Year: 2019

Jeff Bezos -founded Blue Origin has recorded another successful mission for its New Shepard sub-orbital launch vehicle, which is a key step as it readies the spacecraft for human spaceflight. This is also the six flight of this re-used booster, which is a record for Blue Origin in terms of relying and recovering one of its rocket stages.

This is the ninth time that Blue Origin has flown commercial payloads aboard New Shepard, and each launch moves it one step closer to demonstrating the system’s readiness for carrying crew on board. This launch carried experimental payloads on board that will be used for research, including materials used in student studies. It also had thousands of postcards on board written by students from around the world, which were submitted to the Club for the Future non-profit set up by Blue Origin earlier this year to provide educational resources about space to schools and students.

Blue Origin intends to fly paying space tourists aboard New Shepard eventually, along with other commercial astronauts making the trip for research and other missions. Up to six passengers can fit in Blue Origin’s capsule atop the New Shepard, but we don’t yet know when it’ll actually be carrying anyone on board, either for testing or for commercial flights.

Today, on stage at TechCrunch Berlin, four of Atomico’s most senior partners took the stage together for the first time, flying into the city from London, Stockholm, and Geneva to talk about a wide range of issues. Among the many things we discussed were direct listings, secondary investments, and the firm’s sweet spot, which, despite its global reach, largely remains on pan-European companies and largely startups needing Series A stage funding, to which Atomico typically writes checks of between $5 million and $15 million in exchange for an ownership stake of between 15 to 20 percent.

We also spent some time talking about the changing complexion of investors in Europe, where pension funds contributed just $902 million of the roughly $13 billion that investment firms in Europe raised last year, according to Atomico’s own research — and we discussed why more money came from outside of Europe to fund regional startups than within it.

We’re zooming in out that part of the conversation for readers; if you missed our discussion and would like to check out other parts of it, you can find it below.

TC: It was surprising to read in your recent state of European tech report that pension funds don’t account for more of the money being raised by venture firms, that much more of the funding continues to come from family offices and high net-worth individuals. Is the problem structural? Is it cultural?

HT: I think the world is waking up to the fact that European venture has comparative performance today with U.S. venture returns. There’s research in that area that’s relatively authoritative in that area.

As a function that yes you’re right [that this an issue]. Pension funds in Europe have roughly $4 trillion under management, but a billion dollars [invested last year in venture firms] is a three-fold increase from the year before, so it is material. But as you say, if you think about the $4 trillion that they are managing, it could probably be put to good use deploying capital into venture capital funds that are looking to change the world in a positive way, because that is what impacts the pensioners who are behind that capital. [So] hopefully we’ll continue to see that trend because there’s more to do there.

TC: Also interesting from your report is the fact that $13 billion from European VCs has been plugged into startups over the last year, which means two-thirds is coming from somewhere else. Where?

SK: This is the way it should be. The companies that that we think should be coming from Europe — a lot of the ones we look to back — are by ambition global companies, And being global also means having investors from other regions, so it’s not a bad thing. I don’t think we should be as investors saying, ‘Well, the funding has to all come from here.’ I think it’s a sign of success that European companies are getting investments from Chinese investors, from U.S. investors, which is really what’s happening.

HT: The universe of tech is expanding to involve many industries, so what’s naturally happening is that a lot of different types of venture capital, strategic, corporate, and individual [investors are]  all getting involved in what is actually happening.  I think that a reflection of where tech is going well, and has been going for the several years if not decades.

TC: Are you seeing more money specifically coming from China because of the ongoing trade war between the coutry and the U.S.?

SR: There’s an interesting point there, which is that [for] certain kinds of companies, particularly a lot of frontier, deep tech companies that are considered sensitive. Europe is kind of neutral ground, so we can get customers from the U.S., customers from China,  and there are examples like Graphcore, one of our portfolio companies, where you know this is tech that is not [saddled] with restrictions that might come with some ongoing spat, and that’s an advantage for us.

TC: In the US, over the last 10 or 15, years, far more money from the Middle East sovereign wealth funds has come into the US, raised by venture firms. Given that some of these regions don’t exactly have unimpeachable human rights records, there’s a lot of debate in the U.S. about whether or not founders and VCs should be taking theirmoney. Do European startups care? Do European venture capital firms care?

HS: I think so, not only [do they care] about what they’re doing in terms of what you know impact to the world, but what type of capital they are choosing, And more people who are becoming founders and entrepreneurs are clearly sensitive, and the people who are tackling big missions and big problems are clearly sensitive in terms of alignment with their investors. And I think that is something that will continue to be a trend that we see with the matching of the type of capital, the investor, and the entrepreneur. I think that will definitely be a continuing trend that we see.

SR: We’re very selective with our [own] LPs. A lot of our LPs are pension funds, which is a really nice virtuous cycle. The pensioners are doing well off of the investment performance that we’re working hard to deliver. And then the founders can feel good about the fact that in many cases, you know, the majority of money may be [from] pensioners.

TC: Your LPs are mostly pension funds? And family offices? And mainly European investors?

SR: I don’t have the stats at hand but I’d say mainly European, yeah.

Google today released its annual “Year in Search” data that takes a look back at some of the biggest searches of 2019. Specifically, Google looked at the biggest trends — meaning, search terms that saw the largest spikes in traffic over a sustained period in 2019 compared to 2018. In the U.S., Disney’s new streaming service “Disney Plus” was the biggest search trend of 2019, followed by Cameron Boyce, Nipsey Hussle, Hurricane Dorian, Antonio Brown, Luke Perry, Avengers: Endgame, Game of Thrones, iPhone 11, and Jussie Smollet.

“Game of Thrones” was also the biggest U.S. TV show search trend of the year, followed by Netflix’s “Stranger Things” and “When They See Us,” then HBO’s “Chernobyl,” and Disney Plus’s “The Mandalorian.”

On the global stage, Apple’s iPhone 11 was the fifth biggest trend of the year, one ahead of Game of Thrones (#6), but behind searches for “India vs South Africa,” which ranked No. 1. The rest of the list included (in order): Cameron Boyce (#2), Copa America (#3), Bangladesh vs India (#4), Avengers: Endgame (#7), Joker (#8), Notre Dame (#9), and ICC Cricket World Cup (#10).

Tech companies’ influence on Google’s Top Trends could also be found in the music category, where “Old Town Road” was the top trending Song globally and in the U.S. in 2019. The Lil Nas X hit song went viral on TikTok this year after the rapper himself uploaded it to the platform back in December 2018.

In addition to topping Google’s list, Lil Nas X was also the No. 1 artist on TikTok according to its own year-end round-up.

Elsewhere, online and tech-influenced trends could be found under the “What is…?” category in Google’s top U.S. search trends. For example, the meme “Storm Area 51” which grew out of of a viral Facebook joke that turned into a real-world event led many this year to search “What is Area 51?”

No. 2 was “What is a VSCO girl?” referring to the latest teen trend and meme whose name comes from the hipper-than-Instagram photo-editing app, VSCO. The VSCO girl dresses in oversized tees, Birkenstocks, wears her hair in a messy bun, and adorns herself with accessories like scrunchies, Burt’s Bees lip balm, puka shell chokers, and carries around a Hydro Flask water bottle.

Also on the “What is…?” list were “momo” as in the “Momo Challenge,” (an artistic sculpture turned viral hoax) and “What is a boomer?,” referencing the latest teen insult for old people, “OK boomer.” The latter also became a huge TikTok meme.

Various online cultures influenced Google’s top U.S. outfit trends, too, including the No. 1 outfit idea of Egirl, a popular demographic found on TikTok that’s a sort of emo subculture (or perhaps an emo-anime-goth variation), followed by Eboy, Soft girl (another TikTok subculture, this time with a hyper-cute aesthetic), and finally Biker shorts and VSCO girl. (If you don’t know which one you are, don’t worry — there’s a BuzzFeed quiz for that, of course.)

Google’s top trends are mainly a reflection of pop culture for the year, Google did take a longer look back this year with its “Decade in Search” retrospective, where it highlights the music, movies and people who influenced culture over the past 10 years.

The company put together a busy visualization of the decade in music through Year in Search, for example.

It also points to some of the people who trended over the course of the decade, including Justin Bieber, Betty White, Lebron James, as well as long-lasting TV and movie trends, including “Toy Story”, “Iron Man,” and “The Walking Dead.”

The full list of Google’s Global Top Trends, which can be filtered by country, is here.

Fourteen startups presented on-stage today at Disrupt Berlin, giving live demos and rapid-fire presentations on their origin stories and business models, then answering questions from our expert judges.

Now, with the help of those judges, we’ve narrowed the group down to five startups working on everything from productivity to air pollution.

These finalists will be presenting again tomorrow (at 2pm Berlin time, viewable on the TechCrunch website or in-person at Disrupt) in front of a new set of judges. The winner will receive $50,000 and custody of the storied Disrupt Cup.

Here are the finalists:

Gmelius

Gmelius is building a workspace platform that lives inside Gmail, allowing teams to get more bespoke tools without adding yet another piece of software to their repertoire. It slots into the Gmail workspace, adding a host of features like shared inboxes, a help desk, an account-management solution and automation tools.

Read more about Gmelius here.

Hawa Dawa

Hawa Dawa combines data sources like satellites and dedicated air monitoring stations to build a granular heat map of air pollutants, selling this map to cities and companies as a subscription API. While the company notes it’s hardware agnostic, it does build its own IoT sensors for companies and cities that might not have existing air quality sensors in place.

Read more about Hawa Dawa here.

Inovat

Inovat makes it much easier for travelers to get reimbursed for the value-added tax, through an app that employs optical character recognition and machine learning to interpret receipts, determine how much VAT you should be owed for your purchase, and prepare the requisite forms for submission online or to a customs officer.

Read more about Inovat here.

Scaled Robotics

Scaled Robotics has designed a robot that can produce 3D progress maps of construction sites in minutes, precise enough to detect that a beam is just a centimeter or two off. Supervisors can then use the software to check things like which pieces are in place on which floor, whether they have been placed within the required tolerances, or if there are safety issues like too much detritus on the ground in work areas.

Read more about Scaled Robotics here.

Stable

Stable offers a solution as simple as car insurance, designed to protect farmers around the world from pricing volatility. Through the startup, food buyers ranging from owners of a small smoothie shop to Coca-Cola employees can insure thousands of agricultural commodities, as well as packaging and energy products.

Read more about Stable here.

This week Gtmhub announced a $9 million Series A led by CRV. The investment was not a large round, even for an A. But the capital found its way into one of the fastest-growing SaaS companies that we’ve spoken with recently, which made it interesting all the same.

And, the firm was willing to talk about its financial performance in some detail. The combination made its Series A impossible to ignore.

TechCrunch caught up with Gtmhub’s CMO Seth Elliott this morning to learn more. 

What it does

Let’s start with OKRs. Objectives and key results, better known as OKRs, are a method for organizational planning. They are famous thanks to their roots in Google’s success, but have since broken free of the technology world and become a well-known planning method for corporations of all sizes and types.

Gtmhub deals with them, providing software and services around OKR implementation, training and tracking. (If you an OKR neophyte, head here for a quick overview of what they are.)

Making OKR software isn’t a differentiator in today’s market. Ally does it (it also raised capital recently), along with WorkBoard, Koan and Lattice, among others.

Given the crowded market, Gtmhub stressed during our call how it thinks of itself as differentiated. The company has three things that it hopes will give it an edge in the market. The first is a focus on enterprise customers. According to Elliot, enterprise-sized clients are his company’s “bread and butter,” from a revenue perspective. Instead of starting with a small or mid-sized business target market and later targeting enterprise-scale customers, Gtmhub is going after the top-end of the market first.

Second, the company’s software is designed to interface with external tooling, allowing for real-time OKR tracking as it ingests information to help teams vet how they are progressing against their goals. And, the firm is working on a marketplace where, over time, customers will be able to learn from existing OKR setups and leverage analytics setups that help with data importation and visibility.

In its own words, Gtmhub is an OKR-centric software company, while “provid[ing] a long-term vision and the execution process necessary to bridge the strategy/execution gap,” according to Elliot.

Notably, Gtmhub, despite its enterprise focus, is not abandoning smaller companies. According to Elliot, the startup is announcing a new, stripped-down, $1 per user per month plan next week called START, aimed at smaller firms.

If START is an attempt to onboard companies when they are small so they can be upsold later, or if it is more a contra-competitor move, isn’t clear. But the new, cheap plan (priced at about 10% of other Gtmhub tiers) could shake up the OKR software space by making table-stakes features worth less than they were before.

Gtmhub’s round

Gtmhub is a distributed company, with offices in Denver, Sofia, Berlin and London for its roughly 60 workers. You might think, given its global footprint and number of employees, that the company had raised lots of capital to fund its operations. The opposite, as it turns out.

The startup’s $9 million Series A dwarfs its preceding rounds, including about $3.2 million in seed capital raised over two rounds (one, two) in February of 2018. Aside from those checks and the new capital, all we know about Gtmhub’s fundraising history is that it picked up $100,000 in angel money in early 2017.

All told, Gtmhub has raised just over $12 million to date, making its Series A about 73% of its known raised capital. That’s not the mark of a company built on burn.

Of course, if Gtmhub kept a lid on its expenses by growing slowly, its parsimony might be more sin than virtue; after all, private companies backed with venture dollars are built for expansion.

The opposite, as it turns out.

Growth

Elliot shared a number of notable metrics with TechCrunch that we’ve prepared for you below, in an ingestible format:

• ARR growth: Over 400% year-over-year (YoY)
• Gross margin: Above 90%, up from over 80% YoY
• ACV trends: +650% YoY

Take a moment and square those results with how much capital Gtmhub raised and ask yourself if the performance matches the raise. It doesn’t. I suspect that Gtmhub could have raised a lot more money than it chose to, given its growth rate and other marks of financial health.

But, after expanding to 60 people on less than $3.5 million in known venture, the company probably isn’t too unprofitable, and can do a lot with just $9 million. (Gtmhub could also raise more if it needed to, given its metrics.)

With Gtmhub and Ally each flush with new cash, it’s going to be enjoyable to watch the OKR and OKR-empowered software space grow over the next few years. There will be eventual consolidation, right?

Photo by Startaê Team on Unsplash

A year ago, we asked some of the most prominent smart home device makers if they have given customer data to governments. The results were mixed.

The big three smart home device makers — Amazon, Facebook and Google (which includes Nest) — all disclosed in their transparency reports if and when governments demand customer data. Apple said it didn’t need a report, as the data it collects was anonymized.

As for the rest, none had published their government data-demand figures.

In the year that’s past, the smart home market has grown rapidly, but the remaining device makers have made little to no progress on disclosing their figures. And in some cases, it got worse.

Smart home and other internet-connected devices may be convenient and accessible, but they collect vast amounts of information on you and your home. Smart locks know when someone enters your house, and smart doorbells can capture their face. Smart TVs know which programs you watch and some smart speakers know what you’re interested in. Many smart devices collect data when they’re not in use — and some collect data points you may not even think about, like your wireless network information, for example — and send them back to the manufacturers, ostensibly to make the gadgets — and your home — smarter.

Because the data is stored in the cloud by the devices manufacturers, law enforcement and government agencies can demand those companies turn over that data to solve crimes.

But as the amount of data collection increases, companies are not being transparent about the data demands they receive. All we have are anecdotal reports — and there are plenty: Police obtained Amazon Echo data to help solve a murder; Fitbit turned over data that was used to charge a man with murder; Samsung helped catch a sex predator who watched child abuse imagery; Nest gave up surveillance footage to help jail gang members; and recent reporting on Amazon-owned Ring shows close links between the smart home device maker and law enforcement.

Here’s what we found.

Smart lock and doorbell maker August gave the exact same statement as last year, that it “does not currently have a transparency report and we have never received any National Security Letters or orders for user content or non-content information under the Foreign Intelligence Surveillance Act (FISA).” But August spokesperson Stephanie Ng would not comment on the number of non-national security requests — subpoenas, warrants and court orders — that the company has received, only that it complies with “all laws” when it receives a legal demand.

Roomba maker iRobot said, as it did last year, that it has “not received” any government demands for data. “iRobot does not plan to issue a transparency report at this time,” but it may consider publishing a report “should iRobot receive a government request for customer data.”

Arlo, a former Netgear smart home division that spun out in 2018, did not respond to a request for comment. Netgear, which still has some smart home technology, said it does “not publicly disclose a transparency report.”

Amazon-owned Ring, whose cooperation with law enforcement has drawn ire from lawmakers and faced questions over its ability to protect users’ privacy, said last year it planned to release a transparency report in the future, but did not say when. This time around, Ring spokesperson Yassi Shahmiri would not comment and stopped responding to repeated follow-up emails.

Honeywell spokesperson Megan McGovern would not comment and referred questions to Resideo, the smart home division Honeywell spun out a year ago. Resideo’s Bruce Anderson did not comment.

And just as last year, Samsung, a maker of smart devices and internet-connected televisions and other appliances, also did not respond to a request for comment.

On the whole, the companies’ responses were largely the same as last year.

But smart switch and sensor maker Ecobee, which last year promised to publish a transparency report “at the end of 2018,” did not follow through with its promise. When we asked why, Ecobee spokesperson Kristen Johnson did not respond to repeated requests for comment.

Based on the best available data, August, iRobot, Ring and the rest of the smart home device makers have hundreds of millions of users and customers around the world, with the potential to give governments vast troves of data — and users and customers are none the wiser.

Transparency reports may not be perfect, and some are less transparent than others. But if big companies — even after bruising headlines and claims of co-operation with surveillance states — disclose their figures, there’s little excuse for the smaller companies.

This time around, some companies fared better than their rivals. But for anyone mindful of their privacy, you can — and should — expect better.

Facebook’s founding got the movie treatment with Aaron Sorkin’s “The Social Network.” The story of how Snapchat came to be will be a flagship series on the upcoming streaming service, Quibi. Today, Spotify is the latest startup to get its story told on screen — this time, as a new Netflix show.

Netflix says it’s developing a scripted series inspired by the book “Spotify Untold” by business reports at Swedish Dagens Industri, Sven Carlsson and Jonas Leijonhufvud. The story will focus on Spotify’s founding and how it changed the way people listen to music over the past decade.

“The founding tale of Spotify is a great example of how a local story can have a global impact,” said Tesha Crawford, Director of International Originals Northern Europe at Netflix. “We are really excited about bringing this success story to life and we look forward to continuing our great collaboration with director Per-Olav Sørensen and the team at Yellow Bird UK.”

Banijay Group company, Yellow Bird UK, is also the production company behind the upcoming Netflix crime series “Young Wallander.” Yellow Bird UK will produce this new and yet-to-be-titled Spotify show and Per-Olav Sørensen will direct. Berna Levin (“Young Wallander,” “Hidden,” and “The Girl in the Spider’s Web”) will serve as executive producer.

The series itself will center around Swedish tech entrepreneur, Daniel Ek, and his partner Martin Lorentzon, who created the free and legal music service at a time when music piracy was at its height. Netflix describes the show as one about “how hard convictions, unrelenting will, access, and big dreams can help small players challenge the status quo.”

Netflix says the series will be available in both English and Swedish languages.

“I’m thrilled to be making this timely and entertaining series for Netflix. The story of how a small band of Swedish tech industry insiders transformed music – how we listen to it and how it’s made – is truly a tale for our time. Not only is this a story about the way all our lives have changed in the last decade, it’s about the battle for cultural and financial influence in a globalized, digitized world,” says Berna Levin, Executive Producer, Yellow Bird.

As Netflix’s announcement also notes, telling the story of a tech startup can be difficult because things move and change quickly. Spotify, after all, is still around and growing. It’s likely that by the time the show goes to air, it will have undergone many more transformations.

“I am excited to bring the story of Sweden based Spotify to life on the screen. It is an ongoing fairytale in modern history about how Swedish wiz kids changed the music industry forever. The story is truly exciting and challenging,” added Per-Olav Sørensen. “Challenging because the Spotify story has not ended yet – it is still running with high speed and will probably change while we work on the project.”

Netflix did not share a release date for the series.

After last year’s stellar turn out of almost 1,000 Silicon Valley shakers and movers at our inaugural Winter Party, TechCrunch is returning with the 3rd Annual Winter Party in San Francisco on February 7.

The party will feature tasty cocktails and canapés, party games and activities, plenty of photo ops, giveaways and some fun surprises. As you network your way across the sea of attendees, you’ll also get to check-out a handful of promising early-stage startups just waiting for their big break.

The shindig will be held in the multi-level facility at Galvanize in San Francisco on Friday, February 7. While the venue is large, it won’t be able to hold all of Silicon Valley, so tickets are very limited and will be released on a rolling basis for $85 each. If you’re a startup and want to demo your product at this event, demo tables are available for purchase at $1,500 each. Demo tickets are limited too, so get yours before we sell out!

More about the Winter Party:

When? Friday, February 7, 6:00 p.m. – 9:00 p.m.

Where? Galvanize, 44 Tehama St., San Francisco, CA 94105

How? Get tickets here for just $85 each. There are only a limited number of tickets for this event. Tickets will be released in batches, so if you don’t see any availability, stay tuned to TechCrunch for our next release (following us on Facebook or Twitter works great), as they sell out quickly. TechCrunch parties have a history of being the place you want to meet your future investor, acquirer or co-founder. And to top it all off, we’re going to give away some really great door prizes, like TC swag and tickets to Disrupt SF.

Hope to see you all there!

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1. The iPhone’s new parental controls can limit who kids can call, text and FaceTime and when

With the release of iOS 13.3, parents will for the first time be able to set limits over who kids can talk to and text with during certain hours of the day. These limits will apply across phone calls, Messages and FaceTime.

In practice, this means parents could stop their child from texting friends late at night or during the school day. It also allows parents to manage the child’s iCloud contacts remotely.

2. Pear, whose seed-stage bets are followed closely, just raised $160 million for its third fund

That’s more than twice the $75 million that the firm raised for its second fund in 2016 and triple the $50 million it raised for its debut fund back in 2013.

3. Uber guarantees space for skis and snowboards with Uber Ski feature

Starting on December 17 in select cities, an Uber Ski icon will pop up on the app, allowing passengers to order a ride with confirmed extra space or a ski/snowboarding rack. Nundu Janakiram, Uber’s head of rider experience, said to expect more features like this.

4. Accel and Index back Tines, as the cybersecurity startup adds another $11M to its Series A

Founded in February 2018 by ex-eBay, PayPal and DocuSign security engineer Eoin Hinchy, Tines automates many of the repetitive manual tasks faced by security analysts so they can focus on other high-priority work.

5. How Station F is boosting the French tech ecosystem

Three years after unveiling Station F at Disrupt, its director, Roxanne Varza, came back to our stage to provide an update on the world’s biggest startup campus, where there are now 1,000 companies at work.

6. Hyperproof wants to make it easier to comply with GDPR and other regulations

As companies try to figure out how to comply with regulations like GDPR, ISO or Sarbanes Oxley, Hyperproof is launching a new product to workflows that will allow them to gain compliance in a more organized way.

7. Introducing ‘Dear Sophie,’ an advice column for US-bound immigrant employees

Dear Sophie is a collaborative forum hosted by Extra Crunch and curated by Sophie Alcorn, who is certified as a specialist attorney in immigration and nationality law by the State Bar of California Board of Legal Specialization.

Shares of popular home exercise company Peloton are off 7% in regular trading today as the company continues to reel in the wake of an advertisement it released that went viral for the wrong reasons.

The ad is to blame for Peloton being in the public eye for the wrong reasons, but can’t be framed for causing all the company’s recent stock price declines. Having a brand-centric company’s name drawn into controversy can have a larger impact on a momentum-focused stock than on, say, an industrials concern whose brand isn’t in the consumer eye. But it isn’t enough, on its own, to explain Peloton’s recent value erosion.

Still, it does matter that Peloton is shedding value after it helped an already fit woman become slightly more fit while her husband slept in. That other brands have picked up on the ad segment (which also got a mention on Saturday Night Live) has helped keep the episode alive far longer than it might have on its own.

History

Peloton, a heavily backed company that raised nearly $1 billion while private, went public earlier this year worth $29 per share. Its post-IPO life was initially fraught, as the company’s losses were rising sharply alongside its revenue leading to investor unrest.

For context, Peloton lost about four times as much in its fiscal year ending June 30, 2019 (a net loss of $195.6 million) compared to the preceding fiscal year ($47.9 million). As the market rejected the WeWork IPO and SmileDirectClub’s own losses seemed to push investors away from high-growth, high-loss companies, Peloton’s debut quickly slipped underwater as its shares closed under its IPO price.

Then things got better. After Peloton reported its first earnings as a public company in early November, its share price recovered, cresting its IPO price and reaching $37 per share. Today the company is worth just a little over $30 per share, a sharp retread from its return to form.

Why

If the ad isn’t entirely to blame, why is Peloton losing value? Short interest is helping spook investors about the company’s future prospects recently, and, I would add, the company’s churn rate is rising.

Regarding the short interest, you can read the report in question here, but it deals mainly with the possible challenge of lower-priced, third-party hardware being paired with Peloton’s lower-cost media option. This would undercut Peloton’s revenue twice, though consumers would still add to the company’s subscription revenue category in the scenario. The same group also points out that Peloton’s valuation per subscriber is higher than some market comps; how to weigh those concerns we leave to you.

Turning to churn, observe the following data from Peloton’s recent earnings report:

The table shows Peloton’s average churn rising from 0.50% to 0.90%. That’s up 80% in a single year. If that trend continues, some of the money that Peloton spent on sales and marketing in the calendar year 2019 will look a bit more expensive than it did at first; rising churn lowers the lifetime value of a subscriber, making marketing spend less efficient.

Peloton shares are down, but remain far above its recent lows, and the company is still worth far more today ($8.5 billion) than it was as a private company ($4.1 billion). The ad, of course, hasn’t helped.