Some more follow-ups this week:
- Earlier this month Coupa Software proved to be one of the very few completed AND successful tech IPOs this year, despite reporting a loss of $24m for total sales of $60m. The shareholders were wise enough to limit the sale to $153m worth of shares, a fraction of the $1bn+ total enterprise value, in order to price the IPO at the top of the range. On the first day of trading the share price had jumped by 121.7% to $39.71, although it has since cooled down to c.$27. In any case this event shows a clear investor appetite for this kind of assets – good news for the likes of Uber and Airbnb.
- On the contrary Theranos, once valued at $9bn, is close to bankruptcy after the FDA pointed out failures in its patient data collection procedures, highlighting the risks for investors who put their money in unicorns operating in ‘regulated’ areas such as healthcare or financial services – remember Lending Club.
Airbnb is facing ‘life-threatening’ disputes in New York and San Francisco whose governors have expressed the intention to rein the ‘short-term rental’ offering in. It is indeed argued that this type of systems contributes to the increase of rents in tight dwelling supply areas since landlords prefer to rent unoccupied flats on a short-term basis rather than putting it back on the market. So far the New York governor has approved a law which allows the city to fine landlords who list apartments for rentals of less than 30 days – a ‘half-baked measure’ difficult to enforce given that the authorities do not have access to the landlords’ identities.
- After China, Uber is facing tough competition in Russia where Yandex Taxi, funded by the eponymous deep-pocketed search engine, has decided to cut its minimum base fares in half, leading to a taxi driver protest.
- More generally the funding environment for start-ups has deteriorated slightly as investors prove increasingly selective in their investment decisions. Venture capital investment in European companies dropped 32% yoy in Q3, in line ith the 35% YTD drop noticed in California. The IPO window has also proven more and more difficult to reach, with investors perceiving some proposed valuations “ludicrously overpriced compared to existing peers”.
Twitter is back in the doldrums after the last takeover candidate, namely Salesforce, dropped the case after careful deliberations. The share price had already taken a hit after Microsoft denied interest, lowering the competitive tension. Although some experts believe that the company would represent a great ‘trophy asset’ for an activist shareholder, management has now shifted its attention back to streamlining its cost structure, initially designed to serve more than 500m users, way higher than the actual user base (300-350m). This exercise will result in 300 employees losing their job this year, according to Bloomberg.
- Carrefour and Auchan have launched initiatives to tap into the wisdom of start-ups to boost their digital capabilities. Les Echos reports that Carrefour has built relationships with more than 150 start-ups and has invested in the VC fund Partech Ventures while Auchan organised earlier this month its first ‘Salon des start-ups’. Due to its close proximity with historical retailers, Lille appears as the spearhead of ‘French retail tech’, having hosted the #conext show as well.
- UBS became the latest major bank to join the ‘robo-advisor trend’ after it announced that it would roll-out such a service in the UK no later than next month. This decision will make the service available to users with as little as £15k in personal savings, although the 1% annual fee levied for customers investing solely in ‘passive’ funds is still high compared with industry best practices. In the same vein Charles Schwab announced its robo-advisor service was now managing more than $10bn in assets, a c150% yoy growth. The first independent ‘French tech’ player, Yomoni, has much more modest ambitions, targeting $1bn of AuM by 2020.
- Apple reported its first annual decline (9%) in iPhone sales volumes (in line with analysts’ expectations) despite the misfortune of the Samsung Galaxy S7.
That’s it for now!