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Uber had an abysmal second day of trading

It’s not looking great for ride-hailing giant Uber (NYSE: UBER). Today, Uber closed its second day of trading down more than 18.8% from its IPO price at $37.25 per share, with a market cap of $62.2 billion.

Uber, which was previously valued at $72 billion by venture capitalists on the private market, priced its stock at $45 a share for an $82.4 billion valuation last week. On day one, Uber closed at $41.57 a share.

In a memo obtained by CNBC, Uber CEO Dara Khosrowshahi told employees today that, “like all periods of transition, there are ups and downs. Obviously, our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it relates to our stock.”

Moving forward, Khosrowshahi urged employees to focus on the long-term. He also pointed to the comebacks both Facebook and Amazon made post-IPO.

Lyft has similarly suffered on the public market since its IPO in March. Lyft closed the day at $48.15, with a market cap of $13.8 billion.

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Market map: the 200+ innovative startups transforming affordable housing

Daniel Wu
Contributor

Dan Wu is a privacy counsel and legal engineer at Immuta. He holds a JD from Harvard University, and is a PhD candidate for Social Policy and Sociology at The Harvard Kennedy School.

In this section of my exploration into innovation in inclusive housing, I am digging into the 200+ companies impacting the key phases of developing and managing housing.

Innovations have reduced costs in the most expensive phases of the housing development and management process. I explore innovations in each of these phases, including construction, land, regulatory, financing, and operational costs.

Reducing Construction Costs

This is one of the top three challenges developers face, exacerbated by rising building material costs and labor shortages.

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Innovations in inclusive housing

Daniel Wu
Contributor

Dan Wu is a privacy counsel and legal engineer at Immuta. He holds a JD from Harvard University, and is a PhD candidate for Social Policy and Sociology at The Harvard Kennedy School.

Housing is big money. The industry has trillions under management and hundreds of billions under development.

And investors have noticed the potential. Opendoor raised nearly $1.3 billion to help homeowners buy and sell houses more quickly. Katerra raised $1.2 billion to optimize building development and construction, and Compass raised the same amount to help brokers sell real estate better. Even Amazon and Airbnb have entered the fray with high-profile investments.

Amidst this frenetic growth is the seed of the next wave of innovation in the sector. The housing industry — and its affordability problem — is only likely to balloon. By 2030, 84% of the population of developed countries will live in cities.

Yet innovation in housing lags compared to other industries. In construction, a major aspect of housing development, players spend less than 1% of their revenues on research and development. Technology companies, like the Amazons of the world, spend nearly 10% on average.

Innovations in older, highly regulated industries, like housing and real estate, are part of what Steve Case calls the “third wave” of technology. VCs like Case’s Revolution Fund and the SoftBank Vision Fund are investing billions into what they believe is the future.

These innovations are far from silver bullets, especially if they lack involvement from underrepresented communities, avoid policy and ignore distributive questions about who gets to benefit from more housing.

Yet there are hundreds of interventions reworking housing that cannot be ignored. To help entrepreneurs, investors and job seekers interested in creating better housing, I mapped these innovations in this package of articles.

To make sense of this broad field, I categorize innovations into two main groups, which I detail in two separate pieces on Extra Crunch. The first (Part 1) identifies the key phases of developing and managing housing. The second (Part 2) section identifies interventions that contribute to housing inclusion more generally, such as efforts to pair housing with transit, small business creation and mental rehabilitation.

Unfortunately, many of these tools don’t guarantee more affordability. Lowering acquisition costs, for instance, doesn’t mean that renters or homeowners will necessarily benefit from those savings. As a result, some tools likely need to be paired with others to ensure cost savings that benefit end users — and promote long-term affordability. I detail efforts here so that mission-driven advocates as well as startup founders can adopt them for their own efforts.


Topics We Explore

Today:

Coming Tomorrow:

  • Part 2. Other contributions to housing affordability
    • Social Impact Innovations
    • Landlord-Tenant Tools
    • Innovations that Increase Income
    • Innovations that Increase Transit Accessibility and Reduce Parking
    • Innovations that Improve the Ability to Regulate Housing
    • Organizations that Support the Housing Innovation Ecosystem
    • This Is Just the Beginning
    • I’m Personally Closely Watching the Following Initiatives
    • The Limitations of Technology
    • Move Fast and Protect People


Please feel free to let me know what else is exciting by adding a note to your LinkedIn invite here.

If you’re excited about this topic, feel free to subscribe to my future of inclusive housing newsletter by viewing a past issue here.

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Mailchimp expands from email to full marketing platform, says it will make $700M in 2019

Mailchimp, a bootstrapped startup out of Atlanta, Ga., is known best as a popular tool for organizations to manage their customer-facing email activities — a profitable business that its CEO told TechCrunch has now grown to around 11 million active customers with a total audience of 4 billion (yes, 4 billion), and is on track for $700 million in revenue in 2019. (Note: Slack’s previous quarter was around $133 million, and it’s operating at a loss.)

To help hit that number, Mailchimp is taking the wraps off a significant update aimed at catapulting it into the next level of business services. Starting today, Mailchimp will start to offer a full marketing platform aimed at smaller organizations.

Going beyond the email services that it has been offering for 20 years — which alone has led to multiple acquisition offers (all rebuffed) as its valuation has crept up reportedly into the billions (depending on which multiple you use) — the new platform will feature a number of new products within it.

They include technology to record and track customer leads; the ability to purchase domains and build sites; ad retargeting on Facebook and Instagram; social media management. It will also offer business intelligence that leverages a new move into the artificial intelligence to provide recommendations to users on how and when to market to whom.

The latter of these will be particularly interesting considering the data that it has collected and will collect on 4 billion individuals and their responses to emails and other services that Mailchimp now offers.

As of Wednesday of this week, Mailchimp also plans a pretty significant shift of its pricing into four tiers of free, $9.99/month, $14.99/month or $299/month (up from the current pricing of free, $10/month, $199/month) — with those fees scaling depending on usage and features.

(Existing paid customers maintain current pricing structure and features for the time being and can move to the new packages at any time, the company said. New customers will sign up to the new pricing starting May 15.)

The expansion is part of a longer-term strategic play to widen Mailchimp’s scope by building more services for the typically underserved but collectively large small-business segment.

Even as multinationals like Amazon and other large companies continue to feel like they are eating up the mom-and-pop independent business model, SMBs continue to make up 48% of the GDP in the U.S.

And within the SMB sector, the opportunity has totally changed with the rise of the internet.

“What’s really key is the role digital apps, digital publishing and social media have played,” said Ben Chestnut, Mailchimp’s co-founder and CEO. “We can have a 10-employee company with a customer base bigger than 1 million. That’s a combination you couldn’t achieve before the growth of online.”

And within that, marketing is one of those areas that small businesses might not have invested in much traditionally but are increasingly turning to as so much transactional activity has moved to digital platforms — be it smartphones, computers, or just the tech that powers the TV you watch or music you listen to.

In March, we reported that Mailchimp quietly acquired a small Shopify competitor called LemonStand to start to build more e-commerce tools for its users. And the new marketing platform is the next step in that strategy.

“We still see a big need for small businesses to have something like this,” Chestnut said in an interview. Enterprises have a range of options when it comes to marketing tools, he added, “but small businesses don’t.” The mantra for many building tech for the SMB sector has traditionally been “dumbed down and cheap,” in his words. “We agreed that cheap was good, but not dumbed down. We want to empower them.”

The new services launch also comes at a time when an increasing number of companies are closing in on the small business opportunity, with e-commerce companies like Square, Shopify and PayPal also widening their portfolio of products. (These days, Square is a Mailchimp partner, Shopify is not.)

Marketing is something that Mailchimp had already been dabbling with over the last two years — indeed, customer-facing email services is essentially a form of marketing, too. Other launches have included a Postcards service, offering companies very simple landing pages online (about 10% of Mailchimp’s customers do not have their own web sites, Chestnut said), and a tool for companies to create Google, Facebook and Instagram ads.

Mailchimp itself has a big marketing presence already: it says that daily, more than 1.25 million e-commerce orders are generated through Mailchimp campaigns; over 450 million e-commerce orders were made through Mailchimp campaigns in 2018; and its customers have sold over $250 million in goods through multivariate + A/B campaigns run through Mailchimp.

There are clearly a lot of others vying to be the go-to platform for small businesses to do their business — “Google, Facebook, a lot of the big players see the magic and are moving to the space more and more,” Chestnut said — but Mailchimp’s unique selling point — or so it hopes — is that it’s the platform that has no vested interests in other business areas, and will therefore be as focused as the small businesses themselves are. That includes, for example, no upcharging regardless of the platform where you choose to run a campaign.

“We are Switzerland,” Chestnut said.

Given that Mailchimp took 20 years to grow into marketing from email, it’s not clear what the wait will be for future expansions, and into which areas those might go. Surprisingly, one product that Mailchimp does not want to touch for now is CRM. “No plans for CRM services,” Chestnut said. “We are focused on consumer brands. We think about small organizations, with fewer than 100 employees.”

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India’s Locus raises $22 million to expand its logistics management business

Locus, an Indian startup that uses AI to help businesses map out their logistics, has raised $22 million in Series B funding to expand its operations in international markets.

The financing round for the four-year-old startup was led by Falcon Edge Capital and Tiger Global. Existing investors Exfinity Venture Partners and Blume Ventures also participated in the round. The startup has raised $29 million to date, Nishith Rastogi, co-founder and CEO of Locus, told TechCrunch in an interview.

Locus works with companies that operate in FMCG, logistics and e-commerce spaces. Some of its clients include Tata Group companies, Myntra, BigBasket, Lenskart and Bluedart. It helps these clients automate their logistics workload — tasks such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination — that have traditionally required intensive human labor.

“Say a Lenskart representative is visiting a house or an office to offer an eye checkup, and suddenly two more people there are interested in getting their eyes checked. The representative could attend these two new potential clients, or wrap things up with the first client and take care of his or her next appointment,” said Rastogi.

Locus looks at a client’s past data, identifies patterns and automates these kind of decisions on a large scale. In an example shared earlier with TechCrunch, Rastogi talked about how Locus had built a scanner for e-commerce companies for measuring products.

Rastogi said he will use the fresh capital to develop products and expand Locus in Southeast Asian and North American markets. The startup says half of its 110-person workforce is outside of India. Half of the IP it has built and the revenue it generates comes from its team outside of India.

He said the startup has spent the recent quarters studying these international markets, and has secured some anchor clients to expand the business. Locus is operationally profitable already and any additional capital goes into expanding its business, he added.

The logistics market in India has long been riddled with challenges. A growing number of startups, including BlackBuck — which raised $150 million last week — have emerged in recent years to tackle these problems.

The new funding also illustrates Tiger Global’s new strategy for the Indian market. The VC fund, which has invested in B2C businesses Flipkart and Ola in India, has made a number of investments in B2B startups in recent months. Last month, it invested $90 million in agritech supply chain startup Ninjacart, and weeks later, it gave cloud-based solutions provider Zenoti $50 million. It also participated in customer marketing service ClearTap’s $26 million round.

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As a founder, I mistook my work for self-worth

Dale Stephens
Contributor

Dale Stephens was one of the first Thiel Fellows and ran an education company for six years. These days he works an executive coach, helping entrepreneurs and executives grow as fast as their companies.

These days, most days are good days. My clients are founder and executives, I set my own schedule, and I live in a city I love. As an executive coach and advisor, I work with founders and CEOs of companies who have raised more than $100M. Like any enterprise, it’s taken a lot of building, planning, and failing for me to get where I am.

What I’m supposed to tell you is that I worked hard and persevered – and I did.

But what I’m not supposed to tell you is how it felt to do all that failing, and above all how, for years, shame was the primary emotion that guided my life and career. How, at my lowest point, I felt worthless. How I even contemplated self-harm.

It takes a herculean energy to start a company, which is maybe why, so often, our stories sound like myths. Mine went something like this: If I could just raise money from a top-tier VC, get to $1M in revenue, and sell the business for more than $5M, then I’d be good enough. I’d be the successful young adult I wanted to be. Then, once I had made my first million, I could take a swing and start a billion-dollar company.

The fact that I didn’t feel worthy of love, that I lacked inherent value, drove my decisions. My failure to reach the goals I set reinforced the belief I that I was unworthy. Luckily, I eventually found the self-awareness to realize that blindly pursuing goals I couldn’t achieve was unhealthy.

But I didn’t expect that walking away from my job as CEO would break me, nor did I realize how far I would sink.

I thought that if I was “successful,” people would see that I wasn’t flawed, and I’d finally be worth something.

After extensive therapy, it’s easy for me to see how misguided I was from the outset. Shame, most of the time, is a thing of the past. But for a long time, it fueled every decision I made yet never seemed to exhaust itself – there was always more. In the business world, this is more common than we’re led to think — almost every entrepreneur I meet shares an experience “otherness.” We glorify failure, but we don’t have the patience to honor the pain that turns into the shame of feeling “I’m not good enough.”

We are supposed to be resolute, driven, and resilient. To that end, I want to share what I’ve learned so others who struggle with worthlessness know they aren’t alone, and that happiness – and enjoying success – is still possible.

Accidentally Starting a Company

At 19, I didn’t have a grand plan to change higher education. I was simply a pissed off freshman in college. In an interview with the Chronicle of Higher Education, Jeff Young asked me: what would I do with UnCollege, the site I’d just put online?

UnCollege was a fledgling website I’d created out of my frustration in college. It was designed to create a community of people who were frustrated with the status quo in higher education. In that pivotal moment, when Young asked about my plans for the site, I immediately tied my self-worth to its future. It was, after all, the reason I was being interviewed by a major publication. I had to turn UnCollege into something, or else I’d be a failure – and worse, everyone would know it, because now it was public.

From then on, I started a mental list of what I needed to do to be a successful entrepreneur. My list grew quickly and each item carried a familiar caveat. I must write a book or I’m worthless. I must start a company and raise $1M or I’m worthless I must speak at conferences around the world or I’m worthless.

I did raise money. I did start the company. I got to $1M in revenue. Each time I checked one of these boxes, I wasn’t happier. I started to be afraid I would never feel I was enough. I didn’t feel “successful,” especially in the way I saw success portrayed by others, both online and in the industry.

I thought that if I was “successful,” people would see that I wasn’t flawed, and I’d finally be worth something. What I didn’t know is that each time I checked something off my mental checklist, I’d be consumed with shame and insecurity, needing to check the next item off the list in order to feel worthy.

Instead, I felt trapped. I didn’t yet know that self-worth must come from within.

Mistaking my work for self-worth

I realized quickly that I’d committed myself to starting a company because I was afraid of failure, not because I had carefully considered what problem I wanted to dedicate the next ten years of my life to solving. Nonetheless, UnCollege enrolled its first students in September 2013.

That fall, I began to suspect I’d made a mistake. But I was afraid to tell my investors, and those that had supported me to get the business this far. My survival skill was to smile and act like I knew better than everyone else. If only I’d had the courage to sincerely ask for advice.

One consequence of not asking for help was I had to let go of two of the first people I hired, and layoff two more because we didn’t have the cash.

The first cohort was a disaster. I hadn’t designed a properly structured curriculum, and students were dissatisfied. The students liked the community of self-directed learners, but the company wasn’t delivering value beyond the community. Two weeks before the end of the semester, the students declared mutiny and demanded to know what we were going to do to improve the program.

I was terrified and wanted to leave, but we’d already taken money for the next cohort of students. I believed I didn’t have any other choice. We created a coaching program, hired coaches, built two dozen new workshops, and started working to get students placed into internships. The coaching model we built worked, and we spent the next two years improving it.

In the spring of 2015, I called my lead investor, my voice shaking. He knew that I had my share of fear and insecurity, but I told him clearly that day “I can’t do this anymore. It’s going to break me.”

Ignoring my feelings was a survival skill as child. Ignoring the doubt and anxiety caused by early critics allowed me to push through and launch a company. But it was also my achilles heel.

At the same time I was experiencing burnout, the company was pivoting from a college alternative into a pre-college program. The board agreed: it was time to hire a CEO.

After hiring a CEO, it became more difficult to motivate myself to go to work every day. Getting out of bed became a chore. One morning, after a breakfast with a prospective investor at the Four Seasons, I sat down on a bench outside and began to cry. Looking up, I saw one of our previous students waving at me, and quickly wipe away my tears to give him a faint smile.

I felt embarrassed, weak, and helpless.

Deriving identity from my work wasn’t working, and I knew I had to put an end to it. But what were my alternatives?

I was excited for my company and its new leadership, but I was anxious. I was empty. I didn’t know where the company stopped and I began. At my 25th birthday dinner, I couldn’t eat. I was consumed by shame, by fear. I managed to hold off all through dinner, but as soon as I arrived home I broke down sobbing.

Shame is a Habit

In December, I was no longer CEO of my own company. Six months later, I couldn’t get out of bed.

Those first few months I spent catching my breath. I was still on the board of the company, but I didn’t control it. As I began constructing a life post-UnCollege, I had no idea where to start. I didn’t yet realize it, but I needed to go through the individuation process – to figure out who I was and what I believed, independent of my family of origin. Already 25, I’d managed to avoid these questions. The irony is not lost on me that most of my peers faced them in college.

Shame is a consumptive state of being. The longer I went without answers to questions tied to my selfhood, the more shame ate me up. What did I care about? Did I make the right choice? Was the sacrifice I’d made to start this company worth it? Had I taken the wrong path? Was all the pain I’d been through a waste? Would I ever learn to feel happy again? I was beginning to feel as if I had no self at all.

Without a job to make me feel useful, I spent most days drinking at Dolores Park in San Francisco. I knew this wasn’t healthy, but I convinced myself I deserved it after years of hard work. Again, I was only 25. Life had lost its color. Things that once brought me joy no longer did. I could no longer grin and bear the pain. Believing my own bullshit about how I was going to be OK was no longer working. The more this cycle continued, the stronger it got, and the weaker I felt – all the more trapped.

Even the most successful people carry trauma, and often lash themselves onward with its whip

One Monday in October, I found myself completely unable to function. Alone in my house, I realized I hadn’t gotten out of bed or eaten a meal for several days. I was supposed to get on a plane to fly to Minneapolis, and I just couldn’t bring myself to do it. Instead, I called my dad, who encouraged me to message my doctor and say, “I think I might be depressed.” I was still too scared to pick up the phone, and it would be another few months before I uttered those words out loud. I started therapy, but things got worse before they got better.

Beyond “I’m sad that my company didn’t turn into what I wanted,” I didn’t have names for my emotions. A lightbulb moment came when my therapist asked, “When have you felt anxiety?” The only example I could think of was the time my company was only a few days from running out of cash.

“Have you ever considered that you only feel your emotions at extremes – a 20, for example, on a 1-10 scale? It’s human to feel anxiety in day-to-day life.”

That opened a door. I wasn’t just sad about leaving my company: I felt shame that I wasn’t “successful.” It wasn’t only my identity I’d tied to the business, but my self-worth. Deep down, my core belief that I – myself – wasn’t good enough. This is shame by definition: a hole that forms in our deepest selves we can never fill because it seems permanent; it seems, by nature, that this is who we are, not what we have done.

Shame often comes from feeling different as a child. In my case, I stuttered as a child. My voice was too ugly to be heard, so I concealed it. I used synonyms to avoid the sounds I couldn’t make. I did this because I couldn’t handle the intense shame of not being able to say my own last name without stuttering. In doing so, I learned to ignore, to numb those intense feelings of shame. I coped, and because I learned to cope so early in life, I learned to numb the rest of my feelings along with it.

By the time I launched a company, all those feelings that tell us “something’s wrong” – sadness, exhaustion, frustration, embarrassment, anxiety, guilt, and so on – were so buried and so unnamed that I could only tell myself “You are what’s wrong” when I hit a block, when I encountered the normal and natural failures that entrepreneurs face every day, no matter how successful in the long run.

Ignoring my feelings was a survival skill as child. Ignoring the doubt and anxiety caused by early critics allowed me to push through and launch a company. But it was also my achilles heel. It led me to derive my identity and self-worth from my work.

A CEO, the story goes, has it all together: a CEO is a visionary who sees around corners without any help. Because of this, I couldn’t give myself permission to ask for help, and when I left the company, I lacked the vocabulary or awareness to describe my feelings. My perfectionism, which long ago enabled me to ignore my stuttering, had associated help with failure, and failure with shame.

All these years later, I still couldn’t allow myself to ask for help.

Learning to tame trauma

Stress, overwhelm, burnout: these were the closest words I had to describe my feelings. This is startup lingo for things you cycle through now and again, and the story goes that we push past them and keep working. But these aren’t emotions. They are coverups for feelings of pain and shame. Ultimately, they describe trauma.

When most people think of trauma they imagine a car crash, or maybe a natural disaster or physical assault. An event that curtails your ability to function entirely. But trauma is simply a piece of the past we carry with us in the present that shapes us — in both positive and negative ways.

In my coaching career, I’ve worked with entrepreneurs and executives who felt too pretty, too ugly, too gay, too fat, too foreign, too dumb, too smart, too dark, or too light. These were the holes of shame they couldn’t fill and believed would always be there. They weren’t by any means failures: even the most successful people carry trauma, and often lash themselves onward with its whip. But shame is something even the best of us can’t outrun. Eventually it catches up with you. It took me years to understand this, and being compassionate towards myself will be a lifelong journey.

Once I had the vocabulary to separate my self-worth from my professional ambitions, UnCollege was a failure I could be proud of, not to mention a learning experience I could bring to my next project: Helping others learn to love themselves, and as a result, build wildly successful companies.

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Startups Weekly: Venture capitalists are crazy for cannabis

Lately, my inbox has been chock-full of pitches for weed businesses.

A couple of years ago it was bitcoin/blockchain startups, then came scooters; now, it seems “CannTech” is hitting an all-time high thanks to support from venture capitalists. By the way, I didn’t make up the term CannTech, but it seems just as good as anything else, so I’m rolling with it.

According to data collected by PitchBook, VCs have put $1.2 billion in U.S.-based cannabis companies so far in 2019. That’s significantly more than last year’s record high of $836 million, and we aren’t even halfway through 2019.

At this rate, we can expect roughly $2.5 billion invested in CannTech in 2019, i.e. more capital invested in the space in a single year than has been funneled into the space in the last decade.

What’s going on? A few things. Of course, states are increasingly legalizing medical and/or recreational marijuana. That’s allowed companies like Eaze, a marijuana delivery company, to grow at unprecedented rates. The startup, for example, closed its Series C in December on $65 million and is already fundraising again, this time at a $500 million valuation.

In addition to legalization, VCs, and more importantly, limited partners, have woken up to the business opportunity of cannabis. Soon, gone will be the days of strict morality clauses that dissuaded VC firms from supporting startups focused on weed. The firms that were early to understand the space, like DCM Ventures or Snoop Dogg’s Casa Verde Capital, will reap the benefits.

Speaking of DCM, the firm put on a huge, first-of-its-kind summit this week focused on CannTech: “For three years I was struggling with a lot of pain issues,” DCM co-founder David Chao told the audience. “One day I was playing Xbox with Blake Krikorian [co-founder of Sling Media] and I said ‘you know Blake, I have this pain problem’ and he said, ‘oh, you should try pot.’ And I said ‘why should I do that? I haven’t smoked since college?’ “

Long story short, Chao can thank his friend Blake for making him aware of an exploding market, and he can thank DCM’s scrappy partner, Kyle Lui, for helping the firm score some major investments in the space, like Eaze.

“We were the first Sand Hill VCs to invest in cannabis and everyone started calling me saying ‘you’re crazy, why are you doing this?’ ” Lui said.

It’s still very early days in the CannTech space, but the market is expected to be worth as much as $80 billion by 2030. That can only mean interest will soar from here.

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Uber Begins First Day Of Trading At New York Stock Exchange

IPO corner

Uber: It was a disappointing debut, to say the least. The ride-hailing business (NYSE: UBER), previously valued at $72 billion by venture capitalists, priced its stock at $45 apiece for a valuation of $82.4 billion on Thursday. Then it began trading Friday morning at $42 apiece, only to close even lower at $41.57, down 7.6% from its IPO price.

Slack: Not a whole lot of news to share here yet, other than that the workplace messaging business will host its investor day on Monday. It’s invite-only, though Slack, like Spotify, will live-stream the event to the public. More details on that here.

Luckin Coffee: The Chinese upstart going after Starbucks is set to debut on the Nasdaq under the symbol “LK.” In a new filing, Luckin said it plans to sell 30 million shares at an initial range of $15-$17. That gives an estimated raise of $450 million to $510 million, but it could be bumped up if underwriters take up the additional allocation of 4.5 million shares. So, as a grand total, the listing could raise $586.5 million if the full offering is bought at the top of the range.

Lyft: Not an IPO update but the company did release its first-ever earnings report. Here’s the TL;DR: revenues of $776 million on losses of $1.14 billion, including $894 million of stock-based compensation and related payroll tax expenses. The company’s revenues surpassed Wall Street estimates of $740 million, while losses came in much higher as a result of IPO-related expenses.

Share price alone is no sign of value… @Uber trading at $44 ($45 IPO price)@Lyft trading at $53.8 ($74 IPO price)@Pinterest trading at $28.4 ($19 IPO price)@zoom_us trading at $77.5 ($36 IPO price)@pagerduty trading at $48.7 ($24 IPO price)

— Kate Clark (@KateClarkTweets) May 10, 2019

M&A

Harry’s razors are crappy, I’m told. Alas, the brand is worth $1.37 billion to Edgewell Personal Care, the company behind Schick and Banana Boat. Founded in 2013, Harry’s had raised about $375 million in venture capital funding. Edgewell says its $1.37 billion payment will break down to roughly 79% cash and 21% stock, giving Harry’s shareholders an 11% stake in Edgewell.

Big rounds

Small(er) rounds

Inspiration

Meet Beat Saber, an eight-person startup with no funding that’s turned into VR’s biggest success story. Venture capital isn’t always the answer, folks.

~Extra Crunch~

Our premium subscription service was loaded with A+ content this week. TechCrunch contributor Jon Evans wrote a piece titled “Against the Slacklash,” wherein he makes the case that Slack isn’t inherently bad. “Rather, the particular way in which you are misusing it epitomizes your company’s deeper problems.” Plus, Eric Peckham asked nine top VCs, including Cyan Banister and Charles Hudson, to share where they are putting their money when it comes to media, gaming and entertainment.

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture capital-focused podcast, Equity. In this week’s episode, available here, Crunchbase News’ Alex Wilhelm, TechCrunch’s Connie Loizos and I chat with blogging pioneer and True Ventures partner Om Malik about the on-demand economy, Carta’s big raise and more.

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India’s most popular services are becoming super apps

Truecaller, an app that helps users screen strangers and robocallers, will soon allow users in India, its largest market, to borrow up to a few hundred dollars.

The crediting option will be the fourth feature the nine-year-old app adds to its service in the last two years. So far it has added to the service the ability to text, record phone calls and mobile payment features, some of which are only available to users in India. Of the 140 million daily active users of Truecaller, 100 million live in India.

The story of the ever-growing ambition of Truecaller illustrates an interesting phase in India’s internet market that is seeing a number of companies mold their single-functioning app into multi-functioning so-called super apps.

Inspired by China

This may sound familiar. Truecaller and others are trying to replicate Tencent’s playbook. The Chinese tech giant’s WeChat, an app that began life as a messaging service, has become a one-stop solution for a range of features — gaming, payments, social commerce and publishing platform — in recent years.

WeChat has become such a dominant player in the Chinese internet ecosystem that it is effectively serving as an operating system and getting away with it. The service maintains its own “app store” that hosts mini apps. This has put it at odds with Apple, though the iPhone-maker has little choice but to make peace with it.

For all its dominance in China, WeChat has struggled to gain traction in India and elsewhere. But its model today is prominently on display in other markets. Grab and Go-Jek in Southeast Asian markets are best known for their ride-hailing services, but have begun to offer a range of other features, including food delivery, entertainment, digital payments, financial services and healthcare.

The proliferation of low-cost smartphones and mobile data in India, thanks in part to Google and Facebook, has helped tens of millions of Indians come online in recent years, with mobile the dominant platform. The number of internet users has already exceeded 500 million in India, up from some 350 million in mid-2015. According to some estimates, India may have north of 625 million users by year-end.

This has fueled the global image of India, which is both the fastest growing internet and smartphone market. Naturally, local apps in India, and those from international firms that operate here, are beginning to replicate WeChat’s model.

Founder and chief executive officer (CEO) of Paytm Vijay Shekhar Sharma speaks during the launch of Paytm payments Bank at a function in New Delhi on November 28, 2017 (AFP PHOTO / SAJJAD HUSSAIN)

Leading that pack is Paytm, the popular homegrown mobile wallet service that’s valued at $18 billion and has been heavily backed by Alibaba, the e-commerce giant that rivals Tencent and crucially missed the mobile messaging wave in China.

Commanding attention

In recent years, the Paytm app has taken a leaf from China with additions that include the ability to text merchants; book movie, flight and train tickets; and buy shoes, books and just about anything from its e-commerce arm Paytm Mall . It also has added a number of mini games to the app. The company said earlier this month that more than 30 million users are engaging with its games.

Why bother with diversifying your app’s offering? Well, for Vijay Shekhar Sharma, founder and CEO of Paytm, the question is why shouldn’t you? If your app serves a certain number of transactions (or engagements) in a day, you have a good shot at disrupting many businesses that generate fewer transactions, he told TechCrunch in an interview.

At the end of the day, companies want to garner as much attention of a user as they can, said Jayanth Kolla, founder and partner of research and advisory firm Convergence Catalyst.

“This is similar to how cable networks such as Fox and Star have built various channels with a wide range of programming to create enough hooks for users to stick around,” Kolla said.

“The agenda for these apps is to hold people’s attention and monopolize a user’s activities on their mobile devices,” he added, explaining that higher engagement in an app translates to higher revenue from advertising.

Paytm’s Sharma agrees. “Payment is the moat. You can offer a range of things including content, entertainment, lifestyle, commerce and financial services around it,” he told TechCrunch. “Now that’s a business model… payment itself can’t make you money.”

Big companies follow suit

Other businesses have taken note. Flipkart -owned payment app PhonePe, which claims to have 150 million active users, today hosts a number of mini apps. Some of those include services for ride-hailing service Ola, hotel booking service Oyo and travel booking service MakeMyTrip.

Paytm (the first two images from left) and PhonePe offer a range of services that are integrated into their payments apps

What works for PhonePe is that its core business — payments — has amassed enough users, Himanshu Gupta, former associate director of marketing and growth for WeChat in India, told TechCrunch. He added that unlike e-commerce giant Snapdeal, which attempted to offer similar offerings back in the day, PhonePe has tighter integration with other services, and is built using modern architecture that gives users almost native app experiences inside mini apps.

When you talk about strategy for Flipkart, the homegrown e-commerce giant acquired by Walmart last year for a cool $16 billion, chances are arch rival Amazon is also hatching similar plans, and that’s indeed the case for super apps.

In India, Amazon offers its customers a range of payment features such as the ability to pay phone bills and cable subscription through its Amazon Pay service. The company last year acquired Indian startup Tapzo, an app that offers integration with popular services such as Uber, Ola, Swiggy and Zomato, to boost Pay’s business in the nation.

Another U.S. giant, Microsoft, is also aboard the super train. The Redmond-based company has added a slew of new features to SMS Organizer, an app born out of its Microsoft Garage initiative in India. What began as a texting app that can screen spam messages and help users keep track of important SMSs recently partnered with education board CBSE in India to deliver exam results of 10th and 12th grade students.

This year, the SMS Organizer app added an option to track live train schedules through a partnership with Indian Railways, and there’s support for speech-to-text. It also offers personalized discount coupons from a range of companies, giving users an incentive to check the app more often.

Like in other markets, Google and Facebook hold a dominant position in India. More than 95% of smartphones sold in India run the Android operating system. There is no viable local — or otherwise — alternative to Search, Gmail and YouTube, which counts India as its fastest growing market. But Google hasn’t necessarily made any push to significantly expand the scope of any of its offerings in India.

India is the biggest market for WhatsApp, and Facebook’s marquee app too has more than 250 million users in the nation. WhatsApp launched a pilot payments program in India in early 2018, but is yet to get clearance from the government for a nationwide rollout. (It isn’t happening for at least another two months, a person familiar with the matter said.) In the meanwhile, Facebook appears to be hatching a WeChatization of Messenger, albeit that app is not so big in India.

Ride-hailing service Ola too, like Grab and Go-Jek, plans to add financial services such as credit to the platform this year, a source familiar with the company’s plans told TechCrunch.

“We have an abundance of data about our users. We know how much money they spend on rides, how often they frequent the city and how often they order from restaurants. It makes perfect sense to give them these valued-added features,” the person said. Ola has already branched out of transport after it acquired food delivery startup Foodpanda in late 2017, but it hasn’t yet made major waves in financial services despite giving its Ola Money service its own dedicated app.

The company positioned Ola Money as a super app, expanded its features through acquisition and tie ups with other players and offered discounts and cashbacks. But it remains behind Paytm, PhonePe and Google Pay, all of which are also offering discounts to customers.

Integrated entertainment

Super apps indeed come in all shapes and sizes, beyond core services like payment and transportation — the strategy is showing up in apps and services that entertain India’s internet population.

MX Player, a video playback app with more than 175 million users in India that was acquired by Times Internet for some $140 million last year, has big ambitions. Last year, it introduced a video streaming service to bolster its app to grow beyond merely being a repository. It has already commissioned the production of several original shows.

In recent months, it has also integrated Gaana, the largest local music streaming app that is also owned by Times Internet. Now its parent company, which rivals Google and Facebook on some fronts, is planning to add mini games to MX Player, a person familiar with the matter said, to give it additional reach and appeal.

Some of these apps, especially those that have amassed tens of millions of users, have a real shot at diversifying their offerings, analyst Kolla said. There is a bar of entry, though. A huge user base that engages with a product on a daily basis is a must for any company if it is to explore chasing the super app status, he added.

Indeed, there are examples of companies that had the vision to see the benefits of super apps but simply couldn’t muster the requisite user base. As mentioned, Snapdeal tried and failed at expanding its app’s offerings. Messaging service Hike, which was valued at more than $1 billion two years ago and includes WeChat parent Tencent among its investors, added games and other features to its app, but ultimately saw poor engagement. Its new strategy is the reverse: to break its app into multiple pieces.

“In 2019, we continue to double down on both social and content but we’re going to do it with an evolved approach. We’re going to do it across multiple apps. That means, in 2019 we’re going to go from building a super app that encompasses everything, to Multiple Apps solving one thing really well. Yes, we’re unbundling Hike,” Kavin Mittal, founder and CEO of Hike, wrote in an update published earlier this year.

It remains unclear how users are responding to the new features on their favorite apps. Some signs suggest, however, that at least some users are embracing the additional features. Truecaller said it is seeing tens of thousands of users try the payment feature for the first time each day. It’s also being used to send 3 billion texts a month.

And Reliance Jio, of course

Regardless, the race is still on, and there are big horses waiting to enter to add further competition.

Reliance Jio, a subsidiary of conglomerate Reliance Industry that is owned by India’s richest man, Mukesh Ambani, is planning to introduce a super app that will host more than 100 features, according to a person familiar with the matter. Local media first reported the development.

It will be fascinating to see how that works out. Reliance Jio, which almost single-handedly disrupted the telecom industry in India with its low-cost data plans and free voice calls, has amassed tens of millions of users on the bouquet of apps that it offers at no additional cost to Jio subscribers.

Beyond that diverse selection of homespun apps, Reliance has also taken an M&A-based approach to assemble the pieces of its super app strategy.

It bought music streaming service Saavn last year and quickly integrated it with its own music app JioMusic. Last month, it acquired Haptik, a startup that develops “conversational” platforms and virtual assistants, in a deal worth more than $100 million. It already has the user bases required. JioTV, an app that offers access to over 500 TV channels; and JioNews, an app that additionally offers hundreds of magazines and newspapers, routinely appear among the top apps in Google Play Store.

India’s super app revolution is in its early days, but the trend is surely one to keep an eye on as the country moves into its next chapter of internet usage.

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Equity Shot: Judging Uber’s less-than-grand opening day

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

We are back, as promised. Kate Clark and Alex Wilhelm re-convened today to discuss the latest from the Uber IPO. Namely that it opened down, and then kept falling.

A few questions spring to mind. Why did Uber lose ground? Was it the company’s fault? Was it simply the macro market? Was it something else altogether? What we do know is that Uber’s pricing wasn’t what we were expecting and its first day was not smooth.

There are a whole bunch of reasons why Uber went out the way it did. Firstly, the stock market has had a rough week. That, coupled with rising U.S.-China tensions made this week one of the worst of the year for Uber’s monstrous IPO.

But, to make all that clear, we ran back through some history, recalled some key Lyft stats, and more.

We don’t know what’s next but we will be keeping a close watch, specifically on the next cohort of unicorn companies ready to IPO (Postmates, hi!).

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

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Uber’s trading debut: who was (and wasn’t) at the opening bell

Uber finally made its debut Friday on the New York Stock Exchange, ending its decade-long journey from startup to publicly traded company.

So far, it’s been a ho-hum beginning, with shares opening at $42, down from the IPO price. The share price is hovering just under $44.

Thirteen people, including executives, early employees, drivers and customers, were on the balcony for the historic bell ringing that opened the markets Friday. Noticeable absentees were co-founder Garrett Camp and former CEO and co-founder Travis Kalanick, who was ousted from the company in June 2017 after a string of scandals around Uber’s business practices.

Kalanick, who still sits on the board and has an 8.6% stake in Uber, wasn’t part of the opening bell ceremony. However, Kalanick and Camp were both at the NYSE for the event.

Here is who participated in the opening bell ceremony.

The bell ringer

Austin Geidt, who rang the bell, was employee No. 4 when she started as an intern in 2010, and is one of Uber’s earliest employees.

Geidt joined Uber in 2010 and has since worked in numerous positions at the company. She led Uber’s expansion in hundreds of new cities and dozens of new countries. Geidt now heads up strategy for Uber’s Advanced Technologies Group, the unit working on autonomous vehicles.

Executives

CEO Dara Khosrowshahi stood next to Geidt at the opening of the market Friday. Khosrowshahi joined Uber in 2017 after Kalanick resigned and the board launched an extensive search for an executive who could change the culture at the company and prepare it for an eventual IPO.

Khosrowshahi was the CEO of Expedia before joining Uber. Khosrowshahi gave a one-year update on his time at Uber during TechCrunch Disrupt in September 2018.

Uber CTO Thuan Pham has been with the company since 2013. Prior to coming to Uber, Pham was vice president of engineering at VMware.

Rachel Holt, vice president and head of New Mobility, was also on hand. Holt has worked at Uber since October 2011, when the company was live in just three cities. In May 2016, she became VP and regional general manager of Uber’s operations in the U.S. and Canada.

She was promoted to head up new mobility in June 2018. She’s responsible for the ramp-up and onboarding of additional mobility services, including public transit integration, scooters, car rentals and bikes.

Rachel Holt (Getty Images)

Other executives included Pierre-Dimitry Gore-Coty and Andrew MacDonald, both vice presidents and regional general managers at Uber, as well as Jason Droege, a vice president who heads up Uber Eats.

Droege, who joined Uber in 2014, has the official title of head of UberEverything. This is the team that created the food delivery service Uber Eats, which now operates in 35 countries.

Drivers

Uber had five drivers on hand for the opening bell, who represented different services and geographies.

Among the drivers were:

  • Jerry Bruner, a Los Angeles-based driver who is a military veteran and former professional golfer. Bruner has completed more than 30,000 Uber trips.
  • Tiffany Hanna, a military veteran, is based out of Springfield, Missouri. Hanna is a truck driver who uses the Uber Freight carrier app. 
  • Jonelle Bain, a New York-based driver. Uber, which shared the bios of the drivers, said Bain is taking coding classes and plans to become a software engineer.
  • Onur Kerey is a driver based out of London. Kerey is deaf. According to his bio, “He doesn’t let his disability get in the way of his passion for driving or connecting with others.”
  • J. Alexander Palacio Sanchez is based in Australia and has been driving with Uber since 2015. His true passion is acting, according to Uber, and at the urging of his riders, he auditioned for the role of Kevin in “The Heights” — and landed it.

Customers

One customer, Elise Wu, also participated in the opening bell. Wu owns Kampai, a family of restaurants in France that serves affordable cuisine made available for delivery through Uber Eats.

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