Daily Tech Snippet: Friday, April 7

• Lyft Gets $500 Million in New Funding as Its Rival Uber Wobbles: For years, Lyft has trailed its larger rival Uber in the battle to conquer the ride-hailing market. More recently, Lyft has gotten a boost. The smaller ride-hailing company has secured up to $500 million in a new round of funding that values Lyft at $6.9 billion before the addition of new capital, according to two people briefed on the discussions, who asked to remain anonymous because the details were confidential. The privately held company may raise an additional $100 million, these people said. The financing gave Lyft a $2.4 billion increase in value since the company last raised money in 2016. It was not immediately clear which investors were participating in the new financing. Lyft’s previous investors included the venture capital firm Andreessen Horowitz and Chinese e-commerce company Alibaba. Lyft is being bolstered by the woes at Uber, which has been dealing with scandals involving the company’s workplace culture and aggressive leadership team. A grass-roots movement to boycott Uber has sprung up around the country, with the hashtag #deleteuber spreading quickly across Twitter related to the company’s shortcomings.

• Samsung Withstands Scandals to Report Higher Profit, Revenue: Samsung Electronics Co. posted its best operating profit in almost four years on robust sales of memory chips and displays, showing that the core businesses remain stable even as its mobile unit recovers from a costly recall and the trial of the group’s de facto chief. Operating income rose 48 percent to 9.9 trillion won ($8.74 billion) in the three months ended March, the Suwon, South Korea-based company said in preliminary resultsreleased Friday. That compares with the 9.18 trillion-won average of analysts’ estimatescompiled by Bloomberg. Rising demand for memory chips and organic light-emitting diode screens helped to fuel a rise in sales to 50 trillion won in the quarter, compared with the 49.5 trillion won analysts expected. The results also underscore how the electronics conglomerate is recovering from last year’s Note 7 crisis, when some smartphones burst into flames and forced Samsung to pull it from shelves. That was followed by the arrest of de facto chief Jay Y. Lee in February in connection with an influence-peddling scandal. Samsung’s shares fell less than 1 percent in Seoul. They have climbed about 16 percent this year and are trading near record highs.

• Why Spotify’s IPO-less IPO is a smart idea:Here's a smart idea: In a traditional IPO, the company listing the stock sells shares to a bunch of institutional investors, like hedge funds and pension funds, at an “initial offering price.” The next day, those institutional investors sell those shares on an open exchange like the New York Stock Exchange. This is when regular folks can buy shares, but at a higher price than the IPO. That’s what generates the “pop,” you always read about on IPO day. The pop also comes since the institutional investors should get a return for the risk they took in the IPO. Let’s take a recent, real-world example: Snap sold stock in its IPO last month for $17 a share. That means Snap’s early investors, like Benchmark, got $17 for every share they sold. But the next day, when those IPO investors sold shares on the NYSE, the stock traded at $24, a 41 percent pop above the IPO price. Every penny above $17 is a penny Snap and its early investors didn’t get. So you could argue the pop was bad for the early owners of Snap. They left 41 percent on the table. So you could see how Spotify CEO Daniel Ek might not want to go through the IPO process. Why give all that money to brokers, instead of people who own Spotify, like his investors, his employees and Ek himself?  Instead, by listing directly, Spotify can skip the IPO pricing altogether and just sell shares on an open exchange. The conceit of a direct listing is that it’s more democratic, very logical, very internet. You can see the appeal to Ek. But there is a rationale for the IPO process too. By hiring underwriters, a company is “pre-selling” shares to qualified buyers. That assures the company will get something for its shares while also stoking interest in the open market. You might even argue that in the case of Snap’s IPO it might not have even gotten $17 a share if they hadn't hired bankers to manage the sale. In effect, the bankers set a price range, then go to the big institutional investors to see where they’ll bite before narrowing in on a set price. (Some analysts have pegged $15 as a fair value price for Snap shares.) Underwriters like Goldman Sachs are paid as much as 7 to 8 percent commission for their work, but companies can negotiate that down. In the case of Snap, it was about 2.5 to 3 percent, according to sources.

Daily Tech Snippet: Thursday, April 6

• Facebook's Whatsapp Is Getting Into Digital Payments in India: Facebook Inc.’s WhatsApp is getting into digital payments in India, a first for a global messaging service that’s only just begun to explore ways to generate revenue. It’s chosen to kick off that maiden effort in India, a market dominated by Alibaba-backed digital payments leader Paytm but where WhatsApp’s 200 million users outnumber any other country. WhatsApp wants to “contribute more to India’s vision for digital commerce,” it said in a statement Wednesday. The company also advertised on its website for a “Digital Transactions Lead, India” to be based in Menlo Park, California, but with an ability to understand local financial standards such as India’s digital-ID program Aadhaar and its banking payments interface. India is seeing unprecedented activity in digital payments, particularly since the government banned high-value currency notes in November and took a series of steps to incentivize digital payments in a country where cash remains king. Among the market’s recent entrants is Sequoia Capital and Kleiner Perkins-backed Truecaller.

• Jeff Bezos Says He Is Selling $1 Billion a Year in Amazon Stock to Finance Race to Space: Standing against the backdrop of his New Shepard rocket booster and a full-scale mock capsule for carrying humans into space, Jeff Bezos revealed on Wednesday that he was selling about $1 billion in Amazon stock a year to finance his Blue Origin rocket company. Mr. Bezos, the billionaire founder of Amazon, showed off the reusable rocket booster and the mock-up of the capsule that will take people up for panoramic views back down at earth, during a symposium here. Mr. Bezos, who hopes to build Blue Origin into a commercial and tourist venture, also disclosed that it would cost about $2.5 billion to develop an even bigger rocket, New Glenn, capable of lifting satellites and, eventually, people into orbit. Like his fellow technology titan Elon Musk of SpaceX and Tesla, Mr. Bezos has identified reusable rocket parts as a key to lowering the price of admission to the field, which he said on Wednesday would lead to a “golden age of space exploration.” Last month, Mr. Bezos announced the first-paying customer, Eutelstat, a satellite company, for New Glenn, whose commercial flights would help offset costs. New Glenn is expected to fly by 2020, he said, but humans will not be passengers on the heavy-lift rocket until many years after that. Mr. Bezos has repeatedly expressed caution about setting timetables for the start of Blue Origin’s commercial or passenger trips, and he did not diverge from that on Wednesday. He would not say when New Shepard would undergo its next round of test flights, or set a specific date as a goal, merely mentioning next year for possible tourist trips.

• Australian regulator sues Apple alleging iPhone 'bricking': Australia's consumer watchdog has sued Apple Inc (AAPL.O) alleging it used a software update to disable iPhones which had cracked screens fixed by third parties. The U.S. technology giant "bricked" - or disabled with a software update - hundreds of smartphones and tablet devices, and then refused to unlock them on the grounds that customers had had the devices serviced by non-Apple repairers, the Australian Competition and Consumer Commission said in a court filing. "Consumer guarantee rights under the Australian Consumer Law exist independently of any manufacturer's warranty and are not extinguished simply because a consumer has goods repaired by a third party," ACCC Chairman Rod Sims said in a statement. The regulator said that between September 2014 and February 2016, Apple customers who downloaded software updates then connected their devices to their computers received a message saying the device "could not be restored and the device had stopped functioning". Customers then asked Apple to fix their devices, only to be told by the company that "no Apple entity ... was required to, or would, provide a remedy" for free, the documents added.

Daily Tech Snippet: Wednesday, April 5

• SoftBank moots Snapdeal sale to Flipkart, proposed deal set to be biggest in Indian e-commerce: SoftBank, the largest shareholder in Snapdeal, held boardroom discussions on the proposed sale of the online marketplace to rival Flipkart on Tuesday, according to two people aware of the development. According to the terms proposed by the Japanese media and telecom conglomerate, Snapdeal shareholders will get one share of Flipkart for every ten they own, said the people cited above. Early investors in Snapdeal — Kalaari Capital and Nexus Venture Partners — have also asked for about $100 million each from the sale, the sources said. The proposed sale could see SoftBank pick up a 20% stake in the country's largest ecommerce company for about $1.5 billion, in the process buying out $500 million to $1 billion worth of Tiger Global's holding in Flipkart, according to two people aware of the matter.  Alibaba-backed Paytm E-commerce has also discussed a potential acquisition of Snapdeal, but the valuation offered was much lower than that offered by Flipkart, added another source.  The meeting signals easing of tensions between Kalaari and Nexus, and SoftBank, said one of the sources mentioned above. 

• Troubled Chinese Giant LeEco Said to Delay Paying U.S. Employees: Chinese technology conglomerate LeEco Inc. delayed payroll for U.S. employees this month, people familiar with the matter said, another sign that billionaire Jia Yueting’s media and Internet empire is grappling with a cash squeeze. LeEco’s U.S. employees are normally paid on the 15th and last day of every month, but the company has told employees that March 31 paychecks would be delayed until April 4, the people said, asking not to be identified discussing private matters. LeEco told employees in the U.S. the delay was due to issues with moving money from China, according to one of the people. After rapid expansion of his tech empire, Jia admitted late last year that the company was struggling to raise cash. Some suppliers said that LeEco was behind on payments and the company was stripped of some sports broadcasting rights after defaulting. The paycheck delays are stoking frustration at a U.S. operation that’s suffered key executive departures in the last few months. Jia said in October that LeEco employs more than 500 people in the country “with more being added each week,” but the company hasn’t disclosed its latest U.S. headcount.

• Apple aims for more control, less cost as it accelerates in chip design: Apple's decision to stop licensing graphics chips from Imagination Technologies Group Plc is the clearest example yet of the iPhone maker's determination to take greater control of the core technologies in its products - both to guard its hefty margins and to position it for future innovations, especially in so-called augmented reality. The strategy, analysts say, has already reduced Apple's dependence on critical outside suppliers like ARM Holdings Plc, now owned by SoftBank Group Corp. Apple once relied heavily on ARM to design the main processor for the iPhone, but it now licenses only the basic ARM architecture and designs most of the chip itself. More recently, when Apple bought the headphone company Beats Electronics, part of a $3 billion deal in 2014, it ripped out the existing, off-the-shelf communications chips and replaced them with its own custom-designed W1 Bluetooth chip. "Apple clearly got rid of all the conventional suppliers and replaced about five chips with one," said Jim Morrison, vice president of TechInsights, a firm that examines the chips inside electronics devices. Most vendors of consumer electronics products rely on outside suppliers for chip design and development, primarily because it is extremely expensive. That has created huge opportunities for companies like ARM, Qualcomm Inc and Nvidia Corp, which have developed core technologies for processing, communications and graphics that are used by scores of vendors. Now, though, Apple is so big that it can economically create its own designs, or license small pieces of others' work and build on it. As with ARM and Qualcomm, the actual manufacturing of the chips is still contracted out to a semiconductor foundry, such as those run by Samsung Electronics and Taiwan Semiconductor Manufacturing Co Ltd.

Daily Tech Snippet: Tuesday, April 4

• Tesla Passes Ford in Market Value as Investors Bet on the Future: The record pace of auto sales in the United States is slowing down, leaving investors increasingly bearish on auto stocks. But there is one exception. Tesla, the electric-vehicle upstart, continues to surge. On Monday, Tesla surpassed Ford Motor in market value for the first time and moved within striking distance of General Motors, starkly illustrating the growing gap in investors’ optimism over its future versus the prospects for the traditional carmakers from Detroit. While G.M. and Ford may have strong profits and healthy balance sheets, Tesla offers something Wall Street loves much more: the potential for dramatic growth. “Investors want something that is going to go up in orders of magnitude in six months to six years, and Tesla is that story,” said Karl Brauer, a senior editor at Kelley Blue Book. “Nobody thinks Ford or G.M. is going to do that.”At the end of Monday’s trading, Tesla reached a market capitalization of $48.7 billion compared with Ford’s $45.6 billion, according to Bloomberg. General Motors was at $51.2 billion. Tesla’s market milestone came at the intersection of two countervailing trends. On Sunday, Tesla said its first-quarter sales were up 69 percent from the same period a year ago. On Monday, monthly sales figures for the conventional automakers showed them struggling to meet last March’s performance.

• Trump Cracks Down on H-1B Visa Program That Feeds Silicon Valley: The U.S. administration began to deliver on President Donald Trump’s campaign promise to crack down on a work visa program that channels thousands of skilled overseas workers to companies across the technology industry. Fed up with a program it says favors foreign workers at the expense of Americans, the Trump administration rolled out a trio of policy shifts. The U.S. Citizenship and Immigration Services agency on Friday made it harder for companies to bring overseas tech workers to the U.S. using the H-1B work visa. On Monday, the agency issued a memo laying out new measures to combat what it called "fraud and abuse" in the program. The Justice Department also warned employers applying for the visas not to discriminate against U.S. workers. The new guidelines released Friday require additional information for computer programmers applying for H-1B visas to prove the jobs are complicated and require more advanced knowledge and experience. It’s effective immediately, so it will change how companies apply for the visas in an annual lottery process that begins Monday. The changes don’t explicitly prohibit applications for a specific type of job. Instead, they bring more scrutiny to those for computer programmers doing the simplest jobs.

• Cloudera’s IPO will test unicorn valuations: Cloudera filed to go public mid-day last Friday, releasing a set of financial numbers that were the locus of anticipation: How would the company’s recent performance stack up to its $4.1 billion valuation set three years ago? Before Cloudera published its S-1 document — detailing its recent quarterly results and several years of financial data — reports indicated that the company would pursue a $4.1 billion valuation in its IPO, flat from its last private round when Intel poured $740 million into the company. That Cloudera might aim for a level valuation with a dozen or so quarters of additional growth under its belt was notable. (Crunchbase News reached out to Cloudera regarding the valuation figure. The company declined to comment.) The situation raises an obvious question: Did Cloudera’s investors incorrectly estimate the potential future value of the company in 2014 if it intends to secure a flat valuation today? It is likely fair to say that Cloudera’s investors were at least partially incorrect about where the company’s value would end up by the first quarter of 2017. No one alive deploys three-quarters of a billion dollars in capital for a flat return over a multi-year period. And doubly, Cloudera may in fact still be overvalued at the proposed $4.1 billion valuation when compared to certain public market comps.

Daily Tech Snippet: Monday, April 3

• Dyson Is the Apple of Appliances (and Just as Secretive): When Michael Aldred joined the British home electronics maker Dyson two decades ago, he had a simple goal: to quickly build a robotic vacuum cleaner. But Mr. Aldred and his team kept running into roadblocks. Their first attempt, unveiled in 2001, was too clunky for James Dyson, the company’s founder. The next prototype involved creating a computer vision system that would allow the machine to skirt independently around furniture; it took more than a decade to perfect. As smartphones became everyday tools, Dyson’s robotics team again had to rethink the vacuum cleaner, adding internet connectivity so the machine could send notifications — with a heat map of where it had cleaned — to a mobile device. After a nearly 20-year odyssey, the robot cleaner, priced at an eye-watering $1,000, finally hit stores worldwide last year. “At times, I really asked myself what I had signed up for,” Mr. Aldred said in an interview at Dyson’s rural headquarters near the border with Wales. “But James Dyson always told us to focus on the product. Everything else would follow.” Not many consumer electronics brands would spend almost two decades — and tens of millions of dollars — building a vacuum cleaner that retails for more than a top-of-the-line laptop. But combining an almost obsessive eye for design and engineering, the privately held Dyson has cornered the nonglamorous market of high-end vacuum cleaners, lights and hair dryers — and in the process bucked the technology truism that companies rarely make money in the difficult arena of hardware. Even as other hardware brands like Samsung, the smartwatch maker Fitbit and the camera designer GoPro have struggled with physical products because of low-priced copycats and thin profit margins, Dyson has shown an uncanny ability to mint money. Its latest robot cleaner, which is selling briskly, exemplifies that and puts Dyson in rarefied company alongside Apple as one of the few tech companies worldwide to consistently profit from consumer gadgets.

• Why do developers who could work anywhere flock to the world’s most expensive cities? I believe there’s a more fundamental economic divide opening than the one between haves and have-nots. I think we are witnessing a growing rift between the world’s Extremistan cities, in which truly extraordinary things can be achieved, and its Mediocristan towns, in which you van work and make money and be happy but never achieve greatness. (Labels stolen from the great Nassim Taleb) The arts have long had Extremistan cities. That’s why aspiring writers move to New York City, and even directors and actors who found international success are still drawn to L.A. like moths to a klieg light. Now it is true of tech too. Even if you don’t even want to try to (help) build something extraordinary – and the startup myth is so powerful today that it’s a very rare engineer indeed who hasn’t at least dreamed about it – the prospect of being where great things happen is intoxicatingly enticing. But the interesting thing about this is that it could, in theory, change; because — as of quite recently — distributed, decentralized teams can, in fact, achieve extraordinary things. The cards are arguably stacked against them, because VCs tend to be quite myopic. But no law dictates that unicorns may only be born in California, and a handful of other secondary territories; and it seems likely that, for better or worse, Extremistan is spreading. It would be pleasantly paradoxical if that expansion ultimately leads to lower rents in the Mission.

• Jerks and the Start-Ups They Ruin: The tech industry has a problem with “bro culture.” People have been complaining about it for years. Yet nobody has done much to fix it. That may finally change, if the people in charge of Silicon Valley — venture capitalists, who control the money — start to realize that the real problem with tech bros is not just that they’re boorish jerks. It’s that they’re boorish jerks who don’t know how to run companies. Look at Uber, the ride-hailing start-up. It’s the biggest tech unicorn in the world, with a valuation of $69 billion. Not long ago Uber seemed invincible. Now it’s in free fall, and top executives have fled. The company’s woes spring entirely from its toxic bro culture, created by its chief executive, Travis Kalanick. Bro cos. become corporate frat houses, where employees are chosen like pledges, based on “culture fit.” Women get hired, but they rarely get promoted and sometimes complain of being harassed. Minorities and older workers are excluded. Bro culture also values speedy growth over sustainable profits, and encourages cutting corners, ignoring regulations and doing whatever it takes to win. Sometimes it works. But often the whole thing just flames out. The bros blow through the money and find they have no viable business. For example: Quirky, founded in 2009 by the 20-something Ben Kaufman. It raised $185 million to build a “social product development platform” that sold kooky gadgets, but filed for bankruptcy basically because the “brash” and “unorthodox” chief executive had no business being a chief executive. One indication that Mr. Kaufman is a bro? Well, the first reference he lists on his LinkedIn page is: “He’s a dick … but hilarious.”

Daily Tech Snippet: Friday, March 31

• YouTube creators have complained about declines in ad revenue: Some YouTube creators might get less money from Google, at least temporarily, as the company adds new controls for advertisers in the wake of an ad controversy that erupted two weeks ago. A number of big-name advertisers suspended ads on YouTube last week and the week before after discovering their ads were making money for videos containing hate speech or supporting terrorism. Google has responded by promising greater transparency and saying it will be more aggressive in ensuring brand safety of ad placements. “If you’re seeing fluctuations in your revenue over the next few weeks, it may be because we’re fine tuning our ads systems to address these concerns,” reads a YouTube community manager post from Thursday. The changes stem from tweaks to the ads system, rather than any revenue loss that might have come after advertisers pulled their business, according to a source close to the situation. YouTube could lose $750 million in revenue this year over advertisers halting business, according to analyst firm Nomura Instinet. Some YouTube creators appear to have lost ad revenue altogether, which the post addresses: “If you think your video was demonetized in error, request an appeal by clicking on the yellow $ icon next to the video in Video Manager.”

• Elon Musk’s SpaceX makes history by launching a ‘flight-proven’ rocket: From a distance, it looked like any other rocket at Florida’s Kennedy Space Center, a soaring tower of thrust and power, ready to blast off into orbit. Upon closer inspection, though, there were signs of something different about this rocket. The Falcon 9’s first-stage booster was not as clean and shiny as they usually are. It was just a touch dull, showing, ever so slightly, the scorched wear from its first launch, almost a year ago — a “flight-proven” rocket, as Elon Musk’s SpaceX likes to call it. On Thursday evening, almost one year after it had previously flown the Falcon 9 rocket, SpaceX launched it again. The launch, at 6:27 p.m., marked the first time that a rocket had flown a payload to orbit, landed vertically and then been reused. The flight signaled an important landmark, capping years of work and some fiery theatrics of boosters screaming back from space only to explode in failed attempts to land on ships at sea. In December 2015, SpaceX was able to land its first rocket on a landing pad at Cape Canaveral. A few months later, the company did it again, this time at sea. Since then, it has made landing rockets as exciting — or more so — than the 3-2-1, bone-rattling liftoffs of fire and smoke that have reignited interest in space exploration. After the successful launch, an emotional Musk called it “an incredible milestone in the history of space.”

• Embattled Oculus co-founder Palmer Luckey leaves Facebook: Palmer Luckey is out at Facebook. The Oculus co-founder, who helped kickstart the recent VR craze with a prototype headset built out of his parents’ garage, has left the company after a year that heralded the launch of the consumer Oculus Rift but also a number of lawsuits and a pro-Trump meme scandal. Oculus has confirmed the report of Luckey’s departure, first spotted by UploadVR, in a statement to TechCrunch that reads about as much as a eulogy as it does a farewell. In an era filled with seemingly countless examples of “bro” founders emerging from top universities and starting companies with their frat brothers, Luckey appeared to be a breath of fresh air. The home-schooled college dropout was a tinkerer who frequented message boards asking for help taking apart and rebuilding game consoles in his parents’ garage before expanding to a deep interest in 3D screens and head-mounted displays. This fascination eventually brought him to encounter legendary game developer John Carmack, who helped the young Luckey gain the attention of the gaming community after showcasing one of his VR headset prototypes at a major gaming conference. The excitement led to a wildly successful Kickstarter campaign that later brought the interest of some major investors, including Andreessen Horowitz, Founders Fund and Formation 8. Facebook acquired Oculus in March of 2014 for $2 billion. Luckey has not commented on what exactly he earned from the deal, but Forbes pins his net worth at $730 million. Luckey’s departure follows a lengthy period of absence from public view brought about by a Daily Beast piece revealing his involvement and funding of a pro-Trump troll group called Nimble America. News of his support came during a time when very few figures in Silicon Valley were publicly showing support for candidate Trump, the most notable being Peter Thiel, an early investor in Facebook who started the VC firm Founders Fund, which backed Oculus, as well.

Daily Tech Snippet: Thursday, March 30

• Samsung launches Galaxy S8 and dreams of recovery from Note 7: Samsung unveiled its Galaxy S8 flagship smartphone as it battles to regain the market leadership it lost to Apple after the embarrassing withdrawal of the fire-prone Note 7s. Boasting some of the largest wrap-around screens ever made, the long-awaited S8 is the South Korean technology company's first new premium phone since its September recall of all Galaxy Note 7 smartphones equipped with fire-prone batteries. Samsung halted their sales in 10 markets, and the phones were banned from aircraft in the United States, denting a revival of the firm's mobile business. Two versions of the Galaxy S8, code-named Dream internally, were launched at a media event in New York on Wednesday, with 6.2-inch (15.75 cm) and 5.8-inch curved screens - the largest to date for Samsung's premium smartphones. They will go on sale on April 21.The S8 features Samsung's new artificial intelligence service, Bixby, with functions including a voice-commanded assistant system similar to Apple's Siri. There is also a new facial recognition application that lets users unlock their phones by looking at them. "The Galaxy S8 is the most important phone for Samsung in a decade and every aspect will be under the microscope following the Note 7 recall," said Ben Wood, a veteran smartphone industry analyst with UK-based CCS Insight.

• Amazon is shutting down Diapers.com — whose founder is now at war with Amazon: Amazon said on Wednesday that it is shutting down Quidsi, one of its largest-ever acquisitions, which runs six shopping sites, including Diapers.com, Soap.com and Wag.com. The shutdown will result in layoffs of 263 people, according to a New Jersey state filing. But Bloomberg, which first reported the news, said some of these employees would be able to apply for new positions at Amazon. Amazon bought Quidsi almost six years ago to the day in a deal valued at around $545 million — the company’s fourth-largest purchase as of now. The acquisition was the culmination of an intense price battle between the companies that were threatening to push Jersey City-based Quidsi out of business. Quidsi’s co-founder and then-CEO Marc Lore worked at Amazon for a few years following the deal, but it is an open secret in the industry that he did not enjoy his time there. He went on to launch an Amazon competitor, Jet.com, in 2015, which he sold last year to Walmart for $3.3 billion.

• It sounds like Munchery’s early investors are screwed: Munchery, an on-demand food delivery startup that has already raised more than $120 million, is reportedly looking to raise an additional $15 million in funding that would force a recapitalization of the company, Bloomberg reports. Munchery reportedly has raised more than $5 million in this new financing. As part of the recapitalization, Munchery issued shares to new investors in the form of a convertible note, which can later be exchanged for equity in the result of another equity raise or liquidity event. One person told Bloomberg that the valuation on the note is capped at $80 million. Munchery’s last round of funding was an $85 million Series C, which valued the company at around $300 million. So Munchery wouldn’t be valued at more than about a quarter of what it once was. This new deal essentially wipes out the stakes of pre-existing investors and early Munchery employees. Recapitalizations generally happen when the company can’t find outside investors to drive the valuation further up, so it resets the cap table and starts from scratch. Munchery has had a rough last 12 months, between scathing reports of the company wasting an average of 16% of the food it makes, laying off 30 employees, and burning through most of the money it’s raised.

• Pandora is in trouble, and Big Music is surprisingly sad about that: Pandora’s days seem numbered. And the music business isn’t happy about that. Pandora, once a music streaming pioneer, now looks like a music streaming casualty. While competitors like Spotify and Apple Music are booming, Pandora has been treading water. Pandora’s management is under investor pressure, yet again, to explain why they shouldn’t sell the company. Sirius XM remains, as always, the logical buyer. The new, new thing is that Big Music — the music labels and publishers that dominate the industry — aren’t gleeful about that prospect. That’s a change from years past, when Pandora was the company the music guys loved to hate, because Pandora had figured out how to build a big streaming music service without charging for music, and without making deals with Big Music. Instead, Pandora took advantage of U.S. copyright rules that let them pay a set price for each song they streamed, without ever negotiating with the labels and without ever charging consumers. You will not be surprised to know that the Big Music guys argued that Pandora built a multi-billion dollar business with their stuff without giving them their proper cut. But that was then! Now, things are different in two significant ways: Pandora ended up negotiating licenses directly with the big guys. Pandora now plans to launch a subscription service, which will mirror the ones sold by the likes of Spotify and Apple Music. “They’ve seen the light,” said a Big Music executive, explaining why the industry would like to see Pandora stay afloat.