Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, has launched an electric taxi service and charging network in Zimbabwe with plans to expand across the continent.
The South Africa headquartered company has acquired a fleet of Nissan Leaf EVs and developed its own solar powered charging stations.
The program goes live in Zimbabwe this week, as Vaya finalizes partnerships to begin on-demand electric taxi and delivery services in markets that could include Kenya, Nigeria, South Africa and Zambia.
“Zimbabwe is a sandbox really. We’ve moved on to doing pilots with other countries right across Africa,” Vaya Mobility CEO Dorothy Zimuto told TechCrunch on a call from Harare.
Masiyiwa has become one of Africa’s Gates, Branson type figures, recognized globally as a business leader and philanthropist with connections and affiliations from President Obama to the Rockefeller Foundation.
The initiative comes as Africa’s on demand mobility market has been in full swing for several years, with startups, investors, and the larger ride-hail players aiming to bring movement of people and goods to digital product models.
Ethiopia has local ride-hail ventures Ride and Zayride. Uber’s been active in several markets on the continent since 2015 and like competitor Bolt, got into the motorcycle taxi business in Africa in 2018.
Over the last year, there’s been some movement on the continent toward developing EV’s for ride-hail and delivery use, primarily around two-wheeled transit.
In 2019, Nigerian mobility startup MAX.ng raised a $7 million Series A round backed by Yamaha, a portion of which was dedicated to pilot e-motorcycles powered by renewable energy.
Last year the Government of Rwanda established a national plan to phase out gas motorcycle taxis for e-motos, working in partnership with EV startup Ampersand.
Vaya Mobility CEO Dorothy Zimuto, Image Credits: Econet Group
The appeal of shifting to electric in Africa’s taxi markets — beyond environmental benefits — is the unit economics, given the cost of fuel compared to personal income is generally high for most of the continent’s drivers.
“Africa is excited, because we are riding on the green revolution: no emissions, no noise and big savings… in terms of running costs of their vehicles,” Zimuto said.
She estimates a cost savings of 40% on the fuel and maintenance costs for drivers on the ride-hail platform.
At the moment, with fuel prices in Vaya’s first market of Zimbabwe at around $1.20 a liter, the average trip distance is 22 kilometres for a price of $19, according to Econet Group’s Oswald Jumira.
With the Nissan Leaf vehicles on Vaya’s charging network, the cost to top up will be around $5 for a range of 150 to 200 kilometres.
Image Credits: Vaya Africa
“It’s the driver who benefits. They take more money home. And that also means we can reduce the tariff for ride hailing companies to make it more affordable for people,” Jumira told TechCrunch .
The company has adapted its business to the spread of COVID-19 in Africa. Vaya provides PPE to its drivers and sanitizes its cars four to five times a day, according to Zimuto.
Vaya is exploring EV options for other on-demand transit applications — from delivery to motorcycle and Tuk Tuk taxis.
On the question of competing with Uber in Africa, Vaya points to the reduced fares offered by its EV program as one advantage.
The CEO of Vaya Mobility, Dorothy Zimuto, also points to certain benefits of knowing local culture and preferences.
“We speak African. That’s the language we understand. We understand the people and what they want across our markets. That’s what makes the difference.” she said.
It will be something to watch if Vaya’s EV bet and local consumer knowledge translates into more passenger flow and revenue generation as it goes head to head with other ride-hail companies, such as Uber, across Africa.
Conservative members of the United Kingdom’s government have pushed Prime Minister Boris Johnson to draw up plans to remove telecom equipment made by the Chinese manufacturer Huawei from the nation’s 5G networks by 2023, according to multiple reports.
The decision by Johnson, who wanted Huawei’s market share in the nation’s telecommunications infrastructure capped at 35 percent, brings the UK back into alignment with the position Australia and the United States have taken on Huawei’s involvement in national communications networks, according to both The Guardian and The Telegraph.
The debate over Huawei’s role in international networking stems from the company’s close ties to the Chinese government and the attendant fears that relying on Huawei telecom equipment could expose the allied nations to potential cybersecurity threats and weaken national security.
Originally, the UK had intended to allow Huawei to maintain a foothold in the nation’s telecom infrastructure in a plan that had received the approval of Britain’s intelligence agencies in January.
“This is very good news and I hope and believe it will be the start of a complete and thorough review of our dangerous dependency on China,” conservative leader Sir Iain Duncan Smith told The Guardian when informed of the Prime Minister’s reversal.
As TechCrunch had previously reported, the Australian government and the U.S. both have significant concerns about Huawei’s ability to act independently of the interests of the Chinese national government.
“The fundamental issue is one of trust between nations in cyberspace,” wrote Simeon Gilding, until recently the head of the Australian Signals Directorate’s signals intelligence and offensive cyber missions. “It’s simply not reasonable to expect that Huawei would refuse a direction from the Chinese Communist Party.”
Given the current tensions between the U.S. and China, allies like the UK and Australia would be better served not exposing themselves to any risks from having the foreign telecommunications company’s technology in their networks, some security policy analysts have warned.
“It’s not hard to imagine a time when the U.S. and China end up in some sort of conflict,” Tom Uren of the Australian Strategic Policy Institute (ASPI) told TechCrunch. “If there was a shooting war, it is almost inevitable that the U.S. would ask Australia for assistance and then we’d be in this uncomfortable situation if we had Huawei in our networks that our critical telecommunications networks would literally be run by an adversary we were at war with.”
U.S. officials are bound to be delighted with the decision. They’ve been putting pressure on European countries for months to limit Huawei’s presence in their telecom networks.
“If countries choose to go the Huawei route it could well jeopardize all the information sharing and intelligence sharing we have been talking about, and that could undermine the alliance, or at least our relationship with that country,” U.S. Secretary of Defense Mark Esper told reporters on the sidelines of the Munich Security Conference, according to a report in The New York Times.
In recent months the U.S. government has stepped up its assault against the technology giant on multiple fronts. Earlier in May, the U.S. issued new restrictions on the use of American software and hardware in certain strategic semiconductor processes. The rules would affect all foundries using U.S. technologies, including those located abroad, some of which are Huawei’s key suppliers.
At a conference earlier this week, Huawei’s rotating chairman Guo Ping admitted that while the firm is able to design some semiconductor parts such as integrated circuits (IC), it remains “incapable of doing a lot of other things.”
“Survival is the keyword for us at present,” he said.
Huawei has challenged the ban, saying that it would damage the international technology ecosystem that has developed to manufacture the hardware that powers the entire industry.
“In the long run, [the U.S. ban] will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.”
SoftBank Group Corp. is currently seeking buyers for about $20 billion of its shares in T-Mobile US, according to reports in the Wall Street Journal and Bloomberg. If the proposed sale goes through, its proceeds could help offset SoftBank’s heavy investment losses over the past year.
According to its first-quarter earnings report yesterday, SoftBank’s Vision Fund lost $17.4 billion in value for the year ended March 31, obliterating the $12.8 billion gain the fund recorded a year ago. Earlier this year, the company announced plans to sell up to $41 billion of its assets to increase its share buyback program.
Bloomberg reports that under the proposed deal, which could be announced this week, SoftBank would sell part of its stake to Deutsche Telekom AG, T-Mobile’s parent company. Deutsche Telekom currently owns about 44% of T-Mobile’s shares, but would achieve majority ownership if the deal with SoftBank goes through. Softbank would then sell some of its remaining stake to other investors in a secondary offering.
T-Mobile is the United States’ third-largest wireless carrier, after AT&T and Verizon Wireless*, and it has a current market capitalization of about $126 billion, which means SoftBank’s stake is worth about $31 billion, while Deutsche Telekom’s is about $55 billion.
According to the Wall Street Journal, banks including Morgan Stanley and Goldman Sach Group are currently seeking investors for the proposed sale.
*Disclosure: Verizon is TechCrunch’s parent company.
Apple outlines new safety measures as it reopens stores, Huawei responds to new U.S. chip curbs and Jack Ma departs SoftBank’s board of directors.
Here’s your Daily Crunch for May 18, 2020.
In mid-March, Apple closed all of its stores outside of China “until further notice.” In a statement issued today under the title, “To our Customers,” Retail SVP Deirdre O’Brien offered insight into the company’s plans to reopen locations.
Nearly 100 stores have already resumed services, according to O’Brien. Face covers will be required for both employees and customers alike. In addition, temperature checks are now conducted at the store’s entrance, coupled with posted health questions. Apple has also instituted deeper cleaning on all surfaces, including display products.
Following the U.S. government’s announcement that it would further thwart Huawei’s chip-making capability, the Chinese telecoms equipment giant condemned the new ruling for being “arbitrary and pernicious.” Adding to its woes, the Nikkei Asian Review reported that Taiwanese Semiconductor Manufacturing Co. has stopped taking new orders from the company. (Huawei declined to comment, while TSMC said the report was “purely market rumor.”)
The company did not give a reason for the resignation, but over the past year, Ma has been pulling back from business roles to focus on philanthropy. Last September, he resigned as Alibaba’s chairman, and is also expected to step down from its board at its annual general shareholder’s meeting this year.
Facebook-owned Oculus released a new sales figure as the company reaches the one-year anniversary of the release of the Quest headset. We didn’t get unit sales, but the company did share that it has sold $100 million worth of Quest content in the device’s first year — a number that indicates that although the platform is still nascent, a handful of developers are definitely making it work for them.
Devin Coldewey talks about what’s going to change with coffee shops and co-working spaces, Alex Wilhelm discusses the future of the home office setup and Danny Crichton talks about the revitalization of urban and semi-urban neighborhoods. (Extra Crunch membership required.)
In an internal email, which the Bangalore-headquartered food delivery startup published on its blog, Swiggy co-founder and chief executive Sriharsha Majety said the company’s core food business had been “severely impacted.”
The latest full episode of Equity looks at a funding round for pizza delivery company Slice and the possibility of Uber acquiring Grubhub, while the Monday news roundup takes a deeper look at the financials of the food delivery business. Meanwhile, Original Content is back on a weekly schedule, and we review the new Netflix series “Never Have I Ever.”
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into SoftBank’s latest earnings slides. Not only do they contain a wealth of updates and other useful information, but some of them are gosh-darn-freaking hilarious. We all deserve a bit of levity after the last few months.
The visual elements we quote below come from SoftBank’s reporting of its own results from its fiscal year ending March 31, 2020. Much of the deck is made up of financial reporting tables and other bits of stuff you don’t want to read. We’ve cut all that out and left the fun parts.
Before we dive in, please note that we are largely giggling at some slide design choices and only somewhat at the results themselves. We are certainly not making fun of people who’ve been impacted by layoffs and other such things that these slides’ results encompass.
But we are going to have some fun with how SoftBank describes how it views the world, because how can we not? Let’s begin.
TechCrunch has a number of folks parsing SoftBank’s deck this morning, looking to do serious work. That’s not our goal. Sure, this post will tell you things like the fact that there are 88 companies in the Vision Fund portfolio, and that when it comes to unrealized gains and losses, the portfolio has seen $13.4 billion in gains and $14.2 billion in losses. $4.9 billion of gains have been realized, mind you, while just $200 million of losses have had the same honor.
And this post will tell you that the “net blended [internal rate of return] for SoftBank Vision Fund investors is -1%.”
Hell, you probably also want to know that Uber was detailed as Vision Fund’s worst-performing public company, generating a $1.46 billion loss for the group. In contrast, Guardant Health is good for a $1.67 billion gain, while 2019 IPO Slack has been good for $605 million in profits. Those were the two best companies in the Vision Fund’s public portfolio.
But what you really want is the good stuff. So, shared by slide number, here you go:
Following the U.S. government’s announcement that would further thwart Huawei’s chip-making capability, the Chinese telecoms equipment giant condemned the new ruling for being “arbitrary and pernicious.”
“Huawei categorically opposes the amendments made by the U.S. Department of Commerce to its foreign direct product rule that target Huawei specifically,” said Huawei Monday at its annual analyst summit in Shenzhen.
The new curbs, which dropped on Friday, would ban Huawei from using U.S. software and hardware in certain strategic semiconductor processes. This will affect all foundries using U.S. technologies, including those located abroad, some of which are Huawei’s key suppliers.
Earlier on Monday, the Nikkei Asian Review reported citing sources that Taiwanese Semiconductor Manufacturing Co., the world’s largest contract semiconductor that powers many of Huawei’s high-end phones, has stopped taking new orders from Huawei, one of its largest clients. Huawei declined to comment while TSMC said the report was “purely market rumor”.
Decisions from TSMC point to its attempt to strengthen bonds with the U.S. though, as it’s planning a new $12 billion advanced chip factory in Arizona with support from the state and the U.S. federal government.
At the Monday conference, Huawei’s rotating chairman Guo Ping admitted that while the firm is able to design some semiconductor parts such as integrated circuits (IC), it remains “incapable of doing a lot of other things.”
“Survival is the keyword for us at present,” he said.
Huawei stated the latest U.S. ban would not only affect its own business in over 170 countries, where it has spent “hundreds of billions of dollars,” but also the wider ecosystem around the world.
“In the long run, [the U.S. ban] will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.”
Huawei has announced a raft of contingency measures ever since the Trump administration began slapping technology sanctions on it, including one that had cut it off certain Android services from Google.
Huawei said at the summit that it had doubled down on investment in overseas developers in an effort to lure them to its operating system. Some 1.4 million developers have signed up for Huawei Mobile Services or HMS, a 150% jump from 2019. In its search to identify alternatives to Google’s app suite in Europe, it has partnered up with navigation services TomTom and Here, search engine Qwant and news app News UK.
Huawei is facing an uphill challenge in the overseas market as its upcoming devices lack the full set of Google apps and services. That leaves ample room for its Chinese rivals to chase after foreign consumers.
That includes Oppo, the sister brand of Vivo under Dongguan-based electronics holding company BBK. In an announcement on Monday, the Chinese firm announced a partnership with Vodafone to bring its smartphones to the mobile carrier’s European markets. The deal kicks off in May and will sell Oppo’s portfolio of advanced 5G handsets as well as value-for-money models into the U.K, Germany, the Netherlands, Spain, Italy, Portugal, Romania and Turkey.
While Vodafone pulled Huawei phones from its U.K. 5G network last year following the U.S. export ban that stripped Huawei models of certain Android services, the British operator can now tap Oppo’s wide range of mobile products in a heated race to sign up 5G customers. The partners will jointly explore online sales channels as many parts of Europe’s physical premises remain closed due to the COVID-19.
Oppo, currently the second-largest smartphone vendor in its home country after Huawei, has seen a spike in sales across Europe since entering the market in mid-2018. The company was one of the first to launch commercially available 5G phones in Europe last year and now ranks fifth on the continent.
“Oppo has a product range that can hit many of the same segments as Huawei, enabling it to gain market share at the expense of Huawei,” Peter Richardson, research director at Counterpoint Research, explained to TechCrunch. “Oppo has always used quite a European flavour in its product design. This extends to things like colour choice, packaging, and advertising materials. This makes it acceptable to European consumers.”
Interestingly, Richardson pointed out that Oppo, which has a less “Chinese sounding” name than its domestic rivals Xiaomi and Huawei, will help it circumvent some of the “negative media surrounding China just now – first Huawei’s difficulties around security threats and more recently the COVID-19 pandemic.”
The novel coronavirus pandemic has disordered traditional notions of work, travel, socializing and the way we collaborate with colleagues.
It seems obvious that the future of work must evolve, given what we’re experiencing, but what will that future look like? Which changes are here to stay and which ones will revert the moment offices reopen?
TechCrunch has been a WFH employer for essentially its entire existence. Our staff is distributed across major startup hubs like SF and NYC, but we also have writers in smaller cities around the world, so we compiled reflections and thoughts from three of them about how remote work has changed our lifestyles and what we predict to see in the next few years, post-COVID 19.
Devin Coldewey talks about what’s going to change with coffee shops and co-working spaces, Alex Wilhelm discusses the future of the home office setup and Danny Crichton talks about the revitalization of urban and semi-urban neighborhoods.
I’ve worked from home for over a decade and part of what makes it so lovely is the ability to do my work from a nearby cafe, or even a restaurant or bar. I’m lucky in that my part of the city is famously packed with excellent coffee shops, but in the time I’ve lived here I’ve seen them grow increasingly packed with — well, people like me. Some days they seem more like co-working spaces than cafes — and this is something business owners and neighborhoods are going to need to acknowledge one way or the other.
Most urban and suburban American communities were formed around the convention of commuting, which means fewer work-related resources where people live. Instead, we have all the restaurants, bodegas, thrift stores and all the other things that cater to people who aren’t working.
WeWork co-founder Adam Neumann accused SoftBank Group of abusing its power in a new lawsuit filed Monday that alleges breach of contract and breach of fiduciary duty for pulling a $3 billion tender offer for WeWork shares.
The lawsuit, filed in Delaware Court of Chancery, included a motion to consolidate his case with a lawsuit filed last month by a Special Committee of WeWork’s board. Both lawsuits focus on Softbank Group and its Vision Fund’s decision to back out of a deal to buy shares of the co-working company.
SoftBank Group pulled its $3 billion tender offer for WeWork shares April 1, citing COVID-19’s impact on the business but also closing conditions not being met. Specifically, it pointed to outstanding regulatory investigations, a growing body of litigation against the company and the failure to restructure a joint venture in China as reasons to torpedo the agreement.
“SoftBank will vigorously defend itself against these meritless claims,” Rob Townsend, senior vice president and chief officer at SoftBank, said in a statement. “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr. Neumann – the biggest beneficiary – sought to sell nearly $1 billion in stock.”
A deal was struck in October 2019 to buy out some of the equity held by Neumann, as well as the venture capital Benchmark Capital and many individual company employees. Neumann was set to receive almost $1 billion for his shares.
WeWork and Neumann gave control of the company to SoftBank, which increased its ownership at a significantly reduced price, according to the complaint.
“SoftBank has abused its position of power to “renege on its promise to pay [Neumann, shareholders, and hundreds of employees] for the benefits it already received,” the complaint said. The lawsuit claims that SoftBank was “secretly taking actions to undermine it” by pressuring investors not to waive certain rights and preventing the China roll-up transaction from closing.
The lawsuit further alleges that SoftBank’s financial condition influenced the company’s decision to terminate the tender offer.
The lawsuit alleges that SoftBank “abused its power” after WeWork’s special committee filed a lawsuit by insisting that only the board, which is controlled by SoftBank, could take legal action.
“In real time, Softbank Group and Softbank Vision Fund are abusing their control of WeWork in an effort to stop the Special Committee’s meritorious lawsuit from being heard,” the complaint reads.
Nvidia today announced its plans to acquire Cumulus Networks, an open-source centric company that specializes in helping enterprises optimize their data center networking stack. Cumulus offers both its own Linux distribution for network switches, as well as tools for managing network operations. With Cumulus Express, the company also offers a hardware solution in the form of its own data center switch.
The two companies did not announce the price of the acquisition, but chances are we are talking about a considerable amount, given that Cumulus had raised $134 million since it was founded in 2010.
Mountain View-based Cumulus already had a previous partnership with Mellanox, which Nvidia acquired for $6.9 billion. That acquisition closed only a few days ago. As Mellanox’s Amit Katz notes in today’s announcement, the two companies first met in 2013 and they formed a first official partnership in 2016. Cumulus, it’s worth noting, was also an early player in the OpenStack ecosystem.
Having both Cumulus and Mellanox in its stable will give Nvidia virtually all of the tools it needs to help enterprises and cloud providers build out their high-performance computing and AI workloads in their data centers. While you may mostly think about Nvidia because of its graphics cards, the company has a sizable data center group, which delivered close to $1 billion in revenue in the last quarter, up 43 percent from a year ago. In comparison, Nvidia’s revenue from gaming was just under $1.5 billion.
“With Cumulus, NVIDIA can innovate and optimize across the entire networking stack from chips and systems to software including analytics like Cumulus NetQ, delivering great performance and value to customers,” writes Katz. “This open networking platform is extensible and allows enterprise and cloud-scale data centers full control over their operations.”
Today marks the conclusion of a years-long saga that started when John Oliver did a segment on Net Neutrality that was so popular that it brought the FCC’s comment system to its knees. Two years later it is finally near addressing all the issues brought up in an investigation from the General Accountability Office.
The report covers numerous cybersecurity and IT issues, some of which the FCC addressed quickly, some not so quickly and some it’s still working on.
“Today’s GAO report makes clear what we knew all along: the FCC’s system for collecting public input has problems,” Commissioner Jessica Rosenworcel told TechCrunch. “The agency needs to fully fix this mess because this is the way the FCC is supposed to take input from the public. But as this report demonstrates, we have real work to do.”
Here’s the basic timeline of events, which seem so long ago now:
Then it’s been pretty quiet basically until today, when the report requested in 2017 was publicly released. A version with sensitive information (like exact software configurations and other technical information) was internally circulated in September, then revised for today’s release.
The final report is not much of a bombshell, since much of it has been telegraphed ahead of time. It’s a collection of criticisms of an outdated system with inadequate security and other failings that might have been directed at practically any federal agency, among which cybersecurity practices are notoriously poor.
The investigation indicates that the FCC, for instance, did not consistently implement security and access controls, encrypt sensitive data, update or correctly configure its servers, detect or log cybersecurity events, and so on. It wasn’t always a disaster (even well-run IT departments don’t always follow best practices), but obviously some of these shortcomings and cut corners led to serious issues like ECFS being overwhelmed.
More importantly, of the 136 recommendations made in the September report, 85 have been fully implemented now, 10 partially, and the rest are on track to be so.
That should not be taken to mean that the FCC has waited this whole time to update its commenting and other systems. In fact it was making improvements almost immediately after the event in May of 2017, but refused to describe them. Here are a few of the improvements listed in the GAO report:
Representative Frank Pallone (D-NJ), who has dogged the FCC on this issue since the beginning, issued the following statement:
I requested this report because it was clear, after the net neutrality repeal comment period debacle, that the FCC’s cybersecurity practices had failed. After more than two years of investigating, GAO agrees and found a disturbing lack of security that places the Commission’s information systems at risk… Until the FCC implements all of the remaining recommendations, its systems will remain vulnerable to failure and misuse.
Tesla has added Hiromichi Mizuno as a new member to its board of directors and audit committee — the former chief investment officer of Japan’s $1.5 trillion pension fund and a longtime opponent of common market practices like short selling.
With Mizuno’s appointment the Tesla board now has 10 members, including Oracle founder, chairman and CTO Larry Ellison and Walgreens executive Kathleen Wilson-Thompson. Mizuno will also sit on the board’s audit committee.
Hiro has a long career in finance and investment that included a stint as executive managing director and chief investment officer of Japan’s Government Pension Investment Fund (GPIF), the largest in the world with about $1.5 trillion in assets under management. Hiro left his position in late March.
During his time at GPIF, Hiro promoted environmental, social and governance practices. He was also known for challenging short selling — a practice that has plagued Tesla and its CEO Elon Musk . During his tenure, the GPIF suspended stock lending, which caught many by surprise. Hiro’s opposition to short selling is at odds with some market purists who believe the investment strategy — which speculates on the decline in a stock — actually provides greater price transparency. Hiro has said in previous interviews with media outlets like the Financial Times that it conflicts with his long-term perspective.
Hiro is on a number of government advisory boards, including the board of the PRI, the World Economic Forum’s Global Future Council and the Japanese government’s strategic fund integrated advisory board.
He also challenged many established market practices, including short-selling, to promote long-term value creation by corporations.
As a director, Mizuno will get an initial award of an option to purchase 2,778 shares of Tesla’s common stock, vesting and exercisable on June 18, 2020. For serving on the audit committee, he will get an initial award of an option to purchase 4,000 shares of Tesla’s common stock, vesting in 12 equal monthly tranches assuming continued service on each vesting date, according to a regulator filing Thursday.
Tesla’s board had sat unchanged for years until late 2018 when Ellison and Wilson-Thompson joined the board as independent directors as part of a settlement with U.S. securities regulators over CEO Elon Musk’s infamous tweets about taking the company private. Under the settlement, Tesla agreed to add two independent directors and Musk would step down as chairman for three years. Robyn Denholm, the former chief operations officer of Telstra Corporation Limited, a telecommunications company, was named chairman in November 2018.
In April 2019, the company said it would cut its board down by more than one-third, to seven directors, by 2020, a move that included the loss of some of Musk’s early advisers and allies.
Longtime board members Brad Buss and Linda Johnson Rice, who joined two years ago as an independent director, did not seek re-election in 2019 and their terms expired at the company’s annual shareholder meeting in June. The board said in the proxy filing at the time that it didn’t plan to fill their seats.
For the past month, VC investment pace seems to have slacked off in the U.S., but deal activities in China are picking up following a slowdown prompted by the COVID-19 outbreak.
According to PitchBook, “Chinese firms recorded 66 venture capital deals for the week ended March 28, the most of any week in 2020 and just below figures from the same time last year,” (although 2019 was a slow year). There is a natural lag between when deals are made and when they are announced, but still, there are some interesting trends that I couldn’t help noticing.
While many U.S.-based VCs haven’t had a chance to focus on new deals, recent investment trends coming out of China may indicate which shifts might persist after the crisis and what it could mean for the U.S. investor community.
Image Credits: PitchBook
Just like SARS in 2003 coincided with the launch of Taobao and pushed Jingdong to transform from an offline retailer into online giant JD.com, there may be dark horses waiting to break out when this pandemic is over. Paraphrasing “A Tale of Two Cities” — this is the worst time, but also maybe the best time.
In addition to obvious trends about food delivery, digital content, gaming and other sectors, I have identified five other trends that are closing the most deals in Q1 on the early-stage side that could define the post-pandemic environment: e-commerce, edtech, robotics and advanced manufacturing, healthcare IT/life Science and AI/enterprise SaaS.
The Japanese technology conglomerate SoftBank Group said it would lose a staggering $24 billion on investments made through its Vision Fund and bets on the co-working real estate company WeWork and satellite telecommunications company OneWeb.
Ultimately, the company expects the losses to help generate a $7 billion total loss for the technology giant for the year as its ambitious bets on early-stage companies come up short.
Over the past two years SoftBank and its founder Masayoshi Son have staked billions of (other people’s) dollars and its own fortunes on a vision that investments in machine learning technologies, robotics and next-generation telecommunications would reap hundreds of billions in financial rewards.
While that was the vision that Son and his team sold, the reality was multiple billions of dollars invested into real estate investment plays like WeWork, OpenDoor and Compass, and companies with direct-to-consumer merchandising plays like Brandless, pet supply businesses like Wag and the food delivery business DoorDash. Add the hotel chain Oyo to the mix and the investment selection from the Vision Fund looks even less visionary.
Over the past year, several of its investments ran aground. Though none of them imploded as spectacularly as WeWork — whose valuation was slashed from more than $40 billion to around $8 billion — many have struggled.
Brandless went bust earlier this year, and real estate investments in Compass along with investments in travel and tourism-related businesses like Oyo have suffered in the wake of the COVID-19 outbreak, which has shuttered economies around the world.
While many SoftBank and SoftBank Vision Fund bets were made into companies that have failed, seem to be on that path or perhaps may struggle in the economic downturn, not every wager is a clunker. The Vision Fund put lots of capital into Slack before it went public, and the company has caught a huge tailwind in the remote-work boom that we’re currently seeing in light of COVID-19.
Perhaps the most visionary of the SoftBank investments (and one not included in the Vision Fund), OneWeb, too, collapsed under the weight of its own capital-intensive vision for a network of satellites providing high-speed global telecommunications services. Zume, SoftBank’s robotic pizza delivery business, also folded.
The only reason all of these gambles haven’t completely destroyed SoftBank is that the company still has a cash cow in its Alibaba stake and a relatively strong core business in telecommunications and semiconductor holdings.
“The difference in income before income tax is, in addition to the above, mainly due to the expected recording of non-operating loss totaling approximately JPY 800 billion for fiscal 2019 on investments held outside of SoftBank Vision Fund, including The We Company (WeWork) and WorldVu Satellites Limited (OneWeb),” the company said in a statement. “This will be partially offset by the gain relating to the settlement of variable prepaid forward contract using Alibaba shares recorded in the first quarter of fiscal 2019 and the dilution gain from changes in equity interest in Alibaba recorded in the third quarter of fiscal 2019, as well as an expected year-on-year increase in income on equity method investments related to Alibaba.”
Ultimately, it seems that Son was too enamored of the mythology he’d created around himself as a maverick and a visionary. To the detriment of his company’s outside shareholders and investors.
As Bloomberg noted in an op-ed earlier today:
Son’s insistence that startups grow faster than their founders planned, and strong-arm them into taking more money than they might have wanted, has turned into a burden. And that’s become a huge liability to investors in the Vision Fund and SoftBank, too.
By throwing cash around, dozens of startups became addicted to spending instead of building fiscal discipline into their business models. For years, it seemed like a sound strategy. By having more money than rivals, SoftBank-backed companies could win market share by offering bigger incentives, taking out more ads and luring the best talent.
Today, SoftBank has a major stake in sector leaders like Uber Technologies Inc., WeWork, Grab Holdings Inc. and Oyo. But climbing to number one doesn’t mean being profitable.
Tesla started Friday to furlough its sales and delivery workforce — with the least experienced employees bearing the brunt of the action — days after a companywide email announced salary cuts and reductions due to the COVID-19 pandemic.
Several employees, who work in sales and delivery and spoke to TechCrunch on condition of anonymity, reported they were on corporate calls in which more details of the furloughs were explained. Performance is less of a factor. Instead, experience and position is being used to determine who stays and who is furloughed. Delivery and sales advisors who have been with the company less than two years will be furloughed, according to sources.
CNBC reported earlier Friday that furloughs would impact half of Tesla’s U.S. delivery and sales workforce. TechCrunch was unable to verify the total number of sales and delivery employees who would be impacted.
The furloughs also come a little more than a week after the end of the quarter, a typically busy time for delivery staff who try to meet lofty internal goals. COVID-19 hampered delivery efforts, although customers were still reporting deliveries in California, New York and other states.
The furlough calls have been expected since an internal email sent April 7 by Tesla’s head of human resources Valerie Workman informed employees that the company would be cutting pay for salaried employees and furloughing others.
It wasn’t clear, until Friday, exactly who might be affected.
The internal email, which was viewed by TechCrunch, told employees that production at its U.S. factories would be suspended until at least May 4 due to the COVID-19 pandemic, requiring the company to cut costs.
Salaried employees will have pay reduced between 30% and 10%, depending on their position. The salary reductions are expected to be in place until the end of the second quarter, according to the email. The salary cuts and furloughs will begin April 13. Employees who cannot work from home and have not been assigned critical onsite positions will be furloughed until May 4, according to the email.
The COVID-19 pandemic has put a spotlight on virtual care options as both doctors and patients try to reduce in-person visits for routine care as much as possible. Patients aren’t always aware of what’s available to them, though, so over the course of the next two weeks, Google will roll out new features in Search and Maps that will highlight telehealth options.
Hospitals, doctors and mental health professionals can now add details about their virtual care offerings to their Business Profile in Search and Maps, for example. When a patient then searches for them, they’ll see a ‘get online care’ link that will take them to their provider’s website with more information.
In the U.S., Google will also start showing virtual care platforms when people use search queries like ‘immediate care.’ The search results page will now highlight both in-person and virtual care options, something that wasn’t previously the case. Uninsured users will also see more details about out-of-pocket prices for their visits.
In addition, Google will now also automatically try to surface a link to a health care provider’s COVID-19 page, where they can highlight their own policies for walk-in visits or updates to their operating hours, for example.
In March, the virus gripping the world — COVID-19 — started to spread in Africa. In short order, actors across the continent’s tech ecosystem began to step up to stem the spread.
Early in March, Africa’s COVID-19 cases by country were in the single digits, but by mid-month those numbers had spiked leading the World Health Organization to sound an alarm.
“About 10 days ago we had 5 countries affected, now we’ve got 30,” WHO Regional Director Dr Matshidiso Moeti said at a press conference on March 19. “It has been an extremely rapid…evolution.”
By the World Health Organization’s stats Tuesday there were 3,671 COVID-19 cases in Sub-Saharan Africa and 87 confirmed deaths related to the virus, up from 463 cases and 8 deaths on March 18.
As COVID-19 began to grow in major economies, governments and startups in Africa started measures to shift a greater volume of transactions toward digital payments and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.
Kenya, Africa’s leader in digital payment adoption, turned to mobile money as a public-health tool.
At the urging of the Central Bank and President Uhuru Kenyatta, the country’s largest telecom, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency.
The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free for three months.
Kenya has one of the highest rates of digital finance adoption in the world — largely due to the dominance of M-Pesa in the country — with 32 million of its 53 million population subscribed to mobile-money accounts, according to Kenya’s Communications Authority.
On March 20, Ghana’s central bank directed mobile money providers to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.
Ghana’s monetary body also eased KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers, according to a March 18 Bank of Ghana release.
Growth in COVID-19 cases in Nigeria, Africa’s most populous nation of 200 million, prompted one of the country’s largest digital payments startups to act.
Lagos based venture Paga made fee adjustments, allowing merchants to accept payments from Paga customers for free — a measure “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.
In March, Africa’s largest innovation incubator, CcHub, announced funding and engineering support to tech projects aimed at curbing COVID-19 and its social and economic impact.
The Lagos and Nairobi based organization posted an open application on its website to provide $5,000 to $100,000 funding blocks to companies with COVID-19 related projects.
CcHub’s CEO Bosun Tijani expressed concern for Africa’s ability to combat a coronavirus outbreak. “Quite a number of African countries, if they get to the level of Italy or the UK, I don’t think the system… is resilient enough to provide support to something like that,” Tijani said.
Cape Town based crowdsolving startup Zindi — that uses AI and machine learning to tackle complex problems — opened a challenge to the 12,000 registered engineers on its platform.
The competition, sponsored by AI4D, tasks scientists to create models that can use data to predict the global spread of COVID-19 over the next three months. The challenge is open until April 19, solutions will be evaluated against future numbers and the winner will receive $5,000.
Zindi will also sponsor a hackathon in April to find solutions to coronavirus related problems.
Image Credits: Sam Masikini via Zindi
On the digital retail front, Pan-African e-commerce company Jumia announced measures it would take on its network to curb the spread of COVID-19.
The Nigeria headquartered operation — with online goods and services verticals in 11 African countries — said it would donate certified face masks to health ministries in Kenya, Ivory Coast, Morocco, Nigeria and Uganda, drawing on its supply networks outside Africa.
The company has also offered African governments use of of its last-mile delivery network for distribution of supplies to healthcare facilities and workers.
Jumia is reviewing additional assets it can offer the public sector. “If governments find it helpful we’re willing to do it,” CEO Sacha Poignonnec told TechCrunch.
More Africa-related stories @TechCrunch
African tech around the ‘net
When looking for answers, where do people first turn? For many, it’s Google.
During the first half of March, we saw Google searches for “work from home” reach a 12-month high, garnering at least 50% more search interest than the anticipated peak, which usually occurs within the first week of January. This number will continue to grow as outside circumstances evolve.
This search behavior reflects the world around us. Today, employees and employers alike are grappling with the new norm — at least for the short-term — which is working remotely. While having a remote-ready model in place was once viewed as a competitive advantage to attract talent, it’s now a must-have to keep organizations afloat.
With vacant positions costing organizations around $680 daily, the impact that interrupted recruiting efforts can have on a business’ bottom line is jarring. As such, HR professionals were early adopters of successful remote communication practices, learning lessons that can be applied across the business to successfully make personal connections without being in-person. Employers are doing all they can to address their existing employee base at this critical time, while also working hard to maintain their hiring efforts.
Having the right technology in place to sustain work-from-home practices is more important now than ever before. There are four steps that employers can take to successfully integrate and adapt successful virtual hiring technologies into their business continuity plans, considering all outside circumstances, and without sacrificing their productivity and unique company culture.
Prepare and plan. Employers have an obligation to provide their people with clear direction in times of disruption.