No. 1), with words like “mission” used to describe lightning-quick delivery of Cocoa Krispies or selfie sticks. “One time I didn’t sleep for four days straight,” said Dina Vaccari, who joined in 2008 to sell Amazon gift cards to other companies and once used her own money, without asking for approval, to pay a freelancer in India to enter data so she could get more done. “These businesses were my babies, and I did whatever I could to make them successful.” David Loftesness, a senior developer, said he admired the customer focus but could not tolerate the hostile language used in many meetings, a comment echoed by many others. For years, he and his team devoted themselves to improving the search capabilities of Amazon’s website — only to discover that Mr. Bezos had greenlighted a secret competing effort to build an alternate technology. “I’m not going to be the kind of person who can work in this environment,” he said he concluded. He went on to become a director of engineering at Twitter.
- Amazon's strong Q4 profits (and slowing revenue) were both driven by a surge in marketplace: "Q4 2014 was whene Amazon flexed its marketplace muscles: After analyzing all the data, this quarter was a real stand out for the Amazon third-party marketplace. In fact, Amazon has started to open the kimono a bit on how much they reveal about the 3P business (particularly FBA) and it was all very strong in Q4. In fact, I’d go so far as to say the marketplace simultaneously drove the improved margin picture at Amazon and the revenue decline (will describe that in a future post). Acceleration – As mentioned above, the 3PM really accelerated to levels we haven’t seen in a long, long time. 33% y/y growth in a 15% e-commerce backdrop is quite impressive. 3P unit share – Another stand out metric from Q4 was Amazon announced that 43% of paid units came from third party sellers. Paid item growth -Paid item growth came in at 20%, flat with Q3. Media share – Media hit a low-water mark of 24% with EGM at a high-water mark of 70% (the missing 6% is other -ads and AWS). Geographical mix - Amazon’s revenues were 64% North American and 36% rest of world (Amazon’s largest regions outside the US are Germany, Japan and UK). See below for the details on geo mix. Active users – If there was a blemish on Q4, it was units/user and active users. Active users grew only 16% y/y to 270 (a slow-down from Q3’s 16% growth rate). Units per user – One interesting metric is the units/user – this metric shows us buyer frequency. In other words, are buyers increasingly active or decreasing activity. Of course, increasing is good and programs like Prime, and recommendations and upsells are working. Units per user was up .6% which is a bit of a slowdown."
- Even-steven: Apple will spend $2B on a data center in Arizona, even as AT&T sells data center assets worth $2B: On Monday, Arizona announced that Apple would invest $2 billion in the creation of a data center at a facility in Mesa after its original plans to produce sapphire, a material tougher than glass, there were abandoned. Apple had contracted GT Advanced Technologies, a sapphire producer, to make sapphire screens for iPhones, among other things. But to Apple’s surprise, GTAT declared bankruptcy last October after failing to meet some of Apple’s demands. As a result, Apple released it latest iPhones without sapphire. While Apple may have abandoned sapphire production at the Arizona facility, the company has not given up on the facility itself, which measures 1.3 million square feet. Apple on Monday said that the multibillion-dollar investment in the data center was one of its most significant investments ever, creating 600 engineering and construction jobs. The center will be partly used as a central command center for monitoring Apple’s other data centers around the world, the company said. AT&T Inc is selling some data centers worth about $2 billion as it continues its streak of asset sales, people familiar with the matter said on Monday. AT&T, the No. 2 U.S wireless provider, has been exploring options to pay down its debt and raise funds for investments in recent months. The company declined to comment. The three sources requested anonymity because the matter is not public. AT&T and its rival Verizon have been selling non-core assets in recent months. Verizon is close to announcing divestitures of wireless towers and wireline markets worth $10 billion, the Wall Street Journal reported on Monday. AT&T hired a financial adviser to assist in the sale. Following spectrum investments and pending acquisitions, AT&T's debt ratio may rise in the near term, the company said last week after spending close to half of the total bids in the record-setting $44.9 billion spectrum sale that concluded last week. AT&T emerged the top bidder in the AWS-3 spectrum auction by bagging 251 licenses worth $18.2 billion.
- Apple sold $6.5 billion in bonds on strong demand..: after boosting the deal by 30 percent, in the iPhone maker’s fourth major debt offering in the past two years as it preserves its overseas cash hoard. The company sold the securities in five parts, with the longest portion maturing in 30 years, according to data compiled by Bloomberg. The deal will be used for stock repurchases, dividend payments and debt repayments, according to a person with knowledge of the matter. Apple has issued the equivalent of $39 billion of bonds since April 2013, when it sold $17 billion in what at the time was the biggest corporate-bond offering ever. The Cupertino, California-based company’s previous debt deal was a sale of 2.8 billion euros ($3.17 billion) in November that allowed it to fund shareholder rewards without using cash from abroad that would be subject to U.S. repatriation taxes. “The company is building on the momentum of a strong past couple of weeks,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, which manages $61 billion in assets, said in a telephone interview. “They are being advantageous with the current environment.” The company issued $2 billion of 3.45 percent 30-year notes at a yield of 125 basis points more than similar-dated Treasuries, Bloomberg data show. That’s more than the relative yield of 100 basis points the company paid on 30-year bonds in the April 2013 offering. The shortest maturity portions included $1.25 billion of 1.55 percent five-year bonds that yielded 42 basis points more than comparable Treasuries. A basis point is 0.01 percentage point. Apple’s bonds have returned 13.6 percent since the start of last year, outperforming the 10.3 percent gain in debt of similarly rated companies, and more than quadruple the 3.2 percent return on speculative-grade bonds, according to Bank of America Merrill Lynch Indexes
- ..even as Netflix plans to raise $1B in borrowing despite a ratings downgrade: Netflix today said it plans to offer $1 billion in senior notes and plans to use the proceeds for “general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.” Markets are not entirely thrilled with the move. Netflix’s stock is trading down slightly, and S&P has downgraded the company’s debt rating to B+ from BB-. S&P notes that Netflix already has $9.5 billion streaming content commitment as of December 31, 2014, up from $7.3 billion a year earlier. “We expect that streaming content commitments will continue to increase and that Netflix’s pursuit of more original programming with global rights will increase its cash flow deficits,” it concludes.
- Twitter out-performed Facebook during the Super Bowl, say some analysts: Twitter appears to still be the place for live social media commentary, especially for brands that have to pay to get the most out of their Facebook activity. However, Facebook has made major efforts to capture the discussion, introducing trending topics (much like Twitter) and creating a Super Bowl hub for game chatter. Last night placed the two platforms head-to-head in a way that shows the benefits and drawbacks of both. In some areas, Twitter dominates, and Facebook controls others. Half the ads in the Super Bowl featured hashtags, while Facebook was mentioned four times. There were 265 million posts, comments and likes related to the Super Bowl on Facebook, the company said. Update: There were 36 million tweets related to the Super Bowl, up from about 25 million last year, and they recieved 2.5 billion impressions, according to Twitter.The conversation was most active on both platforms at the end of the game when New England sealed the victory with a last-second interception. Facebook said 1.36 million people per minute were discussing the Patriots' win by the end of the game. Twitter calculated 395,000 tweets per minute on the interception. Katy Perry's halftime show generated 3 million tweets. Meanwhile, Facebook said more than 1 million people per minute discussed the performance in real time.
- Google maybe getting ready to launch a competitor to Uber: Google Ventures, the search giant's venture capital arm, invested $258 million in Uber in August 2013. It was Google Ventures' largest investment deal ever, and the company put more money into Uber's next funding round less than a year later. Back then, it was easy for observers to imagine Google teaming closely with Uber, or even one day acquiring it. David Drummond, Google’s chief legal officer and senior vice president of corporate development, joined the Uber board of directors in 2013 and has served on it ever since. Now there are signs that the companies are more likely to be ferocious competitors than allies. Google is preparing to offer its own ride-hailing service, most likely in conjunction with its long-in-development driverless car project. Drummond has informed Uber's board of this possibility, according to a person close to the Uber board, and Uber executives have seen screenshots of what appears to be a Google ride-sharing app that is currently being used by Google employees. This person, who requested not to be named because the talks are private, said the Uber board is now weighing whether to ask Drummond to resign his position as an Uber board member. have left executives at Uber deeply concerned—for good reason. Google is a deep-pocketed, technically sophisticated competitor, and Uber’s dependence on the search giant goes far beyond capital. Uber’s smartphone applications for drivers and riders are based on Google Maps, which gives Google a fire hose of data about transportation patterns within cities. Uber would be crippled if it lost access to the industry-leading mapping application, and alternatives— such as AOL's MapQuest, Apple Maps, and a host of regional players—are widely seen as inferior. Google’s entrance into the ride-sharing market would also leave Uber without a partner in the suddenly plausible future in which cars without steering wheels roam the streets. Uber will either have to develop the technology itself or form an alliance with a company that can if it wants to offer autonomous vehicles within its fleet. Mercedes, Audi, Tesla, and other carmakers have said they are developing driverless cars, though it's not clear that any is as advanced as Google's.
- Lenovo Q4 earnings beat expectations on smartphone strength: revenue $14.1B, +31% Y/Y, net income $253M, down from $265M: Lenovo Group Ltd (0992.HK), the world's leading PC maker, said on Tuesday its third-quarter revenue rose 31 percent to $14.1 bln, beating investor expectations, as its smartphone division sales more than doubled. The company said net profit was $253 million, down from $265 million a year prior due to ballooning operating expenses associated with two multi-billion dollar acquisitions completed in recent months. The results beat expectations of $13.71 billion in revenue and $200 million in net profit, according to analysts polled by Thomson Reuters SmartEstimates. The Beijing-based company acquired American phone brand Motorola for $2.91 billion and IBM's low-end server unit for $2.1 billion to expand its business beyond the declining PC market. Lenovo, which closed the Motorola purchase in late October and included two months of Motorola's results in this quarter's earnings, touted the American handset brand's early performance and said it achieved "hyper growth" in emerging markets outside China. Motorola sold more than 10 million handsets during the quarter, a company record, and its purchase by Lenovo made the combined company the world No. 3 smartphone maker with 6.6 percent market share, Lenovo said. Total sales from the mobile division rose 109 percent to $3.39 bln, or a quarter of the company's sales. Lenovo continued to consolidate its hold on the shrinking PC market, reaching a record 20 percent share during the quarter with sales of $9.15 billion. Shipments rose 5 percent compared to a 3 percent decline in the broader industry, with growth particularly strong in Eastern Europe, Lenovo said.
