By MATT GALLAGHER, Red Herring journalist
As NTP Software’s CEO Bruce Backa is fond of saying: “The business of file data management may not be as sexy as Google or Facebook, but like death and taxes you can’t get away from it.”
Luckily now you don’t have to. Thanks to NTP’s Universal File Access, a product the company debuted this week, file data management can be done from the beach, the golf course, the car pool in rush hour traffic.
It works as simple as Dropbox’s “synch and share model,” uploading digital content from any device with a few simple commands, but is far from ubiquitous. The company provides an end-to-end solution that enables corporate users the ability to interact safely and securely with the organization’s file data from any device on an Internet or mobile connection.
Content is immediately compressed, encrypted, and sent to the data center, where corporate policies are automatically enforced by software. NTP Software claims to be the only vendor with extensions in the OS and file systems of Windows, NetApp, EMC and HNAS. Policy enforcement is the company’s special sauce. Cloud agnostic, UFA uses the cloud only to transport, not to store the sensitive data. The tool enables 1000 mobile devices to connect to the database with a secure connection.
“Our goal isn’t to synch with every machine and share it with your closest friends,” Backa said. “Our goal to recognize these are valuable digital assets, governed by security. In addition to encrypting them, we ensure existing data center policies continue to be enforced. Objects used in our application receive the same security they’d get from a desktop.”
It’s an ideal tool for insurance adjusters on the road downloading sensitive accident photos that could be used in a court case, or child welfare agents on assignment sharing sensitive client data within the agency.
Founded in 1993, the 20 year old company has a rich history in file data management. It started working with Microsoft to help consolidate file data management on Windows. In the early days of the Windows NT platform, Microsoft competed against NetWare, which had intrinsic quota reporting functions Microsoft lacked. NTP provided Windows a higher level of file data management, and overtime, adapted their software to perform similar functions for the platforms of NetApp, EMC and HNAS.
That kind of legacy has earned the company an impressive list of clients that include 82 of the Fortune 100 and 76 of the Global 100. Its markets include government and education, finance and insurance, technology and media, healthcare and life sciences, energy and retail. Honda, Chevron, the Walt Disney Company, and Starbucks use NTP’s products. Every day, over 20 million users are using the company’s software.
Its traditional products include NTP Software QFS, an integrated policy engine; NTP Software File Reporter, a file analytics tool; and NTP Software File Auditor, an audit and compliance tool. Each is deeply integrated with the OS and file systems of Windows, NetApp, EMC and HNAS.
Its latest product UFA features a Cloud Connector, which maintains a connection between internal storage hosts and the BYOD Manager. It integrates with Windows Active Directory and provides control over limits on size, quantity and type of file data. Connecting end user devices, its BYOD Manager provides flexible caching options, proxies Active Directory security and aggregates communications. Its BYOD Suite provides end users with the ability to immediately upload and delete file data, and allows for lost or stolen devices to be shut down and wiped of business-critical information.
The new product puts NTP’s technology closer to the user, which essentially opens up its market to the smaller business community and completely changes the game, Backa explained.
“Up to now, we just managed storage, and end users don’t really know we exist,” Backa said. “With this latest tool moves us much closer to the end user, the person who really drives benefits from the technology. Overtime, this will allow us to reach smaller and smaller players. Previously, you had to be in at least the top half of all organizations to have enough storage, people and money to get real value. With this, even a one person company could get value.”
To Backa’s knowledge, its new product offers a singular technology that begins a new space competitors have yet to enter. NTP’s data center heritage and legacy technology put it at a unique advantage. Backa estimates the company is ahead of the competition by several years.
“Nine women can’t make a baby in a month,” Backa said. “If a company plunks $100 million on the table, they can’t write technology faster. This technology takes years to develop.”
Intel Corp. has made an offer to acquire Stonesoft, a public Finnish firewall security company, for $389 million in cash to bolster the offerings of its McAfee security software package. Public stock of the security company soared following the announcement. Stonesoft investors are poised to faire nicely at 4.50 euros ($5.90) a share, more than double the company’s closing price.
It’s the biggest purchase McAfee has made since its own acquisition to Intel in 2010 for $7.68 million.
The offer has been accepted by Stonesoft’s CEO Ilkka Hiidenheimo, Chairman Hannu Turunen and Timo Syrjaelae, a board member, who together hold 34.7 percent of shares. The deal is recommended by the company’s board.
“The mega-trend for cyber security isn’t showing any signs of slowing down as you’re always hearing about some corporation being hacked,” Mikael Rautanen, an analyst at Inderes Oy in Helsinki, told Bloomberg. “Stonesoft has the potential to see strong growth so this is a pretty good deal for Intel, and the offer price makes it a good deal for Stonesoft shareholders.”
Based in Helsiniki, Stonesoft offers a scope of cyber security solutions including next-generation firewalls, evasion prevention systems and SSL VPN solutions. It features military-grade firewalls either through software, hardware or virtualized appliances. A Gartner security report recently awarded the company a “visionary status.” The company offers one of the most complete security solutions in the industry, which explains McAfee’s interest.
“McAfee already designs and deploys a high-assurance firewall, which provides protection to the world’s most critical networks including government agencies,” Pat Calhoun, Senior Vice President and General Manager of Network Security for Intel, wrote in his blog. “With this acquisition, I am extremely confident that we can deliver a next-generation firewall with the cutting-edge, technology from Stonesoft that is designed to meet the needs of an entirely new larger enterprise segment.
“…With Intel’s backing, we can now provide two leading firewall solutions that will be a critical layer in our Security Connected strategy,” Calhoun continued. “This investment in Stonesoft will also allow us to focus our resources on evolving our IPS platform to be the market-leading solution to help businesses defend against the most sophisticated and advanced threats. Couple IPS and firewall with our advanced threat intelligence, threat evasion expertise, and leading web and email protection solutions, and there is no question McAfee will be leading the way in the network security space.”
Founded in 1990, Stonesoft has more than 6,500 customers, including governments, retailers, and financial services companies. Though the company enjoyed net sales of 9.2 million euros ($12 million) for the first quarter of this year, up 12 percent from the previous year, but suffered a loss per share of 0.03 euro cents ($0.04), down by 0.02 euro cents on a year ago.
The acceptance period for the offer is scheduled to start on May 21 and run for three weeks.
Namshi, a product of Rocket Internet’s incubator program, recently raised a $13 million round to harness recent growth in its fashion ecommerce channels in the Middle East. Summit Partners led the investment.
Namshi provides ecommerce fashion retail to Middle Eastern markets, featuring clothing, accessories, and footwear for women, men, and kids from over 550 international and local brands. Serving markets in the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain, the company features free shipping and a fairly open return policy.
Founded in 2012, the company has leveraged substantial growth in the region, and this latest funding will serve to further accelerate that growth. The company plans to expand its operations and move stock to a more centrally located distribution center to more quickly serve customers.
“We see our partners’ growing support as an encouragement for us to continue serving our customers with world-class products and services,” said Hosam Arab, co-founder and Managing Director of Namshi, in a statement. “Our customers made the company what it is today. Therefore, they will be the ones to see the main benefits coming from this investment. We will further focus on providing a shopping experience like no other in the region.”
Summit Partners has a history of backing projects of Rocket Internet, the infamous incubation program launched by the Samwer brothers, who habitually launch clones of already successful companies into regions yet to be tapped. Other Rocket Internet investments by the private investment firm include Linio, Lazada and Dafiti, Jumia, Linio, and Zando.
This is also Summit Partner’s second investment in Namshi, which has also previously seen investment from JP Morgan Chase, Kinnevik, Holtzbrink Ventures, and Blakeney Management.
“Namshi and its management team have done an exceptional job of growing the company, and we are happy to support the company’s continued expansion,” said Scott Collins, an MD and head of the Summit Partners London office, in a statement.
Like other Rocket Internet launches, Namshi capitalizes on the rapidly burgeoning ecommerce market in the developing world. This cash infusion gives it the necessary capital resources to develop a strategic foothold in the market just as it is beginning to take off.
Namshi competes against Souq, an ecommerce channel based in Dubai.
Matrix Partners recently announced the closing of its 10th fund, a $450 million package focused on early stage technology investments. The fund was first leaked to Fortune’s Dan Primack last month, but now the paperwork makes it official.
The fund will focus on consumer investments in early stage consumer Internet, mobile, enterprise software and IT infrastructure startups. It is the third consecutive $450 million fund to focus on early stage investments. Though the fund was oversubscribed, the firm chose to stick to the $450 million range “because it fits our focused and selective investment practice,” Matrix explained on its blog announcing the fund. Unlike its previous fund, Matrix IX, this fund will be Matrix’s only US investment vehicle.
“Due to the unusual market conditions in 2008, we coupled a $150M Special Opportunity Fund with Matrix IX to take advantage of some unique investment opportunities we thought might emerge, but we never called any capital in that fund,” the firm explained on its blog.
Matrix is known for making investments in the $2 million to $10 million, along with the occasional seed or late stage investment.
Founded in 1977, Matrix stands out as one of the oldest firms in the venture community. Previous successful investments include Sycamore Networks, Cascade Communications, SanDisk, TheLadders, HubSpot, Gilt Groupe and Quora.
“We are grateful for the ongoing support of our limited partners who believe in Matrix’s long-term approach to venture capital,” said Matrix general partner, Timothy Barrows. “Matrix X will continue our long history of partnering with exceptional founders at the early stages of company formation to develop disruptive technologies and build world-class companies.”
In a further sign of economic rebound, the US stock market surpassed pre-recession levels for the first time, hitting a pace this year that puts it on track to reach the heights achieved just before the financial crisis.
So far this year, 64 companies have raised $16.8 billion, the Wall St. Journal reported, citing Dealogic data. In the same period in 2012, the most financially robust year since the financial crisis, 73 companies raised $13.1 billion.
Last week was Wall St.’s busiest since December of 2007, with 11 US companies reaching IPO.
A more robust stock market provides much needed capital for US companies to reduce debt or invest in their businesses, and is seen by economists as a sign of recovery. The market is also not seeing the wide price swings that have plagued the market since the start of the recession. Stocks have been steadily climbing, encouraging investors to take risks on investing in companies that have only recently gone public. The upward trajectory could also have a snowballing effect.
Successful IPOs tend to encourage other startups to go public.
“I think you’re seeing a really good kind of stable sweet spot,” said Jim O’Donnell, chief investment officer at San Francisco-based Forward Management, told the Wall St. Journal.
Though the IPO market is still a good distance away from the bubble years of the 1990s, 2013 is shaping up to be the steadiest investment year since the crisis began, the paper pointed out.
Companies are also going public at more reasonable prices, with only 29 percent of IPOs in 2012 falling below their opening day price range, the lowest since the crisis began. More stocks are also rising following their debut. While only 19 percent of IPOs dropped on their first day of sale in 2012, that’s an improvement from the 31 percent average in 2008 to 2012.
Some of the year’s strongest IPOs include Fairway (FWM), a supermarket in New York, and SeaWorld Entertainment (SEAS +4.84%), the aquatic animal and roller coaster themed amusement park.
In a sign that social and ecommerce are becoming peas in the same pod, Alibaba, the Chinese Amazon giant, has purchased Weibo, China’s version of Twitter, for $586 million. The deal values Weibo at over $3 billion, according to Reuters.
A number of analysts, who peg Weibo’s value at between $600 million and $2.5 billion, have described the transaction as generous.
The deal stands out as one of the largest Internet deals in China and will likely affect the ecosystem significantly.
Alibaba retains an option to increase its stake by up to 30 percent at an unspecified price. The deal generates $380 million for Seina Corp.’s Weibo over the next three years, providing substantial revenue for a company that struggled to monetize its service.
Weibo works similarly to Twitter, which is blocked by the Chinese government. It has more than 500 million users.
In a statement, Alibaba chairman Jack Ma explained that the company hopes to integrate ecommerce options into the social microblogging service. He also explained that Weibo will provide much needed mobile expertise and insight as the company attempts to focus greater on mobile, key as Chinese consumers get over security concerns of paying with a mobile device. The companies will share data, develop better online payment methods, and cooperate on advertising, according to the Wall St. Journal.
“We believe e-commerce will play a vital role in building an ecosystem around Weibo’s open platform,” said Charles Chao, Chairman and CEO of SINA. ”Weibo and Alibaba’s e-commerce platforms are natural partners. Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile Internet.”
Alibaba is expected to soon go public with a valuation around $100 billion, according to Reuters.
Ouya, a Los Angeles-based startup whose Android-based games console attracted a lot of attention, not to mention money, from a better than anticipated Kickstarter campaign, recently raised $15 million, this time from venture capitalists.
Led by Kleiner Perkins Caufield & Byers, the round included participation from the Mayfield Fund, Nvidia, Shasta Ventures and Occam Partners.
As part of the deal, Kleiner Perkins general partner and former Electronic Arts executive Bing Gordon will join its board of directors, advising on retail strategy, product development and game developer community support.
The company features an Android-based gaming system that plugs into a TV and costs $99, giving it a competitive edge against other game consoles like Xbox and Sony PlayStation. Ouya features a built in store for downloading games as well as an extensive developer community. All games are free to try.
At the onset, investors had serious doubts, and the company struggled for a long time to raise a Series A. It took an extremely successful and record breaking Kickstarter campaign to quell their fears. Ouya launched its Kickstarter campaign with a goal of raising $1 million, but ended up with $8.6 million, nine times what it originally asked for. The company received 63,000 backers despite not having an actual product yet.
“That definitely took the ‘is there interest from consumers’ question off the table,” Mayfield Fund’s Tim Chang told the Wall St. Journal. “That flipped the bit for investors. What got me more excited was the interest from the developer community.”
And the company has still yet to place a product on the market. The original release data had been scheduled for June 4, but has since been pushed back to June 25.
It does, however, have sizable distribution channels, with nationwide retailers including Target, Best Buy, GameStop and Amazon waiting to launch the product.
But as even Chang pointed out, interest and hype alone does not make a successful gaming company.
“Anyone can launch an Android box, but not many have the chops to build a developer ecosystem around it, ranging from indie to known publishers and brand,” Chang told the Wall St. Journal. “That’s the real special sauce; it’s the software platform side, not the fact that you can quickly launch a box.”
Will Android powered games compete on the same TV set as popular games like Call of Duty or Assassin’s Creed? Ouya clearly has the attention of investors, but only time will tell if the gaming community will follow through on its Kickstarter jumpstart.
Baidu, the largest search engine in China, has acquired PPStream, the Shanghai-based online video platform, for $370 million, the company confirmed this week following weeks of rumors on the deal.
PPS will be merged into iQiyi, Baidu’s video platform, to become China’s largest video platform according to viewing time and number of mobile users. The deal is expected to close in the second quarter of 2013.
PPStream is a leading online streamer of video content in China under the popular PPS.tv domain. It provides content to mobile apps and desktops.
The deal helps solidify Baidu’s position in China’s splintered video market, giving it better content and more flexible advertising options to compete against Youku Tudou, China’s largest Internet television provider formed last August following the merger of Youku Inc. and Tudou Holdings.
“The merger of iQiyi and PPS’s online video business is a major step toward consolidation in the industry and will contribute to the development of China’s Internet video industry. The merger will generate significant synergies, and will provide for an improved user experience as well as more and better content. It will also deliver better marketing value and a wider range of options for advertisers,” said iQiyi CEO Gong Yu in a statement.
Baidu’s latest acquisition is an evident sign of the increasing importance of video for web companies as more viewers shift to watching content online instead of traditional TV. The sale follows shortly after Alibaba, a major ecommerce channel in China, announced buying an 18 percent stake in Weibo, China’s version of Twitter, for $586 million. In Europe, Yahoo offered $200 million for a majority stake in Dailymotion, known as the YouTube of France, but was denied by the French government over concerns of a US company taking a controlling interest in a French entity.
BMC Software agreed to privatize itself in $6.9 billion sale to a group of investors led by Bain Capital and Golden Gate Capital. The deal pays $46.25 per share to the buyer’s group which includes the Government of Singapore Investment Corporation and Insight Venture Partners. That’s a 14 percent premium on BMC’s share price on May 11, 2012, the last business day before it was disclosed Elliott Management had taken a 9.6 percent share and was pushing for a sale.
“BMC believes the opportunity to become a private company will provide additional flexibility and position us to invest more strategically to drive powerful innovation and deliver cutting edge customer solutions,” said Bob Beauchamp, chairman and chief executive officer at BMC. “We look forward to working closely with all parties to complete this transaction and enter into our next chapter of growth and industry leadership.”
The deal represents the largest “pure” leveraged buyout this year, Reuters reported.
Based in Houston, BMC creates software to help manage corporate software networks. The company has two main divisions. Its enterprise service management business counts for nearly two-thirds of the company revenue, networks, databases and storage. About 40 percent of its business comes from managing International Business Machines Corp.’s sizable mainframe computers. That division grows slowly, but offers a valuable asset that should prove profitable to the new owners. The company has had a difficult time staying ahead of rivals in the server software market as more companies rely on web delivered services.
“They’ve been out positioned by some of the growth companies out there,” Joel Fishbein, an analyst at Lazard Capital Markets, told Bloomberg. “The world’s changed from a technology perspective very dramatically, and they haven’t been able to keep up.”
The company’s revenue is expected to grow a mere 3 percent to $2.23 billion in the year ended March 31. The previous year, growth was 5 percent.
A number of buyout firms had expressed interest in the company during its auction process. Bain and Golden Gate aggressively began leading the deal last week.
“BMC is the only enterprise software vendor that can go from mainframe to mobile, with solutions that help IT drive real business innovation and optimize operations management and employee productivity,” said Ian Loring, managing director at Bain Capital.
BMC has 30 days to consider higher bids. The deal is expected to close later this year.
Baidu managed to post impressive revenue growth of 40 percent for the first quarter of 2013, but its earnings missed analysts’ expectations due to excessive R&D costs. The company earned $961 million in total revenue, or 5.97 billion RMB, but missed analyst pre-estimates of 5.99 RMB. Its net income increased 8.5 percent to $328.9 million but fell short of the $354.9 million analysts had predicted in a Bloomberg poll.
The company managed to increase online marketing revenue by 40 percent to 40 percent to $958.5 million (5.95 billion RMB), and increased active online customers by 28 percent to 410,000 compared to the previous year. Revenue per online customer, however, slipped 6.5 percent from the previous quarter.
Meanwhile, the company’s selling, administrative and general costs rose 77 percent, while R&D jumped 83 percent, stymieing its profit despite the recent growth.
The company’s efforts to buy a stake in online video site iQiyi last November also cut into its profit rate.
“For the quarter, we also recognized a whole quarter consolidation of iQiyi,” said Baidu CFO Jennifer Li.
The company predicted second quarter revenue to be between $1.19 billion and $1.22 billion, which analysts are also expecting.
Though Baidu’s CEO Robin Li admitted the company was rapidly “burning through cash,” he described the overall results for the quarter as “healthy” during an earnings call.
“Continually developing the most advanced search technology remains central to Baidu’s overall strategy, and we’re very excited by the possibilities opened up by innovation in image and voice recognition,” Li said. “Our focus will remain on tightly integrating our leading search core with valuable vertical products in areas such as travel, e-commerce and location-based service to bring users the information they want as quickly as possible on both desktop and mobile devices.”
Those waiting for Eventbrite to go public will have to be patient. The online ticketing company recently raised $60 million to buy it more time.
The round was led by Tiger Global Management, and included a new investment partner, T. Rowe Price. It brings Eventbrite’s total investment to $140 million.
“We believe Eventbrite has a strong underlying financial model that will continue to scale, and its valuation will be well supported by traditional financial metrics in the future,” said Henry Ellenbogen, Portfolio Manager at T. Rowe Price Associates, Inc. “When we look at private companies, we look for companies that possess the capabilities and mindset to build a much larger and durable company. We believe that the Eventbrite team has the track record and skills to achieve that status.”
The funding will be used to further innovate the company’s platform, accelerate international growth, evolve its mobile capabilities, and hire personnel.
Though the company has long been eying an IPO, this latest investment means it can take its time.
“This gives us flexibility in setting the timeline for a later IPO, on our schedule,” co-founder and CEO Kevin Hartz told the Wall St. Journal. ”An IPO is an inevitability, but the timing is (to be determined).”
People close to the deal said the company’s valuation was about $600 million to $700 million.
The talk of an IPO was more than just a rumor. Hartz told the Next Web in June that its next capital raising would be an IPO rather than another funding round. The company apparently changed its mind.
Eventbrite competes head to head with Ticketmaster, which is actually Live Nation Entertainment following its merger with Live Nation in 2010. Eventbrite has sold more than 100 million tickets and registrations, or more than $1.5 billion in gross ticket sales since its 2006 founding. A third of those sales have happened in the last nine months.
“Live experiences are the new luxury good — from large festivals and concerts to conferences and political rallies, people are increasingly looking to share live experiences with people of similar interests and passions,” said Kevin Hartz, CEO of Eventbrite. “We’re pleased to be able to work with existing as well as new investors who truly understand the opportunities that these kind of occasions represent, as well as the power of the platform we have built to make them happen.”
Though Supercell only entered the gaming market a couple of years ago and only has two titles in the Apple app store, its overnight success is garnering some serious cash. Forbes recently confirmed the young Finnish gaming startup raised $130 million at a $770 million valuation as investors bet on its multi-billion dollar potential. The financial publication described Supercell “as the fastest-growing gaming company ever” that is likely on track to earn a billion dollars in revenue this year.
IVP and Index Ventures co-led the round with equal investments and were joined by Atomico.
Perhaps even more impressive than the valuation and the size of the check is the company’s accelerating revenues. Supercell earned $179 million last quarter, including $104 million in pure profit. It earned $100 million last year, and is on track to earn at least $800 million this year, and perhaps even a billion dollars. The company earns $2.4 million per day.
It’s a far cry from Zynga, a once golden jewel of the gaming industry that currently trades for a third of its opening day IPO price due to declining revenues. The company had approached a billion dollars in revenue four years after its 2007 founding, but saw earnings continually plummet since mid-2012 as public interest in its games wanes.
As Supercell’s CEO Ilkka Paananen explains to Forbes, Supercell focuses more on the fun of the game than the revenue it will earn. “It really is that simple–just design something great, something that users love,” Paananen told the publication. It is known for celebrating failure, or more exactly, “the learning that comes from failure,” Paananen told Forbes. Whenever a game fails to make it to market, the entire company celebrates with a champagne toast, discusses what went wrong and what they can do better.
Another unique approach the company takes is the cellular game design model. Each game is built by a cellular team that reportedly has no autocratic leader by design.
Though the Finnish company currently has only two titles, Clash of Clans and Hay Day, they’re immensely popular at 8.5 million daily players who each play an average of 10 minutes every day. Supercell’s usage numbers are actually lower than Zynga’s, proving the company has more effective monetization of its base.
With the kind of profitable revenue Supercell has been raking in, it doesn’t really need the cash. It took the money and ran in order to pay off early investors, reward its employees, and avoid going public, at least for a while.
All shareholders, including Accel Partners who invested $12 million at a $52.3 million valuation, as well as employees sold 16.7 percent of their holdings to the new investors. Everyone walked away with some cash in their pockets, not just the executives and early investors.
Supercell plans to live up to its $770 million valuation. It strives to become the Pixar of mobile games, and plans to expand into Asia in the next three years to give billion-dollar Japanese companies GREE and DeNA a run for their money.
Supercell’s investors are certainly confident they can do it.
“…Staggering customer traction, revenue growth and profitability were not the main reasons we invested in Supercell,” explained Index Ventures Neil Rimer on his blog. “We have seen impressive numbers before– granted none quite as impressive as these — but what we found uniquely compelling was the way in which Ilkka Paananen and his team had managed to deliver two incredibly popular games which were showing no telltale signs of declining engagement, with such limited resources. … From our point of view, the Supercell rocket still has a long way to go. We believe it will be one of the companies that will leave a lasting mark on its industry….”
Supercell is proving that the Finnish market still has some impressive startups to deliver, despite the tumble of Nokia that has created a vacuum in the region. Rovio, another Finnish company, was a popular gaming entity with its popular title Angry Birds, and continues to offer a great degree of relevance in the market. Supercell is just another example of the region’s vitality. VCs are betting that its fast growth trajectory is only the beginning of a long journey to come.
In a sign that devops, the practice of fast software deployment, is the next big thing, IBM has acquired UrbanCode, a Cleveland software startup that automates the production and delivery of apps. The company’s systems are aligned with IBM’s own SmartCloud and Mobile First initiatives and will reportedly nicely complement IBM’s Worklight mobile application development platform.
“For example, by combining UrbanCode software with the IBM MobileFirst Worklight technology, businesses can now author and deploy an application for any mobile device in hours, versus a previous multi-day timeline,” IBM explained in a press release. “The UrbanCode solution also works with traditional applications including middleware, databases and business intelligence.”
Terms of the deal were undisclosed.
UrbanCode works to speed up the design, production and delivery of software, cutting down the time between updates to applications. The company’s DevOps platform includes applications such as uDeploy, uBuild, uProvision, and uRelease, and helps to update apps, receive feedback, and improve production speeds. It’s a play that better connects IBM to social, cloud and big data app producers that require rapid development speeds.
“Companies that master effective software development and delivery in rapidly changing environments such as cloud, mobile and social will have a significant competitive advantage,” said Kristof Kloeckner, general manager, IBM Rational Software. “With the acquisition of UrbanCode, IBM is uniquely positioned to help businesses from every industry accelerate delivery of their products and services to better meet client demands.”
IBM will continue to support UrbanCode’s clients and plans to upsell them on a broader portfolio.
“Together UrbanCode and IBM technology will be unmatched in the industry, providing businesses a continuous process for developing, testing, and delivering new and updated software,” said Maciej Zawadzki, chief executive officer, UrbanCode. “By removing the bottlenecks that traditionally exist between development teams and production systems, businesses can drive rapid innovation.”
Its IBM’s second deal of 2013. In the last three years, IBM has spent about $12 million on acquisitions, ISI analyst Brian Marshall noted in the company’s press release.
To gain similar capabilities, BMC, an IBM competitor in systems management tools, acquired Varalogix to accelerate its development speeds.
Netflix topped expectations with its first quarter revenue report this year, earning $1 billion in quarterly revenue and surpassing HBO’s user base with 29.2 million subscribers. Though HBO does not publish customer data, the research firm SNL Kagan estimated that the cable channel had 28.7 million subscribers at the end of 2012. As the New York Times pointed out, Netflix is on track to meeting chief content officer Ted Sarandos’ goal “to become HBO faster than HBO can become us.”
The video streaming company is defying analyst critiques of unsustainability as it accelerates its user base through original programming. It gained 2 million subscribers this last quarter, beating analysts expectations of 1.7 million. Globally, it gained 3 million streaming subscribers. The company released the original series “House of Clouds” in February to critical acclaim. Its second original release, a horror series from Eli Roth titled “Hemlock Grove,” had more viewers its first weekend than “House of Cards” and is particularly popular with young adults. Netflix plans to release a third series, a revival of the Fox sitcom, “Arrested Development,” this Memorial Day weekend.
“The global viewing and high level of engagement with the show increased our confidence in our ability to pick shows Netflix members will embrace and to pick partners skilled at delivering a great series,” the company explained in a letter to shareholders explaining the quarterly results. “The high level of viewer satisfaction implies we are able to target the right audience without the benefit of existing broadcast or cable viewing data and the strong viewing across all our markets gives us faith in our ability to create global content brands in a cost effective, efficient way.”
Netflix stocked jump 6.73 percent to $174.37 on Monday’s release of the quarterly report, and then surged another 20 percent in afterhours trading.
Netflix’s practice of posting all episodes in an original series online had drawn concerns that consumers would sign up only temporarily to watch their preferred content and then unsubscribe. This does not appear to be the case. Only 8,000 customers accepted Netflix’s free trial to watch “House of Cards” and then canceled their subscriptions.
Netflix also announced a new subscriber option designed for large households and families. Whereas the existing service costs $7.99 per month and allows two devices to stream, the company will soon launch an option to allow four streaming devices for $11.99.
Netflix’s profit for this quarter was actually diluted due to a $16 million loss on “extinguishing of debt” related to a February refinancing. Earnings had expected to be 20 cents per a share, but were actually 5 cents. That’s still much better than the company did a year earlier, when it posted a loss of $5 million, or 8 cents a share, for the same quarter last year.
Battling Pandora for turf in the on-demand music streaming service business, Spotify announced plans to expand its footprint into Asia, Latin America and Northern Europe recently on its blog.
The company will expand into eight new countries, bringing its total markets to 28. The new locations include Singapore, Hong Kong, Malaysia, Mexico, Estonia, Latvia, Lithuania and Iceland.
“Today we’re thrilled to announce that we’re bringing a new world of music to eight new markets
across the globe,” Spotify announced on its blog. “We’re taking our first steps in Latin America with Mexico, and Asia with Hong Kong, Malaysia, and Singapore. Plus we’re thrilled to make new friends in Estonia, Latvia, Lithuania and Iceland. This fantastic step now brings us to 28 markets and closer to our dream of making all the world’s music available instantly to everyone, wherever and whenever they want it.”
Based in Stockholm, the company already serves users in the US, most of Europe, Australia and New Zealand.
Founded in 2008, Spotify offers on-demand music content. The company offers a free service that enables users to listen to an unlimited amount of music on desktops for free with advertising sponsorship. That aspect of the service currently has over 24 million active users, which are defined by anyone who has used it in the last 30 days. Spotify Unlimited lets users listen to advertising free music on desktops for $5 per month. The company also offers a premium edition that is advertising free, enables users to download an unlimited amount of music, and listen to the service on any device, including mobile. The paid service downloads can also be listened to without an Internet connection. It has six million paid subscribers.
The company pays about 70 percent of its revenue back to copyright owners, sharing royalty revenue with record labels and artists. It claims to be the solution to Internet piracy by offering users cheap access to music that circumvents the need for illegal downloads and file sharing.
Spotify is rivaled by Pandora, another streaming service that acts as a curated Internet radio based on the tastes of the user. Pandora vastly outsizes Spotify in its free service with 69 million users, but has struggled to earn a profit due to the hefty fees it pays in royalties.
The Spotify Unlimited Service will not be offered in Asia, the Next Web pointed out, as that service requires a desktop and the vast number of Asians using the service will likely do so through mobile. Users can choose a free option, which acts as a curated radio station similar to Pandora, or choose a Premium service for SG$9.90/HK$48.00/MYR 14.90 per month.
The expansion is certainly significant, especially considering the size of the Asian market. Facebook’s biggest market is Asia with more than 250 million registered users, so the region offers plenty of room for growth as the company strives to increase its paid user base.
The China Internet Network Information Center released some startling figures on the growth, size and potential of China’s ecommerce market. The sector earned more than 1.2 trillion RMB ($190 billion) in 2012. That’s a 66.5 increase over what it made the year before.
And with 242 million Chinese Internet users purchasing goods last year in a country of more than 1.3 billion people, there is still plenty of room to grow. Despite the high numbers, ecommerce purchases still made up only 6.1 percent of the total retail sales for all consumer goods in China.
The growth was the result of widespread adoption of mobile, which has introduced the Internet to a growing segment of the Chinese population. In the last half of 2012, 40.7 percent of online shoppers used a mobile device to browse ecommerce sites, with 53.6 accessing ecommerce channels via mobile instead of a traditional desktop.
The most common purchases were clothing, at 81.8 percent, daily necessities, at 31.6 percent, and computers and digital electronics, at 29.6 percent.
About 53.3 percent of respondents used their mobile devices to shop while still at home, as many are turning to mobile instead of desktops to research ecommerce options. About 26.2 percent reported browsing on smartphones at work or school, while 10.6 percent research ecommerce options while in commute or using public transport.
Those are some serious numbers, but it’s only the beginning. China’s ecommerce market is set to soon overtake the US. Last November, China’s “Double Eleven,” a Chinese holiday for singles on November 11 similar to Valentine’s Day, helped Chinese ecommerce site Taobao to earn $3 billion in a single day, more than twice the $1.25 billion Cyber Monday earned in the US just before. Continue to expect startling growth rates from China as its sizable population enters the middle class and can afford next generation technologies.
The Red Herring editorial team selected the 2013 Top 100 Europe. This exceptional group of companies are among the most innovative, unique and promising companies selected from a pool of hundreds from across Europe. The Top 100 were evaluated on both quantitative and qualitative criteria, such as financial performance, technology innovation, quality of management, IP creation, CAGR, execution of strategy, and disruption in their respective industries.
The Samwer brothers, the infamous siblings behind Berlin’s Rocket Internet incubator known for launching clones of successful companies in new markets, have teamed up with Fabian Siegel, one of the co-founders of Delivery Hero, a global online food delivery platform, to launch a new fund to be headquartered in Munich, Germany.
Global Founders Capital will include three partners, including Siegel, Oliver and Marc Samwer, with a €150 million ($194 million) fund provided by unnamed tech entrepreneurs. It will operate separate from Rocket Internet, and will be location agnostic, but given the Samwer brothers name and its European base, it can be assumed that some regions will be given more focus, especially those where funding is scarce. With deals at €100,000 to €10 million, the new fund will focus on anything from seed to late stage that has the potential to lead one or several markets. It is said the fund will be similar to the European Founders Fund, previously launched by the Samwer brothers.
“I was fortunate throughout the last 15 years building Internet businesses. I believe the Internet is providing a once in a lifetime opportunity to entrepreneurs around the world,” Oliver Samwer said in a statement. “With Global Founders Capital we want to support these entrepreneurs with operational know-how, our network and the required funding to scale their businesses.”
Rather than providing follow-up funding or growth capital for Rocket Internet startups, this fund will focus on projects Rocket can’t do.
Though the fund has yet to announce any investments, the partners have already whittled down 800 leads to 130, with the expectation to do about 30 deals, the Wall St. Journal reported. The first investments will be announced later this year.
Much of the selection will have a data focus.
“A lot of VCs don’t appear to have a system. I am going to do 30 deals, but what happens to the 770 deals I am not doing? I want to track them, I want to look at the data. What can we learn from that?” Siegel told the Wall St. Journal. “Maybe we can build something that is more like a machine, that we can understand what works and what doesn’t. Or maybe we will find that it is all gut feeling after all.”
It costs money to look good, and Indochina just got a bundle, raising $13 million in a Series B round led by the Highland Consumer Fund with participation by existing investors Madrona Venture Group, Acton Capital Partners, and Jeff Mallett , Indochino Chairman and former president and COO of Yahoo!.
Tom Stemberg of the Highland Consumer Fund will join the company’s board. Stemberg is the founder of Staples and sits on the board of a broad set of retailers from lululemon athletica to PetSmart.
“Most men need all the help they can get when shopping for their own wardrobe,” says Tom Stemberg, Managing General Partner of Highland Consumer Fund. “By providing higher quality custom menswear at a lower cost, Indochino has revolutionized the direct-to-consumer business and become a global presence in custom menswear.”
Indochina is an online menswear shop that specializes in custom clothing. Shoppers choose from a selection of suits, shirts, outerwear and accessories, select a style for each with customizable options such as linings, trim, and monograms. Each measurement profile is customizable at every level. The suit is then assembled and delivered to the buyer’s home within 35 hours.
The company claims it can offer high quality clothing at a reasonable price by cutting out the middleman at the tailor shop while still providing a speedy service. The company will invest this latest round in building out its management team as well as its marketing and development departments.
“Over the past several years we have seen incredible growth in the world of online to offline fashion,” said Kyle Vucko, CEO and co-founder, Indochino. “Consumers are accustomed to the convenience of online shopping, but want something more personal.”
With this round of funding, the company announced the launch of a pop up “travelling tailor” store in Boston where shoppers can be measured in person.
The online mens shopping sector has gotten a good deal of investment heat lately. Online men’s clothing retailer Bonobos raised $16.4 million last year.