Despite YouTube’s ubiquity and its role as a public-facing platform, it remains a private forum, not a public forum subject to judicial scrutiny under the First Amendment
– Circuit Judge M. Margaret McKeown
Dots to connect: internet platforms’ products that operate like government, possible platforms with political views, regulation vs. indirect influence on tech firms, etc.
Below is the chart for Jumia’s performance in terms of GMV.
A spike in 2018Q4 just before IPO is controversial..
Although with the “artificial” growth in 18Q4, the trend looks good
The more worrying part is the slowdown in GMV growth – especially when Jumia is still has a long way to go
Jumia’s full year 2019 GMV is €1.1 billion, up 33% compared to 2018.
Comparatively, Pinduoduo’s GMV in the twelve-month period ended December 31, 2018 was RMB471.6 billion (US$268.6 billion), an increase of 234% from RMB141.2 billion in the twelve-month period ended December 31, 2017.
Combined with Jumia’s annual active customer base, we can see the GMV per AAC declining over time.
In its Q4 press release, Jumia says “we have reduced promotional intensity and consumer incentives on lower consumer lifetime value business. While most product categories experienced GMV growth in the 20 to 50% range, phones and consumer electronics contracted by approximately 20% on a year-over-year basis. This aspect of the business mix rebalancing will likely continue to negatively impact GMV development over the next two quarters.”
“…we have increased our focus on everyday product categories such as Fast Moving Consumer Goods (“FMCG”), fashion, beauty and personal care as well as digital services which provide affordable entry points into the Jumia ecosystem…”
We could also see that Pinduoduo’s GMV per active buyer is a little bit insane..
approx. annual GMV per active buyer = $268.6 billion / 418.5 million = $641.8
Jumia is at ~€180 in 2019, using annual GMV divided by ending AAC.
To compare it with consumers’ e-commerce purchase across the globe..
Jumia was offering 13,500,000 ADR shares with an IPO range of $13 to $16 per share and priced at $14.5 per share.
Mastercard Europe SA has agreed to purchase €50.0 million of shares in a concurrent private placement at the same price.
As of December 31, 2018, Mobile Telephone Networks Holdings (Pty) Ltd (“MTN”), Rocket Internet SE (“Rocket”) and Millicom International Cellular SA (“Millicom”) own respectively 31.28%, 21.74% and 10.15% of the Company.
Other shareholders are AEH New Africa eCommerce I GmbH (8.86%), AXA Africa Holding SAS (6.06%), Atlas Countries Support S.A. (6.06%), Chelsea Wharf Holdings S.à r.l. (5.51%), CDC Group (4.04%), Rocket Investment Funds (3.48%) and Goldman Sachs (2.83%).
Africa has one of the most digitally connected populations on the planet, with 400 million internet users.
Comparatively, say China has three times the number of internet users (1.2bn), Jumia would have 12 million or 18.3 million respectively.
Pinduoduo, a relatively new e-commerce platform in China, said its Active buyers in the twelve-month period ended December 31, 2018 were 418.5 million, an increase of 71% from 244.8 million in the twelve-month period ended December 31, 2017.
We are talking about totally different stages of e-commerce. Low penetration means more education and infrastructure are needed while potential upside is large.
In the future where Fintech firms dominate, established companies are reacting with three main strategies:
Cut costs for legacy business lines – like what we said in a previous post Banking Headcount Cut
Consolidate with other legacy companies to gain more market share and thus more say/power, further cutting expenses and trying to get more economy of scale – like what we said in the last post From TD Ameritrade To E-Trade: A Wave Of Consolidation
Acquire Fintech startups or replicate what they are doing – like the title of this post Buy & Be FinTech
Plaid is a Fintech firm that enables a lot of other Fintech apps & digital transaction based businesses, providing underlying APIs. It counts Venmo, Robinhood, Coinbase, Acorns, etc. as customers.
Credit Karma lets people check their credit scores, shop for credit cards and loans, file taxes and more. It had close to nearly $1 billion revenue in 2019, growing at 20%.
The company started out originally in 2007 providing free credit scores, later extending that to full credit reports. Credit Karma’s launch of a financial planning tool in 2013 drew a direct comparison to Intuit’s Mint. And since then, Credit Karma has launched other products that directly rival Intuit, for example a free tool to help people file their taxes. These not only represented direct competition, but a disruptive threat, since Credit Karma’s products skewed younger and were built on a “free” premise (offering the products at no charge and instead making money off showing users and selling relevant, related products). The fact that Credit Karma partners with so many other financial services providers also means it’s sitting on a huge data trove that it leverages to build and personalize products, representing a data science angle for Intuit here, too. [TechCrunch]
Meanwhile, besides the notable acquisitions of Fintechs, companies are building similar services by themselves.
By mimicking the experiences/apps offered by startups, established players are essentially becoming Fintechs themselves, thus evolving internally and embracing the future more positively.
Another private equity firm Symphony Technology Group (STG) just announced the acquisition of RSA from Dell for $2.075 billion in cash. STG partnered with Ontario Teachers’ Pension Plan Board and AlpInvest Partners in the deal.
Earlier this month, Forescout was to be acquired by Apax and its partner Crosspoint Capital for $33 per share in an all-cash transaction valued at $1.9 billion.
The purchase price represents a premium of approximately 30% over Forescout’s closing share price of $25.45 on October 18, 2019, the last full trading day prior to the release of the 13-D filings by Corvex Management L.P. and Jericho Capital Asset Management L.P. on October 21, 2019, which disclosed they had formed a partnership to approach Forescout and accumulated a combined 14.5% ownership in the company.
Forescout recorded fourth quarter revenue of $91.3 million, compared to $84.7 million in the fourth quarter of 2018 (+8% growth); full year revenue of $336.8 million, compared to $297.7 million in the full year 2019 (+13% growth).
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
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
Dots to connect: global tax reform for tech companies, tech companies go beyond countries/regions, potential indirect trade war in digital world, tech ultimately benefits as it can balance between nations, the leading companies may make it hard for others to expand globally and follow suit, social medias as media & telecom companies, UK’s digital taxes, etc.
The top-funded startup in Europe is global communications company OneWeb in the UK, with almost $3.5B in total disclosed equity funding.
Rounding out the top 3 most well-funded startups in the region are online payments service provider Klarna in Sweden ($1.1B in disclosed equity funding) and mobile banking platform N26 in Germany ($683M).
Eight of the 37 companies featured in our map are unicorns, with disclosed valuations of $1B+ (all tracked in real time on the CB Insights global unicorn club tracker). These unicorns are: Klarna ($5.5B valuation, Sweden), N26 ($3.5B, Germany), BlaBlaCar ($1.6B, France), Vinted ($1.1B, Lithuania), Acronis ($1B, Switzerland), Glovo ($1B, Spain), OutSystems ($1B, Portugal), and Bolt ($1B, Estonia).
The region is home to 16 countries whose most well-funded tech startup has raised over $100M in equity funding. Only OneWeb and Klarna have raised more than $1B+ in equity funding.
The least well-funded startup on the map is Serbia-based data analysis tool Content Insights, which has raised $3.6M.
Since our last update of this map in April, only 1 featured startup has exited: Switzerland-based Veeam Software, which was acquired by VC firm Insight Partners in January 2020 at a valuation of $5B+.
STARTUP CONTINENT: THE MOST WELL-FUNDED TECH STARTUPS IN EUROPE
When Tesla enjoyed an amazing ride this week, let’s look at Elon Musk’s other business SpaceX. Specifically, one of its major client bases – satellites.