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Readying an IPO, Postmates secures $225M led by private equity firm GPI Capital

Postmates, the popular food delivery service, has raised another $225 million at a valuation of $2.4 billion, the company confirmed to TechCrunch on Thursday, ahead of an imminent initial public offering.

Private equity firm GPI Capital has led the investment, first reported by Forbes, which brings Postmates’ total funding to nearly $1 billion. GPI takes non-controlling stakes — between 2% and 20% — in both late-stage private companies and publicly listed ventures.

After tapping JPMorgan Chase and Bank of America to lead its float, Postmates filed privately with the Securities and Exchange Commission for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us onstage at TechCrunch Disrupt on Friday October 4th.

As Forbes noted, last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates’ last-minute financing are unclear; however, the company will certainly begin trading on the stock market at an interesting time. 2019 has proven to be the year of unicorn listings, and former Silicon Valley darlings like Uber and Lyft have struggled to stabilize since their multi-billion-dollar debuts, despite years of support and coddling from venture capitalists.

Meanwhile, activity in the food delivery space has distracted from Postmates’ prospects. DoorDash, for one, recently purchased another food delivery service, Caviar, from Square in a deal worth $410 million. Uber is said to have considered buying Caviar, which had been looking for a buyer at least since 2016, according to Bloomberg. Postmates, for its part, has long been the subject of M&A rumors.

On-demand food delivery, undeniably popular, has yet to prove its long-term viability as a money-making business. At the very least, a sizeable check from a private equity firm ensures Postmates has the capital it needs, for the time being, to accelerate growth and double down on its autonomous robotic delivery ambitions.

Founded in 2011, Postmates is also backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.

Readying an IPO, Postmates secures $225M from private equity firm GPI Capital

Postmates, the popular food delivery service, has raised another $225 million at a valuation of $2.4 billion ahead of an imminent initial public offering, the company confirmed to TechCrunch on Thursday.

Private equity firm GPI Capital has led the investment, first reported by Forbes, which brings Postmates total funding to nearly $1 billion. GPI takes non-controlling stakes — between 2% and 20% — in both late-stage private companies and publicly-listed ventures.

After tapping JPMorgan Chase and Bank of America to lead its float, Postmates filed privately with the Securities and Exchange Commission for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us on stage at TechCrunch Disrupt on Friday October 4th.

As Forbes noted, last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates last-minute financing are unclear, however, the company will certainly begin trading on the stock market at an interesting time. 2019 has proven to be the year of unicorn listings and former Silicon Valley darlings like Uber and Lyft have struggled to stabilize since their multi-billion-dollar debuts, despite years of support and coddling from venture capitalists.

Meanwhile, activity in the food delivery space has distracted from Postmates prospects. DoorDash, for one, recently purchased another food delivery service, Caviar, from Square in a deal worth $410 million. Uber is said to have considered buying Caviar, which had been looking for a buyer at least since 2016, according to Bloomberg. Postmates, for its part, has long been the subject of M&A rumors.

On-demand food delivery, undeniably popular, has yet to prove its long-term viability as a money-making business. At the very least, a sizeable check from a private equity firm ensures Postmates has the capital it needs, for the time being, to accelerate growth and double down on its autonomous robotic delivery ambitions.

Founded in 2011, Postmates is also backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.

If Silicon Valley were a country, it would be among the richest on Earth

With $128,308 per capita in annual gross domestic product, Silicon Valley residents out-produce almost every nation on the planet

Were it real, the Sultanate of Silicon Valley would be among the worlds richest countries.

Cranking out $128,308 per capita in annual gross domestic product (GDP), residents in Californias tech belt out-produce almost every nation on the planet. The valleys output, pegged at $275bn by the federal Bureau of Economic Analysis, is higher than Finlands.

Depending on how one counts it, Qatars per-capita GDP, estimated by the World Bank at $128,647 in 2017, is the worlds highest. The per-person output from Silicon Valley more precisely, the San Jose metro area actually outpaces Qatars by some measures, and puts the valley squarely in the company of wealthy nations like Chinas casino peninsula Macau, estimated per capita GDP $115,367, and Europes sumptuously medieval Luxembourg, estimated per capita GDP $107,641.

Home to nearly 2 million, the San Jose metro area includes Stanford University in Palo Alto, Googles headquarters in Mountain View and Apple HQ in Cupertino. Half the worlds tech billionaires live in Silicon Valley; a sizable portion of the remainder live just north in the San Francisco Bay Area.

San Francisco, Oakland and their suburbs comprise Americas third-most productive metro area by GDP, generating $89,978 per capita, a number that puts it in the company of Singapore and Brunei.

Silicon Valley and the Bay Area only trail the Texas oil center Midland, a metro area with 165,000 residents generating $174,749 per capita GDP.

Speaking with the Mercury News, Silicon Valleys hometown newspaper, the Bay Area Council Economic Institute president Micah Weinberg noted that the regions GDP wouldnt be so high save for areas of California with far lower GDP figures. There really wouldnt be Silicon Valley without the Central Valley, Weinberg said, referring to Californias agricultural heartland.

Wealth hasnt been without cost. Like other US high-per capita GDP areas in south-western Connecticut, Seattle and Boston, the Bay Area and Silicon Valley have seen skyrocketing housing costs, problematic cultural shifts and political clashes tied to rising inequality. GDP, it turns out, is no way to gauge a communitys economic health.

As a measure of output how much stuff is being produced GDP tells us nothing about the distribution of income from that output, which is a much more important determinant of overall well-being in a community, Lew Daly, a senior policy analyst with the thinktank Demos and the coauthor of Beyond GDP: New Measures for a New Economy, told the Guardian.

GDP tells you nothing about how a community is growing, Daly added. If the economy is growing, that might even be a negative thing if it is growing inequitably and unsustainably. GDP doesnt even begin to answer that question.

Researchers like Daly advocate holistic gauges of economic health that capture more than consumption, investment and the other measures underpinning GDP figures. Sometimes, though, there is an overlap. By one more progressive metric, the Human Development Index, Silicon Valley is the nations most well-developed place.

Speaker maker Sonos goes public, but acknowledges vulnerability

Company shrugs off lacklustre opening trading as stocks surged 33% above its IPO price in its market debut

Wall Street investors are still hot for music technology at least that was the message Sonos Inc broadcast this week after its stock SONO surged 33% above its IPO price in its market debut.

Shrugging off lacklustre opening trading, the maker of popular, high-end wireless and voice recognition speakers, closed out the day at over $19 a share on Thursday, giving the 16-year-old Californian company an implied market value of $1.95bn .

If it holds, Sonos flotation could end a curse thats been hanging over commodity technology since companies like Fitbit and GoPro surged at IPO and then crashed. What makes Sonos different, company executives argued last week, is that unlike, say, smartphones and headphones, their speakers arent locked into updating cycles.

People are used to buying commodity tech that needs to be replaced, but were differentiated because our product persists, Mike Groeninger, Sonos vice president of finance, told Marketwatch.

With Sonos, the argument goes, consumers perceive brand loyalty because the Sonos systems are of high quality and will simply add to existing systems when they move or add music-streaming to new areas of the homes.

Sonos backs up that argument with data showing that said 27% of Sonos households own four or more products, and more than 61% of its households have registered more than one device.

Where Sonos products need to be replaced, Groeninger continued, its because its hardware cant support advances in streaming technology. Were not forcing obsolescence, he pointed out.

But if that were all true, and Sonos was uniquely blessed with longterm customer loyalty, then stock analysts could reasonably expect Sonos first day numbers to come in more robustly.

One potential problem is that Sonos greatest asset in partnering with streaming services Amazon, Apple, Google and Spotify is also its most glaring consumer tech weakness: those companies could decide to move into the hardware business.

Jordan Hiscott, chief trader at Ayondo markets, commented that despite Sonos opening day performance his main concern is that Sonos will experience a negative share price performance similar to Fitbit.

Fitbit is another well-run company with popular products, yet its future profitability can be heavily affected when tech conglomerates, like Apple or Google, decide to produce and manufacture similar, niche devices themselves, which consequently undermines market share.

The companys vulnerability to Amazon, for instance, was revealed earlier this month when it was revealed in an SEC filing that the e-shopping giant could disable its Alexa voice recognition technology on Sonos speakers on limited notice.

In its filing, Sonos also acknowledged that not only could Amazon disable Alexa integration but Amazon could also begin charging us for this integration which would harm our operating results.

In the filing, weve just been very upfront about the fact that we could turn off peoples service, they could turn them off. Were transparent by nature, so thats in there, Sonos CEO Patrick Spence told CNBC on Thursday.

Morgan Stanley recently estimated that more than 70% of US households will own a smart speaker with voice commerce capabilities by 2022 and half of all web searches will be voice activated.

The category will become so important to the data tech giants, the report recommended, that Google should give away a free Home Mini smart speaker to every US household.

The $3.3bn this would cost Google parent Alphabet to execute would be a small price to pay for the opportunity, it added, since the potential to make money off the trend will likely go to Amazon and Google because of their dominance in their voice recognition technologies and smart speaker technology.

For Sonos, then, perhaps the best policy would be to remain on good terms. The companys sales have been increasing, albeit modestly from a loyal customer base that drove sales to nearly $1bn last year. The company, still based in Santa Barbara, Californi, where it was founded, has posted annual losses in its three most recent fiscal years.

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