- Apple sells more iPhones than expected, shares jump after hours despite revenue drop: Apple Inc (AAPL.O) sold more iPhones than Wall Street expected in the third quarter and estimated its revenue in the current period would top many analysts' targets, soothing fears that demand for the company's most important product had hit a wall. Its shares rose 7 percent in after-hours trading. The world's most valuable publicly traded company said it sold 40.4 million iPhones in the third quarter, down 15 percent from the year-ago quarter but slightly more than the average analyst forecast of 40.02 million, according to research firm FactSet StreetAccount. IPhone sales dropped for the second straight quarter, pushing down Apple's total revenue 14.6 percent in the fiscal third quarter, ended June 25. Demand for Apple's phones has waned in China, partly because of economic uncertainty there, and has also slowed in more mature markets as people tend to hold on to their phones for longer. The sales slump has stoked concerns about whether the tech leader can continue to deliver profits at the level Wall Street has come to expect. "China was a major letdown," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "Samsung and Huawei are much more competitive now than a year ago and the Chinese economy is not doing well at all." Apple's services business, which includes the App Store, Apple Pay, iCloud and other services, generated nearly $6 billion in revenue, up 18.9 percent from the previous year. As iPhone sales level off, Apple is attempting to use such services to wring more revenue out of its existing base of users. The business emerged as Apple’s second largest after the iPhone for the first time in the second quarter, eclipsing gadgets such as the iPad and the Mac. That shift bodes well for Apple because gross margins on services are better than the average for the rest of the company, Maestri said.
- Twitter still has revenue problems, and its stock is down big: Twitter reported Q2 earnings on Tuesday and investors aren’t happy. The key issue is likely Twitter’s Q3 guidance. The company says it is targeting $590 million to $610 million in revenue next quarter. Early analyst estimates pegged that number at $678 million, according to Yahoo Finance. So that’s a big discrepancy.The stock was immediately down more than 10 percent on the news and seems to be hovering there.So here’s Twitter’s dilemma: CEO Jack Dorsey has effectively been in charge of Twitter for the past year, and it’s clear that the company’s growth problem is still a problem. On top of that, Twitter has now missed revenue estimates two quarters in a row, and significantly cut its Q3 guidance. So there’s a clear revenue problem to go along with the growth problem. Not good. To state the obvious, this kind of production (or lack thereof) doesn’t help Dorsey’s case for running two companies (remember, he also runs Square). It also puts pressure on the board to consider broader options for the company, namely selling. Twitter is in the very beginning stages of trying to transition its business to look more like TV, but it doesn’t have a lot of runway left.
- $1 Billion for Dollar Shave Club: Why Every Company Should Worry: Unilever is paying $1 billion for Dollar Shave Club, a five-year-old start-up that sells razors and other personal products for men. Every other company should be afraid, very afraid. The deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees. Dollar Shave Club was a phenom in the men’s grooming industry. The online business was founded in 2011 by Mark Levine and Michael Dubin to combat the high cost of razors. The idea was rather simple. Instead of paying $10 or $20 a month at a store for disposable razors, a Dollar Shave Club subscriber could go online and set up a regular order to be shipped to his home monthly at a fraction of the retail cost. The experiment was a brave one. Until that time, Gillette dominated the razor business and was in an arms race with itself to add yet more blades and other features to its razors. Gillette was so dominant in advertising and shelf space that Procter & Gamble paid $57 billion for the company in 2005. Everything changed in 2012, when Mr. Dubin’s comedic free ad posted on YouTube. Within 24 hours, the new business had more than 12,000 orders, more than it could handle. The ad went on to get over 20 million views and rocket Dollar Shave Club to over $240 million in revenue. The wealth will be spread among a few. Dollar Shave Club has over three million subscribers but only about 190 employees. Its razors were made in South Korea by Dorco. Distribution was initially handled in-house but eventually was contracted to a third-party company in Kentucky. What remained was a terrific design, marketing and customer service shop; and a business that was easily expandable to meet demand and that had a good niche with men who do not like to shop. These super-successful companies with few employees should worry an America struggling with inequality. That is the way things roll these days. It used to be that if you wanted to sell razors, you needed a factory, a distribution center, a sales force, a research and development team and a marketing budget. Keeping all of these functions under one roof lowered transaction costs and made operations more efficient. In part this was because of communication structures — having telephone and mail together was a necessity. But the internet, mass transportation and globalization destroy everything. If you do not believe this change is about brand, experience and disruption, know that you can buy razors directly from Dorco, presumably the same brands sold by Dollar Shave Club.
- Flipkart-owned Myntra acquires Jabong for $70 mn in all-cash deal: Flipkart-owned Myntra today said it has acquired Jabong from Global Fashion Group for USD 70 million. Myntra, which itself was acquired by Flipkart in 2014 in an estimated Rs 2,000 crore deal, will have access to a combined base of 15 million monthly active users.Jabong has been in the market for a sell-off and was in discussion with companies including Future Group, Snapdeal and Aditya Birla-owned Abof among others. Jabong was founded in 2012. In September 2014, its investor, Rocket Internet merged Jabong with four other online fashion retailers in Latin America, Russia, the Middle East, South-east Asia and Australia to create Global Fashion Group (GFG). Swedish investment firm Kinnevik also owns a large stake in Jabong's parent Global Fashion Group. While Jabong has managed to reduce losses by reducing discounts, both Kinnevik and Rocket Internet seem unwilling to infuse fresh capital and are believed to be keen to exit.
- A Plunge in China Rattles Markets Across the Globe: Concerns about China’s ability to be a powerful engine of global economic growth have added to worries about the potential impact of higher interest rates in the United States, driving stocks sharply lower in Asia and Europe on Monday. When trading opened in New York, the major market measures went into what was essentially a free fall. While the steepest losses ended within minutes, share prices spent the rest of the day sharply rising and reversing course multiple times. When the day’s roller-coaster ride ended, the benchmark for stocks, the Standard & Poor’s 500-stock index, was down 3.9 percent. That left the index off 11 percent from its May high, in what in market parlance is called a “correction,” its first since 2011. On Monday, the Shanghai composite index closed down 8.7 percent. In Europe, benchmark indexes in Germany, Britain and France fell nearly 5 percent or more. A number of emerging markets were also lower, with leading indexes in Brazil and Indonesia both down around 4 percent. In the United States, the Dow Jones industrial average plummeted 1,000 points before regaining ground. Major US indices recovered some ground but still ended the day down over 3.5% each. The Treasury market was a beneficiary of the fear in stocks. The demand for bonds pushed the yield on the benchmark 10-year Treasury note to as low as 1.90 percent before it settled at 2.01 percent. The recent market tumult began two weeks ago when the Chinese government unexpectedly allowed the value of its currency to drop, partly in response to indications that the country’s economy is weakening. The Chinese moves played into the continuing drop in the price of oil, which has taken the price of a barrel of crude oil down 65 percent over the last year. On Monday, the price of oil, as measured by a benchmark New York contract, dropped below $40. The selling in China has accelerated despite extraordinary government intervention in the last two months aimed at propping up share prices. On Sunday, the Chinese government said that the country’s pension funds would be allowed to invest in stocks for the first time. But the slide on Monday highlighted that the new policy, and several similar recent moves, have not been successful. Many investors are now hoping that the central bank, the People’s Bank of China, will cut the ratio of deposits that banks are required to keep on reserve in a bid to encourage lending and spur economic growth.
- How the stock selloff could kill off some tech unicorns: With so much uncertainty and market volatility, Silicon Valley firms could postpone initial public offerings, cooling a white-hot market for venture funding that has fueled the most lucrative environment for startups in history. Already, executives at RainDance Technologies, a firm that makes genomic tools to detect cancer and other diseases, announced Monday they have pulled their plan to go public, according to Reuters. And the big question is what will happen to the hundreds of startups -- a record 131 are valued at more than $1 billion -- that are now all dressed up for IPOs but with no place to go. "Tech stocks have been getting crushed the past 6 weeks. Many names are down 25-50% from their highs. Today was very tough," Gurley wrote in a tweet last week. "One might reasonably assume that this would have an adverse impact on late stage private market liquidity and valuation. I certainly do. If so, we may be nearing the end of a cycle where growth is valued more than profitability. It could be at an inflection point." Known as "unicorns," the venture-funded firms with valuations of more than $1 billion have exploded in number to 131 companies valued at a total of $485 billion, according to venture capital research firm CB Insights. The sheer quantity of unicorns has for months caused concern of a startup-bubble, with investors racing to put money into bleeding edge innovators and their many imitators, when logically not all will thrive or even survive.
- Visa says its users more likely to complete online purchases than those using PayPal: Visa said on Monday online shoppers using its payment service are 17 percentage points more likely to complete their purchases than those using PayPal. Visa Checkout, which allows shoppers to store their payment information without having to re-enter it every time they make a purchase online, said 66 percent of its enrolled customers completed their transactions after putting items in their shopping cart compared to 49 percent of PayPal's Express Checkout customers. The data was collated for Visa by retail analytics firm ComScore. PayPal's online payment service offers a similar convenience by allowing customers to log into their accounts on a merchant's website. Paypal has not seen this report yet, said Anuj Nayar, senior director of platform, merchant and next gen commerce engagement. Nayar said in addition to PayPal Express Checkout the company has launched a new online payment service called PayPal One Touch, which makes using PayPal faster on any device with a single touch. "Initial reports indicate that One Touch radically improves checkout conversion for merchants and time to checkout for consumers beyond anything else available in the market today," he said. Retailers and payment industry experts have often blamed the high rates of unfinished online transactions, after shoppers add items to their shopping carts, on the tiring process of re-entering payment information every time one makes a purchase. "What has become more and more pronounced is as the size of the screen gets smaller, whether it's a tablet, mobile or a watch, the less likely it becomes a consumer will finish his purchase," Sam Shrauger, senior vice president of Visa's digital solutions, told Reuters.
- Jabong biggest loss-maker among top Rocket Internet ventures: Rocket Internet-incubated Indian fashion and lifestyle venture Jabong has become the top money losing initiative for the German emerging markets and Europe focused internet company. Jabong’s operating loss margin rose far ahead of Southeast Asian lifestyle e-commerce firm Lazada and Latin American e-commerce marketplace Linio in the first quarter of 2015, making it the most operating loss making property among Rocket Internet’s top ventures. Jabong had EBITDA loss margin of (-) 56 per cent last year, an improvement from 2013 when it posted (-) 68.5 per cent. This possibly signals how the firm is trying to push its sales faster with more discounting. This could also possibly reflect net revenues are failing to keep pace with operating expenses. Last year, in the same quarter Lazada sported the biggest EBITDA (earnings before interest tax and depreciation and amortisation) loss margin with Jabong and Linio being neck to neck, as per data shared by Rocket Internet. Also the average selling price of third-party vendors appears to be around 15 per cent higher than that of what Jabong direct e-tails to the customers. The average transaction value (including what it sells directly and products sold by other merchants) in Q1 stood at Rs 1,690 compared with a tad over Rs 1,500 in Q1 2014 and for full calendar year 2014. In the same period, average basket value of products sold directly by Jabong has risen marginally to around Rs 1,423. Third party vendors now represent around one in three transactions on Jabong every day. Meanwhile, Jabong was valued at around $480 million as of last December in its last funding round, according to Rocket Internet’s annual report. This means the firm was valued at around Rs 3,050 crore or 2.3 times its GMV for the year.
- Ahead of Earnings, Alibaba's Shares are at Post-IPO Low, Even as Rivals JD, Tencent have Surged: After Alibaba Group Holding Ltd. raised a record $25 billion last year, founder Jack Ma said the Chinese e-commerce company faced the danger of high expectations. He might be right. About $70 billion of market value has evaporated since Ma made that statement in November as investors worry about slowing growth. Alibaba’s dominance at home as a marketplace for buyers and sellers of goods is being undermined by a Chinese economy projected to grow at the slowest pace since 1990 and a consumer shift to mobile shopping that crimps advertising revenue. While investors have punished Alibaba, an index of U.S.- traded Chinese companies has jumped by 17 percent this year. Rival e-commerce operators have also surged with JD.com Inc. rising 46 percent in New York and Tencent Holdings Ltd. gaining 40 percent in Hong Kong through Tuesday. The two companies have joined forces to compete against Alibaba. Tencent is trying to drive the 1 billion users of its WeChat and QQ chat apps to JD.com, which recently started a service to speed imports to Chinese buyers. As JD.com, China’s second-biggest e-commerce company, “ups its game,” said Mark Tanner, founder of China Skinny, a Shanghai-based research and marketing agency, Alibaba’s previous growth “seems unsustainable in the medium term.” Ma’s push outside China also has yet to gain traction -- its presence in the U.S. and much of Europe remains negligible. Results due Thursday are expected to show that the pace of Alibaba’s revenue expansion fell below the average of the previous seven quarters. Shares of Alibaba closed Tuesday at $79.54 in New York, 33 percent below their November peak and the lowest since the Hangzhou-based company sold stock at $68 apiece in its initial public offering in September. Alibaba currently gets less than 5 percent of its revenue from outside China, Ma said in March on a company Twitter account. Alibaba’s sales probably rose 41 percent in the fourth quarter to 16.9 billion yuan ($2.7 billion), according to the average of 23 estimates compiled by Bloomberg. That compares with an average of about 50 percent during the past seven quarters. The company’s strategy of expanding in under-served regions of China and overseas is driving up marketing costs as more consumers shop on mobile devices, where ads typically generate less revenue than those on desktop computers. Operating income will probably shrink 18 percent to 4.5 billion yuan, according to the estimates.
- Brand Safety and Twitter's Porn Problem: Twitter Scrambles for an Ad Fix as Nielsen's Promoted Tweets Show Up in Porn Feeds TV company pulled its campaign today. Twitter has a porn problem, and it caused one brand to temporarily halt a campaign today. Nielsen, the television and digital data company, pulled the plug on its Promoted Tweets after they appeared near adult content on the site. Nielsen's promos showed up on Twitter profile pages called "Daily Dick Pictures" and "Homemade Porn." Ads are not supposed to appear on a profile page if X-rated content is posted there, and a bug was to blame, a source familiar with Twitter's technology said. "As Twitter works to resolve this issue, we have temporarily suspended our campaign," a Nielsen spokesman told Adweek. Nielsen was not alone, either. Marketers' promos from Duane Reade, NBCUniversal and Gatorade also showed up in feeds of pornographic photos and videos. Brand safety is an issue across the digital advertising ecosystem, where it is difficult to police every website and social media post. Twitter rivals like YouTube and Facebook also have dealt with racy or offensive content that concerned advertisers. Twitter is in a particularly tough position—it has to monitor 300 million active accounts filled with user-generated content—and its troubles with not-safe-for-work material have been raised before. The San Francisco tech company has been trying to clean up its site—not just accounts that share NSFW pictures, but also those that support terrorism or harass other users. It recently introduced a quality filter that removes abusive or offensive tweets from a user's timeline. But just last week, Robert Peck, a SunTrust Robinson Humphrey analyst, wrote a report warning that Twitter ads were appearing near pornography and that brands would pull back on spending if the problem became more widely known. Peck estimated there could be as many as 10 million Twitter accounts dedicated to sharing pornography and that Twitter needs to do a better job of blocking them.
- Aftermath of Secret's Shutdown: Google Ventures Managing Partner Criticizes Founders for 'Taking Money Off the Table': For many in Silicon Valley, the rapid rise and precipitous fall of Secret, the prominent start-up that recently closed its doors, will most likely serve as a cautionary tale of how not to run a company. For Google Ventures, one of Secret’s earliest backers, it will also be a reminder of the type of company not to invest in. The product of two former Google employees, David Byttow and Chrys Bader, Secret attracted intense media interest early in its life. The app let users anonymously share “secrets” to their network of close friends and friends of friends, an activity that quickly caught on among founders, investors and the media of Silicon Valley. It also helped that Secret took some early rounds of funding from Google Ventures and Kleiner Perkins Caufield & Byers, two big venture capital firms. After the flurry of attention and just a few months later, Secret opted to raise another round of financing, this time seeking $25 million. Bill Maris, managing partner of Google Ventures, did not think it was a good idea and the company did not participate. “We advised them against it,” Mr. Maris said in an interview, referring to Secret’s leaders. “We told them they didn’t need the money. And raising that much money that soon, it was going to be impossible to meet the expectations in the future.” The discussion could be considered a case of life imitating art, or perhaps vice versa: In a recent episode of Silicon Valley, the satirical HBO series, a young start-up founder is offered millions of dollars from multiple venture capital firms at high valuations. Ultimately, the founder is advised to instead accept a lower offer, in order to make future funding rounds more achievable and growth targets reasonable. That is not what the founders of Secret chose to do. The company completed its $25 million financing led by Index Ventures and Redpoint Ventures, along with a variety of individual angel investors. In that round, the two founders each wanted to take $3 million off the table for themselves, a practice that is commonplace for more mature companies, but less so for very young start-ups. Not joining the $25 million round proved to be a wise choice for Google Ventures. Downloads of Secret declined over 2014, according to App Annie, an app analytics service. Secret redesigned its entire app to look like a near-perfect clone of Yik Yak, a competing service, but traffic did not improve. Many employees, including Mr. Bader, left the company. Last week, Mr. Byttow said he was shutting down his company, and would return the remainder of the money to the venture capital firms. Neither Mr. Byttow nor Mr. Bader have said if that includes the $6 million the two of them took off the table and deposited into their bank accounts.
- In 2014 Jabong’s GMV grew 2.5x to Rs1320Cr; Ended Year with INR 289 Crore Cash; Lost INR 454 Crore on EBITDA Basis: Rocket Internet-incubated lifestyle e-tailer Jabong.com more than doubled its gross merchandise value (GMV) to Rs 1,320.6 crore during the calender year ended December 31, 2014. The firm’s GMV captures value of total transactions, excluding taxes and shipping costs but including value of paid vouchers and coupons. The firm had ended 2013 with GMV of Rs 511.4 crore, data pulled from its latest annual statistics show. The data is net of returns and cancellations. Jabong shipped 8.7 million orders last year of which 5.9 million transactions represented products sold by Jabong while another 2.8 million orders or close to one in three orders were through its marketplace. This means the firm handled on an average 23,835 orders a day last year as compared to 16,164 in 2013. The company’s net revenues (which captures the sales by the firm as against GMV which includes sales by third party vendors too, for which the company just gets a listing fee) grew 2.3x to Rs 811.4 crore last year. Meanwhile, its loss at an operating level as captured by EBITDA (adjusted for share based compensation) rose to Rs 454 crore as against Rs 236 crore in 2013. This means, for every Re 1 worth of sales it books directly (not covering third party vendors), it is losing around 56 paisa. This is still an improvement over the previous year when it was booking operating loss of over two thirds (68.5 per cent) of whatever it sold. The firm did see its cash position dwindle as a result ending 2014 with Rs 289.4 crore as against Rs 853.2 crore the previous year.
- Home Depot Aiming to Put Apple Pay in Its 2,000 Stores: Home Depot Inc. has the goal of offering Apple Inc.’s mobile-payment platform at its more than 2,000 stores, which would make it the largest retailer yet to accept Apple Pay. Customers already were able to use Apple Pay at some of Home Depot’s stores despite there not being an agreement. The world’s largest home-improvement retailer could accept mobile payments at those locations because its checkout terminals have near-field communication readers. Those devices have now been turned off for the past few weeks during an upgrade of its point-of-sale system, Holmes said. That led to some inaccurate reports that Home Depot had dropped Apple Pay. If it pushes ahead with the plan, Home Depot would join chains like Macy’s Inc. and Whole Foods Market Inc. in embracing Apple Pay at stores. Many other retailers are betting on a mobile-payment option from the Merchant Customer Exchange, which was founded in 2012 by companies such as Wal-Mart Stores Inc. and Target Corp. That offering, CurrentC, is still being developed.
- 3-D Printing Is Saving the Italian Artisan: Italy’s craftsmen turn to a new tool in their competition with cheap products from China. Northeast Italy’s industrial heartland stretches roughly from Milan to Venice, along the floodplains of the Po River all the way to the Adriatic. Like much of the rest of the country, however, the region has fallen on hard times. Italy’s craftsmen have been undermined by competition from China and other parts of Asia. Since the beginning of the global economic crisis, the northeast’s industrial sector has shed about 135,000 jobs—some 17 percent of its total workforce. Techniques such as the 3D printing used by Pomini and Armani have helped turn northeastern Italy into an unlikely hothouse of innovation. Last year growth in the region was positive for the first time since 2007, at 0.5 percent. Exports rose by 3.5 percent in 2014 and are expected to keep climbing. In the province of Trento, for instance, the public and private sectors together invest some 2 percent of gross domestic product in research and development. At the Centro Moda Canossa—a trade school in Trento for children age 14 to 18 specializing in fashion design and tailoring—the faculty recently added a class in which students incorporate 3D printing, laser cutting, and microcontroller chips into their designs. “You can’t offer a job from the past. Nobody will come,” says Michele Bommassar, 36, the school’s vice director. “You have to offer the jobs of the future.” He points to a student project, a purse with a laser-cut pattern on its flap and an interior that lights up when it’s opened: “It’s beautiful, but we believe it is also necessary. The alternative is to be eaten by others.” At their best, these technologies inject elements of the digital economy into the physical world, allowing a galaxy of small companies to compete with multinationals, in much the same way homemade YouTube videos hold their own against traditional video production. The advent of rapid prototyping and other innovations means “you can compensate for your disadvantages with variety, customization, and a rapid response to what the market is demanding,” says Paolo Collini, a business professor and the dean of the University of Trento. Or, as Armani puts it: “If something doesn’t work, you simply stop producing. You haven’t filled a warehouse. For a designer, it’s a dream. You can take more risks.”
- Salesforce shares spike on report of Microsoft evaluating bid: Shares of Salesforce.com Inc (CRM.N) jumped as much as 6.4 percent on Tuesday after a Bloomberg report that Microsoft Corp (MSFT.O) was evaluating a bid for the cloud software provider. Salesforce shares rose from $71.4 to $75.82 in about a minute late Tuesday afternoon, after which trading was temporarily halted. The stock closed 1.6 percent higher at $72.75. Microsoft shares closed down 1.3 percent at $47.60. Microsoft is evaluating a bid after Salesforce was approached by another potential buyer, Bloomberg reported, citing people with knowledge of the matter. Microsoft is not in talks with Salesforce, and no deal is imminent, the report said. Bloomberg had reported last week that Salesforce was working with financial advisers to help it field takeover offers after being approached by a potential buyer. The news sent the company's shares up as much as 17.3 percent to an all-time high of $78.46 last Wednesday.
Amazon is circling Jabong; potential deal size ~$1-1.2B, two sources privy to the development told Techcircle.in. According to a source, the meeting took place very recently and it has not even been a week. Restructuring would be complicated: Jabong is an inventory-based e-tailer, where foreign investment is not allowed at present. Another source cited above said that Amazon would keep Jabong as a separate property post the acquisition. “It (deal) would be very much on the lines of Amazon’s acquisition of Zappos in the US,” he said. Jabong, which is one of the two top lifestyle e-tailers in the country along with Flipkart owned Myntra, reported gross merchandise value (GMV) of Rs 509.5 crore from 3.197 million orders in the January-June 2014 period. This marked a three-fold rise over the previous year. If it maintains the same growth through the rest of the year it may end with GMV of around Rs 1,300-1,500 crore for the year ending March 31, 2015. Accepted fair valuation in e-com space internationally is pegged at 3.5x sales which would value Jabong at around Rs 5,000 crore. Jabong could be looking to drive a hard bargain given the strategic play of Amazon in India and significance of the deal to win in the high stakes game in the country.
Twitter launches Twitter Offers, Which Link To Your Credit Or Debit Card; Separately Twitter's CFO commits a DM Fail: Companies will be able to offer cashback rewards in their tweets, and those rewards will tie directly into consumers’ credit and debit cards. The card-based approach should offer some significant advantages. If you see an offer in your timeline (to use the example in the screenshot above, it might be $2 back on a $5 purchase at a coffee shop), you should be able to add it to your card without leaving Twitter. Then when you go into the store, you don’t need to change your behavior — instead of bringing a coupon, you just pay with that card and the cashback payment should show up on your statement shortly after. A Twitter spokesperson said the card integration was already built by CardSpring, which Twitter acquired in July.Meanwhile, this gives businesses a way to track when their Twitter ads are actually driving consumers to make purchases in the store. From a security standpoint, Twitter says your card information will be encrypted and can be removed from your account at any time. Twitter Offers are being tested initially on desktop and mobile in the United States. The post says Twitter will be working with “a handful of brands” to test these offers in holiday-related promotions, and it will announce those brands “in the near future.”
Uber is close to a round of financing at $35-$40B valuation: T. Rowe Price Group Inc. is in discussions to be a new investor, said the people, who asked not to be identified because the details are private. Existing investor Fidelity Investments is also set to participate in the funding, they said. Uber is raising at least $1 billion, the people said. The financing hasn’t closed and the terms and investor group may still change, one of the people said. T. Rowe previously considered investing in Uber and may still end up passing this time, two of the people said. If Uber completes the funding, a valuation of $35 billion to $40 billion would more than double its $17 billion value from a June financing. At the time, the valuation was a record for a U.S. technology startup in a direct investment round. That put Uber at the front of a pack of elite U.S. technology startups that are valued in the eleven-digit range, including Airbnb Inc. and Dropbox Inc. Such valuations are spreading internationally. In China, smartphone maker Xiaomi Corp. is in talks for a funding round that would value it at $40 billion to $50 billion, people familiar with the matter have said.
Tumblr Overtakes Instagram As Fastest-Growing Social Platform, Snapchat Is The Fastest-Growing App; Facebook saturated: While Tumblr and Pinterest appear to have seen the most growth, they are not seeing as much use when it comes to frequency, where the numbers almost appear to invert. With 1.35 billion active monthly users, Facebook continues to be the world’s largest social network by some margin, but when it comes to picking up new users, it appears to have reached a saturation point. Research out today from the Global Web Index notes that Tumblr’s active user base in the last six months grew by 120%, while Facebook’s grew by only 2%. And in overall member growth, Pinterest took the lead with 57% growth while Facebook’s member base grew by 6%. In mobile apps specifically, while Facebook is the largest app today, Snapchat — with an emphasis on teen and 20-something users — is the fastest growing of them all, up 56% this year. It is however followed closely by Facebook Messenger and Instagram — a sign of not just how Facebook’s mobile apps continue to represent the company’s growth drivers, but also how its push to drive more users to the standalone app by cutting out Messaging from the main app has helped it grow. China continues to be dominated by home-grown social networks. Sina Weibo, Qzone and Tencent Weibo lead, while Youku and Tudou round out the top 5.
Rural consumers accounted for ~10% of Alibaba’s US$9.3B Singles Day haul, washing machines, wool and down coats in top 10 items: Alibaba VP Wang Yulei said at the event that the top ten products China’s rural residents bought via Alibaba’s online marketplaces this Singles Day were, in order of popularity: Mobile phones Flatscreen TVs Boots Wool coats Women’s down coats Men’s down coats Low-top shoes Bedsheets/sets Facial skin products Washing machines According to Wang, there are some significant differences between that and the urban top ten list, on which flatscreen TVs rated lower and washing machines didn’t rate at all, among other differences.
Snapchat is getting into p2p payments; linking audience identity information to (currently anonymous) Snapchat might be the rationale: Snapchat doesn’t ask for your real name, but its on the debit card you use for its new peer-to-peer payments feature Snapcash. That could prove very lucrative for the ephemeral messaging service. To use the feature for sending friends money that launched today, users connect their debit card to their Snapchat accounts through a partnership with Square Cash. The real names, addresses, and account information associated with those debit cards could potentially be cross-referenced with databases of personal information to give Snapchat a much better idea of who users are and what ads they might want to see.
Rocket Internet in Asia: Jabong H1 GMV $81M (195% Y/Y), Lazada H1 GMV $91M (202% Y/Y): Rocket Internet’s first earnings report since its October IPO on the Frankfurt Stock Exchange revealed: Jabong H1 GMV up 195% Y/Y to US$81 million; Orders grew 171% to 3.2 million, no data for active users. EBITDA loss US$0.129K slightly worse than the loss in H1 2013. Lazada H1 GMV (US$91.4 million), up 202% Y/Y. 1.8 million orders from its 1.4 million active users. Rocket Internet explains that Lazada is shifting from a direct sales model (shipping from its own warehouses) to a marketplace model for third-party merchants. As a result, revenue may suffer. But for now, revenues are stronger than last year, with H1 2014 already amounting to EUR 47.3 million (US$59.2 million), which is 83% of the total 2013 net revenues. EBITDA was negative EUR 40 million (US$50 million). Zalora, which sells clothing in 10 Asian nations: H1 GMV US$70.1 million (44% Y/Y), 1.5 million orders, 1.2 million active users during H1. Revenues US$55 million. EBITDA loss US$41.9 million (more than halved since the whole of 2013).
Monday October 13
Jabong net revenues more than tripled, from Rs 143.3 crore to Rs 438.5 crore in the year ended March 31, 2014. net loss declined to Rs 293.4 crore from Rs 318.7 crore in the previous year.Private labels account for every fifth item shipped by the firm.Tier II and III cities, generated approximately 62 per cent of its net revenues in Q2 2014 (Apr-Jun). Link
Amazon is going to open an actual bricks-&-mortar retail store in New York. The Manhattan space will contain a selection of inventory to accommodate local same-day delivery and shoppers who want to pick up products bought online, according to the Wall Street Journal, which cited unnamed sources. Amazon was also mulling over the idea of using the space as a showroom for its gadgets, such as Kindle e-readers and Fire smartphones, the report said. A successful trial could persuade the company to open stores in other cities around the country, the Journal said. The retailer has set up metal lockers around the country in places like 7-Eleven stores so people can conveniently pick up packages. Link
Samsung Electronics' smartphone business is sagging badly, and it issued a profit warning for the September quarter. Link
Truecaller, a mobile social app that builds a social number directory, raised $60m and has 85m (active?) users. Tools that rethink how to make those old-fashioned voice call things are getting very interesting right now. Link
Line recorded $177M in Q2 (April-June) 2014 revenue (mostly from game-related purchases); also Line finally reveals its monthly active user count: 170 million monthly active users, out of a current count of 560 million registered users. (Japan: 54 million registered users, Thailand: 33 million, Indonesia: 30 million, Spain: 18 million, Taiwan: 17 million) The company originally intended to IPO this autumn, but has since postponed with an eye towards next year. Link
