VenueBook, a New York-based ticketing and venue platform, has raised $2 million in seed funding from investors including I2BF Global Ventures, Cayuga Ventures, MI Ventures and Kindler Capital. The company’s offering is aimed at venues and events planners and helps them manage bookings. VenueBook will use the funds to expand sales and marketing and further develop the mobile app.
Group project management platform Trello has raised a $10.3 million Series A round led by Index Ventures and Spark Capital. Trello, launched in 2011, provides a visual board to users to help them manage projects. The company will use the funds to spin out of its parent company Fog Creek Software.
Intigua, a Massachusetts-based IT management company, has raised a $10 million Series B round led by Intel Capital. Bassemer Venture Partners and Cedar Fund also participated in the round. Intigua was founded in 2010 and has raised $21 million to date. The company will use the latest funds to expand sales and marketing.
Red Herring North America Top 100 winner Hortonworks, which provides an open source software to develop, distribute and support Apache Hadoop platforms, has raised $50 million in funding from HP. As part of the two company’s new partnership, HP and Hortonworks are to integrate their engineering strategies, and increase collaboration. HP customers will now be able to deploy the Hortonworks Data Platform as the Hadoop component of HP HAVEn. HP will also work to certify HP Vertica with Apache Hadoop YARN, the architectural center of Hadoop 2.0. “The ability to understand data and put it to effective use is now more crucial than ever,” said Colin Mahony, general manager, HP Vertica. “Hortonworks has demonstrated outstanding dedication and expertise in addressing the business and technology needs of its customers within this new era of information and data, and we look forward to partnering with the Hortonworks team to deliver innovative big data solutions to our customers.”
Cloud and mobile commerce company Deem has completed a $50 million round of funding, led by Hony Capital. The company will use the funds to accelerate its network growth, expand globally and make acquisitions. Deem connects more than 17,000 buying organizations with hundreds of thousands of selling merchants and distribution partners, according to a company press release.
Facebook stock reached an all time high on Wednesday, topping $75 a share after the company’s Q2 earnings report beat analyst expectations.
The social media giant reported $2.9 billion in revenue, surpassing projections of $2.8 billion by analysts. The company also posted $791 million in net income – an increase of 61% compared to the same period last year. Facebook has now beaten analyst estimates on earnings for the past nine quarters. Earnings per share came in at 42 cents, $.10 over analyst projections.
The Menlo Park, Calif.-based company impressed investors with its mobile revenue in particular. The $2.7 billion in earnings from mobile advertising represented 62% of the company’s overall ad revenue, up from 59% the previous quarter and 41% this time last year.
Facebook also reported encouraging numbers on mobile usage. The company now has 1.07 million active monthly mobile users, up from 1.01 million the quarter before. Together, these revelations should alleviate the concerns about a declining user base, especially among the sought after 13-17 year old and 18-25 year old demographics, which surfaced towards the end of last year.
Overall user numbers also impressed, with the service adding 40 million new monthly active users, increasing the size of the social network to 1.32 billion – nearly one fifth of the world’s population.
Facebook’s future success depends on its advertising, and the social media platform is looking to gain an edge over its main competitor Google. This has led the company to explore new ways of delivering corporate sponsored content. In a conference call, COO Sheryl Sandberg addressed this month’s acquisition of LiveRail, the world’s third-biggest video ad platform Facebook purchased for as much as $500 million. “We have a lot to do here,” she said, “but with LiveRail we’re investing in tools that can improve the relevance of video ads across the web.”
Meanwhile, the company believes that the more high-profile acquisitions like WhatsApp (which expects to be finalized by the end of the year), Oculus, and Instagram, alongside a number of internally developed tools, make the company well-positioned to continue its growth into the future.
“While we are excited about the long-term potential of our ads initiatives like Instagram, autoplay video and the Audience Network, we are still in the early days of building these businesses and expect their revenue contribution to remain small in the near term,” said CFO David Wehner.
CEO Mark Zuckerberg has been known to express ambivalence towards how the company’s performance is measured by shareholders, and in the earnings call he reacted with typical understatement to what is an extremely strong quarterly report. “We had a good second quarter,” he explained. “Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world.”
Freshbooks, a cloud-based accounting software provider, has raised a Series A round worth $30 million, led by Oak Investment Partners. Atlas Venture and Georgian Partners also participated. Freshbooks has not previously raised funds since it was founded in 2003 and will use this investment to expand its team.
Commercial drone development and operation platform Airware has secured $25 million in Series B funding from Kleiner Perkins Caulfield & Byers. Airware was founded in 2011 in San Francisco and customizes hardware and software for drones used for commercial purposes from agriculture to construction. The company has raised over $40 million to date.
Chicago-based online lending company AvantCredit has raised a Series C round worth $75 million from Tiger Global Management. The company, founded in 2012, offers loans of up to $20,000 to borrowers who are unable to obtain a loan from a traditional bank. AvantCredit has raised over $100 million in funding to date.
Rong360.com, a Beijing, China-based private lending search provider, has raised $60 million in Series C financing, in a round led by a subsidiary of Singapore’s Temasek Holdings, Pavillion Capital Pet, according to reports. Existing investors Lightspeed Venture Partners, KPCB, Zero2IPO Ventures and Sequoia Capital all participated. Rong360.com was launched in 2011 and has previously received $30 million in funding last July.
Mobile games developer Social Point has raised $30 million in Series C funding led by Highland Capital Partners Europe. Existing investor Idinvest also participated. Social Point develops mobile games for both iOS and Android platforms, after initially only developing titles for Facebook. “The company has been profitable for the last seven consecutive quarters and is on pace to surpass $100M in revenue for this year,” said Andrés Bou, co-CEO of Social Point.
Restaurant reservation platform Quandoo has closed a Series C financing round worth $25 million. Pilton Capital and affiliates led the round, and Holtzbrinck Ventures, DN Capital, the Sixt family and Texas Atlantic Capital all participated. Quandoo intends to use the funds to expand through Europe and launch in APAC and Latin America.
Apple reported mixed quarterly earnings today, with increased iPhone sales, higher than expected net income and strong growth in gross margins offset by declining iPad sales and lower than expected revenue.
Apple reported $37.4 billion in revenue for Q3, down slightly from the $38 billion forecasted by analysts, but a 5.9% increase from the same period last year. Earnings per share stood at $1.28, boosted by the company’s stock repurchase program.
The Cupertino, California-based company sold 35.2 million iPhones in the three months ending June 28, an increase of 12.7% from the same period a year ago, but slightly below analyst expectations of 35.9 million units. Sales were particularly strong in the BRIC countries, with China alone seeing a 48% increase.
Sales of the iPad continued to be a cause for concern for Apple, dropping for the second straight quarter. Apple sold 13.28 million iPads in the last three months, down 9.2 % from the previous year and short of Wall Street expectations. iPads were still selling well in developing markets, with strong sales in the Middle East and China, but growth in those regions was more than offset by poor sales in developed markets such as the U.S.
Despite this, CEO Tim Cook was buoyant about the iPad’s performance. “In just over four years, we have now sold 225 million iPads, which is a larger number than anyone would have predicted at the time,” he said on a company conference call. “We still feel the category at the time is in its early days.”
Cook revealed that the iPad had an 85% share of the education market and a 99% share of Fortune 500 companies, however penetration in business is low: around 20%. This contrasts with the penetration of Apple notebooks in business, which is over 50%. Cook went on to state that this was part of the reason behind the recently announced IBM partnership. “We win if we can drive the penetration number from 20 to 60,” he said of the IBM deal. That would “make the walls shake.”
For the next quarter, Apple has forecast revenues in the range of $37-40 billion, a bigger gap than the company usually uses, suggesting that there is some uncertainty for the next three months. Apple sees gross margins between 37% and 38%, which would be similar to last year’s figure of 37%.
Despite Cook’s insistence that falling iPad sales do not worry Apple, two straight quarters of decline and falling performance in developed markets are surely causing some concern within the company. As smartphones become more powerful, it is feared that tablets will be squeezed into a niche position – not powerful enough to overthrow the laptop, and too big to beat a smartphone. Cook maintains that iPads will overtake PCs at some point, and perhaps that is why the only point of concern he raised was regarding the penetration among businesses. His solution to that is the partnership with IBM, but it remains to be seen whether this can revive the iPad.
Microsoft has reported an 18% increase in revenue for the fourth quarter of its financial year, but the cost of integrating Nokia’s handset business hurt profits.
The software heavyweight earned $23.4 billion in revenues during the last three months of the fiscal year, a 18% increase over the previous quarter’s results of $19.9 billion and just ahead of a consensus analyst estimate of $23 billion, according to a poll by Thomson Reuters.
Gains were helped by a doubling of revenues from its cloud business which includes Azure, Microsoft’s cloud platform, as well as an extra $2 billion added from the newly acquired Nokia.
“We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world…I’m proud that our aggressive move to the cloud is paying off – our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate,” said CEO Satya Nadella.
But Microsoft also revealed a nearly $700 million cost associated with its purchase of Swedish mobile phone manufacturer Nokia in April for a controversial figure of $7 billion. The company estimated that the Nokia operating loss worked out to around eight cents a share of net income, reducing total net income for the period to $4.6 billion or $0.55 per share, weaker than the $0.60 predicted by analysts polled by Bloomberg.
The drain on operating income from the Nokia deal is likely to last at least through the next fiscal year and help explain why the bulk of the 18,000 job cuts Microsoft announced last week will affect the Nokia side of the business and its manufacturing operations.
In better news, other sources of growth were Microsoft’s internet search engine Bing, which saw advertising revenue increase 40%, while the number of Microsoft Office 365 subscriptions increased 98% year-on-year to 5.6 million users.
Microsoft saw healthy growth in its most important market, enterprise software, which included a 14% rise in revenue from licences for older products like its database software SQL Server and Windows operating software for computer servers. The company also pointed to a boost in sales of software to small-and-medium-sized businesses, which historically have not been its main customers.
In a conference call to investors on Tuesday, Nadella outlined his renewed focus on cloud computing and a push to create a seamless user experience between desktops, tablets and mobile devices.
“We will streamline three operating systems into one system for all devices,” Nadella said Tuesday. “We will be relentless in our focus, everything we do starts with digital life and work experiences.”
This renewed focus will reassure investors who were worried the company was spending too much under previous CEO Steve Ballmer. After his first full quarter as CEO, Nadella’s vision of a mobile-first and cloud-first Microsoft seems to be working out.
A two-day hackathon next month is aiming to bring more information to North Koreans. Hack North Korea, held in San Francisco between August 2 and 3, is hosted by New York-based NGO the Human Rights Foundation (HRF), and will pair Silicon Valley experts with defectors from the east Asian state, which is widely considered the most closed society on Earth.
Defectors attending the event will include democracy activist Park Sang-hak, and Kang Chol-hwan, who penned the autobiographical book The Aquariums of Pyongyang about his life as a child prisoner.
Rather than aiming to hack sensitive data, the hackathon will brainstorm ways of smuggling information into North Korea. The nation of almost 25 million has no free press, and Internet activity is limited to a select few government officials.
HRF claims that it has had previous success launching balloons attached to Wikipedia-loaded USB sticks into North Korea, as well as information released in leaflets and shortwave radio broadcasts. But Alex Gladstein, the group’s director of institutional affairs, claims that much more could be achieved by harnessing the prowess of the Bay Area.
“Balloons are more symbolic; a lot of defectors had seen the balloons before,” says Gladstein. “But it would make it more effective if we could get some more metrics on them.”
The group has considered offline WikiReaders, he adds, “but you need an install. If you’re a student in Pyongyang why would you use that? We want to have more Autoplay, image-based software and stuff that’s more easily accessible.”
Gladstein stresses that the hackathon is not pledging to “change massive problems overnight,” but rather to open a dialogue between North Korean defectors and Silicon Valley. “Defector-led groups’ budgets total under $2 million,” he says. “That’s tiny. I think there’s a lot of room for policy-makers, businesses and governments to get involved.”
Gladstein adds that there have already been proven positive impacts from the HRF’s work. Most homes now have ‘secret televisions’, he claims, where families access information from outside the country. The group also says that a quarter of all North Koreans have listened to a foreign radio device.
We’re tapping into an existing, ongoing phenomenon,” says Gladstein. “The government is losing control of the way people are making financial investments and consuming culture. When that’s happening you can really make leveraged investments. It’s education, it’s learning.”
North Korea is governed by Kim Jong-un, 31, who succeeded his father, Kim Jong-il, in 2011. Last year the state raised tensions with a series of missile launches and fierce rhetoric, directed mainly at its southern neighbour and the United States. Most recently Kim has been attempting to negotiate with Seoul regarding its participation at this year’s Asian Games, which will be held in the southern city of Incheon in September and October.
North Korea, despite its perceived lack of technology, is active in cyber warfare. Last year a massive attack paralyzing South Korean banking and broadcasting systems was widely blamed on Pyongyang. Speaking after the attack Sun-Chul Kim, a South Korean cyber security expert, claimed that the North “employs up to 4,000 people dedicated to cyber conflict.”
Today North Korea launched a cooking website ‘for housewives’ called Korean Dishes, two years after it was initially announced.
SimpleReach, a content marketing startup, has raised a Series A round worth $9 million. MK Capital led the round, with participation from Atlas Venture, Village Ventures and High Peaks Venture Partners. SimpleReach was founded in 2010 and helps marketers and publishers effectively measure the value of content and adverts. The company will use the funds to expand the analytics tools it offers.
Intent Media, a marketing intelligence provider for the travel industry, has secured a $22.7 million Series C round led by Insight venture Partners. Existing investors Matrix Partners and Redpoint Ventures also participated. Intent Media, which counts Expedia, Lastminute.coma nd Travelocity among its customers, offers data-driven advertising products.
Cloud-based payment management company Taulia has raised a $27 million Series D round led by QuestMark Partners. Existing investors Trinity Ventures, Matrix Partners, Lakestar and DAG Ventures also participated. The San Francisco-based company was founded in 2009 and provides invoicing as a service to its customers. The firm has now raised $62 million to date.
Solexel, a solar panel manufacturer, has raised $31 million in Series D funding. Kleiner Perkins Caulfield & Byers, Technology Partners and DAG Ventures all participated in the round, which brings Solexel’s total funding to $200 million. The company will use the funds to begin commercial-scale module production.
Boulder, Denver based LogRhythm, a security intelligence and compliance company, has raised a $40 million Series E round of funding. Riverwood Capital led the funding, with participation from Piper Jaffray and existing investors Adams Street Partners, Access Venture Partners and members of LogRhythm senior management. LogRhythm will use the money for product development and customer service enhancements.
Application performance management and monitoring company AppDynamics has raised $120 million in equity and debt, at a valuation of more than $1 billion. The new funding was led by Battery Ventures, ClearBridge Investments and Sands Capital. Current investors Greylock Partners, Lightspeed Venture Partners, Kleiner Perkins Caulfield & Byers and Institutional Venture Partners also participated. Founded in 2008, AppDynamics will use the funds to accelerate sales and expand globally. The company, which is targeting a future IPO according to reports, helps companies monitor their apps to enable efficient performance.
Netflix now has more than 50 million subscribers worldwide according to the company’s quarterly earnings report released today.
The content streaming website added 1.69 million users during the second quarter ending June 30, with 1.12 million new international subscribers and 570,000 additional U.S. members bringing the company’s total users to 50.05 million. Netflix beat its own forecast of 1.46 million new subscribers over the three month period.
The Los Gatos, California-based firm posted revenue of $1.34 billion and earnings per share of $1.15, meeting analysts’ estimates on the former but not the latter. Analysts polled by Thomson Reuters predicted per share profit of $1.16 and $1.34 billion in revenue. Netflix also reported net income of $71 million, more than double that of the same period last year. Shares in Netflix rose by 1% in after hours trading following the release of the numbers.
The second quarter of the year has traditionally been a slow one for Netflix’s subscription numbers. The company added 4 million new subscribers in the first quarter of 2014 and analysts predicted a more conservative figure for Q2. But the number of new users beat expectations despite the challenges of increased competition from the likes of Amazon, the popularity of the FIFA World Cup and a price increase of $1 extra per month for new users.
“I think we’ve seen the impact of the price change go through already,” Netflix CEO Reed Hastings said in a conference call. “[The effects are] pretty nominal, both in terms of acquisition and retention. We’re thrilled with that outcome.”
Hastings also revealed that the company was worried about the effects on viewing numbers around the world caused by the FIFA World Cup in Brazil. However, there was no drop off in growth rates even in the South American country hosting the event, he said.
With 36.24 million users in the U.S., Netflix has become the largest standalone subscription programming service in the country. Yet this expansion has come at a cost as the company has fought with internet service providers over who should pay for the bandwidth all those users require.
Earlier this year, Netflix reached agreements with Comcast and Verizon to pay for faster and more reliable access to the cable companies’ subscribers. However, a very public battle is still underway with the latter, and the partnership has yet to be implemented. The debate concerns the wider issue of net neutrality, in which some argue that internet service providers should not be able to prioritize certain bandwidth usage at the expense of others.
As Netflix’s subscriber base increases, so too could the ferocity of its arguments with broadband providers. Hastings urged the Federal Communications Commission to use merger conditions to introduce net neutrality regulations, adding that he’d hate to see “ISPs brown out or black out certain internet sites while they extract payments.”
For the current quarter, Netflix has projected per-share earnings of 89 cents, and expects to add 3.69 million subscribers, 2.3 million of which to be added internationally. As of close of trading on Monday, Netflix stock had risen 71% over the past 12 months.
The news that Yo has raised a Series A will do nothing to calm those fearing a tech bubble. The messaging app’s sole function is to send “Yo” back and forth between its users, but has secured $1.25 million in venture funding from Betaworks and Pete Cashmore (founder of Mashable). The financing values the company between $5 and $10 million, according to those familiar with the deal. Yo was founded by Mobli CEO Moshe Hogeg and is based in Israel. The app claims it currently facilitates 2 million “Yo’s” per day. While it is unclear what the app’s specific business strategy might be, it has been suggested that the application could be used for customer alerts.
The UK-based daily deal online furniture store Swoon Editions has raised £4 million ($6.8 million) from Octopus Investments and Index Ventures. The platform allows its subscribers to purchase boutique furniture directly from the producers before it has even been completed, dramatically reducing the need for warehouse space.
Threadflip, a peer-to-peer women’s shopping platform, has raised $13 million in Series B from Norwest Ventures and returning backers Baseline Ventures, First Round, and Shasta Ventures. The round brings the company’s total funding to $21.1 million. Threadflip is one of several companies attempting to become the chosen marketplace for Craigslist-type designer fashion. Competitors include Poshmark, Vinted, and Twice.
The parking reservation app, ParkWhiz, announced that it has raised $10 million from Jump Capital and existing investors Hyde Park Venture Partners, Alexis Ohanian (the Reddit co-founder who also became a partner at Y Combinator over the weekend), Amreesh Modi, and Henry Feinberg. ParkWhiz, which has now raised over $12 million, is joined by SpotHero as a venture-backed, Chicago-based parking startup.
Urban Compass, a New York-based real estate platform, has raised $40 million in Series B funding from Thrive Capital, Founders Fund, .406 Ventures, Advance Publications, Kenneth Chenault and Marc Benioff. Urban Compass has raised over $70 million to date and will use the funds to double its number of employees, currently 100. The company’s main focus is helping users buy and rent apartments in the New York market.
TradeBlock is the latest to benefit from Andreessen Horowitz’s bullish opinion of the cryptocurrency market. Incubated at Y Combinator but now operating out of New York, the company provides authoritative research, data, and analysis about developments in digital currency mining, markets, and regulation. Barry Sillbert, Devonshire Investors, and FinTech Collective joined a16z in the $2.8 million investment.
Jobr, a job search platform, has raised $2 million in seed funding from Lerer Ventures,Redpoint Ventures, Eniac Ventures, Lowercase Capital, Tim Draper, and others. The Jobr app seeks to connect job seekers and employers through a Tinder style model of swiping either left or right. Jobr plans to use the new funds to hire staff and build out its platform.
Online translation service Unbabel has raised $1.5 million in seed funding from investors including Jared Fliesler of Matrix Partners, Kevin Rose of Google Ventures, FundersClub and Elad Gil. The company, which is backed by Y Combinator was launched in March and uses crowd translation and artificial intelligence to provide affordable translation services. Unbabel will use the funds to expand its engineering and marketing teams.
Workspace-as-a-service provider Workspot has raised a Series A round worth $6.5 million. Helion Ventures led the investment, while Translink Capital and Qualcomm Ventures both participated. Workspot was launched in April last year and has raised over $9 million to date. The company provides business applications for mobile workforces.
Vision Critical, a cloud-based customer intelligence platform, has raised $16 million in new funding from Georgian Partners, Northleaf Venture Catalyst Fund (NVCF) and Kensington Global Private Equity Fund. The Vancouver-based company previously raised $20 million in 2012 and counts John Deere, Banana Republic and Time Inc. among its customers.
Dough, which provides educational content on personal investing, has raised a $25 million round of funding from Technology Crossover Ventures. The company will use the funds to hire more people to narrate videos and expand its offering internationally. The Chicago-based massively open online course (MOOC) site teaches people how to make investments.
Keep an Eye On
The Naver Corporation, a South Korean company that operates the popular messaging application Line, announced on Tuesday that it had filed its subsidiary with the Tokyo Stock Exchange for an IPO. Line boasts over 430 million users, many of whom live in Japan. Like its Chinese counterpart WeChat, Line relies on in-app purchases for most of its $500 million revenue. The terms and trading date have only been speculated about, but for some context, WhatsApp was bought earlier this year for $19 billion by Facebook when it claimed 500 million users and around $400 million in revenue. Viber, meanwhile, was bought in February by the Japanese online retailer Rakuten for $900 million with around 300 million users.
When General Electric divests part of its retail finance unit, Synchrony Financial, it could raise upwards of $3.5 billion in the IPO. Synchrony operates private-label credit cards for major retailers like Gap and Walmart. GE is expected to sell 125 million shares of Synchrony (15 percent of the company) within the $23-$26 price range. If sold in the middle, the company would be valued at $20.3 billion. The company announced its intentions with an SEC filing in March, but the announcement about the projected share price comes a month after GE agreed to buy the power and grid business of Alstom, a French industrials company, for $13.5 billion. The company reported a positive second quarter, with revenues of $36.2 billion (up 3% YoY) and net income of $3.5 billion (a 13% gain).
The video marketing company TubeMogul raised $44 million in its IPO on Thursday after selling 63 million shares at $7, less than half of what it expected to gain earlier in the week. On the first day of trading the stock surged at various times nearly 50%, to as high as $10.30, but share prices were originally set within the $11-$13 range. BofA Merrill Lynch, RBC Capital Markets, and Citigroup served as lead underwriters. It is trading on the Nasdaq under the ticker symbol TUBE. The company, which provides a platform for enterprises to optimize their video advertising, earned $57 million in revenue last year alongside a $7.4 million net loss.
LinkedIn announced on Tuesday that it had acquired Newsle, an application that aggregates news data into 140 character headlines. Newsle was founded in 2011 by Axel Hanson and Jonah Varon, who were Harvard undergraduates at the time. Writing on the company’s website, the two said: “We founded Newsle with a simple goal: to deliver news about the people who matter to you…LinkedIn is equally passionate about offering insights that can help professionals better do their jobs and will help us accelerate our efforts by making Newsle available to its members.” The company had raised over $2.5 million from backers Lerer Ventures, SV Angel, DFJ, and Bloomberg Beta, among others. The financial details of the acquisition were not announced, but it appears that the site will continue to operate independently.
Twitter acquired CardSpring, a platform that allows app developers to build applications for credit cards and other types of payment systems. The service will be kept open, but it is expected that Twitter will integrate it to allow enterprises to post deals on their Twitter accounts that could then be redeemed by users. With CardSpring, the credit card information it collects online is verified when the customer makes an in-store transaction, facilitating the time of online-offline transactions that many retailers are after. The announcement comes on the heels of news about Facebook’s increased interest in e-commerce. Also this week, Facebook introduced a Buy button to the mini-feed that allows users to buy advertised products directly from the site. CardSpring had raised $10 million from investors that included Greylock and Accel, but there is currently no word on how much Twitter paid.
Google, Inc has reported modestly rising quarterly earnings for the second quarter of 2014. The tech giant earned $3.4 billion, or $4.99 per share, in the April-to-June period. The figures represent a slight increase on the $3.2 billion, or $4.77 per share, reported in the second quarter of last year.
“We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term,” said Google CFO Patrick Pichette. Hardware sales were better than expected at $3.3 billion, while analysts have warned that continually-declining ad sales remain a strong concern for the firm.
Employee stock compensation was blamed for adjusted earnings that fell below analyst predictions for the third time in three quarters. Google has been on a hiring spree this year, adding another 4,300 employees to its wage bill. It now employs 52,000 people, which is still less than half that of tech rival Microsoft, which this week announced the culling of 18,000 jobs from its 127,000-strong workforce.
However one employee leaving the firm is chief business officer Nikesh Arora, who is stepping down after ten years in the role. He will become vice president of Japan’s SoftBank, in a move that has surprised industry insiders. Google CEO Larry Page was full of praise for his former charge, calling Arora a “tremendous leader, adviser and mentor to many Googlers – including me.
“We have learned a lot together, and had a lot of fun along the way,” added Page. Arora’s departure comes just days after Google added former Ford chief Alan Mulally to its board of directors.
“I expect to see a lot of movement at executive level at Google,” said Rob Enderle, principle analyst at the Enderle Group. “Arora would have wanted more influence, but he wasn’t rich enough to start up something new. It’s like an incubator, Google.”
This year has seen the Silicon Valley-headquartered company ramp up its pursuit of new technologies, piling investment into wearable browsers, driverless cars and robots. This quarter’s report “was expected,” added Enderle. “It shows that they’re focused on the future. It’s reasonable; nothing to run to the hills for.”
Enderle added that Google should be “very careful” about taking on government institutions in the future. The firm has been embroiled in a court case with the EU over privacy for several months.
U.S. tech giant Microsoft is set to lay off 18,000 employees, according to an internal memo from its new CEO. Satya Nadella, who took over the reigns from longterm chief Steve Ballmer in February, admitted that Microsoft needs to be “leaner” alongside more streamlined rivals such as Apple and Google, Inc.
Nadella added that the biggest hit would be felt at Nokia, the communications firm Microsoft acquired for $7.2bn this April. The cuts – which represent 14 % of Microsoft’s 127,000-strong workforce, will include 12,500 Nokia factory and professional positions, half the number added to the payroll in April.
A total of 1,351 jobs will be lost in the U.S. city of Seattle, while another 1,000 are expected to go in Nokia’s home country of Finland, including the shuttering of its R&D facility in the northern city of Oulu. Microsoft operations in Beijing and San Diego will also be affected. The move represents the largest job loss since Microsoft’s founding in 1975.
“The first step to building the right organization for our ambitions is to realign our workforce,” wrote Nadella on Monday (July 14). The India-born chief promised more details when he announces Microsoft’s quarterly earnings on July 22.
The cull comes as little surprise to many in the industry. When April’s deal concluded, Microsoft claimed it would trim costs by $600 million per year within 18 months. Insiders have also pointed out Nokia’s lacklustre attempts to keep its foothold in the mobile market next to Apple’s iPhone and Google Inc.’s Android.
Ahead of April’s deal, Nokia’s chairman, founder and CEO Risto Siilasmaa admitted he had been suffering sleepless nights over the company’s financial losses.
In addition to the job losses, Sabella announced that Nokia’s Lumia product line will now run on Microsoft’s Windows OS, as opposed to an initial plan to run Google’s Android. “This builds on our success in the affordable smartphone space, and aligns with our focus on Windows Universal Apps,” he wrote.
Nadella, a Microsoft veteran who had helmed its cloud computing division before taking over from 14-year CEO Ballmer, thinks the Nokia acquisition was “a big mistake” according to Business Insider’s Steve Kovach, who adds that Nadella has been left to clean up Ballmer’s “mess”. Founder and chairman Bill Gates stressed that there is “no-one better” to lead Microsoft, in the wake of this week’s news.
The numbers appear to agree. Microsoft posted better-than-expected net profits of $5.7bn in April. At time of going to press its shares were stable at $44.53, after a yearly high of $45.30 yesterday. Nokia’s shares were also stable at $7.38, from a high of $8.18 in January.
Even without the job losses, Microsoft remains far behind the world’s largest private employer, American retailer Walmart, which counts some 2.1 million staff on its books.
Open-source machine learning startup PredictionIO has raised $2.5 million in seed funding in a round led by Quest Venture Partners. Azure Capital Partners, CrunchFund, the StartX Fund and Kima Ventures all participated in the round. Prediction IO was founded last year and has created an open-source program which allows developers to add predictive features to applications.
Sensoria, a wearable technology developer, has raised a $5 million Series A round from Reply SpA. Reply will acquire a 20% stake in the company as part of the deal. Sensoria produces textile and traditional sensors that allow manufacturers to create clothes that can gather data biometrically. As part of the transaction Heapsylon, a Nevada limited liability company, will rename as Sensoria Inc., a Delaware corporation.
Stock media marketplace Pond5 has raised a Series A round worth $61 million. Accel Partners and Stripes Group led the funding into the company, which allows users to upload and sell video, music, photos and special effects. Pond5 will use the funds to build out its product and hire new staff.
Shyp, an on demand shipping startup, has raised $10 million in Series A funding. Shervin Pishevar and Scott Stanford’s SherpaVentures led the round. Shyp is an iPhone app that delivers users a simplified shipping process by working with all the major shipping companies. The company has previously raised $2.3 million in seed funding.
Capillary Technologies, a cloud-based retail customer engagement management provider, has secured a $14 million Series B round led by Sequoia Capital and Norwest venture Partners. The company previously raised $17 million in Series A financing in 2012. Capillary Technologies will use the most recent funds to grow its partnership ecosystem.
Funding Circle, a peer-to-peer lender based in London, has secured a $65 million Series D round led by Index Ventures. Accel Partners, Union Square Ventures and Ribbit Capital also participated. The company, founded in 2009, has now raised more than $123 million to date. Funding Circle connects small businesses with lenders through an online marketplace.
The Palo Alto, Calif.-based Internet Exchange solutions providerIIX, Inc. has secured $10.4 million in Series A funding from New Enterprise Associates, bringing total funding to over $15 million. IIX provides a platform that allows customers to connect to leading Internet Exchange Points (IXPs) through a single connection from anywhere in the world, a process that improves the performance and security of applications and services. Before the Series A the three year old company was operating on a combination of angel, seed, and debt financing and revenues from its customers, which include Microsoft, Box, and LinkedIn.
Boomerang Commerce, a company that promises dynamic price optimization to online retailers, raised an $8.5 million Series A round from Madrona Venture Group and Trinity Ventures. While the biggest online e-commerce retailers might change their prices every two minutes to remain competitive, smaller outfits, the ones Boomerang is seeking as customers, traditionally do so every three months.
Index Ventures has led a €5.8 million investment inAutobutler, a Danish provider of side-by-side price comparisons for car repairs and services. Index was joined by existing investors Dawn Capital and Creandum. Autobutler joins RepairPal, OpenBay, and YourMechanic as venture-backed companies interested in automating the car maintenance experience.
Zooz, an Israeli ecommerce payments company, has raised a $12 million Series B round led by Blumberg Capital. Access Industries and Camp One Ventures joined previous investors XSeed Capital, lool Ventures and Rhodium in the round. Zooz has raised a total of $15 million to date, having been founded in 2010. The company will use the funds to expand and improve its technology.
Plastiq, a “Square for the buyer” that allows users to pay for items that otherwise require checks through any Internet-connected device for a fee (<2%), has raised $10 million. The funding, which brings total financing to over $18 million, was led by Khosla Ventures with participation from returning investors Flybridge Capital Partners and Atlas Venture. Plastiq was founded by Eliot Buchannan while he was a student at Harvard, but will relocate its operations from Boston to San Francisco after its latest round of financing. The product has not yet been released for sale to the general public.
Israel-based software development solutions providerJFroghas raised an additional $7 million in Venture funding from VMWare and Gemini Ventures. Its two lead products, Artifactory and Bintray, provide end-to-end tools to both software developers and DevOps teams. The company has now received $11.5 million.
Anonymous sharing app Secret has raised $25 million in Series B funding. Index Ventures, Redpoint Ventures, Gary Tan and Alexis Ohanian, SV Angel, Fuel Capital and Ceyuan Ventures all participated in the round. The San Francisco-based company has already raised over $36 million since it was founded last year. Secret also announced new features such as the ability to log in with Facebook and collate posts.
RedMart, a grocery delivery service based in Singapore, has raised a Series B funding round worth $23 million. Existing investors Eduardo Saverin and Garena joined new investors SoftBank Ventures and Visionnaire Ventures in the round. RedMart was founded in 2011 and will look to boost growth within Singapore using the extra funds, and will now offer fresh food delivery.
Captricity, an enterprise data capture company, has secured $10 million in a Series B round led by Atlas Venture. Social+Capital also participated in the round, which brings Captricity’s total funding to $17 million. The company is planning to use the funds for product development and hire employees. Captricity’s offering helps companies digitize paperwork.
Fangdd, a Shenzhen, China-based real estate platform, has raised an $80 million Series B round from Vision Knight Capital China Fund, Lightspeed China Partners and previous investor CDH Venture. Fangdd was founded in 2011 and provides marketing services to property developers, home buyers and brokerage agencies. Fangdd works with more than 5,000 real estate agencies countrywide and operates in more than 30 cities across China, according to company data, which also reveals turnover reached around $8 billion in the first half of the year.
MTPV Power Corporation, a clean energy company, has raised $11.2 million in a Series B funding round led by Northwater Capital Management’s Intellectual Property Fund. Investors included Total Energy Ventures, Saudi Arabian petrochemical firm SABIC, Point Financial, Spinnaker Capital, Ensys Capital, the Clean Energy Venture Group and several other existing shareholders. MTPV’s technology allows the company to convert heat into electricity using semiconductor chips.
Social analytics provider NetBase has completed a Series D investment round worth $15.2 million from Thomwest Ventures, Altos Ventures and WestSummit Capital and SAIF Partners. NetBase has now raised a total of $51.8 million and will be put towards the continued expansion of the company.
NetDocuments, which provides document and email management services to law firms, has secured a $25 million round of venture funding. Frontier Capital provided the funding to the company, which operates with a software-as-a-service model. “As our research shows, NetDocuments is the only pure play software-as-a-service provider of document management in the legal industry, which is just beginning to realize the benefits of cloud computing,” said Frontier partner Michael Ramich, in a statement.
Southeast Asia is the next big market for online shopping according to a recent study by UBS, which warns of the threat to established retailers posed by e-commerce firms.
Physical barriers such as poor transport logistics infrastructure still hinder virtual shopping in the ASEAN group of countries, but as online retailers like China’s Alibaba plan international expansion, the e-commerce market for Southeast Asia could be worth as much as $35 billion in the next six years.
UBS researchers analyzed the region’s web traffic data and found the number of people with access to the Internet in the Association of Southeast Asian Nations (ASEAN) is growing faster than previously thought.
The bank estimated there were almost 200 million internet users across the region, which represents an internet penetration rate of 32% out of a total population of 620 million. This contrasts with previous market data claiming that the number of people online could be as low as 62 million.
The researchers suggest that the market for B2C e-Commerce, businesses selling to consumers through their websites, could increase at least five fold by 2020 – representing an opportunity worth up to $35 billion.
Rising personal incomes and increased access to the Internet through mobile devices pose a serious threat to traditional ‘bricks and mortar’ shopping malls in countries such as Thailand, Singapore and Indonesia. Unlike the U.S., where retailers such as Walmart have popular online storefronts, the main Southeast Asian mall owners are late to develop their own e-commerce platforms and risk being overtaken.
“The power shift is moving quickly against them, and a cohesive online strategy is now a priority…or online platforms will take significant share of wallet,” the report’s authors claim.
Even if Internet access is no longer the bottleneck it once was, there are plenty of other barriers to scalable growth in ASEAN e-Commerce that have no quick solutions. Currently the infrastructure in the region, perhaps with the exception of Singapore, does not support the kind of next day delivery offered by Amazon, the U.S. firm that pioneered and perfected the transport logistics of e-commerce.
“Customer experience is key to the success of online retailing, and with a high proportion of transactions based on ‘cash-on-delivery’, online platforms and retailers require confidence that the last-mile delivery does not tarnish the experience,” said the report’s researchers. Over the past decade, development of highways and related infrastructure in countries such as Indonesia, Vietnam, Cambodia and Myanmar has failed to keep up with the rising number of vehicles. Road quality and capacity can vary greatly between countries. While Singapore and Thailand boast fully paved roads, 2007 data from the Economic Research Institute for Asia (EIRA) show that fewer than 10% of roads in Laos and Cambodia and just under half of Vietnamese roads are paved.
Consumers in Southeast Asia also make far fewer payments by credit card than their Western counterparts, in Thailand only around 5% of the population has a credit card compared to 80% of 18 to 64 years olds in the U.S.
One company with the resources and vision to overcome these issues is the Chinese e-Commerce company Alibaba Group Holding Ltd. The private firm valued itself at $130 billion in a recent regulatory filing ahead of its initial public offering, while last year the value of goods sold on its platforms was greater than Amazon and eBay combined.
Alibaba’s business to consumer platform, called Tmall, accounts for 45% of the Chinese B2C market according to the Beijing-based market research firm Analysys International. Revenues from Tmall and its consumer to consumer website, the eBay-like Taobao, reached 35.17 billion yuan ($5.66 billion) in the nine months ended December 31, 2013, representing 86.9% of revenues from the period.
Recognising the logistical challenges in the ASEAN region, in May this year Alibaba agreed to buy a minority stake in SingPost, Singapore’s main postal service, for S$312.5 million. The deal signals the Asian e-commerce firm’s plans for international expansion and the two groups are reportedly discussing a joint venture for international e-Commerce logistics.
With UBS predicting that 48% of Southeast Asia will be online by 2017, a modest rise in the volume of online shopping from the current 0.2% of all retail sales to 5% would create a market worth $21.8 billion.
This should be enough incentive for firms and policymakers to address the structural problems holding back e-commerce, bricks and mortar retailers are right to be worried about the looming threat to their business models.
Rocketrip, a travel management company, has raised $3 million in a Series A round led by Canaan Partners and Genacast Ventures. CrunchFund and Paul Bucheit also participated. Rocketrip was founded last year and has raised $6.2 million to date. The company’s search and booking platform targets enterprise users.
Rap Genius has raised a Series B round worth $40 million and has changed its name to Genius. The round was led by Dan Gilbert and Andreessen Horowitz. Brooklyn, New York-based Genius provides annotations for thousands of rap songs and has raised over $56 million to date. The company is planning to use the latest funds to expand its service beyond rap songs and to hire new staff.
Dog product delivery service provider Bark & Co. has raised a $15 million Series B funding round. The company, which is behind the BarkBox service, received $10 million from Resolute.vc, RRE, Boxgroup, Lerer Ventures and other existing investors, while the remaining $5 million came from debt financing from City National Bank. The company was founded in 2011 and sends monthly boxes of dog toys and treats to its customers, of which there are over 200,000.
Xagenic, a molecular diagnostics company, has announced the second closing of its Series B financing round, bringing the total raised to $25.5 million. BDC Capital joined as a new investor. Xagenic is currently developing a lab-free molecular diagnostic platform which would take 20 minutes to produce results. “Securing this additional financing from high-quality new and existing investors demonstrates confidence in the Xagenic X1 platform. We look forward to continuing our development program in anticipation of our analytical and clinical study start later this year,” said Shana Kelley, Founder and CTO of Xagenic.
Keep an Eye On
Anticipation for the Box IPO will continue to mount, after it was announced this week that the company has instead raised $150 million from private investors TPG and Coatue Management. The latest round of funding values the company at around $2.4 billion, up from the $2 billion valuation it received when it closed its Series F in December. This form of late-stage, growth-equity funding is nothing new to TPG, which has similarly invested in Airbnb and Uber. As for the web storage company, it publicly filed for an IPO in March, but is waiting until after Labor Day, when investor enthusiasm for technology stocks should increase, to follow through, sources say. The announcement was also accompanied by the company’s first quarter financials. Despite doubling revenue to $45.3 million, losses were up thirteen percent from the previous year. Box has yet to turn a profit.
The Wall Street Journal has reported that the Alibaba IPO, which could be the biggest ever, will in fact happen some time in mid-August. This came on the heels of news that Tango, a mobile messaging app company that raised $280 million in a Series D round led by Alibaba, has moved into a 55,000 square foot Mountain View, Calif. office. The Tango deal is the highest profile American investment for the company to date, which in the fall set up an American investment team to help it compete with Amazon and eBay when it decides to challenge the domestic e-commerce market.
Yodlee, Inc., a fifteen year old Redwood City, Calif.-based cloud services platform for online banking, has filed its S-1, hoping to raise as much as $75 million in an IPO. Goldman Sachs, Credit Suisse, and Bank of America Merrill Lynch will lead the underwriting, while the stock will trade on Nasdaq under the YDLE ticker symbol. The company has raised nearly $125 million in VC since 1999. Investors like Warburg Pincus (owner of a 37.5% pre-IPO stake), Bank of America (12.71%), Institutional Venture Partners (12.61%), and Accel Partners (9.25%) stand to benefit from the process.
Following a trend set by competitors Tremor and YuMe, it was announced Tuesday that video ad-buying platform TubeMogul will go public, with pricing expected to happen some time next week. After seeing first quarter revenue grow almost 130 percent (from $9.58 million to $22.02 million) and losses decrease, the Emeryville, CA-based company plans to raise $75 million, by selling 6.3 million shares in the $11-$13 range. Backers like Trinity Ventures (26.5 percent of pre-IPO company), Foundation Capital (22.7 percent), and Northgate Capital (8 percent) have contributed over $50 million in VC funding. BofA Merrill Lynch, Citi, and RBC Capital Markets will serve as joint bookrunners.
ReWalk Robotics, an Israeli manufacturer of the only FDA-approved exoskeleton for paraplegics, has filed for an IPO. The company reported $1.6 million in revenue last year but plans to raise up to $57.5 million, having received FDA approval in June. The company will trade on the NYSE under the RWLK ticker symbol. Barclays and Jeffries will serve as book-running managers, with Canaccord Genuity acting as a co-manager.
China’s leading independent mobile game publishing platform, iDreamSky Technology Ltd., filed for an IPO last Thursday with the SEC. The five year old company behind games like FruitNinja, Subway Surfers, and TempleRun 2 intends to raise as much as $115 million. iDreamSky’s largest stakeholder is Tencent, currently behind only Google, Facebook, and Amazon as the fourth-largest Internet company by market cap, although it figures to be surpassed by Chinese counterpart Alibaba after its IPO later this summer. J.P. Morgan and Credit Suisse are set to act as lead underwriters.
Trainline, a British online rail ticket booking platform owned by Exponent Private Equity, has hired Morgan Stanley to manage an IPO that could raise as much as £400 million, according to Sky News. The company, which handles ticket sales for many of the UK’s major rail companies, was founded in 1999 and acquired by Exponent in 2006.
Button, a New York-based customer acquisition and engagement startup, has raised a $2.25 million seed round led by Atlas Ventures. DCM, Greycroft Partners, MESA+ and VaynerRSE all participated, as did a number of angel investors. The company’s platform is currently in private beta and will use the funds to hire new staff and continue product development.
New York-based restaurant payments app Cover has raised a $5.5 million Series A round led by Spark Capital. O’Reilly AlphaTech Ventures, Lerer Ventures and a number of angel investors also participated. Cover, which is currently available in New York and San Francisco allows users to easily pay a restaurant bill, leave a tip and split payments between diners.
Video conferencing platform Vidyo has raised a Series E round of funding worth $20 million from Sevin Rosen Funds, Menlo Ventures, Rho Ventures, QuestMark Partners, Saints Capital, Four Rivers Group ORR Ventures, Triangle Peak Partners and Juniper Networks. The Vidyo solution is aimed at enterprise customers and the company has now raised over $135 million to date. The latest funds will be used to develop sales and marketing.
D-Wave Systems, a quantum computing technology company, has raised $28.4 million in new funding. Investors in the latest round included Fidelity Canada Fund, Draper Fisher Jurvetson, Goldman Sachs and the Business Development Bank of Canada. D-Wave Systems had previously raised a $30 million round in October 2012 and its total backing now comes to approximately $160 million.