Category: Billion Dollar Companies

Another unicorn from Silicon Valley? Whatever next? Shoemaking startup Allbirds now joins the list, valued at $1.4 billion, after closing a $50 million series C funding round. The investors behind the deal are Tiger Global Management, Fidelity Management & Research Company, and T. Rowe Price Investment Management.

The valuation wasn’t publicly disclosed, but people familiar with the deal say that the investors collectively received about a 3.5% stake for their investment. With a growing customer base in New Zealand, Australia, the US, and Canada, Allbirds has raised $75 million in venture capital so far.

From Wood and Wool to Billions

Allbirds makes eco-friendly footwear for men, women, and kids. The shoes have conquered celebrities and capitalists because they’re made with sustainable materials only, which include a fabric made from eucalyptus fiber (called “SweetFoam”), merino wool, sugarcane-based, carbon-negative foam rubber for the shoe soles, and recycled plastic bottles for laces.

Last year, investors valued Allbirds at $370 million. According to co-founder Joey Zwillinger, the company was “profitable since day one,” and rumors confirm this statement. In fact, Allbirds has brought in over $200 million in revenues in the last two years.

The company says it will use the funds to research new sustainable materials and to accomplish its expansion strategy.

First UK Allbirds Store to Be Opened in London

The San Francisco-based company sells casual sneakers directly to its customers through its online store in New Zealand, Australia, Canada, and the US. The company has two brick-and-mortar stores, in San Francisco and New York.

Allbirds will open its first store in Europe in London’s Convent Garden at the end of this year. It’s a 1,600 square foot store, located at 121-123 Long Acre, where British people can try on and experience the design of the eco-friendly casual shoes and sneakers that venture capitalists and celebrities alike seem to love so much.

The company plans to open more locations in the US and even launch its fashionable shoes in Asia in 2019. Tiger Global’s partners across the region and locations in Singapore and Hong Kong should give them a headstart here.

Featured image from Allbirds.

Despite its critics, a dwindling user base, and freefalling stock price, Snapchat refuses to give up without a fight. Now the social media app is trying another desperate move to counter Instagram’s popularity and hold onto its slice of the market.

The photo-based social media app revealed its first batch of Snap Originals, a series of interactive shows meant to generate buzz among teenagers.

Snapchat has been losing users for a while now, with the company’s market value dropping by more than $1 billion this year. Its developers hope to lure back their lost audience and attract new users with experiences that people can step into and share.

The new shows are supposed to make Snapchat a competitor not only to Instagram but to Netflix and Hulu as well.

Will Snap Originals Save Snapchat?

Snap Originals are similar to TV shows and include a full series of content offers, from documentaries to teen drama–all shot vertically to be watched from smartphones. For this project, Snapchat is working with influencers and social media stars, like Summer McKeen and Dylan Jordan.

By jumping on the social influencers train, Snapchat aims to generate a new trend with social media users, especially teenagers and young adults. Rumor also has it that the company is ready to onboard more advertisers as well, with commercial spots inside the shows. Nick Bell, Snap’s VP of Content told CNN.

“If the programming really resonates with the demographic… people will go into school or the workplace, [and] they’ll tell their friends about it. We hope that will bring new people into the app.”

The shows have their own section inside the app, are shareable, and can be marathon watched, as well. The first programs revealed last week include a series on university life called “Co-Ed,” and a drama about teen drag queens, “Growing Up is a Drag.”

Fewer Users, More Money – For How Long?

With 188 million users (down from 191 million), Snapchat is way behind Instagram, which claims to have over 1 billion monthly users. Snap lost a lot of its popularity after a woeful redesign in February, that aimed to enhance the use of video instead of photos on the platform but went down like a led balloon with its users.

Scrambling to fix the faux pas, Snapchat’s developers had to pull the plug on their algorithm and go back to chronological listing instead.
Despite losing three million users in the second quarter of 2018, the company managed to grow its revenue.

It seems that brands and advertisers are still interested in Snapchat thanks to its young audience. But, since Snapchat’s stock has been in a tailspin, it’s going to have to work pretty hard to restore shareholder confidence.

It seems that Uber isn’t content with making colossal losses. They’re looking to get further indebted as well to the tune of $1.5 billion. In what may be the company’s first foray into the junk bond market, Uber now seeks to raise their next astronomical sum of cash in high-yield bonds.

Teaming up with Morgan Stanley, Uber is working on a private placement that could yield between 7.5-8% on $500 million in 5-year notes and a further $1 billion in 8-year notes.

Uber Is in Good Company

Uber isn’t the only unicorn posting losses left and right with WeWork tripling its losses in 2017. It’s also not the first to get into high-yield bonds. The office-space provider entered into a $702 million deal earlier this year, as did Tesla with $1.8 billion in 2017. Even the ride-hailing company itself has already raised billions from creditors.

In fact, this new transaction comes just a few months after Uber sold $1.5 billion in leveraged loans that were marketed directly to investors. And Uber’s first leveraged loan deal took place in 2016 for the same amount.

Fundraising Like It’s Going Out of Style

The upstart startup has been raising funds like it’s going out of style, including from private equity investors. That includes some $9 billion from a consortium led by Japan’s SoftBank. Toyota also invested half a million dollars in Uber as part of a collaboration effort to look into autonomous vehicles. We all know how well that’s gone so far.

But it seems that Uber’s appetite for stockpiling funds can’t be satiated and their return to the debt market looks to be opportunistic. Under normal circumstances, high-yield investors will try to gauge a company’s health based on cash flow and earnings compared to its debt burden, all of which are disastrous metrics for Uber.

However, most investors recognize that these analyses aren’t appropriate for loss-making companies like Uber and that they may need to carry out their own research on how the company will be able to repay their debt.

Since Uber appears to have a cash burn problem, it doesn’t seem like there will be much interest from investors in getting saddled with Uber’s bad debt. Although, a few ears will be listening since the interest rate on the bonds is so high.

Uber IPO Ahead

While Uber has its sights set on going public, its IPO isn’t targeted until next year. In the meantime, that’s a lot of time left to blow through extra cash. Uber seeks a further $1.5 billion to ramp up its business efforts to compete in new businesses such as bike and scooter sharing and food delivery.

Uber CEO Dara Khosrowshahi believes that it will still be some time before the company becomes profitable. They need to invest in further avenues of growth first.

“We suffer from having too much opportunity as a company,” he reportedly said. Sounds like a nice problem to have.

Featured Image from Uber, Uber CEO Dara Khosrowshahi 

After Elon’s run-in with the SEC, there’s an empty seat on the Tesla board. But that could be about to be filled, as charismatic media tycoon James Murdoch expressed his interest in taking over. As one of the world’s most innovative and ambitious companies, a seat on the Tesla board is a hotly contested spot.

Murdoch is far from the only horse in the race to keep leather covering warm. But according to an article by the Financial Times, he looks to be the favorite to succeed Mr. Musk as the new Tesla chairman–a position that must be filled by the middle of November.

Elon Musk Damaging Tesla Stock

Social media, particularly Twitter, seems to be the downfall of many a celebrity who can’t keep themselves from getting into Tweet wars or rants in public. However, it’s not a healthy addiction to have.

When it comes to everyday people, we might get anxious, irritated, or even amused by getting into fights on Twitter. But when it comes to billionaire businessmen with a duty to their shareholders, things are a lot more serious.

In fact, making certain knowledge public on social media can be considered as breaking the law. Mr. Musk was forced to leave the role as Tesla chair in a settlement deal with the SEC after they claimed he broke the securities laws following a tweet that he had the “funding secured” to take the electronic car manufacturer private.

While Musk is staying on (for now) as Telsa’s CEO, the SEC requires the Chairman’s seat to be filled by an independent party and non-executive of Tesla. According to the FT, Mr. Musk declined to comment, although later replied to the FT tweet stating that Mr. Murdoch was the frontrunner, saying:

“This is incorrect.”

Short but to the point. He negated to reply anything further. It’s well-known that Musk’s favored candidate is Antonio Gracias, Tesla’s lead independent director. However, Musk has already been advised that his relationship is not independent enough due to his involvement with Mr. Musk and his companies.

Mr. Gracias is the owner of Valor Equity Partners that invested in Tesla in 2005. He also invested in SpaceX.

Mr. Murdoch was also not available for comment, however, those close to the media tycoon said that he had expressed his willingness to take up the role. It looks to be a sensible move for Murdoch since he will soon be stepping down as chair executive of 21st Century Fox once the sale to Walt Disney is completed. He also stepped down as Sky’s chairman following the company’s sale to Comcast.

James Murdoch Gives High Praise for the Tesla Tycoon

At a recent on-stage interview at a Goldman Sachs conference, Murdoch spoke well of Musk and his time as a Tesla director. Calling Elon and his companies “exciting” and “audacious.”

Murdoch is also a friend of Musk, having joined Tesla last year as an independent director thought to help strengthen the board. His appointment, however, seems to have failed to do that, as they continue to pander to Mr. Musk’s outlandish wishes.

Murdoch was, in fact, one of the directors who praised Musk’s rejection of the SEC deal that saw 14% shaved off of Tesla’s shares. This may not make shareholders so thrilled at the possibility of having Murdoch take over the position.

Tesla has until the middle of next month to find a replacement, although this period can be prolonged upon Mr. Musks request.

Featured image by NRKbeta.

Closely following reports of Google+ data breaches, the company has announced three new Google devices, including the Pixel 3, at its “Made by Google” event.

The technology colossus seems undeterred by recent scandals including the Google+ breach and subsequent closure of the platform, and a $5 billion fine from the European Commission.

The commission alleges that Google has abused its market domination by paying mobile manufacturers to include its applications. The giant has also been fined $2.7 billion for ranking its own shopping services higher than competitors in web search results.

Across Google’s software and search products, it has a billion users. Google’s search engine sees over 90% of all our web searches. For Android, it has over 76% of the market share.

Google’s adverts, on and off Google products, reach 90% of people who have access to the internet and parent company Alphabet is approaching a value of $1 trillion.

Google, like Facebook, is a daily part of our lives. Even with changing attitudes towards these massive corporations and how they collect and use our data, Google isn’t slowing its pace.

Cheaper New Google Devices

This week three new Google devices have been revealed and guess what – all three undercut their competitor’s prices. TechCrunch suggests that if a loss is being made on these devices, Google will be making it back through services.

Google’s Pixel 3 $799 smartphone base model undercuts that of the Apple iPhone XS at $999. Its new Home Hub smart home management system is $80 less than Amazon’s Echo Show. The Google Pixel Slate will be $599 versus the similar size iPad Pro at $799.

The new devices are designed and priced for function, as well as impacting three key areas of our home technology stacks. Of course, they will be loaded with Google software products making it even easier for us to Google, Google, Google.

Getting more embedded in our lives seems to be an unhidden strategy for Google. Ivy Ross, Google’s Vice President and Head of Design said at the launch event:

“As technology progresses, it needs to be closer to us.”

Of the design and integration into our daily lives Ross added:

“It will eventually be invisible, the design challenge is to make that transition natural and inevitable. Our job is to figure out what it means to hold Google in your hand.”

To quote satirical Forbes writer Curtis Silver:

“Soon, the spaces in between the spaces where our hand stops and Google begins will be so minuscule we’ll need a microscope and a tiny Dennis Quaid to find them.”

Iimages from Google.

Money is plowing into fintech and the deals are just getting bigger. UK-based FNZ, a financial technology solution provider has been acquired by ex-US Vice President Al Gore’s Generation Investment Management LLP (Generation), and a Canadian pension fund.

The deal sees private equity firms General Atlantic and HIG Capital sell their share of FNZ, at a stake of two-thirds, to Generation and Caisse de Depot et Placement du Quebec who teamed up to make the deal. This investment is the first by this new partnership who plan to spend around $3 billion on long-term equity investments.

Generation Investment Management was founded by Gore and an ex-Goldman Sachs partner David Blood. Caisse de Depot et Placement du Quebec is the second largest pension fund in Canada.

As well as capital investments, Gore is heavily involved in climate change organizations, as the chair of the Alliance for Climate Protection and a recipient of the Nobel Peace Prize in a joint award with the Intergovernmental Panel on Climate Change, 2007. He also sits on the board of directors for Apple and is a senior advisor to Google.

Generation is a sustainable investment management firm and has built a global research platform to integrate sustainability research into equity analysis. The investment firm seeks to identify sustainable businesses, with low-carbon outputs and which work to a healthy and safe society.

A Trillion-Dollar Market

Founded in New Zealand in 2003 and moving to Edinburgh, Scotland in 2006, FNZ provides wealth management platform technology to financial services firms including Santander, Aviva, and Barclays. Its clients currently account for around $330 billion dollars worth of global assets. The acquisition and capital injection may help FNZ to gain a larger share of what is a $30 trillion global market.

Adrian Durham, 44, founder and Group CEO of FNZ told Bloomberg the deal:

“will help us grow share in the wealth-management platform market to trillions versus hundreds of billions. You have to be a scale player.”

Both Durham and around 400 of the company’s 1,400 employees will retain shares totaling around a third of the business.

• Giant social media platform Facebook Inc. finally launches its video chat device called Portal.
• Portal is equipped with a camera to watch every home and get into users intimate spaces.

Facebook Inc. the popular social media giant has finally released its video chat device called Portal into the market. The first announcement about this device was made in August 2017 when Facebook revealed that it was working on a video chat device for homes.

Earlier this year, the tech company said that it would name the device ‘Portal’ and it would help in the creation of its voice-activated speakers, very similar to iPhone’s Siri.

Unveiling Facebook’s Portal

Facebook Inc. on Monday, October 8, officially launched its new video chat device for homes, Portal. The social media company stated that the device is equipped with cameras to track every movement and would be in intimate spaces, such as the living rooms and kitchens.

However, Portal’s ability to track moments in every home has raised lots of questions for Facebook Inc., who was recently caught in a series of privacy scandals.

After countless data breaches, many users won’t be receptive to the idea of a monitoring Facebook camera in their living rooms. Amazon and Google had released a similar device but none of them added a monitoring function to their products. However, the social media giant stated that its device is as un-creepy as possible. And as long as Facebook says it, that means it must be true.

During Portal’s demonstration in San Francisco, Rafa Camargo, a Facebook executive, stated that the tracking camera was fitted only to capture a user’s position correctly. So that during a video call, users can move around hands-free.

He added that both the camera and microphone on the device can be turned off so that there wouldn’t be any way to record videos in case users are particular about privacy issues. He also stated that the processing of users’ voice commands takes place in the device, and not in the Facebook data center. Rafa said:

“Privacy is very, very, very important. We really made a conscious choice of not recording, so you have peace of mind. If users don’t trust the off switch for the camera, there’s a small plastic cover they can slide over the lens when it’s not in use.”

While some users may be placated by Camargo’s use of the word “very” three times, others will remain unconvinced.

2 Variants of the Video Chat Device

The video chat device comes in two variants – Portal and Portal+. Both have similar functions, such as the ability to listen to music, make video chats, which can integrate with music-streaming apps like Pandora and Spotify, view pictures and watch videos from some selected applications, and video conferencing with as many as six people at once.

However, both differ in screen size and sound quality. Portal has a 10-inch screen size and sits horizontally, it is very similar to Amazon’s Echo Show. While Portal+ has a 15-inch screen size that can display in both portrait or horizontal mode. Portal costs $199, while Portal+ costs $349. But according to Facebook, there would be a $100 discount for a user who decides to buy the two at the same time.

Both devices are controlled mostly by voice. So saying “Hey Portal” activates the video chats. Presently, the devices are using Amazon’s digital assistant, Alexa. Hence, users would say “Alexa” for more advanced functions.

Facebook added that users can use the device to hold calls with other Portal users as well as Facebook’s Messenger app on both desktop and smart devices. Though there is no ability to dial a regular phone number on the device yet.

The social media company concluded by saying that very soon, it will release tools for third-party developers to develop apps for the video chat device. Portal may be a good device for some home users, but the thought of Facebook’s prying eyes inside their homes may keep other away. And also raise the question–do we really need Facebook in our homes?

Featured Image from Shutterstock.

Let’s face it, when it comes to online search, Google takes the cake. The tech giant is also pretty good at analyzing data, targeting ads, and helping people find their way around cities. But one area in which it hasn’t emerged victorious is social media. Perhaps it doesn’t matter since they own YouTube anyway and between them and Facebook account for some 70% of all internet traffic.

But something about a failed business has got to hurt somewhere. Yesterday, in the wake of a security vulnerability that put user data at risk, the search company decided to shut down Google+, a social network it once hoped would challenge Facebook.

Google+ An Accident Waiting to Happen

Google took a slamming yesterday from its critics for failing to announce a security lapse at Google+ that left user data exposed. The vulnerability had actually been in place since 2015, although the company only discovered it this year. They then promptly set about fixing it before the news hit the public sphere. In fact, Google clearly hoped that the news would never hit the public sphere.

Now the tech behemoth has been accused of “lack of transparency.” Its critics say this type of behavior is exactly what led the European Union to impose stricter laws for protecting consumer data. In the wake of Cambridge Analytica, the vulnerability in the flailing social network being kept so quiet was hardly an accident. Google was clearly trying to distance itself from Facebook and its angry mob of haters.

Avoiding Regulatory Scrutiny

Now Google isn’t just suffering from a lack of interest from the Google+ user base or even a security vulnerability. The company comes over as underhand, unethical, and ever-so-slightly incompetent.

Labeled as a ‘bug’ in the Google+ service, as many as half a million users’ data was exposed to developers of some 438 third-party apps who could have used it to improve their own services.

Google says that its decision to keep the information about the breach quiet was based on a couple of reasons. Firstly, they were unsure of the extent of damage done (or in fact, if any information had even been compromised). Second, the data was not “deeply sensitive” (the information contained names, occupations, and email addresses). Moreover, the company was unsure which users had been affected.

However, the revelations by the Wall Street Journal over Google’s internal decision making on the breach placed the tech giant under scrutiny. Being thrust under the microscope by regulators in the US was something they clearly wanted to avoid. Conveniently, the company fixed the breach before the GDPR came out in May, keeping it quiet at a time when corporations are under attack for their misuse of data.

Google Will Always Be Under the Knife

The bigger they are, the harder they fall. Google will always be under public scrutiny and even ex-Google employees are going into direct competition with them. Launching data privacy apps, blockchain companies for data transparency, and other disruptive services.

Just after the news of Facebook and its latest breach, there are calls for even tougher regulation in the US and Europe. After all, if there was an issue with Google+ who’s to say there isn’t one with a number of Google’s applications? Alphabet stock closed in the red at by 1.02% down yesterday.

As the company fixed the Google+ flaw before the EU’s GDPR came out this May, they will be exempt from any fines. They will also be placing tighter restrictions on the types of user data they will reveal to developers.

Images from Shutterstock.

Airbnb and Uber, along with other digital services websites, will be required to pay a 3% tax as per the Spanish Finance Ministry’s new tax rules.

These digital companies are responsible for opening new doors for businesses and investors alike. However, until now, innovative startups such as Just Eat have reaped benefits due to the lack of regulation for digital platforms.

María Jesús Montero, Finance Minister from the Spanish Socialist Workers’ Party, said:

“There are businesses we all know that are dedicated to services and are generating billions in economic activity, yet do not pay appropriate taxes, because the current tax laws do not recognize this type of activity.”

Currently, the tax applies to digital advertisement and brokerage services, and Sale of Data (SoD) websites, that earn over $3.44 million revenue in Spain and $860 million globally.

According to Spanish Newspaper El País, Airbnb published an official statement claiming that the company pays tax in every country it operates in, including Spain.

Tax Rules for Airbnb in the US

Spain isn’t the first country to create a new tax structure for online platforms. On October 1, New Jersey applied a 5% tax of “hotel occupancy fee” for Airbnb and travel website VRBO. Since the law exempted realtors from this tax, visitors can avoid this situation by getting in touch with real estate agents.

Meanwhile, Huntsville doesn’t plan on following New Jersey anytime soon. The city applies a lodging tax on Airbnb hosts and believes that it’s sufficient for the time being.

Last month in Colorado, various residents requested authorities to change the category of Airbnb rentals from residential to commercial. This would increase the tax figure from 7% to 29%. Since a lot of people rent out their properties and earn their income through the digital platform, this move would result in a loss. Some people even rent a portion of their houses and share it with strangers to make ends meet. According to Molly Weedn, Public Affairs manager of Airbnb US West:

“This proposed change could mean much of this important supplemental income would go to state coffers, rather than helping a host pay their bills.”

Thus, on October 3, it was finally revealed that Colorado had decided against implementing this tax rule.

France and UK Weigh in on the Situation

Last month, French politician, Ian Brossat, submitted a proposal which explained that Airbnb should be banned from Paris. He also raised a question regarding Airbnb’s tax activities, “Why does Airbnb pay as much tax in France as a neighborhood bakery?”

Earlier today, Financial Times reported that Her Majesty’s Revenue and Customs (HMRC) reached out to Airbnb to discuss tax regulations applied on the company. However, Airbnb’s official statement added that these are just “routine checks.” The company was previously criticized for paying only £379,075 in tax from the profits earned in 2017 and £188,000 in 2016.