- JD.com and Tencent back the same horse - to invest $1.55 billion in Chinese auto e-commerce site Bitauto: Chinese auto information website operator Bitauto Holdings Ltd said JD.com Inc and Tencent Holdings Ltd would invest about $1.3 billion in the company, sending its shares sharply higher in early trading on Friday. E-commerce company JD.com and Tencent, best known for its communications app WeChat, will also invest a total of $250 million in Bitauto unit YiXin Capital Ltd. JD.com, China's No. 2 e-commerce company after Alibaba Group Holding Ltd, will invest $400 million in cash and about $750 million in resources to Bitauto, whose sites offer sales data and other information on new and used vehicles as well as customer reviews. Tencent will pay $150 million for its shares.
- Infosys weighs smart uses of its ~INR 35,000 Crore cash pile; stock up 7% on strong earnings (Q3 Rev INR 13,796 Crore, +6%, NI INR 3250 Crore, +13% Y/Y): Under new CEO Vishal Sikka Infosys, once a trendsetter for India's more than $100 billion IT outsourcing industry, has made a push for new age technologies such as machine learning and artificial intelligence, which the CEO has said will help Infosys hit annual revenue growth rates of 15-18 percent over time. On Friday, Infosys said it was also using its workforce more efficiently, with a utilisation rate of 82.7 percent excluding trainees, its highest in 11 years. Attrition, or the number of people leaving or retiring, fell in absolute terms to 8,900 employees in the third quarter from 10,100 in the quarter before. India’s second largest software company reported a 13 percent on year increase in net profit to Rs 3,250 crore and 6 percent rise in revenue to Rs 13,796 crore for the quarter ended December, sending its shares soaring about 6 percent yesterday. The company’s cash and cash equivalents stood at Rs 34,873 crore as on 31 December. With a change in the top leadership, there are expectations that the company will start using this cash more productively. "We are interested in acquisition of small innovative companies. We are not interested in acquiring technologies from yesterday, but in acquiring technologies of tomorrow," Sikka had told analysts in a recent interaction.
- Amazon takes 1.3 days on average to return cash, the quickest among online stores, and customers respond, according to new research from StellaService Inc., which tracks e-commerce data. While most Web stores will only pay once a return parcel is on its way, Amazon offers instant refunds for some purchases, issuing immediate credit and 30 days to return a product. Instead of tying up cash and preventing customers from buying other things, Amazon’s aim is to get people spending again. That’s especially critical during and after the annual holiday shopping season, when gift returns spike and consumers are predisposed to buy merchandise. Fast refunds are also important in Internet commerce because shoppers buy things they haven’t touched or tried, making return rates higher than in retail outlets. “Amazon is killing it on refunds and others should follow suit,” said Eduardo Vilar, chief executive officer of Returnly Technologies Inc., a San Francisco company that researches retail returns. “Customers who are given the right experience on a return are more loyal shoppers.” Amazon’s instant refund, which was rolled out quietly last year, gave the Web retailer the fastest refund-processing time out of 40 companies measured by StellaService. Amazon’s closest competitors in refund-processing speed include online furniture and home goods retailer Wayfair Inc. (W) and personal computer and printer-maker Hewlett-Packard Co., which both took about three days to issue refunds, according to StellaService. The average refund-processing time of the 40 companies tracked by the researcher was more than nine days.
- Offline retailers bet on smart in-store tech: Neiman Marcus is reinventing the mirror: The retailer announced Thursday that it has installed a MemoryMirror from MemoMi in its Walnut Creek, Calif. store. It plans to install two in its San Francisco store later this month and then two in Dallas. The mirror* allows for shoppers to compare in real time how different outfits look on them. After trying on clothes in the fitting room, a customer can head to the sales floor where the special “mirror” is located. A customer controls the mirror with an iPad, instructing it when to start recording or take photos. Then he or she can try on additional outfits, and compare video footage. Two outfits can be looked at side-by-side, and the mirror stores as many clips as the customer wants. So a customer could try on a dozen looks, take videos of each, and quickly compare how each look. There’s also the option to e-mail videos or photos to friends for their input, or share on social media. The MemoryMirror isn’t technically a mirror, but a 70-inch screen with a camera on top that films the consumer. MemoMi founder Salvador Nissi Vilcovsky says the secret sauce is its perspective distortion correction, which automatically sizes the mirror to fit the customer. So no matter if you’re standing four feet in front of it or 10 feet away, it proportions the mirror so the customer fills the shot. “The world is going in the direction of in-store devices and personalization. We want to make these devices as cheap as possible and give these services not only for luxury brands,” said Vilcovsky. Nordstrom and Rebecca Minkoff have also dabbled in the smart fitting room space, using eBay technology. MemoMi is working on adding features to its MemoryMirror that allow a customer to see how they look in different colors or patterns of the clothes they’re trying on. Vilcovsky also envisions one day technology such as this being available on consumers’ televisions.
- Box is finally close to $162M IPO, valulation likely lower than last round of funding: After months of delay, Box is finally close to making its stock market debut. Box, the online data storage provider, disclosed on Friday that it was seeking to raise up to $162.5 million in its initial public offering, as the company embarked on a road show for potential investors. (If demand proved high, the company could sell additional shares and raise up to $186.9 million.) In an amended prospectus, Box said that it planned to price its shares at $11 to $13 a share. At the midpoint of that range, the company would be valued at about $1.4 billion — less than the valuation the company fetched in a private $150 million fund-raising round last summer. Founded in 2005, Box became one of the most prominent independent providers of online storage and file sharing services, particularly for corporations. But the company has been somewhat overshadowed by the much bigger Dropbox, a member of the 11-digit club of start-ups with a $10 billion or more valuation, and rival file-sharing offerings from technology juggernauts like Google. According to its prospectus, Box still hasn’t turned a profit. It lost $121.5 million in the nine months ended Oct. 31, a slight narrowing from the same time in the previous year. Sales, however, jumped 80 percent during that same period, to $153.8 million. And Box has asserted that it has won clients like General Electric, DirecTV and AstraZeneca. The company first filed to go public last spring, but put off its I.P.O. plans as a sudden investor distaste for risky technology companies rippled through the markets. Since then, the start-up has waited for a more propitious time to make its stock market debut. Bankers and companies are betting that time is now. Last month, a number of technology start-ups, ranging from the peer-to-peer lending juggernaut Lending Club to the data analysis provider New Relic, enjoyed strong trading debuts. The company is expected to begin trading on the New York Stock Exchange under the ticker symbol “BOX.”
- Americans teens switching to Snapchat, but adults are still loyal to Facebook; Instagram, Pinterest gaining, Twitter and LinkedIn losing: Pew study of user engagement: American Teenagers may be spending more time on messaging services like Snapchat, but American adults are still increasing their use of social networks, according to a new survey released Friday by the Pew Research Center. The Pew survey, conducted in September, found that 52 percent of Internet users regularly logged on to at least two social networks, up from 42 percent in Pew’s August 2013 survey. The percentage of adults using Facebook, the most general social network, stayed about the same, at 71 percent of the online population. But Pew found significant increases in the number of people using Instagram, a photo service owned by Facebook; Pinterest, a visually oriented service for “pinning” favorite items; LinkedIn, a business networking service; and Twitter, a microblogging service oriented toward real-time news and information. Facebook users were the most dedicated, with 70 percent logging in at least once a day. Nearly half of Instagram users visit the site daily. Twitter, which has reported slow user growth in recent quarters, saw fewer visits from its American users, according to the Pew study. Only 36 percent of them visit the site daily, the researchers found, compared with 46 percent in the 2013 survey. In a statement after the survey data was released, Twitter disputed the findings, saying, “Pew’s data is so wrong as to be laughable. As we said at our Analyst Day in November, 48 percent of our monthly active users in our top 20 markets use the service daily, and the U.S. is our top market,” said Rachel Millner, a Twitter spokeswoman. LinkedIn users also said they visited the site less frequently, although a dedicated core of 13 percent said they went at least once a day. What the numbers don’t reveal was the time people spent on each service. Because most social networks generate revenue from advertising, more time on the service means a greater opportunity for visitors to see ads. But the researchers did learn that for the median Facebook user, two-thirds of his or her friends weren’t “actual” friends at all. And less than half of adult Facebook users have friended their parents or children on the service.
- Cash collection can make the difference between life and death for a Saas business: how does one achieve rapid growth in a SaaS business while maintaining capital efficiency? By focusing on the timing of cash collection, not just cash spend. The timing of cash collection can drastically influence the cash consumption of a high-growth, recurring-revenue business significantly beyond what one would intuitively assume. This ultimately has implications on the attractiveness of a business or, at a minimum, the level of shareholder dilution it experiences over time and will become an increasing area of focus as the period of cheap growth capital slowly comes to an end. Let’s take two hypothetical early-to-mid stage, high-growth, recurring-revenue SaaS businesses and model them over a five-year period. We assume each company admirably grows annual GAAP revenue from $2M-$6M-$13M-$28M-$53M and enjoys a 100 percent annual renewal rate. Both companies have identical aggregate cost structures that are well over 100 percent of revenue, which is benchmarked on dozens of recent high-growth SaaS businesses we’ve evaluated or invested in, or that have gone public. As illustrated below, the two companies thus have identical GAAP bookings, revenues and operating income. The only difference is that the first company, Company M (“monthly”), is like most SaaS companies in that it gets paid cash monthly and ratably over the one year contract period. The second company, Company A (“advance”), collects the full annual contracted value in advance. The difference in cash consumption between the two companies is staggering. Company A would have burned $36 million less cash over the five-year period due to growing deferred revenue balances, to achieve the exact same revenue and bookings trajectory as Company M. This gap in cash consumption can be the difference between success and bankruptcy or moderate versus significant dilution for the founders and early investors. Company M burned more than three times the amount of capital as compared to Company A despite identical bookings, revenue growth and operating expenses. Who can afford to ignore this?
- Twitter Product Update #1: Twitter Will Launch Autoplay Video, but Here's How It Will Differ From Facebook Marketers have 6 seconds to entice users to click. Twitter is about to give marketers new ways to share videos with a feature the ad world has been asking for: autoplay. Twitter has been working on its built-in video system for months, which would finally give users and marketers a way to shoot footage within the app. However, the video capabilities will be different for users and brands. We spoke with industry insiders who saw Twitter's video pitch at CES, and here's what it will look like: Six-seconds to wow The autoplay feature allows marketers to create a six-second video preview, a quick opportunity to entice users to click. Choose wisely The six-second preview, however, does not have to be the first six of the video. Brands can take the best six seconds, the most captivating, and use that as the autoplay preview. Everyone knows that getting clicks on video is all about an exciting hook from the start. No sound to start The autoplay video will not have sound until a user clicks to watch the promoted tweet. Advertisers don't pay until they get that click. There's a lot of time to play with Brands will be offered up to 10 minutes of video time, which is an eternity in social media. Everyday users will only get 30 seconds.
- Twitter Product Update #2: Twitter Plans To Increase Revenue With Ads On Publisher’s Apps: Twitter reportedly has a new advertising strategy – sell ads within third-party apps. According to the Wall Street Journal, the social media network revealed the new plan to expand advertising revenue during a presentation at CES. The social media company is planning to sell ads within streams of tweets on other publishers’ apps and websites.” It isn’t clear which publishers have signed up so far. The WSJ says there were references to ESPN’s Sports Center app and Flipboard during the meeting. Twitter and ESPN have reportedly been chatting about the idea
