Daily Tech Snippet: Friday, June 24

• Twilio, a Cloud-Based Business, Soars After Its IPO: Shares of Twilio, a maker of software that helps companies like Uber and Nordstrom communicate with their customers, soared 92 percent on Thursday, their first day of trading after becoming the largest technology initial public offering of stock so far this year. Twilio began trading in a market that has not been receptive to tech initial offerings. Only three technology companies have made their debuts so far in 2016.The company said on Wednesday that it had raised $150 million, pricing 10 million shares at $15 each, above the range it marketed to investors. The I.P.O. price yielded a market valuation of $1.2 billion, slightly higher than the $1.1 billion valuation Twilio received in a private funding round a year ago. Twilio, based in San Francisco, has been hailed as a trailblazer compared with the almost 170 unicorns — companies with valuations above $1 billion — that have chosen to stay private for now. Twilio was a test of investor receptivity to the software company’s finances, which show 88 percent revenue growth over last year but consistent net losses. As markets became more uncertain, investors preferred that companies going public turn a profit. Twilio had $167 million in revenue last year from about 25,000 active customer accounts. WhatsApp, the messaging service owned by Facebook, represented 17 percent of that revenue.

• InMobi, fined $1m for tracking users, had fine reduced based on 'company's financial condition': Mobile advertising network InMobi has been fined $950,000 by the US Federal Trade Commission (FTC) for tracking the locations of millions of consumers, including children, without their knowledge or consent. InMobi was subject to a $4-million civil penalty, but it was reduced to $950,000 based on the company's financial condition. In addition, the company will be required to delete all information it collected from children, and will be prohibited from further violations of the Children's Online Privacy Protection Act (COPPA).

• BlackBerry Rises on Profit Forecast After More Software Gains: BlackBerry Ltd. rose as much as 4.6 percent after forecasting better-than-expected profit and insisting there was a way to make its ever-shrinking phone business profitable again. Fiscal first-quarter earnings per share, excluding some items, broke even, compared with analysts’ average estimate of a loss of 7 cents. Revenue in the quarter was $424 million, including software and services revenue of $166 million that was 21 percent higher than the same period last year ($137 million). Analysts had estimated total revenue of $471 million. BlackBerry changed its reporting structure to include revenue from both smartphone sales and licensing deals. The new unit -- “mobility solutions” -- accounted for 36 percent of revenue. The company sold 500,000 devices in the quarter, compared with 600,000 in the previous quarter. Shares gained 2.4 percent to $6.90 at 9:57 a.m., after reaching as high as $7.05 in New York in Thursday.

• Uber switches out surge for price transparency: No more pop-ups asking you to agree to those murky “2.1x” (or some other “x” amount) surge fares on the Uber app. Soon Uber will just tell you the price of your ride up front. Uber pricing will still fluctuate with demand, but now you’ll know the dollar amount you’ll be paying for the ride, instead; “no math and no surprises,” says Uber. The new costs are calculated similarly to the old “x” surge pricing so you might still end up paying a ridiculous sum in certain places or times of day where demand for a ride home is going to be high. The price is based on expected time, distance, traffic, the number of riders requesting rides at that time and the number of drivers available nearby, but at least now you’ll know exactly how much of a punch the ride will make to your bank account. Uber will also allow either the driver or rider to update the app if you change your destination in the middle of the ride and says you’ll get a notification in the app with the change in price. The rideshare company also told me you won’t have to worry if your Uber driver goes way off the map and tries to charge you more or if the route is suddenly busy and they need to change course. The price you agreed on will still be the price you pay. So no more lightning bolts and pop-up screens asking you to agree to “3x” surge or whatever it is after you stumble out of the bar or head all the way across town. Just like with hotels and airfare, the prices change all the time, but you’ll know what the price is before you book. According to Uber, “hundreds of thousands of riders” have already received the pricing transparency rollout — including those in Miami, San Diego, Seattle, New Jersey, New York and some of the bigger cities in India like Mumbai and Hyderabad. Uber plans to roll out the changes to pricing in the app globally in the next few months.

Daily Tech Snippet: Thursday, June 23

• Clash of Clans May Spur Tencent’s Marvel-Like Aspirations: Tencent is spending $8.6 billion to gain control of Supercell Oy -- the Finnish maker of mobile games including Hay Day, Clash Royale and Boom Beach -- from SoftBank Group Corp. To see how that portfolio may fit into Tencent’s emerging entertainment empire, look at how the Chinese company leveraged World of Warcraft and League of Legends into global powerhouses.League of Legend’s 67 million monthly users helped Tencent earn $9 billion in game revenue last year, and the Tencent-backed movie “Warcraft” is setting box-office records in China since this month’s release. Acquiring Supercell reinforces Tencent’s entertainment aspirations against Alibaba Group Holding Ltd. and Baidu Inc., and comes after Tencent bought the rights to 300-plus Japanese anime franchises in a push to become a worldwide multimedia brand like Marvel, DC and Disney. “Tencent has taken on a strategy to convert good IPs into movies and anime,” said Mark Tanner, founder of China Skinny, a Shanghai-based research and marketing agency. “It’s creating a world of superhero characters for entertainment.” Supercell occupied the top spot on researcher App Annie’s rankings of publishers fortwo years running. Clash of Clans was named an “essential” app by Apple Inc. and was promoted during the 2015 Super Bowl in a commercial featuring Academy Award-nominee Liam Neeson. Yet the game hasn’t been among the 10 top-grossing apps in China and Japan’s iOS Store since 2015, which is where Tencent’s clout can help.The company’s QQ and WeChat instant messaging apps have more than a billion users combined, and it could use those apps to promote Supercell games, Tanner said. That distribution system helped Tencent’s mobile-game revenue increase 16 percent to 8.2 billion yuan ($1.3 billion) in the quarter ending March 31, compared with the previous three months. China’s mobile gaming market expected to reach 68.8 billion yuan by 2018. “We do see there’s an opportunity for IPs of games and movies and video to cross and splice with each other, in the right way,” Martin Lau, Tencent’s president, said during a conference call Tuesday.

• Okta hires Goldman Sachs to lead IPO or sale: Okta Inc, a U.S. cloud identity management company valued at $1.2 billion in its latest private fundraising round, has hired Goldman Sachs Group to lead an initial public offering or outright sale, people familiar with the matter said. Okta's exploration of both an IPO and a sale underscores the dilemma faced by several technology companies this year, as frothy stock market valuations of many of their peers begin to come down, prompting potential buyers to enter the fray. Okta could file for an IPO as early as the second half of this year, the people said this week. However, the San Francisco-based company has also held talks with technology peers about being acquired, and could pursue a sale if it believes it can fetch a significantly higher valuation than in an IPO, the people added.Okta helps companies organize passwords and authenticate the identity of employees who log into work applications made by other software firms. Its customers include satellite TV provider Dish Network Corp and hospitality company MGM Resorts International. Okta has raised a total of roughly $230 million to date with investors such as Sequoia Capital, Andreessen Horowitz, Greylock Partners and Khosla Ventures, Janus Capital Group and Altimeter Capital.

• Twilio prices its IPO at $15 per share, above its previous target: Twilio today said it would price its initial public offering at $15 per share, which would value the company at around $1.23 billion. That would value Twilio above its previous $1 billion valuation from its last financing round. With the pricing, the company expects to raise around $150 million, with an option for another 1.5 million shares to be purchased. It’s also a higher price than the $12-$14 per share price that the company previously targeted. Twilio’s IPO will be an important one given the drought of tech IPOs this year. Anxiety has gripped many startups that have hit unicorn status given the complete lack of tech IPOs for 2016 (Twilio will only be the third of the year). The hope, for many startups, is that Twilio will re-open the tech IPO window with a strong showing after trading begins tomorrow. If that happens, it might convince investors that many startups that have hit frothy valuations have come back in line with reality, and these companies could be good investment targets if they choose to go public. Twilio is not profitable, with the company reporting a net loss of $35.5 million on $166.9 million in revenue last year. But it’s showing strong revenue growth, with the company bringing in $88.8 million in revenue from 2014. In total, Twilio has raised more than $200 million in venture financing, with Bessemer Venture Partners owning the largest chunk of the company at 28.5 percent per its last IPO filing. Twilio is expected to start trading tomorrow, and we’ll see whether or not the appetite for tech IPOs will be coming back with its performance.

Daily Tech Snippet: Friday, May 27

• Google Prevails as Jury Rebuffs Oracle in Code Copyright Case: A jury ruled in favor of Google on Thursday in a long legal dispute withOracle over software used to power most of the world’s smartphones. Oracle contended that Google used copyrighted material in 11,000 of its 13 million lines of software code in Android, its mobile phone operating system. Oracle asked for $9 billion from Google. Google said it made fair use of that code and owed nothing. The victory for Google cheered other software developers, who operate much the way Google did when it comes to so-called open-source software. Unlike traditional software created by corporations and tightly held, open-source products are released, often with some restrictions, for anyone to use and modify. “Great news for progress and innovation,” Chris Dixon, a technology investor with Andreessen Horowitz, the venture capital firm, posted on Twitter after the verdict. Android relies in part on Java, an open-source software language that Oracle acquired when it bought Sun Microsystems for $7.4 billion in 2010. Oracle argued that Google executives violated Oracle’s copyright by using aspects of Java without permission. The courtroom fight was something of a watershed for technology and could offer clarity on legal rules surrounding open-source technology, which is used in everything from smartphones and digital recording devices to the software that runs many of the world’s biggest data centers. People who work with open-source technology worried that a victory for Oracle would have led other companies to make similar demands of open-source products. “It does give a lot of breathing room to other companies and individuals trying to do a lot of innovative activity,” said Parker Higgins, director of copyright activism at the Electronic Frontier Foundation, a digital rights advocacy group.

• Bessemer-Backed Twilio Files for Initial Public Offering: Twilio Inc., the San Francisco-based company that helps clients including Uber Technologies Inc. build web and mobile applications, filed for an initial public offering. The software developer, backed by Bessemer Venture Partners, filed with an initial offering size of $100 million, a placeholder amount used to calculate fees that will probably change. Twilio had more than 28,000 active customers at the end of March, according to the prospectus filed Thursday. They include enterprise-software company Box Inc., department-store chain Nordstrom Inc. and rideshare company Uber. Twilio said in the filing its communications software is embedded in Uber’s mobile app, helping it update riders in real-time about their ride requests as well as helping the company scale its business. Bessemer holds a stake of 28.5 percent in Twilio, according to the prospectus. Union Square Ventures holds 13.6 percent and Fidelity owns 6.1 percent. Twilio has yet to make a profit. It posted a net loss of about $36 million in 2015, on sales of $167 million, even as revenue grew 88 percent that year after a 78 percent bump in 2014. The company said that it expects its growth rate to decline over time. WhatsApp Inc. contributed a significant chunk of that revenue. The messaging tool owned by Facebook Inc. uses Twilio’s technology in its applications to verify new and existing users. WhatsApp accounted for 17 percent of Twilio’s sales last year and 15 percent in the first three months of 2016.

• Snapchat raises $1.81 billion in new funding round: Messaging app Snapchat has raised $1.81 billion in funding, the company reported in a U.S. regulatory filing on Thursday, a sign that investor interest is strong despite concerns among some venture capitalists that the platform is struggling to attract advertisers. Venture capital database PitchBook estimated the company's valuation after the financing at $17.81 billion, up from $16 billion at it most recent financing in February.Snapchat, headquartered in Venice, California, has faced concerns from big investors familiar with the company that its estimated valuation is not justified because of an uneven revenue stream. Its advertising business, which began last October, is the company's only significant revenue source. But, with a strong user base of 13- to 24-year-olds, the app provides an attractive platform to reach millennials and hook young consumers on brands. The company has more than 100 million active users, about 60 percent of whom are 13- to 24-year-olds. Snapchat early this year raised $175 million from Fidelity Investments in a "flat round" of financing that did not adjust the company's valuation. The mutual fund bought shares at $30.72 each. Fidelity has repeatedly adjusted the estimated valuation of its stake in the company, slashing it by at least 25 percent last year only to boost it by more than 60 percent in February. Investors in this latest round include General Atlantic, Sequoia Capital, T. Rowe Price and Lone Pine, among others, tech blog TechCrunch reported on Thursday. TechCrunch also reported that Snapchat's revenues in 2015 were $59 million, according to a presentation to investors that was seen by the news site. That's up from $3.1 million for the first 11 months of 2014, sources told Reuters last year.
• InMobi grapples with senior, mid-level attrition amid concerns about future: Online advertising startup InMobi , one of India's early 'unicorns,' is struggling to retain senior executives amid questions about whether new strategic initiatives are working as well as worries about the future of the company. InMobi, which was founded by Naveen Tewari in 2007 and was the first startup in which Japan's SoftBank invested, now has some 1,500 employees compared to twice that number at its peak. The Japanese conglomerate, which has since backed Snapdeal and Ola, poured $200 million into InMobi in 2011 but wrote down most of that amount in 2014. The exits also come during a time when InMobi is struggling to raise funds and chart out a sustainable business model that can adapt to the massive changes that are taking place in the online and mobile advertising space, according to both current and former executives at the company. According to these executives, InMobi, which was estimated to be valued at $1 billion, now generates between around $300 million in annual revenue. InMobi has not registered profits since its founding in 2007. InMobi's challenges have been compounded by the fact that its flagship product Miip -- that targeted global retailers like Walmart -- hasn't taken off. Miip also took much longer than expected to scale and customers found the product underwhelming, according to at least two customers who have used the product.