Category: UNCATEGORIZED

After weeks of rumors, Huawei confirmed it is selling its budget phone unit Honor to a consortium of companies, including government-backed firms and Honor’s distribution partners, according to a joint statement released Tuesday morning in a local Shenzhen paper.

“This acquisition represents a market-driven investment made to save Honor’s supply chain. It is the best solution to protect the interests of Honor’s consumers, channel sellers, suppliers, partners, and employees,” said the statement signed by the 40 companies.

Huawei lost major chip and software suppliers after the U.S. government slapped trade sanctions on the telecoms equipment and smartphone giant. A spin-out can in theory exempt Honor from the supply chain restrictions that have struck Huawei hard.

In the meantime, no one in the consortium poses an existential threat to Huawei’s market position. That leaves enough leeway for Huawei if it ever wants to buy Honor back from the group of government-backed firms and phone dealers and agents.

The announcement did not put a price tag on the purchase, though Reuters previously reported it could cost 100 billion yuan ($15 billion).

This is an updating story.

GitHub defies a takedown order, Strava raises a big round and Moderna reports promising COVID-19 vaccine results. This is your Daily Crunch for November 16, 2020.

The big story: GitHub reinstates YouTube downloading project

Back in October, the Recording Industry Association of America sent a DMCA complaint to GitHub over a project called YouTube-dl, which allows viewers to download YouTube videos for offline viewing. According to the trade group, YouTube-dl both circumvented DRM and, in its documentation, promoted the piracy of several popular songs.

However, the Electronic Frontier Foundation sent GitHub a letter criticizing the RIAA’s argument and suggesting that, among other things, it mischaracterizes how YouTube-dl’s code actually works.

In response, GitHub has restored the project’s code. It also says it’s rethinking how it will handle takedown notices in the future, with a new $1 million developer defense fund and the response of technical and legal review of any future claims filed under section 1201 of the DMCA.

The tech giants

You can now embed Apple Podcasts on the web — Apple is making it easier to discover and listen to podcasts via the web.

Apple’s IDFA gets targeted in strategic EU privacy complaints — The complaints, lodged with German and Spanish data protection authorities, contend that Apple’s setting of the IDFA breaches regional privacy laws.

Spotify adds a built-in podcast playlist creation tool, ‘Your Episodes’ — The feature lets you bookmark individual episodes from any podcast, which are then added to a new “Your Episodes” playlist.

Startups, funding and venture capital

Strava raises $110M, touts growth rate of 2 million new users per month in 2020 — Strava has 70 million members already according to the company, with presence in 195 countries globally.

Squarespace adds support for memberships and paywalled content — Squarespace’s new Member Areas allow businesses to charge for access to exclusive content.

Computer vision startup Chooch.ai scores $20M Series A — Chooch.ai hopes to help companies adopt computer vision more broadly.

Advice and analysis from Extra Crunch

Will edtech empower or erase the need for higher education? — Campuses are closed, sports have been paused and, understandably, students don’t want to pay the same tuition for a fraction of the services.

Three growth tactics that helped us surpass Noom and Weight Watchers — Over the past year, nutrition app Lifesum has acquired users at nearly twice the rate of both Noom and Weight Watchers.

Unpacking the C3.ai IPO filing — C3 is actually in pretty good financial shape, generating both growing recurring software revenues and cash in some quarters.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Moderna reports its COVID-19 vaccine is 94.5% effective in first data from Phase 3 trial — Following fast on the heels of Pfizer’s announcement of its COVID-19 vaccine efficacy, Moderna is also sharing positive results from its Phase 3 trial.

HBO Max arrives on Amazon Fire TV devices — As a part of the new deal, existing HBO subscribers on Amazon will be able to use the HBO Max app at no additional cost.

Original Content podcast: ‘The Vow’ offers a muddled look at the NXIVM cult — It’s a fascinating documentary hampered by some unfortunate storytelling choices.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

Today we have an Equity Shot for you about Airbnb’s S-1 filing, as it looks to go public before the year is out.

• First we get into Airbnb’s macro performance, which shows a stable picture historical revenue growth. There is a ton of numbers to get to so get ready for a quick dive into net revenue, gross margins, and losses.
• Then we discuss the dramatic drop in bookings, the promising comeback, and if short-term travel is Airbnb’s future.
• There’s a weird quarter of profitability that you should all know about, and a heads up on what to look for in Q4 numbers.
• Finally, we talk about the bullish and bearish case on Airbnb, which poetically filed the same day that Moderna announced a promising vaccine trial. 

All that, and our trusty other host Danny Crichton was busy filing a post about the winners and losers of the Airbnb IPO. Ownership, you quiet, billionaire beast. There’s more coming from TechCrunch on the company’s IPO, and from the Equity crew on everything else we ferret out on Thursday. Stay tuned!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

 

Tesla will be added to the S&P 500, a milestone that will expand its investor base and put the electric automaker in the same company as heavyweights like Apple, Berkshire Hathaway and Microsoft.

The announcement, made Monday afternoon by the S&P Dow Jones Indices, sent shares 13.7% higher in after-market trading. Tesla will officially join the benchmark index prior to trading December 21, the S&P Dow Jones Indices said in a statement.

When Tesla joins the S&P 500, it will be among the most valuable companies on the benchmark. Its weighting will be so influential that the S&P DJI mulling whether to add the stock at the full float-adjusted market capitalization weight all at once or in two tranches.

“Tesla will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history,” S&P DJI said in a statement. “However, Tesla itself is very liquid, and adding the stock at the upcoming December quarterly rebalancing coincides with the expiration of stock options, stock futures, stock-index options, and stock-index futures, which may help facilitate the funding trade.”

Joining the S&P 500 has its benefits as investors that have index-tracked funds will be forced to buy shares. With share prices already popping that will mean investors will have to sell other stocks to make room for Tesla. Existing investors may, in turn, want to take advantage of that demand and sell. The upshot: the traditionally volatile stock might get a bit more volatile.

The inclusion on the benchmark follows Tesla’s decision in August to split its shares 5 for 1.

After giving in to the looming threat of subpoenas, two of tech’s most high profile CEOs will again be grilled by Congress.

On Tuesday, the Senate Judiciary Committee will host Twitter’s Jack Dorsey and Facebook’s Mark Zuckerberg for what’s likely to be another multi-hour airing of assorted grievances. In this round, Republican lawmakers called the hearing to press the tech titans on “Censorship, Suppression, and the 2020 Election.” The hearing, which was scheduled before the election, was apparently inspired by the platforms’ decisions to limit the reach of a dubious New York Post story presenting leaked information purporting to implicate now President-elect Joe Biden and his son Hunter in a corrupt political influence scheme in Ukraine.

If the last hearing is any indication, and it likely is, Tuesday’s tech vs. Congress showdown will be less about cornering the two tech platform CEOs on the stated topic than it will be a far-ranging complaint session about Republicans’ ongoing complaints about anti-conservative bias punctuated by bipartisan soliloquies on lawmakers’ various pet topics. While that hearing, held last month in the Senate Commerce Committee, was ostensibly about Section 230 reform, the pressing policy issue barely came up.

Tuesday will be the first post-election Congressional appearance from social media leaders, so we can also expect a war of competing political realities. In one, President Trump, unfairly assailed by tech and the media alike, is somehow still a contender for the presidency. In the other reality (the real one), President-elect Joe Biden won the election decisively but his victory remains mired in social media misinformation. The latter scenario has played out in spite of a mixed bag of special tools and rules devised by Twitter and Facebook to rein in looming post-election conspiracies.

If you’re interested in subjecting yourself to Tuesday’s proceedings, you can watch the hearing live on the committee’s own page or on C-SPAN Tuesday at 7AM PT. If you’re not, and we can’t exactly suggest it, circle back after things are over and we’ll catch you up. But before we leave you, one question: How does YouTube’s Susan Wojcicki keep staying out of these things?

After a tumultuous year for the travel industry, Airbnb’s long-awaited IPO filing just dropped. One thing is clear: there is still plenty of juice left in the home-sharing platform, and a smattering of VCs and the company’s founders are positioned to receive some serious returns.

My colleague Alex Wilhelm has an overview article on Airbnb’s financial picture and overall metrics. It’s a mixed bag, but perhaps stronger than might otherwise be expected, given the global collapse of tourism due to the pandemic. Revenues are stabilizing, growth is up and bookings aren’t catastrophic.

So let’s get to the most fun question with these big startup IPO offerings, who made the money?

First and foremost, Airbnb’s founders — Brian Chesky, Nathan Blecharczyk and Joe Gebbia — managed to hold together a whopping 41.95% of the company based on data offere in its S-1 filing, with Chesky owning slightly more than his two co-founders.

Baidu said on Monday it is acquiring Joyy’s live streaming service YY Live in China for $3.6 billion in an all-cash deal as the Chinese internet giant makes further push to diversify beyond its core search business.

The announcement, which Baidu shared on the sidelines of its quarterly earnings, is the Chinese firm’s biggest foray into the growing market of video streaming. It comes at a time when the company has been struggling to fight new comers such as ByteDance.

YY has amassed over 4 million paying subscribers who watch influencers perform and sell a range of items on the video app. The streaming service last year bought stake worth $1.45 billion in Bigo, a Singapore-based startup that operates streaming apps Bigo Live and Like in a push to expand outside of China.

YY today is only selling its China business to Baidu. The closing of the transaction is subject to certain conditions and is currently expected to occur in the first half of 2021, Baidu said.

“This transaction will catapult Baidu into a leading platform for live streaming and diversify our revenue source.” said Robin Li, co-founder and chief executive of Baidu, in a statement.

“YY Live stands to benefit from Baidu’s large traffic and thriving mobile ecosystem, while Baidu will receive immediate operational experience and knowhow for large-scale video-based social media development, as well as an enviable creator network that will further strengthen Baidu’s massive content provider network. Together with the team from YY Live, Baidu hopes to explore the next-generation livestreaming and video-based social media that can expand beyond entertainment into the diversified verticals on Baidu platform.”

More to follow…

Airbnb filed to go public today, bringing the well-known unicorn one step closer to being a public company.

The company’s financial results show a company on the rebound, but smaller than it was. Its more granular financial results also make clear how hard the pandemic was on the travel-reliant unicorn. Regarding Airbnb’s worth, investors will have to balance how they value recovery and recent profits over the company’s disrupted historical growth arc.

How did we get here?

The home-sharing startup had a tumultuous year, with the COVID-19 pandemic harming its business in the first and second quarter of the year, and Airbnb later recovering on the strength of more local bookings.

Its filing comes mere days after fellow unicorns DoorDash and C3.ai themselves filed to go public in what could be a rush to the public markets by richly-valued startups.

Airbnb’s S-1 filing was expected to come last week, but was delayed due to purported election concerns, a concept that TechCrunch staff did not find entirely convincing.

We’ve scraped together quite a lot about Airbnb’s recent financial performance, but its S-1 is the real treasure trove. What follows is a dive into the company’s high-level numbers. From there, TechCrunch will dig into the company’s financial nuances and ownership stakes.

Airbnb’s financial performance

What we want to know is how the pandemic impacted Airbnb’s business; its year-to-date results, and what we can suss out from its quarterly trends.

Up top in Airbnb’s S-1 is a chart that shows monthly bookings on its platform. The implication is somewhat simple; namely that Airbnb knows what we want to know and wanted to share. Here are those numbers:

As expected, Airbnb took a huge hit in March. But by May things were back to year-over-year growth, where they stayed.

Now, the company has seen precious little bookings growth since June — indeed it has seen bookings fall in the months since — but as it is doing more in bookings than the year-ago period, it can call the results a comeback.

So, what does all of that look like in more traditional accounting figures? Here’s Airbnb’s reported income statement:

As expected, Airbnb’s year has not been tremendous. Indeed, the company is on track to match its 2018 size, if we have our math correct.

What changed from the first three quarters of 2019 to the first three quarters of 2020? The biggest thing, apart from expected lowers revenue costs — less revenue costs less — is the huge decline in sales and marketing spend at the company. Airbnb slashed S&M outlays from $1.18 billion in the first three quarters of 2019 to just $545.5 million in the same period of 2020.

So, where will Airbnb wind up in 2020 once it’s all done? We’ll need to peek at its quarterly results for that. Here they are:

Airbnb’s growth continues in year-over-year terms right until the March 31, 2020 quarter, when it was effectively flat compared to Q1 2019. Or, the company would have grown sans COVID-19. In the June 30, 2020 quarter we see the real damage, with Airbnb’s revenue falling from $1.2 billion in the year-ago quarter to just $334.8 million. That’s a shocking decline.

But, looking ahead to Q3 2020 and we see a large return to form. Yes, Airbnb’s third quarter was smaller than its Q3 2019, with $1.34 billion in top line instead of $1.65 billion in 2019, but the company effectively quadrupled from its preceding quarter. If the company manages another Q3 worth of revenue in Q4, it would be larger than it was in 2018 by a few hundred million.

Critically, Airbnb managed to swing from a number of unprofitable quarters to a profit in Q3, akin to its 2019 Q3 when it was also in the black. Of course, Airbnb’s $219.3 million in GAAP net income during the third quarter pales compared to its losses tallied earlier in the year. The company will not break even in 2020.

Airbnb also reported adjusted profit metrics. Its adjusted EBITDA results are based on the following definition:

Adjusted EBITDA is defined as net income or loss adjusted for (i) provision for income taxes; (ii) interest income, interest expense, and other income (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) net changes to the reserves for lodging taxes for which we may be held jointly liable with hosts for collecting and remitting such taxes; and (vi) restructuring charges.

The decision to remove restructuring costs raised eyebrows, with Amy Cheetham, an investor at Costanoa Ventures saying that “it feels like leaving out restructuring costs is a little aggressive?” We agree, as it gives the company too much flexibility to count the good in its results, like lower operating costs, while discounting what it took to get those results, like restructuring its business operations.

That’s having your cake and eating it as well and not counting the calories.

Still, who are we to withhold numbers from you. Here is the very adjusted EBITDA that Airbnb claims:

The numbers are still not good even after ripping out so very any costs. Worse, perhaps is the company’s cash burn in the year. That deficit helps explain why Airbnb took on more capital when it did earlier this year.

It’s hard to put a firm grade on this S-1. It contains what we expected, but how investors weigh the company’s year-over-year revenue declines in Q3 2020 against its rapid comeback from Q2 2020 should help decide its eventual value. On the whole Airbnb has managed something incredibly impressive — bouncing back from so low a low.

But, now that it’s going public we can’t merely say good job; it wants to price itself well and trade strongly. So, all eyes on its first IPO range as that should tell us what investors just might be willing to pay for the famous company’s equity,

Ride Vision, an Israeli startup that is building an AI-driven safety system to prevent motorcycle collisions, today announced that it has raised a $7 million Series A round led by crowdsourcing platform OurCrowd. YL Ventures, which typically specializes in cybersecurity startups but also led the company’s $2.5 million seed round in 2018, Mobilion VC and motorcycle mirror manufacturer Metagal also participated in this round. The company has now raised a total of $10 million.

In addition to this new funding round, Ride Vision also today announced a new partnership with automotive parts manufacturer Continental .

“As motorcycle enthusiasts, we at Ride Vision are excited at the prospect of our international launch and our partnership with Continental,” Uri Lavi, CEO and co-founder of Ride Vision, said in today’s announcement. “This moment is a major milestone, as we stride toward our dream of empowering bikers to feel truly safe while they enjoy the ride.”

The general idea here is pretty straightforward and comparable with the blind-spot monitoring system in your car. Using computer vision, Ride Vision’s system, the Ride Vision 1, analyzes the traffic around a rider in real time. It provides forward collision alerts and monitors your blind spot, but it can also tell you when you’re following another rider or car too closely. It can also simply record your ride and, coming soon, it’ll be able to make emergency calls on your behalf when things go awry.

As the company argues, the number of motorcycles (and other motorized two-wheeled vehicles) has only increased during the pandemic, as people started avoiding public transport and looked for relatively affordable alternatives. In Europe, sales of two-wheeled vehicles increased by 30% during the pandemic.

The hardware on the motorcycle itself is pretty straightforward. It includes two wide-angle cameras (one each at the front and rear), as well as alert indicators on the mirrors, as well as the main computing unit. Ride Vision has patents on its human-machine warning interface and vision algorithms.

It’s worth noting that there are some blind-spot monitoring solutions for motorcycles on the market already, including those from Innovv and Senzar. Honda also has patents on similar technologies. These do not provide the kind of 360-degree view that Ride Vision is aiming for.

Ride Vision says its products will be available in Italy, Germany, Austria, Spain, France, Greece, Israel and the U.K. in early 2021, with the U.S., Brazil, Canada, Australia, Japan, India, China and others following later.

Beyond Meat has launched two new versions of its Beyond Burgers, the company announced today.

The two new options will be available on store shelves in 2021, but will be on offer at a two-day pop up event in Los Angeles for folks to try.

The new Beyond Burger patties are designed to mirror the options of beef in the market with the presentation of a lower fat patty option and a new version of its higher fat content option that the brand promises will be its “juiciest” patty for the “meatiest” Beyond Meat patty on the market.

The low fat option contains 50% less saturated fat and 35% less total fat than 80/20 beef, according to a statement and both burgers have fewer calories and added vitamins and minerals that are comparable to beef’s micronutrient profile, the company said in a statement.