Daily Tech Snippet: Monday, January 18

• Modi Offers $1.5 Billion Fund, Tax Breaks for India Startups: India said it will set up a 100-billion-rupee ($1.5 billion) fund to encourage startup businesses and pledged to ease regulations for entrepreneurs, as Prime Minister Narendra Modi strives to create the jobs needed in a developing nation of 1.3 billion people. Startups will get tax breaks such as income-tax exemptions for the first three years, quicker patent applications, a credit guarantee program and easier routes to wind up if they fail, Modi said at a government conference for entrepreneurs in New Delhi. The fund will be established over four years. "The government should not interfere in startups," Modi said on Saturday to an audience that included billionaire Masayoshi Son, the founder of Japan’s SoftBank Group Corp., and Uber Technologies Inc. Chief Executive Officer Travis Kalanick. "India’s youth should be a job creator, not a seeker."

• Jawbone Raises $165 Million at Half Its Last Valuation: Jawbone, the once-hot wearable technology start-up, said on Friday that it had raised $165 million in funding at a valuation of $1.5 billion, or roughly half the amount that the company was valued at as recently as 2014, continuing a burgeoning trend of start-ups raising money at lower values than before. When private companies raise money at a lower value than they had previously, the event is known as a “down round.” On Thursday, Foursquare announced it had raised a $45 million round of venture capital — which people familiar with the terms have said was also a down round, with Foursquare valued at $250 million, less than half of the $650 million it was valued at during its last round in 2013. Down rounds are increasing as Silicon Valley sobers up somewhat after a frothy period. In the last quarter of 2015, there was a major investment slowdown; funding to private companies dropped 30 percent from the previous quarter, to $27.3 billion, the research firm CB Insights said. Mutual fund investors have also recently marked down the valuations of other high-profile private companies like Zenefits, Dropbox and Snapchat. Down rounds, like the ones that Jawbone and Foursquare have raised, tend to destroy value for all of the pre-existing shareholders, including employees who own the company’s private stock. It has been a tumultuous year for Jawbone, which is based in San Francisco. The company’s Up fitness band line faces stiff competition in a crowded market for wearable technology that is dominated by Fitbit and Apple, according to the research firm IDC. Last year, Jawbone laid off employees as part of a restructuring. The company raised nearly $300 million in debt from the money management firm BlackRock last April.

• As Delivery Startups Cool, Food-Delivery Startup DoorDash Eats Its Words in Fundraising Talks: The company lowered its ambitions by cutting as much as $400 million off its proposed valuation to investors. In meetings late last year, DoorDash pitched venture capitalists on an investment that would value the food-delivery company at $1 billion, people with knowledge of the matter said. The company is back on the fundraising trail for that same round, except this time it’s slashed its lofty goal to as low as $600 million, according to the people, who requested not to be named because the discussions were private. If DoorDash closes the financing at the terms proposed to some investors recently, the valuation would be around the same as the one from the last round in March 2015, which was $600 million, the people said this week. The talks are ongoing, and the terms could change again, they said. A spokesman for DoorDash declined to comment. The comedown for DoorDash shows delivery startups may be losing some of their allure. Such businesses are costly to operate and often take on huge losses in pursuit of growth. Instacart, the grocery-delivery company that was valued at $2 billion by investors, raised prices in December, a move it attributed partly to “changing market conditions.” It also cut staff, according to Re/code. Good Eggs, which works with farmers to deliver fresh produce, closed all of its operations outside San Francisco in August.

• Alphabet (formerly known as Google) Shakes Up Its Robotics Division:  Google’s robotics division has been plagued by low morale and a lack of leadership since the unit’s founder left abruptly in 2014. Now Alphabet is cleaning it up. Over the last two months, Alphabet, the new holding company that separated Google from its collection of speculative projects, has reframed the robots effort, moving it from a stand-alone division inside Google to a piece of the X research division. The company has also hired Hans Peter Brondmo, a technology industry veteran who last worked at Nokia, to help with management. A reorganization of the robots group is one of several recent moves inside the X division, which used to be called Google X but was rebranded with the Alphabet reorganization and recently unveiled a new logo. A range of companies, including tech competitors like Amazon and car manufacturers, are signaling their interest in robotics. X has several projects in varying degrees of completion, but has lately been “graduating” them as stand-alone companies or preparing them for such a move. The life sciences group, for example, is now called Verily. X also recently hired an auto industry veteran to lead its self-driving car effort — called Chauffeur internally — and noted that the project was a good candidate to be spun out. Robotics has gone in the opposite direction for reasons that are personal and practical. The division was created in 2013 by Andy Rubin, who led the development of the widely used Android operating system software, and it has been without a leader since Mr. Rubin left in 2014 to start a technology incubator that helps young start-ups turn their ideas into businesses. After starting the robotics division, Mr. Rubin quickly went on a buying spree, purchasing a number of promising companies, including Boston Dynamics, the maker of experimental military robots, and Schaft, an elite group of Japanese roboticists from the University of Tokyo. But while the companies were promising, Mr. Rubin invested in several technologies that had industry observers scratching their heads about his overall direction. Mr. Rubin originally said that the robotics division would be a 10-year moonshot, and when he was in negotiations to acquire companies he talked about the possibility of the driverless Google car rolling up to your house and the Google robot jumping off the back bumper. Google’s robotics effort stalled after his departure, going through a variety of leaders, including James Kuffner, a Carnegie Mellon roboticist who has since joined Toyota’s research and development laboratory in Palo Alto, and Jonathan Rosenberg, who is a troubleshooter for Larry Page, the Google co-founder who is Alphabet’s chief executive. Many in the industry say it is likely to be awhile before companies, Alphabet included, can get through the many technological and regulatory hurdles that stand in the way of robots becoming a huge business.

• Xiaomi Misses Smartphone Sales Target by 10% on China Slowdown: Xiaomi Corp. sold more than 70 million smartphones last year, falling well short of its target and prompting founder Lei Jun to tell employees he was refocusing research efforts into “cool stuff” like robotics and virtual reality. The Chinese startup had a stated goal of selling 80 million devices. Xiaomi originally predicted selling 100 million units, but then changed that after China set its lowest growth target in 15 years and copycat vendors started taking away market share. The miss was a blow to company morale, Lei said in an e-mail to employees. “We set a target of 80 million and, before we knew it, it became an obligation,” Lei said. “We changed under this pressure, and everyone’s faces gradually lost all traces of humor.” The smartphone maker was one of China’s most exciting startup stories of past years, with a valuation of $45 billion that trailed only that of Uber Technologies Inc. Xiaomi thrived through online sales of budget-priced devices with advanced components, overtaking domestic competitors and challenging Apple Inc. and Samsung Electronics Co. for supremacy in the world’s biggest market. Xiaomi’s market share has been pinched by competitors including Huawei and Meizu, said Jeff Pu, an analyst at Yuanta Securities Co. They are among the Chinese vendors that have flooded the Internet with ultra-thin phones offering similar features and prices to Xiaomi’s Mi 4i and Redmi Note 2. Huawei said it shipped more than 100 million smartphones last year as it expanded in the U.S. and Europe, defying an industry slowdown. Pu expects Xiaomi’s sales growth to slow to 10 percent this year. “With sales growth slowing, Xiaomi’s valuation will be hurt,” Pu said. “It could even face a down round, as investors are less willing to pay.”

Daily Tech Snippet: Monday, November 23, 2015

• Once Valued At $4.5B,  LivingSocial Offers a Cautionary Tale to Today’s Unicorns: The first thing you see when walking into the headquarters of LivingSocial is row upon row of mostly empty desks, broken up by small street signs that employees once needed to find one another when the office teemed with people. One row, “BYFAD Lane,” was named after a start-up, BuyYourFriendADrink, which LivingSocial acquired to get into the daily deals business. Other signs, such as “Sky Diving Street,” were named for some of the hottest discount coupons that the company once provided. On a recent visit, some desks were piled high with boxes of employee belongings, the detritus left behind after a round of layoffs that eliminated one-fifth of the work force. In one refrigerator, the milk was six months old. The technology industry’s boom over the last few years has been defined by the rise of “unicorns,” the private companies that investors have valued at $1 billion or more. Before the term came into vogue, LivingSocial was among the biggest unicorns of its day. It now offers a glimpse of what some of today’s unicorns might look like several years down the road if things go awry. Just four years ago, LivingSocial and its larger rival Groupon grew rapidly on a simple pitch: The companies would match customers to local businesses with a daily deal in users’ inboxes, like half off at a local deli or a two-for-one massage promotion. LivingSocial and Groupon would take a cut of each transaction. Venture capitalists anointed daily deals as the way that the Internet would invade local business, and by late 2011 LivingSocial had raised more than $800 million and reached a valuation of $4.5 billion, according to data from the research firm VC Experts. The company counted Amazon and the mutual fund giant T. Rowe Price among its investors. LivingSocial spent heavily, blanketing the airwaves with TV ad campaigns. Riding a wave of momentum, the company explored going public. Today, LivingSocial is more unicorpse than unicorn. The company never filed for an initial public offering and consumer fervor for daily deals has cooled. T. Rowe Price has written down its stake in LivingSocial to nearly zero, data from Morningstar shows. The company’s work force has shrunk to around 800 employees from 4,500 at its peak in 2011. Groupon, which did go public, is trading at more than 85 percent below its I.P.O. price.

• Airbnb raises $100 million in funding, Valuation stays flat at $25.5B: source: Apartment-sharing startup Airbnb Inc has raised over $100 million in a new round of funding, a source close to the company said. Airbnb, once a startup selling cereal, expects to achieve profitability in 2016, the source said. Airbnb revenue doubled to $340 million in the third quarter on bookings of $2.2 billion, the source said. The company expects revenue of $900 million this year. The round was done at the same $25.5 billion valuation as the previous funding round over the summer, indicating that unicorns, or private tech companies worth $1 billion or more, are finding it tougher to convince investors to buy shares at continuously escalating valuations.

• Snapchat's lackluster ad business threatens $16 billion valuation: Snapchat, maker of a free mobile app that lets users send videos and messages that disappear in seconds, is struggling to gain traction with advertisers, fuelling investor concern that its $16 billion valuation isn't justified by a business that hasn't yet shown it has a steady source of income. Even in a world where upwards of 140 private companies are reckoned to be worth $1 billion or more, Snapchat's outsized value stands out. Fidelity Investments' decision to slash the estimated value of its Snapchat stake by 25 percent in the third quarter exacerbated concern about the company's ability to meet advertisers' expectations. For Snapchat advertisers, the question is whether prices that can reach more than $500,000 for some ads is worth it when the company lags competitors in targeting specific consumers and measuring how ads perform. "If Snapchat doesn't get that figured out, they're in trouble," said Nick Godfrey, chief operating officer at RAIN, a digital strategy agency. Snapchat lost more than $128 million in the first 11 months of 2014, according to a financial statement leaked earlier this year, which also showed Snapchat had revenue of $3.1 million. Its advertising business began in mid-October. Tech media outlet Re/code estimated that Snapchat's revenue could reach $50 million in 2015, citing sources familiar with the company. Snapchat doesn't comment on its revenue or its losses. The company has raised $1.2 billion from investors, ample resources to develop its advertising techniques. But time may be limited as the company is in early discussions for an IPO, according to sources. Snapchat's $16 billion valuation was calculated at its most recent funding round in May based on how much investors were willing to pay for shares.

• Yelp Surges as Investors See Bargain Buying Opportunity: Yelp Inc. shares surged the most in six months Friday as investors see the customer-review website at bargain prices after it lost almost half of its value this year. Shares jumped 11 percent to close at $31.21 in New York, the biggest increase since May 7 and the highest price since July 28. Yelp shares plummeted July 29 after the company cut its revenue forecast and said it would stop selling national brand advertising. The stock is down 43 percent this year. Yelp Chief Executive Officer Jeremy Stoppelman is trying to convince investors the company is on the right track by boosting its local advertising sales force and pulling back from banner ads from national brands that aren’t getting responses from Yelp users. The move is part of Yelp’s shift to mobile users, who make up a larger portion of its audience than desktop users.

• Google aims for China launch of Google Play app store next year: Google, part of Alphabet Inc (GOOGL.O), aims to launch the China version of its Google Play smartphone app store next year, according to people familiar with the matter, its first major foray in the market since ending localized product support in 2010. The Google Play app store would be set up specifically for China, and not connected to overseas versions of Google Play, two of the people said. They said Google intends to comply with Chinese laws on filtering content that might be viewed as sensitive by the ruling Communist Party, and laws requiring the company to store the app store's data within China.

• Jawbone Lays Off 60, 15% Of Staff Globally, Closes NY Office. Some difficult news this week for Jawbone, maker of fitness trackers, speakers and Bluetooth headsets. TechCrunch has learned and confirmed that the company yesterday laid off around 60 employees, or 15% of staff. It’s a global round of layoffs affecting all areas of the business; and as part of it Jawbone is also closing down its New York office (which was concentrated on marketing) and downsizing satellite operations in Sunnyvale and Pittsburgh. In an emailed statement, a spokesperson said the layoffs are part of a wider “streamlining.” From what we understand, there are no specific product areas being cut as part of this restructuring. The company, in other words, will continue to sell its Jambox speakers and the Era headset, along with related accessories. More generally, however, Jawbone has been increasingly focusing is R&D, product and marketing attention on its range of UP fitness trackers.

Daily Tech Snippet: Wednesday, June 10

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• Asia is driving Facebook's growth - Facebook now earns 51 percent of ad revenue overseas - Asia revenue growing 57% Y/Y; by contrast Europe lags the US. For the first time, Facebook has detailed ad sales outside the United States and Canada as a percent of worldwide sales. Overseas markets bring in more advertising revenue than the United States for Facebook, amounting to 51 percent of global ad sales in the first quarter. Growth in Asia was the fastest at 57 percent. While Europe is growing slower than the United States, the Asia Pacific region is ahead and a focus for Facebook. By comparison, Google said that 57 percent of its revenue was from international markets in the first quarter, although it did not break out ad revenue specifically. Mobile advertising represents more than 70 percent of Facebook's total ad revenue, and mobile is particularly strong and attractive to advertisers in emerging markets. Facebook is benefiting from exporters in China trying to reach people outside its country and from an influx of venture capital funding into India, giving start-ups funds for advertising. Total advertising revenue for the quarter increased 46 percent to $3.3 billion, the vast majority of Facebook's $3.5 billion in quarterly revenue. International advertising revenue rose 36 percent from a year earlier, Facebook said.

• Google Talent Departs for Unicorn Herd: Cloudera taps Google VP as Engineering Head, DropBox poaches Neal Mohan for top job: Cloud analytics software company Cloudera said today it has named Daniel Sturman as its VP of engineering. Sturman previously spent eight years at Google, where as VP of engineering he was in charge of keeping its computing infrastructure for services like Google Compute Engine and Google App Engine. Neal Mohan, Google’s VP for display and video advertising, is leaving for the top product job at Dropbox. He is part of a wave of execs departing the search engine in recent months for fast-growing, pre-IPO startups. More recently, Uber claimed Tom Fallows, who had led Google’s same-day delivery service, in November, followed by communication and policy chief Rachel Whetstone. Jawbone nabbed Fallows’s boss, Sameer Samat. Indian e-commerce unicorn Flipkart snatched two Googlers: The VP of product at Motorola and the person who ran the low-cost handset Android One project. On the smaller startup side, the ads product head at YouTube recently headed to Luxe, an on-demand parking startup. There’s more, but you get the idea. Google downplays exits, citing them as regular industry churn. But they come as Google’s core business faces rising threats and fears that it has grown too large and too uninspired to retain ambitious top tech talent. Apparently, the Google bench is not as rewarding for some as the thrill of a unicorn ride.

• Tinder Goes Through A Small Round Of Layoffs; spring-cleaning, not restructuring, company says. Tinder — one of the most popular dating apps currently available across the globe — laid off around 10 percent of its staff last week. TechCrunch has learned and confirmed that the company laid off six members of the 60-65 member team, including three marketing employees and three engineers. TechCrunch was told this wasn’t part of a re-structuring, or even a result of leadership changes with new CEO Chris Payne and VP of Engineering Hugh Williams, but rather a spring-cleaning of sorts. Tinder has gone through much larger transitions before, including a lawsuit waged by former VP of Marketing Whitney Wolfe, the resignation of CMO Justin Mateen, and the transition of Sean Rad from CEO to President. Since then, Chris Payne has joined the team as CEO and Hugh Williams has taken over the engineering squad. The first year of monetization can be tricky for any social startup, and with the complexities of Tinder Plus — ads, premium features, oddball pricing, etc. — it would make sense to double-check that the team is as lean as possible.
• Tesla CFO retires; Firm Will Start Delivering Model X SUV in 3 to 4 Months, Says Elon Musk; Tesla Motors will begin deliveries of the Model X sport utility vehicle in three to four months, keeping close to the timeline the electric-car maker laid out earlier this year, Chief Executive Officer Elon Musk said. “The Model X will be a better SUV than the Model S is a sedan,” Musk, 43, said Tuesday at Tesla’s annual shareholders meeting, held at the Computer History Museum in Mountain View, California. Musk said he’s been driving the latest prototype of the Model X, which Tesla first unveiled as a concept in February 2012 and previously sought to have ready by the end of 2014. More recently, Tesla told investors that initial deliveries to customers, several of whom have been waiting for more than three years, would begin late in the third quarter. Car-based SUVs are popular among female drivers, and in a January interview with Bloomberg, Musk said that the Model X is drawing more than half its orders from women. This is a contrast from the predominantly male customer base for its Model S sedan and the Roadster, which the Palo Alto, California-based company no longer sells. Tesla is also working on the Model 3, to be released in 2017 with a starting price of roughly $35,000. In addition, the company is readying another software upgrade for the Model S, including so-called autopilot driver-assist technology, and “may be able to get it out to early-access customers by the end of this month,” Musk said. Musk has said the company probably won’t turn net income positive until annual sales reach 500,000. “I expect we’ll achieve profitability in 2020,” he said. Musk is by far Tesla’s largest shareholder with 22 percent. He said in February that at the rate it’s growing, if all goes right, Tesla in a decade could be worth as much as Apple Inc., the world’s largest company by market valuation, is now. Musk also said CFO Deepak Ahuja will retire at the end of this year. Ahuja has been Tesla’s CFO since 2008, coming from Ford Motor and seeing Tesla through its June 2010 initial public offering. He said he’s retiring to pursue other life goals.
• Geek shortage stymies Israel's Tech Boom as Soviet emigre engineers retire, fewer youth study advanced science. Israel's technology miracle is threatened by a dearth of people in the very professions that made it happen: engineers and computer scientists. Companies say finding qualified workers is one of their biggest problems. And the shortage may worsen as fewer students sign up for the most advanced math classes, the building block for tech careers. This in an economy whose health depends on exports—about one-third of them from technology companies. One explanation for the shortage: Engineers who emigrated from the former Soviet Union in the 1990s are retiring. "We don't truly appreciate that immigration,'' says Adam Fisher, a partner at Bessemer Venture Partners. "Without that I'm not sure we would be 'Start-Up Nation'.Meanwhile, fewer of Israel's youth are choosing to study advanced math, and there's no increase in those studying advanced science, in part put off by the level of difficulty that could bring down overall grades. The number of high school students matriculating in advanced math dropped by a quarter from 2006, to 9,350 in 2014, according to the Trump Foundation, dedicated to improving education in Israel. Almost a year ago, a ministerial committee drew up a program to increase skilled manpower for the industry. Its plan includes recruiting more Israeli Arabs into the industry, training ultra-Orthodox men and women, luring Israeli engineers abroad to return home, and making it easier for non-Israelis to get work visas. It must be approved by the new cabinet and could be passed later this year. Some parts are in place: About 300 academics were persuaded to return to Israel last year out of 4,300 who registered as willing to do so.
• IBM plans Data Analytics push - bets on Spark, open-source software project that aims to be Hadoop successor.IBM has created a Technology Center in San Francisco to focus on a free open-source software project called Spark, according to IBM executive Rob Thomas. IBM hired 20 people within the last month, Thomas said in a video posted online June 3. “We’re going to be scaling this up to hundreds of people that are just focused on Spark open source and how we evolve that for the enterprise,” Thomas said. Spark is a framework developed originally at the University of California at Berkeley that helps companies process large amounts of data rapidly, by storing information within the fast memory of computers. It is seen by many in Silicon Valley as a potential successor to Hadoop, which has spawned a variety of companies including Cloudera, MapR Technologies and Hortonworks. “This is a much more significant bet than even what we have done on Hadoop to be frank,” Thomas said. “We think Spark is going to be enormous and change the face of enterprise IT.”
• Microsoft drops the price of the Xbox One and introduces a 1TB console; will sell $25 adapter that allows streaming games from console to PC. Microsoft announced Tuesday that it's dropping the price of the 500 gigabite Xbox One to $349, which had previously been advertised as a "promotional" price drop from $399. Now, Microsoft will offer a new 1 terabyte model -- that's double the storage of the old standard model -- for $399 instead, the company said in a blog post. The Xbox is still locked in a battle with Sony's PlayStation to control the console world, and this is a clear play to appeal to hardcore gamers. As gaming guide Kotaku and others have reported, Sony is, in fact, expected to release a 1 TB version of the PlayStation soon. Microsoft also had some more news on its growing efforts to mix Xbox and PC gaming; a major feature of its upcoming operating system is that users can stream games from their console to their computer. To that end, Microsoft also announced it will sell a $25 adapter that will allow players to use their wireless controllers with their current computers. The company has redesigned the controller to allow players to plug their gaming headsets into the controller, which gives them the option to control settings such as the volume of their microphone or the game's audio while they play. Microsoft has also improved the quality of the sound that comes through the controller. The new controller doesn't mean, however, that you have to buy all new headsets or other accessories. "All existing controller accessories will work with the updated controller," the company said.
• China's big biotech bet starting to pay off as country's patent portfolio burgeons. Years of pouring money into its laboratories, wooing scientists home from overseas and urging researchers to publish and patent is starting to give China a competitive edge in biotechnology, a strategic field it sees as ripe for "indigenous innovation." The vast resources China can throw at research and development - overall funding more than quadrupled to $191 billion in 2005-13 and the Thousand Talents Program has repatriated scientists - allow China to jump quickly on promising new technologies, often first developed elsewhere. These efforts were illustrated vividly in April - not without controversy - when scientists at Sun Yat-sen University in Guangzhou published results of a ground-breaking experiment to alter the DNA of human embryos using new gene editing technology. Data compiled by Thomson Innovation, a Thomson Reuters unit, shows China is a growing force in gene editing, with a burgeoning patent portfolio. More than 50 Chinese institutions are patenting in the field, led by the Chinese Academy of Sciences, universities, the Anhui Academy of Agricultural Sciences and Beijing Jifulin Biotech. Nearly a fifth of the 518 families of gene editing patents analyzed since 2004 were associated with Chinese entities. For top-tier institutions, "the level of available resources is incredible in terms of the freedom, the flexibility that gives key leading Chinese scientists to move very, very fast on a given research track if a new opportunity arises".