Alternatives Newsletter: October 10th
Good morning,
The attached brief is designed to keep readers informed of the key headlines impacting the startup space. Please let us know if you have any comments or suggestions.
Highlights:
-Small Businesses Can Now Advertise on Spotify with New Ad Studio Launch
-SoftBank-Uber Deal Hits Potential Snag
-Y Combinator Sees Surge in India Applications
-French Taxi Drivers Union Blocks Taxify
-Hulu Picks up 4 New eSports Series
-HelloFresh Plans IPO
-China's Top Anime Streaming Platform Plans U.S. IPO
-MongoDB's Valuation Takes a Hit
Small Businesses Can Now Advertise on Spotify with New Ad Studio Launch -
Spotify Ad Studio’s self-serve audio platform for small business was just launched in the US in beta mode. The tools in Ad Studio let advertisers create and manage audio campaigns, with budgets the company says small businesses can afford. The big question for a small business is, will an audio ad have any impact in today’s video-centric world? According to a 2017 Nielsen Media Lab study, Spotify cites audio ads had 24% bump compared to display ads. It starts by giving users access to 140M daily free ad-supported and paid subscribers who listen to more than two hours of streaming content a day. But more importantly, they can truly target audience, and can choose age, gender, location, activity, and music taste on mobile and desktop platforms. The ads are delivered in 15 or 30 second messages happening between break songs during listening sessions.
SoftBank Billion-Dollar Investment into Uber Hits Potential Snag-
Less than a week after Uber cleared the way for a significant investment by SoftBank, a potential snag has arisen: Benchmark Capital, one of Uber's largest shareholders who has previously sued its former CEO Travis Kalanick, has declined to waive its right of first refusal over the upcoming tender offer, the Financial Times first reported. The waiver by not only Benchmark but other significant Uber investors, those owning more than 2M shares, has puzzled the ride-share firm. Under current terms of the deal, SoftBank along with other investors will spend between $1bn and $1.25bn to purchase additional shares in Uber at a valuation of roughly $68bn. The deal will also see the group purchase secondary shares from existing shareholders at a valuation said to between $45bn and $50bn. Because SoftBank group has yet to submit a price for the secondary shares, major Uber shareholders have the right of first refusal to dismiss the purchase. Several shareholders wish to see the amount first before deciding on whether to buy or sell, according to the report.
Y Combinator sees a surge in Indian startup applications-
Y Combinator, the accelerator behind some of the most-valued startups such as hospitality service Airbnb and payment processing company Stripe, is seeing the most applications from Indian startups after the US in its upcoming applicant pools. The accelerator has already seen the entry of 18 Indian startups, more than the aggregate of 12 between 2011 and 2016. The winter 2017 batch that ended March had 11 Indian startups, while the summer batch that finished in August had seven. The accelerator plans to hold office hours in Bengaluru, Delhi and Mumbai to drum up applications with three of its partners visiting in October.
French drivers block Uber rival's recruitment-
Move over, Uber, there's a new enemy in town. French taxi drivers declared war yesterday on Estonian start-up Taxify, blocking its recruitment offices in protest at its "aggressive" arrival in Paris. Taxi unions have recently staged repeated demonstrations against Uber as debate rages in France over labour conditions for its drivers, who are mostly self-employed contractors with no job security. Taxify, another app which started operations in the French capital last week, has vowed to undercut market leader Uber with backing from Chinese ride-sharing giant Didi Chuxing.
Hulu picks up four new eSports series-
Hulu has picked up four new series that are centered around e-sports, according to Variety. The network-backed streaming service, which has been coming in hot lately with an Emmy-winning original drama and a push toward more back-log seasons of popular series, purchased the rights to about 15 total hours of content from Esports leagues. eSports is growing not only on native platforms like Twitch and MLG.tv, but has gotten mainstream attention as well. Turner has its own ELeague, which is broadcast on TBS and online. And now, Hulu has gotten in on the action with the purchase of this new content from ESL.
HelloFresh plans initial public offering-
German meal kit delivery company HelloFresh has announced plans for an IPO, aiming for proceeds of 250 million to 300 million euros to fund its expansion. HelloFresh, which delivers meal ingredients and recipes and is controlled by Rocket Internet, also said it expected to break even on an operating level (EBITDA) by early 2019.
China's Top Anime Streaming Site Is Said to Plan IPO in U.S.-
Bilibili, China’s top online platform for streaming Japanese animation, is planning a U.S. IPO that could raise at least $200M. The website operator aims to list in New York as soon as next year. U.S. first-time share sales from Chinese companies have already raised $1.3bn this year, nearly triple the same period in 2016, with four of the five such deals this year over $100M are trading above offer price, including last month’s IPO from Zai Lab, which has risen 71%. Baidu Inc.’s iQiyi unit is also targeting a U.S. offering as soon as next year in a deal that could value the online video service at more than $8bn, with the unit agreeing to a licensing deal with Netflix earlier this year that covers television dramas, animated series, documentaries and variety shows. Bilibili has acquired more new Japanese anime titles than any other platform in China, beating Tencent Holdings and iQiyi, according to reports.
$1.6 billion startup MongoDB could be worth less than $1 billion when its IPO happens next week-
Unicorn startup MongoDB has taken another step toward its IPO by offering a price range for its shares: between $18 and $20 apiece it said in an updated prospectus filed with the SEC. The IPO is generally expected to take place at the mid price, as MongoDB would raise about $152M at a $930M valuation. That's quite a bit shy of its last valuation as a private company of $1.6bn. The New York-based database company has been a darling of the VC world. As for financials, the company isn't profitable, albeit revenues are growing and losses are shrinking.
