Sourcery (1/29/2020)
Deals of the day
Sources: TS, Pro Rata, FinSMEs
Attentive, a NYC-based personalized mobile messaging SaaS platform for brands and organizations, raised $70m in Series C funding (read here)
ServiceNow (NYSE: NOW), is to acquire Passage AI, a Mountain View, Calif.–based conversational AI platform company (read here)
Bond, a New York-based startup that offers ecommerce companies delivery and distribution center services, raised $15 million in funding. Investors include Lightspeed Venture Partners, MizMaa Ventures, and TLV Partners.
1Huddle, a Newark-based workforce tech company that trains and motivates employees through mobile games, raised $5 million in Series A funding. Tribeca Venture Partners led the round, and was joined by investors including Humbition, NRD Capital and Newark Venture Partners.
Encantos, a Corte Madera, Calif.-based creator of direct-to-consumer family entertainment education brands, raised $2 million in seed funding. Kapor Capital led the round, and was joined by investors including Boston Meridian Partners, Chingona Ventures, Human Ventures, and MathCapital.
Crown Affair, a New York-based beauty brand, raised $1.7 million in funding from Brand Foundry, Amplifyher Ventures, Thirdlove’s Heidi Zak, Create & Cultivate’s Jaclyn Johnson, Brian Spaly of Bonobos and TrunkClub, and Shiza Shahid of Malala Fund and OurPlace.
Miovision, a Canadian smart traffic platform, raised C$120 million. TELUS Ventures led, and was joined by McRock Capital. http://axios.link/L28s
Securiti.ai, a San Jose, Calif.-based provider of cybersecurity and compliance automation tools, raised $50 million in Series B funding. General Catalyst led, and was joined by Mayfield. http://axios.link/hpWc
Advano, a New Orleans-based developer of solutions for improving rechargeable battery life, raised $18.5 million in Series A funding. SBI Material Innovation Fund, Future Shape, and PeopleFund co-led, and were joined by Thiel Capital, DCVC, and YC. http://axios.link/fCGc
Open Phone, an app for adding a second phone number to a device, raised $2 million led by Slow Ventures. http://axios.link/5lhV
Cooks Venture, an AgTech and food company, raised $4m in funding (read here)
Thistle, a San Francisco, CA-based plant-centric meal delivery company, raised $5.65M in Series A financing (read here)
Wheel, an Austin, Texas-based digital health company building the infrastructure required for virtual care to realize its full potential, raised $13.9m in Series A funding (read here)
Patchwork Health, a London, Manchester and Liverpool, UK-based healthtech startup, raised £3m in funding (read here)
Yumpingo, a London, UK-based restaurant intelligence platform, raised $10m in Series A funding (read here)
Funds:
Prime Movers Lab, a Jackson, Wyo.-based partnership that invests in breakthrough scientific startups, raised approximately $100m for its first early-stage fund (read here)
. . .
Sources: MorningBrew, Axios
U.S. markets: Stocks recovered from Monday's huge sell-off. Which is good, because the calendar only gets busier from here. Today, the Fed will make its monetary policy announcement and some of the world's biggest companies report quarterly earnings.
2020 appears to be the year that Corporate America is serious about addressing climate change, but it remains unclear if venture capitalists plan to join the fight.
Many VCs still have painful scars from the mid-to-late aughts, when they lost billions on investments in "cleantech" companies.
Those deals were largely based on a presumption that federal climate policy, if not also dollars, would move swiftly and strongly in a favorable direction. But that didn't really happen, and VCs became saddled with manufacturing-intensive businesses that they didn't really know how to properly manage.
To be sure, much has changed over the past decade. Renewable energy has become more price viable, there's a much more comprehensive capital stack, and there's a wider supply of interested institutional capital (as opposed to before, when it was mostly fueled by a pair of large California pension plans).
But I'm still not hearing much interest, outside of the few remaining survivors from the last go-around. And that's a big stumbling block, because fundamental climate solutions like carbon capture will rely on the very sorts of commercialized innovations that venture capital is charged with enabling.
And, for existing technologies that require greater deployment, both growth equity and private equity have key roles to play.
The bottom line is that if Corporate America is really serious, beyond PR-laden lip service, then it must work to convince venture that it will be the change agent — particularly as a customer throughout the supply chain — that the federal government failed to be. It can be done, but it will take more than press releases out of Davos.
•Going up: Last week we discussed the bidding war for Thyssenkrupp’s elevators unit, arguing that a private equity win would confirm that German sentiment has softened on the onetime "locusts."
Maybe we needn't wait for a winner. Finnish strategic Kone reportedly has made the highest bid so far, at a whopping €17 billion, but the head of a German labor union says "offer size alone is not enough." Apparently believing that a sale to private equity could save more member jobs.
•Breaking: The WSJ reports that Victoria's Secret could be on the block. Word is that private equity has been kicking the tires pretty hard.
How much more can a $1.4T company grow? Heading into earnings yesterday, momentum was already in Apple's favor: Shares were up 30% since its last report and over 100% from a year ago.
Unlike The Morning Show, Apple didn't disappoint. Fiscal Q1 revenue rose 9% annually to $91.8 billion—beating most expectations by $3+ billion. Let's dig in.
The goods
CEO Tim Cook pointed to strong performances from iPhone 11s and the Wearables, Home, and Accessories division, which did $10+ billion in quarterly sales for the first time ever. If those numbers are so big to the point of abstraction, here's another: Apple passed 1.5 billion active devices globally.
Wearables specifically were up 44%, Cook said, and over 75% of Apple Watch buyers were first-timers. But the product du jour was AirPods, which Apple can’t make enough of to satisfy demand.
The company didn't disclose numbers, but one analyst estimates AirPods did as much as $4 billion in Q1.
Big picture: Apple is king and queen of the wearables market.
And the services?
Cook's been refocusing Apple on services, including subscription video, gaming, and payments. Last quarter, the division took in $12.7 billion—a 17% year-over-year increase. The highlights:
Apple has 418+ million paid subscriptions across its platforms and expects half a billion come March.
Apple Pay revenue and transactions more than doubled annually.
Executives said they're using subscriber totals to judge Apple TV+'s success…but stopped short of handing over those digits.
And China
Revenue from Greater China, Apple's second-most important market, rose 3% annually to $13.6 billion.
About a year ago, Apple cut its sales forecast over fears of lower iPhone demand among Chinese consumers.
But yesterday, Cook said iPhone revenue grew by double-digits on the mainland in Q1.
Looking ahead...Apple is closely monitoring the coronavirus outbreak, which could hurt sales during the Lunar New Year and impact some of its production as plants remain closed around the country.
Apple reported record quarterly revenue and profits well-above estimates and its own forecasts thanks to better-than-expected iPhone and services sales. (Axios)
CEO Tim Cook, however, told CNBC that the company has shut one store in China and restricted employee travel, and Apple's expected Q1 revenue has a $4 billion range due to uncertainty around the coronavirus outbreak.
Starbucks is temporarily closing more than half of its 4,300 stores in China as a result of the coronavirus outbreak. (NPR)
The White House told airline executives it is considering suspending all U.S. flights to and from China as the number of confirmed cases rose to near 6,000, already surpassing the SARS pandemic. (CNBC)
Match Group CEO Mandy Ginsberg announced she will be leaving her role at the company, the owner of online dating sites including Match and Tinder. (Axios)
Hyperdynamic Pricing. Hotels and airlines are now using artificial intelligence software to re-price tickets and stays, sometimes dozens of times a day, the New York Times reports.
Why it matters: More often than not this is resulting in higher prices for consumers as great deals are removed from travel websites and replaced by higher prices when the AI software notices increasing demand.
How it works: "Traditionally, hotels and airlines priced their offerings depending on peak demand periods, past sales data and the number of current reservations." Per NYT...
"Now, changes in travel pricing are being made much more frequently. The practice, called 'hyperdynamic pricing,' is poised for significant growth, said Angela Zutavern, a managing director at the technology consulting firm AlixPartners."
Go deeper:In the Race for Cheap Airfare, It’s You vs. the Machine (NYT)
. . .
More headlines…
Sources: MorningBrew, Axios, Bloomberg
The Top Five Myths About Building Billion-Dollar Startups 365 Ventures
The duo behind Honey, the coupon app that recently sold to PayPal, are now worth about $1.5 billion.
3M, the conglomerate that makes Scotch tape (and much more), is cutting 1,500 jobs. It missed expectations on both the top and bottom lines last quarter.
Nike said its online store sold out of items related to Kobe Bryant. Earlier inaccurate reports claimed it had pulled those products.
Starbucks beat earnings expectations but also said the coronavirus could negatively affect business. The chain has closed more than half of its Chinese stores.
C-suite shakeups: Match Group CEO Mandy Ginsberg is stepping down months before the company is slated to be spun off. And J.Crew is getting a new boss—former Victoria's Secret exec Jan Singer.
Facebook proposed bylaws for its upcoming oversight board. It also announced "Off-Facebook Activity," a tool that lets you see and delete data about your internet activity sent to Facebook by other businesses, websites, and apps.
Related: Pew found that 74% of U.S. adults support an option to remove potentially damaging personal info from online searches. Pertinent to the "right to be forgotten" clauses of GDPR.
L Brands CEO Les Wexner is in talks to leave his role and break up the company, the WSJ reports.
Chipotle agreed to pay a $1.3 million fine for 13,253 child labor violations in Massachusetts.
The Vitamin Shoppe has opened stores within nine existing LA Fitness gyms.
Three retail chains filed for bankruptcy Monday: Lucky’s Market, Bar Louie, and Bakers Square and Village Inn owner American Blue Ribbon Holdings.
PwC reports retail M&A transaction value fell 28% in 2019.
Big Tech is getting greener — but that’s not keeping it out of climate advocates’ crosshairs, Axios' Ben Geman reports.