Roundup of news and ideas from the world of startups – Week ending 16th Sept 2018
News you can use
For a Start-Up, 100 Million Was Once Big Money. Now, It’s Common – An interesting article in the New York Times reviews startups that are generating ‘mega-round’ investments; essentially large-scale fund raising of more than $100 million. For the start-ups, the pots of money are changing the normal way of building a tech company. They must move even faster, expand their ambitions and collect more investment money than ever — even if they might not be ready. They risk becoming too reliant on funding and never finding a path to profit.
Amazon extends franchise model by ordering 20,000 Mercedes-Benz – A while ago, we blogged a detailed writeup – What is the Amazon’s franchise program? How do I become a Franchisee? Amazon has been pushing forward on the program by extending its Delivery Service. In June, Amazon announced that it was rolling out its Delivery Service Partner program to increase its package delivery and logistics service capabilities. It also aims to enable entrepreneurs to set up their own businesses to deliver Amazon packages. The e-Commerce giant describes the program to prospective franchisees.
Corporate M&A
Microsoft buys AI startup Lobe – Microsoft announced that it has acquired Lobe, an AI startup that helps developers make deep-learning models without coding. Lobe, a platform that can understand hand gestures, read handwriting, and hear music, will continue to develop as a standalone service. Lobe was founded in 2015 by Mike Matas, Adam Menges, and Markus Beissinger in order to make deep learning accessible to everyone.
Gov-tech startup CityBase acquired for $160 million – The software company, which helps cities such as Chicago do business with constituents, went looking for funding and found a buyer instead. CityBase, a Chicago software startup that helps governments connect with the residents and businesses they serve, has been acquired for $160 million by an Austin, Texas-based company.
WeWork makes its third-biggest acquisition to date, shelling out $100 million for a software startup called Teem – WeWork, the eight-year-old, 800-pound gorilla in the co-working space, hasn’t been known for being terribly acquisitive, despite the billions of dollars it has raised and its valuation, which one of its biggest investors, SoftBank, apparently believes to be approaching $35 billion. To wit, it made just one small acquisition in 2015 (Case), and one other in 2016 (Welkio).
Startup shut and failed last week
Google funded Drone startup Airware to shut down – Airware, a google funded startup that had raised $118 million from top investors like Andreessen Horowitz, Google’s GV, and Kleiner Perkins informed its employees that it was ceasing operations. Drones are enabling companies to more efficiently and effectively capture data, and Airware allows enterprises to integrate this data with existing information and workflows to improve efficiency, productivity, and safety. Airware was positioning itself as an “enterprise drone analytics company” trying to help enterprises harness aerial data.
Last mile delivery startup, The New Post shuts down – A 5-month-old package holding and delivery service, The New Post, abruptly closed down, leaving its customers in a lurch. Its general manager Sean Khokhar confirmed on Sunday that they had closed.