Andreessen Horowitz introduced the Marketplace 100, a ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies.
The top 4 companies (Airbnb, Doordash, Instacart, and Postmates) account for 76 percent of the list’s total observed GMV
Fast-growing marketplace startups grow quickly in the early years—often >3-5x year-over-year
Read more a16z’s thoughts on marketplaces.
HSBC recently surprised the outsiders with a 35,000 job cut plan in three years.
The largest bank by asset in Europe, London-based HSBC does most of its business in Asia.
Financial Times reported last year in October that HSBC has embarked on a cost-cutting drive that threatens up to 10,000 jobs, as its new interim chief executive Noel Quinn seeks to make his mark on the bank.
It will now cut the headcount from 235,000 to about 200,000 in 2022.
It is also not a surprise as fintech companies are becoming more compelling and providing more superior services efficiently.
The long-term trend is inevitable. For example, in retail banking, every major bank is shutting down branches. The previous “comparative advantage” of having more footprint in the last century has become a liability. The bigger they were, the more pain they were feeling.
In a Jan 2017 report, The Guardian said HSBC “will be left with 625 branches by the end of the year [2017], which means it will have more than halved its high street presence since June 2011 when it had 1,301 branches.”
And in today’s report, HSBC US said the bank will close about 80 branches this year in the U.S. alone, a reduction of about 30%.
Other retail banking services such as trading and wealth management are also shifting online + automation. Younger generations just don’t need much face-to-face financial services and digital infrastructure has become more potent than ever. The industry’s reduction in cost structure leads to lowering fees and squeezes every player who couldn’t adapt (fast).
Many Institution services are also digitalized/automated.
Not surprisingly, many parts of the investment banking world such as trading are cutting headcount as well.
Last August, Financial Times reported that
Almost 30,000 lay-offs have been announced since April at banks including HSBC, Barclays, Société Générale, Citigroup and Deutsche Bank. Most of the cuts have come in Europe, with Deutsche accounting for more than half the total, while trading desks have been hit hardest.
On Feb 14, Oaktree Capital Management, a Los Angeles-based distressed debt manager, became the first foreign company to set up a wholly owned unit in China under a trade accord with the U.S. The Beijing-based subsidiary has a registered capital of $4.55 million. // Caixin
On Feb 17, OYO reported a $951 million revenue globally for the financial year ending March 31, 2019, growing 350% yoy. In 16 month, OYO China has grown into an annual revenue of $307 million (~1/3 of total revenue). While facing more pressure, OYO China now has expanded into 3 brands and signed up 19,000 hotels. // TechCrunch | FT
Coronavirus has pushed many industries in China to go digital. In the past few weeks, there are booms in enterprise remote working apps 远程办公 (DingTalk surpasses WeChat to rank first in the App Store in China on Feb 5), online house tours 云看房 (of the top 100 residential real estate developers, 92 have launched the online selling services), online grocery shopping 生鲜电商 (Miss Fresh GMV grew by 321% yoy during the Chinese New Year), etc.
Tesla (NASDAQ: TSLA) is in advanced stages of talks to use batteries from Contemporary Amperex 宁德时代 (SHE: 300750) that contain no cobalt – one of the most expensive metals in electric vehicle (EV) batteries – in cars made at its Gigafactory 3 in China. Tesla started to deliver cars from that factory in December 2019. // reuters
Greenhouse gases trap heat and make the planet warmer.
Several of the major greenhouse gases occur naturally but increases in their atmospheric concentrations over the last 250 years are due largely to human activities. Other greenhouse gases are entirely the result of human activities. [IPCC’s Fourth Assessment Report]
Carbon dioxide (CO2) is the primary greenhouse gas emitted through human activities.
In 2017, CO2 accounted for about 81.6 percent of all U.S. greenhouse gas emissions from human activities.
Emissions of CO2 from fossil fuel use and from the effects of land use change on plant and soil carbon are the primary sources of increased atmospheric CO2.
For total U.S. CO2 emissions, which mainly come from the combustion of fossil fuels (coal, natural gas, and oil), by economic activity types, transportation accounts for about 34.2 percent, electricity accounts for about 32.9 percent, industrial processes accounted for about 15.4 percent.
An analysis by the International Council for Clean Transportation (ICCT), shows an estimate of lifecycle emissions for a typical European conventional (internal combustion engine) car, the hybrid conventional car with the best available fuel economy (a 2019 Toyota Prius Eco), and a Nissan Leaf electric vehicle (best-selling EV overall in Europe for 2018) for various countries, as well as the EU average.
An electric car using average European electricity is almost 30% cleaner over its life cycle compared to even the most efficient internal combustion engine vehicle on the market today
In most countries, the majority of emissions over the lifetime of both electric and conventional vehicles come from vehicle operation – tailpipe and fuel cycle – rather than vehicle manufacture. The exception is in countries – Norway or France, for example – where nearly all electricity comes from near-zero carbon sources, such as hydroelectric or nuclear power. Lifecycle emissions for electric vehicles are much smaller in countries such as France (which gets most of its electricity from nuclear) or Norway (from renewables). [carbonbrief]
There is an important variable here – how the batteries of EVs are produced, as the largest part of the emissions, around 50%, is currently from battery (including cell) manufacturing.
Producing batteries in a plant powered by renewable energy – as will be the case for the Tesla factory – substantially reduces lifetime emissions. The IVL researchers estimate that battery manufacturing emissions are between 61 and 106 kg CO2-equivalent per kWh.
With the technology advancements and cleaner energy sources for plants, the marginal and average cost of producing batteries will continue to go down.
DTC is a buzzword that attracts capital in the private market.
However, public market usually doesn’t have much patience or appetite for future stories.
Casper, the magical mattress unicorn, which raised $100 million in March 2019, marketing itself as a “Sleep Economy” company, is receiving a market cap of $400 million (EV ~$300 million).
The main problem though, is not about the DTC model.
Brands such as Canada Goose and Lululemon are counting on DTC to grow.
The slowing revenue growth rate is also okay. Public market is not relentlessly looking for 100% or 50% growth.
Indeed, Canada Goose and Lululemon, which grew at sub-25% in the last 12 month, are valued at over 4x and 8x sales respectively.
Casper, which is expected to grow at 23% for 2019, has EV/Revenue below 1x.
The cost structure is where things are different.
From 2019 April to December (FY20Q1-Q3), Canada Goose‘s SG&A expenses are 31.2% of revenue.
From 2019 February to October (FY19Q1-Q3), Lululemon‘s SG&A expenses are 36.4% of revenue.
That ratio is 70.5% for Casper from Jan to Sep 2019.
Plus the differences in gross margin, the unprofitable DTC brand growing at sub-25% still needs additional efforts to prove its business is viable/sustainable.
Financial Times – Tesla shares surge again despite Saudi Arabian exit
It has been more than 13 years since Youtube was acquired for $1.65 billion by Google back in October 2006.
Founded in February 2005, with $11.5 million total venture funding and 65 employees at that time, Youtube commanded 46% of visits to U.S. online-video sites in September. That compared with a 21% share for the video activities of News Corp.’s MySpace site and 11% for Google Video. Youtube had close to 20 million monthly visitors in August 2006.
A year and half before Youtube’s acquisition, MySpace’s parent company Intermix Media Inc. was acquired by News Corp. for $580 million.
Back then, Google reported total revenues of $6.14 billion in 2005 and $10.60 billion in 2006, and had a market value of $132 billion. Its net income was $3 billion in 2006 with $3.6 billion cash flow from operations and more than $11 billion cash balance.
On Monday Feb 3, 2020, Alphabet first provided the breakdown for some of its non-Google-search businesses, including Youtube.
|
Year Ended December 31,
|
||||||
|
2017
|
2018
|
2019
|
||||
|
Google Search & other
|
$
|
69,811
|
$
|
85,296
|
$
|
98,115
|
|
YouTube ads(1)
|
8,150
|
11,155
|
15,149
|
|||
(1) YouTube non-advertising revenues are included in Google other revenues.
Youtube ads generated $4,717 million revenue in 2019 Q4 – a ~$19 billion run rate.
Using a multiple of 5.0x, Youtube could be valued at ~$100 billion – a 60 times return for google acquisition or an IRR of 37% for 13 years.
I guess the success formula is: with the right synergies, acquire early & provide support to grow it.
Major airlines usually would post their monthly operation results on IR websites. While United Airlines and Southwest Airlines among other stopped reporting in 2019, Alaska and Delta are still doing so.
Load factor is a measure of the use of aircraft capacity that compares Revenue Passenger-Miles as a proportion of Available Seat-Miles.
Below is a three-part project that automatically downloads, summarizes and creates chart for 4 airlines’ load factor.
Download
Given certain years, the program will go through pre-defined links to search for monthly report urls and scrap relevant data based on the page structure. BeautifulSoup is used here.
Summary
The program uses file reading and writing to put four airlines’ data together while adjusting for missing data (aligning based on month)
Charting
The program converts csv to excel and draws the chart based on data. pandas and xlsxwriter are used here.
With some adjustments, the program should be able to scrape and virtualize other web-based standard reports.
Two leading national drugstore chains keeps adding more franchised stores than directly operated stores.
Franchised model is more efficient in