The Exchange – Page 3

Meta’s metaverse wager is also a bet on founder control • ZebethMedia

By zebethcontrolPosted on October 27, 2022Posted in EC Consumer Applications, EC Newsletter, Facebook, meta, meta earnings, reality labs, Social, The ExchangeNo Comments

Meta’s other bet is making Alphabet’s long-running Other Bets segment appear cheap, both in cash and market cap terms. Shares of Facebook’s parent company plummeted after the company reported huge costs and losses associated with its future-facing metaverse project, accompanied by a revenue decline that, while forex-impacted, was still far from the heady days when Meta only seemed to grow no matter the business climate. And the company is signaling that more spending is coming. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Meta’s trailing results and future operational guidance pushed its shares down just under 23% in pre-market trading. That the company is not changing course even after shedding more than half of its value, measured from 2021 highs, amid public calls from investors for a course-correction is notable. Today, I want to go over the company’s results as they relate to Reality Labs, or what is colloquially known as the Meta metaverse project, and what the company said in its earnings report. Meta, I believe, is behaving like a startup — wagering a large portion of its wealth on building what’s next. If you don’t agree with CEO Mark Zuckerberg’s vision for the future, I feel you.

Big Tech falls short in the first salvos of the Q3 earnings cycle • ZebethMedia

By zebethcontrolPosted on October 26, 2022Posted in big tech, earnings, EC Consumer Applications, EC Enterprise, EC Newsletter, Enterprise, google earnings, microsoft earnings, The ExchangeNo Comments

If you are a believer in the endless concentration of corporate power, the work of major tech companies to extend their reach into all areas of the digital economy must bring you joy. If you are more in favor of upstart companies attacking and bringing to heel incumbent wealth by the (figurative) sword, it’s probably less welcome. Big Tech companies, once they reach a certain scale, often have the wealth and influence to buy, build or bury their smaller competition. But no matter on which side of the platform wars you stand, the sprawl of the major tech companies means that they regularly off-gas a plethora of statistics that we can use to better understand the world. Given the ever-changing state of the world’s economy this year, the information that Big Tech earnings provide is even more important than usual. As we noted earlier this week, ZebethMedia+ has several questions that we want to be answered during this particular earnings cycle, and yesterday, thanks to Alphabet and Microsoft, we can begin to remedy our own queries. Today, we’re talking through the advertising, enterprise software, cloud and consumer-related inquiries. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. For broad-based looks at how Google etc. and Redmond fared in aggregated numerical terms, head here and here, respectively.

Five questions to consider ahead of Big Tech’s Q3 earnings • ZebethMedia

By zebethcontrolPosted on October 25, 2022Posted in Amazon earnings, apple earnings, EC Cloud and Enterprise Infrastructure, EC Enterprise Applications, EC Newsletter, Enterprise, Startups, tech earnings, The ExchangeNo Comments

Today after the bell, Alphabet and Microsoft will report their calendar third-quarter financial results. Given the breadth of industries that each of these companies touch, their performance will provide us with rich data concerning different areas of the technology landscape. The fun will continue tomorrow when Meta reports its own results. And later this week, we’ll hear from Apple and Amazon, completing the “Big Five” technology earnings reporting cycle in just a handful of days. Get ready for a blizzard of numbers. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Most folks don’t love reading earnings reports, dry documents that are an odd combination of canned CEO-speak and raw numbers. The proffered executive commentary is too pre-chewed to mean much, and numbers are just that: figures on a page. To help you cut a useful line through the upcoming numerical flurry, I’ve detailed below five questions that ZebethMedia+ wants to answer in the coming days. Our queries are centered around issues that impact startups, so we’ll relate each question and its supporting data points back to upstart tech companies.

What does Instacart’s supposedly delayed IPO teach us about how unicorns think? • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in EC Ecommerce and D2C, EC Newsletter, EC venture capital, Instacart, instacart IPO, Startups, The Exchange, VentureNo Comments

Instacart has left us IPO nerds feeling whiplashed. Late last week, Reuters reported that the American grocery delivery and technology company might probably shelve its IPO until next year. The richly valued startup was poised to become the splashiest public offering of the year in the United States, but now it appears we won’t get to see the implications of the IPO’s reception for at least a few more months. Instacart going public is notable not just due to its own corporate history. The company raised huge sums, grew immensely during the pandemic and is in the midst of an expanding into advertising and software. The IPO was also set to be a critical affair for other, yet-private unicorns, as it would have provided some indication of how the public market felt about at least one of their peers. Sadly, we are likely bereft of new unicorn liquidity information for the rest of calendar 2022. While disappointing, this turn of events does teach us a few things. (Instacart declined to comment on its IPO timing, but did reveal some juicy info on its Q3 performance — details below.) The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Recall that Instacart got a new, lower 409a (internal) valuation earlier this month. So we are seeing the company delay its IPO despite what we could consider to be a lower hurdle ahead of it — in terms of pricing, at least.

Could machine learning refresh the cloud debate? • ZebethMedia

By zebethcontrolPosted on October 22, 2022Posted in cloud infrastructure, expensify, Robotics & AI, Startups, TechCrunch Exchange newsletter, The ExchangeNo Comments

Welcome to The ZebethMedia Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily ZebethMedia+ column where it gets its name. Want it in your inbox every Saturday? Sign up here. Should early-stage founders ignore the never-ending debate on server infrastructure? Up to a point, yes: Investors we talked to are giving entrepreneurs their blessing not to give too much thought to cloud spend in their early days. But the rise of machine learning makes us suspect that answers might soon change. — Anna Bare metal, rehashed If you had a sense of déjà vu this week when David Heinemeier Hansson (DHH) announced that Basecamp’s and Hey’s parent company 37signals was leaving the cloud, you are not alone: The debate on the pros and cons of cloud infrastructure sometimes seems stuck on an infinite loop. It is certainly not the first time that I heard 37signals’ core argument: That “renting computers is (mostly) a bad deal for medium-sized companies like ours with stable growth.” In fact, both DHH’s rationale and its detractors strongly reminded me of the years-old discussion that expense management company Expensify ignited when it defended its choice to go bare metal — that is, to run its own servers. However, it would be wrong to think that the parameters of the cloud versus on-premise debate have remained unchanged. As Boldstart Ventures partner Shomik Ghosh noted in our cloud investor survey, there’s more to on-prem these days than running your own servers. Debate aside, I think most of us can agree that bare metal is not for everyone, which is why it’s interesting to see a middle ground emerge. “In terms of terminology,” Ghosh said, “I think on-prem should also be called ‘modern on-prem,’ which Replicated coined, as it addresses not just bare metal self-managed servers but also virtual private clouds, etc.”

Forget flat — small cuts are the new up • ZebethMedia

By zebethcontrolPosted on October 20, 2022Posted in Databricks, EC Newsletter, EC venture capital, Startups, stripe, The Exchange, VentureNo Comments

When venture markets flip from greed to fear, there’s a meme that goes around in startup circles that flat is the new up. It’s shorthand for the idea that in more difficult market conditions, a startup defending its prior valuation in a proximate venture round is as good as raising new capital at a higher valuation in better investing conditions. The brutal repricing of tech companies in the last year has led to some notes — including from this publication — that we had once again found ourselves in flat = up territory. Today, however, the game looks a little bit different. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. News that Stripe is reportedly trying to execute a soft layoff by culling lower-performing staff landed today, along with news that Databricks, one of the other most valuable startups of all time, trimmed its internal (409A) valuation by a modest amount, around 7%. Naturally, you might look at the news and think, dang, some of those unicorns did get out of pocket last year! After all, fintech giant Stripe took a 28% haircut to its own internal valuation earlier this year, so surely we’re seeing signs of excess being drained out of the market? Actually no, not really.

Netflix results confirm we’re not in 2021 anymore • ZebethMedia

By zebethcontrolPosted on October 19, 2022Posted in earnings, EC Media, EC Newsletter, Media & Entertainment, Netflix, The ExchangeNo Comments

Beating expectations is worth something again I don’t know if anyone’s really noticed, but Netflix had a pretty great third quarter, thank you very much. The streaming platform added 2.41 million subscribers when it only expected 1 million. It also beat analysts’ financial expectations, with $7.93 billion in revenue rather than $7.85 billion. Plenty has been written about Netflix’s good results, how much it has to do with its content strategy, and how it compares to rivals like Disney+. But for this column, we’re more interested in how the markets reacted: with a virtual clap. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. No longer priced-in If you have been following quarterly earnings from public tech companies like The Exchange has, you may remember that not so long ago, outstanding growth was met with little more than a shrug. Why? Because in market parlance, it was already “priced-in.”

Maybe we didn’t deserve any IPOs this year • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in EC Newsletter, EC venture capital, IPOs, startup exits, Startups, The Exchange, VentureNo Comments

From one perspective, DoorDash is a bargain today. The same goes for Coinbase, UiPath, AppLovin, Oscar Health, Bumble, and Qualtrics. Indeed, if you pick nearly any 2021 technology IPO and compare its debut price to where it trades today, you will find that the market is offering yesteryear’s standouts at a massive discount. So much of a discount that it’s hard to not wonder if at least part of the reticence of the 2022 IPO market is not predicated on macro conditions, but the more specific — dare we say microeconomic? — awful performance of the public debuts that we saw last year. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. The declines in question are not small, and they are not merely extant when measured from all-time highs. We’re talking bad returns here from the perspective of any time frame. Part of the issue is the simple fact that 2021 valuations were higher than what we see today. It is valid to handicap negative outcomes with pertinent fluctuations in the underlying market; that said, we often cannot provide enough handicapping to get anywhere close to eliminating the fact that so very many 2021 tech IPOs were, from a returns perspective, hot garbage once they were floated.

Pay as you drive, or pay how you drive? • ZebethMedia

By zebethcontrolPosted on October 15, 2022Posted in auto insurance, EC insurtech, Fintech, TechCrunch Exchange newsletter, The ExchangeNo Comments

Welcome to The ZebethMedia Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily ZebethMedia+ column where it gets its name. Want it in your inbox every Saturday? Sign up here. Having talked to many insurtech investors lately, I found myself thinking about usage-based insurance (UBI, which in this case doesn’t refer to universal basic income). On a surface level, this approach makes a lot of sense: For instance, why should drivers pay the same premiums regardless of how many miles they drive? But differentiating users also raises all sorts of questions on what’s fair, and where UBI is heading next. — Anna Stop paying for others? “There has been a lot of noise around UBI […] over the past few years. It was supposed to be the next big thing, but it hasn’t really taken off yet,” New Alpha Asset Management associate Clarisse Lam told ZebethMedia. AV8 VC‘s partner Amir Kabir concurred with Lam, noting struggles among startups and legacy insurance providers alike: “Early startups operating the UBI space had a hard time creating meaningful moat,” he said. Meanwhile, he added, “incumbents have been operating in the UBI space for decades and have yet to see major adoption.” Coincidentally, or perhaps not, one of the insurtechs that was most badly hit by the stock market sell-off was Metromile, which went public in 2021 and saw its valuation decline over 85% before getting acquired by fellow former startup Lemonade. Metromile’s focus was pay-per-mile car insurance, a self-explanatory concept in which drivers get charged less if they drive less.

Is this really the second-best time ever to raise early-stage capital? • ZebethMedia

By zebethcontrolPosted on October 14, 2022Posted in EC Newsletter, EC venture capital, Startups, The Exchange, VentureNo Comments

“The 2022 venture capital market” is nearly a misnomer, as each quarter that passes seems to bring with it a new normal for startup investment. The pace of quarterly change in how venture investors are disbursing capital is making full-year numbers almost misleading. The change inside of 2022, in other words, may at times mask just how much things have been evolving more recently; January and February feel like years ago in startup time, not merely a few quarters back. Such is the case with the early-stage venture capital market in the United States. PitchBook data paints two perspectives on what’s going on today for younger startups. The first is that 2022 will be, when it closes in less than three months, the second-wealthiest early-stage startup investing period in history. That’s good and we presume welcome news for founders. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. At the same time, however, given successive quarterly declines, we are also looking at an early-stage market in retreat. So is it more important to look at Q3 2022 data for venture segments than year-to-date data for the same, if our goal is to grade, or at least understand, the current startup investing climate?