- Uber Sets Sights on Leveraged Loans for Even More Money: Uber has raised more than $14 billion using all sorts of creative funding sources. Now it may add something new to the list: the leveraged loan market. The ride-hailing start-up is looking to issue as much as $2 billion in securities to investors, said a person briefed on the discussions, who spoke on the condition of anonymity. Morgan Stanley, Barclays, Goldman Sachs and Citigroup are managing the process, said the person, adding that the deal has not begun yet and may still fall apart.By tapping leveraged loans, Uber is adding to its trove of billions made up of many types of securities, which the company has been spending as it expands worldwide. Uber has raised equity from traditional venture capital sources, strategic corporate investors and private equity. This month, the company said that it had raised $3.5 billion from Saudi Arabia’s Public Investment Fund. Uber has also raised billions in convertible debt, which can be exchanged for equity at a future date. Uber has redefined private fund-raising, drawing hundreds of millions in new cash or debt at a rapid pace of once every few months. The company needs financing as it now operates in at least 69 countries and is fighting an expensive battle in China against a rival, Didi Chuxing, which is also raising money to expand. Leveraged loans are rarely used among start-ups. A leveraged loan is a security issued to a company that has a lot of debt on its books already, and thus is perceived by investors as being a higher risk. The loans are typically used for leveraged buyouts and are seldom seen in Silicon Valley. Uber has been able to tap less traditional funding sources because investors think its size and scale make it a safer bet than other Silicon Valley companies. Uber’s valuation of $62.5 billion — making it the highest valued venture-backed start-up in the world — would not change with this new investment. Leveraged loans also allow Uber to raise money without diluting the holdings of its many equity investors — some of which have been through more than a dozen rounds of financing.
- Twitter has invested in music streaming service SoundCloud: Two years ago Twitter thought about buying SoundCloud, but ended up walking away from the music service. Now Twitter has bought a piece of SoundCloud instead. Twitter has invested around $70 million in the music service, as part of a round that should end up in the $100 million-range, according to sources familiar with the deal. The round is expected to value SoundCloud at about $700 million — the same value that investors placed on the company in 2014, when it raised $60 million; since then it has also raised a debt round. It’s unclear whether the Twitter investment is part of a strategic partnership, but that would make sense: Twitter might view via an integration with SoundCloud as a way to increase growth and engagement, and SoundCloud may look at Twitter as a way to promote its newly launched subscription service, which is crucial to the company’s plans. And both companies could use some help. Twitter has been punished by Wall Street for its inability to add users at a rapid clip; SoundCloud’s flat valuation indicates that investors are also worried about its own growth prospects.
- Alibaba Tries to Shore Up Investors’ Confidence: The Alibaba Group of China has disappointed investors since its record-breaking American stock listing nearly two years ago, as volatile financial results and regulatory run-ins have driven the price of its shares down almost to where they began. Now the e-commerce giant is trying to reassure. For the first time, Alibaba on Tuesday offered investors financial guidance for the coming year, saying that it expected revenue growth to accelerate from last year’s pace. At a meeting at its Hangzhou headquarters, Alibaba cited strength in its core business, despite China’s slowing economic growth, as well as benefits from new ventures that have raised eyebrows among some investors The forecast comes as Alibaba seeks to demonstrate that its strategy, which has long focused on growth, is good for business. In China, Alibaba operates online sales platforms that connect consumers with mom-and-pop stores, as well as with global brands like Burberry and Zara. It has been showing sales growth on its platforms using a measure called gross merchandise volume, a yardstick for transactions across its platforms. Alibaba said on Tuesday that it would de-emphasize that figure, saying it would no longer report it quarterly. It will continue to report an annual figure, and offered a target for 2020.
- India's Space Program Takes On Elon Musk: India’s space agency will launch a record 22 satellites on a single rocket as it tries to ease a global backlog and demonstrate the ability to compete with commercial spaceflight companies run by billionaires Elon Musk and Jeff Bezos.Satellites from the U.S., India, Canada and Germany will enter orbit after a scheduled June 20 liftoff from the Sriharikota barrier island along the southeast coast, the agency’s chairman, A.S. Kiran Kumar, said in an interview in Bengaluru.The 22 machines being launched next week include an Earth observation satellite to capture light invisible to the naked eye. It is the biggest single launch by India, trailing Russia’s 33 in 2014 and NASA’s 29 the year before. India last month successfully launched a scale model of a reusable spacecraft, a project that in time could pit the nation against Bezos and Musk in the race to make access to space cheaper and easier. The country also injected a probe into Mars’ atmosphere in 2014 for just $74 million, about 11 percent of the cost of the U.S.’s Maven probe.
Ellen Pao resigns as Reddit chief executive: Ellen Pao has resigned as interim chief executive of Reddit, the popular online message board, following widespread user criticism of the way she was running the company. Reddit announced the change Friday afternoon in a company post, saying that the resignation was "by mutual agreement." Pao will be replaced by Steve Huffman, Reddit's co-founder and original chief executive. Pao, who had been at the company only eight months, came under withering criticism for firing a popular employee, Victoria Taylor, the company’s director of talent. Taylor was beloved among Reddit's powerful moderators, who don't work for the company but have complete editorial control over the thousands of niche discussion sections on virtually every topic, including cute animals and depression. Reddit's message boards draw about 160 million active users. Taylor was also a rare, public female face at Reddit and in tech world. Amid the vitriol directed at Pao, many users pointed out the irony that Pao would have let go a prominent woman at Reddit right after losing a bruising, high-profile gender discrimination suit earlier this year. After Taylor's dismissal, moderators revolted, shutting public access to hundreds of discussion boards over several days. Users also circulated an online petition, that has gathered more than 200,000 signatures, calling for Pao to step down. Pao posted an apology this week for the way the Taylor firing was handled. On Friday, she released a statement on Reddit saying that she resigned because "the board asked me to demonstrate higher user growth in the next six months than I believe I can deliver while maintaining reddit’s core principles."
Carmakers to tech partners: Keep your hands off our data: Carmakers are limiting the data they share with technology partners Apple and Google through new systems that link smartphones to vehicle infotainment systems, defending access to information about what drivers do in their cars. Auto companies hope that the vehicle data will one day generate billions of dollars in e-commerce, though they are just beginning to form strategies for monetizing the information. Apple and Google already make money from smartphone owners by providing a variety of products and services, from digital music to targeted advertising, and connecting phones to car systems will almost certainly extend their reach. But as infotainment systems such as Apple's CarPlay and Google's Android Auto become more widespread, auto companies hope to keep tech providers from gaining access to a wealth of potentially profitable information collected by computer systems in cars. Some auto companies have specifically said they will not provide Apple and Google with data from the vehicle's functional systems - steering, brakes and throttle, for instance - as well as information about range, a measure of how far the car can travel before it runs out of gas. Auto companies hope to profit from in-vehicle data in a variety of ways, including the provision of travel planning services and auto repair and service information they hope will bring drivers to dealerships. They also expect to work with insurance companies, providing information that would allow insurers to base their rates on a driver's behavior behind the wheel.
Across Asia, investments in technology start-ups have risen to levels comparable to the United States.: In the first six months of this year, 46 Asian start-ups, including Apus, have had fund-raising rounds of $100 million or more, just short of the 48 in North America, according to the research firm CB Insights. The focus of investors in Asia — China and India in particular — reflects an increasingly decentralized reality in global technology investment. Asian banks, private equity firms, venture capital funds and hardware and Internet giants are all willing to invest in domestic start-ups. And American investors are increasingly willing to back Asian players with advantages in their home markets. China and India have two of the world’s largest smartphone markets, and investors are particularly interested in finding ways to make money from these giants. Small hardware companies that use their knowledge of China’s electronics supply chain to make sensors and novel devices like drones are also drawing attention — realms of technology not yet dominated by the current power players in the industry, namely Apple, Google and Microsoft. In India, the two largest investments were made by the American hedge fund Tiger Global Management and the Chinese e-commerce giant Alibaba. Alibaba and its finance affiliate Ant Financial invested $575 million in the Indian mobile commerce company One97, while Tiger made a $500 million investment in India’s leading e-commerce site, Flipkart. Tiger Global has yet to make an investment in the United States this year and has focused 82 percent of its new investments in India at companies in their early stages, according to a June report from CB Insights. “India is one of the youngest countries, and their mobile penetration is low,” said Michael Dempsey, an analyst for CB Insights. “With more than a billion people, why wouldn’t it be one of the next major tech hubs? That’s what investors are thinking.”
Can SoundCloud Be the Facebook of Music?: SoundCloud has 150 million registered users, up from 10 million in 2011, and claims 175 million total listeners a month. According to ComScore, its traffic across desktop and mobile rose 14 percent in May from a year earlier, and 142 percent from two years ago. The audience skews younger than Spotify’s and Pandora’s. While SoundCloud has become a familiar feature of the digital landscape, it’s barely registered in most coverage of the Grand Streaming Wars of 2015, in which Apple Music, Spotify, Pandora Media, and others scrap for earshare. Then again, 8-year-old SoundCloud has a different mission. Its content is a creator-driven free-for-all: Anybody can upload a song (or other audio) and use SoundCloud’s tools to get it out there. Aspiring musicians, mainstream artists, DJs, podcasters, and others have uploaded 100-million-plus tracks and clips, creating a YouTube-like sprawl of unpredictable content.For listeners, SoundCloud is less like a music collection or radio station than an audio-based social network.
