Skip to main content

Rakuten Takes Subsequent Hit On Lyft Stake

Rakuten CEO Hiroshi Mikitani

image: Seng YAM/PriceMinister on Flickr

Rakuten, the largest shareholder in Lyft, has said it expects to record a $947 million loss on its stake in the ride-hailing company in the latest quarter. This is atop an earlier 24.8 billion yen ($227 million) write-down by the company on its Lyft stake, driven by a tumble of the ride-hailing company's stock price from an all-time high of $88.60 to currently [as of writing] around $41. Lyft is locked in a cash-burning price war with its larger rival Uber in the U.S., a situation that has led to high spend to retain customers which has in turn led to substantial losses.

In the third quarter of this year, Lyft booked $956 million in revenue, up 63% year-over-year, but with losses of $463.5 million, of which $241.6 million was due to stock-based compensation and $86.6 million due to changes to liabilities for insurance. On the whole, Lyft spent $1.4 billion in the third quarter of this year, more than the revenue it pulled in. Just like Lyft, Uber is also spending more than it pulls in, having just posted $1.2 billion in Q3 losses on $3.8 billion in revenue.

Rakuten got to be Lyft's biggest shareholder thanks to an early bet on the company. The Japanese e-commerce giant led a $530 million Series E in 2015 that valued Lyft at $2.5 billion, and also participated in subsequent rounds. Its investments amounted to a 13% stake as at when Lyft went public in March. Rakuten recorded $990 million in paper gains from its Lyft investment in April, one month after the company went public. But with Lyft's stock down more than 50% from its all-time high, it's no surprise the company has recorded subsequent sizable losses.

Lyft isn't the only company Rakuten has backed. The Japanese company drew eyeballs when it led a $100 million investment in Pinterest that valued it at $1.5 billion in 2012  With Pinterest having gone public in April and with a current valuation (as of writing) hovering around $11 billion, it seems safe to say Rakuten booked a sizable profit on its investment. Other notable companies Rakuten has backed include Cabify, Careem (acquired by Uber), Carousell, Glovo, Upstart, Kreditech and Gojek.


The Ultimate USB Hub at HYPER: Shop Now

Comments

Most Read Posts

Google Makes Big Bet On ADT

Google has reached a deal to cough up $450 million for a 6.6% stake in ADT, the publicly-traded security and smart home solutions provider, as part of a broader partnership to jointly develop smart home security products with the company. Google and ADT are each committing $150 million for product development, technology, marketing, and employee training towards developing new products. The partnership primarily combines Google's Nest brand of home security hardware and services with ADT's vast installation, service, and professional monitoring network in the US. Thanks to the partnership, ADT aims to begin offering certain Google devices to its customers beginning this year.

Google is ponying up $450 million for newly created Class B common stock of ADT that'll come with all the usual rights and preferences of the company's common stock except for the right to have a say in the appointment or removal of board directors. The search giant's investment is expected t…

Samsung Debuts Galaxy Watch 3

At this year's installment of its Galaxy Unpacked event, Samsung has debuted the Galaxy Watch 3, the second iteration of the company's iconic line of smartwatches. The new smartwatch is 14% thinner, 8% smaller, and 15% lighter compared to the original Galaxy Watch, and with physical features including the iconic rotating bezel seen in previous Galaxy Watches. Among its specifications include;

8GB internal storage and 1GB RAM360x360 AMOLED displayBluetooth/WiFi connectivity as expected andA 247mAh or 340mAh battery, depending on the version.
The Galaxy Watch 3 is available in two length types, a 41mm (with a 247mAh battery) and 45mm (with a 340 mAh battery). It'll become available in select markets beginning from tomorrow, the 6th of August, 2020.


Update [8/6/20]: we made a correction to indicate that the Galaxy Watch 3 is actually the second iteration of the Galaxy Watch rather than the third, given there was no Galaxy Watch 2.





Epic Games Closes $1.8 Billion Round

Epic Games, the gaming studio best known for creating Fortnite, has announced that it's raised $1.8 billion in new funding that values it at $17.3 billion post-money. The funding both consisted of primary capital for Epic as well as the purchase of shares from existing shareholders in the company. The $1.8 billion figure includes $250 million in funding that recently came from Sony. Other participants include the likes of BlackRock, Fidelity, Baillie Gifford, Lightspeed Venture Partners, KKR, and hedge fund tycoon David Tepper. Even with the new funding, Epic remains controlled by its founder and CEO, Tim Sweeney.

With the new funding, Epic Games has now raised a total of about $3.4 billion in known outside funding since its inception.





Nvidia In "Advanced" Talks For Arm

Chipmaker Nvidia, which was recently reported to be of interest in acquiring famed chip designer Arm, has now been reported [paywall] to be in "advanced" talks to acquire the company by Bloomberg. According to Bloomberg, Nvidia has initiated formal talks with Arm's Japanese owner, SoftBank, and aims to reach a final deal in the "next few weeks".

SoftBank coughed up $32 billion to acquire Arm in 2016 and will be presumably seeking a sizeable profit on its investment. This implies that an Nvidia deal for Arm would likely be one of the largest acquisitions, if not the largest ever, to be witnessed in the semiconductor industry. Nvidia looking to acquire Arm would also likely stir up regulatory scrutiny and probably opposition from hardware companies that utilize Arm's technology.

SoftBank, Arm's owner, has been offloading some prized assets as of recent as it seeks to pay down its sizeable debt load. As part of its efforts, the Japanese tech conglomerate …

Telegram Files EU Complaint Against Apple

Popular chat app Telegram is the latest company to file a formal antitrust complaint against Apple in the European Union, primarily concerned about the iPhone maker's App Store fees and its prevention of Apple device owners from downloading apps from other sources. The formal antitrust complaint follows a guide recently penned by Telegram's CEO, Pavel Durov, where he outlined "7 Reasons Every iPhone User Should Be Worried About the App Store’s 30% Tax". Among the reasons postulated include higher prices for consumers; censorship; lack of privacy; more ads in apps; delays in app updates; fewer apps, in general, being made; and "worse" apps being developed.

Telegram marks the third major company, after Spotify and Rakuten, to have filed formal complaints against Apple in the European Union, where the company is already facing antitrust investigations. Also, Apple's CEO, Tim Cook, is also fresh off an antitrust hearing in the US, pointing towards possible…

Apple Scoops Up Mobeewave

Apple has acquired Mobeewave, a payments startup that develops technology that transforms smartphones into payment terminals, as first reported [paywall] by Bloomberg. According to Bloomberg, Apple paid about $100 million for the startup, which as a standalone company raised $27 million in private funding. Notable investors in the company include MasterCard and Samsung Ventures.

Mobeewave is actually based out of Montreal, Canada, where it'll continue to operate from, as reported by Bloomberg. The company is known to have less than 100 employees in total. Apple usually keeps its acquisitions tight-lipped so it shouldn't be surprising that a Mobeewave acquisition wasn't formally announced. Presumably, Apple is looking to integrate Mobeewave's technology to turn iPhones into payment terminals. Its competitor, Samsung, has already done so, having partnered with and invested in Mobeewave. With Apple's acquisition, it's unclear if the technology will for long be pe…

UK Clears Amazon's Deliveroo Investment

Following what was termed as an "in-depth" investigation, the UK's Competition and Markets Authority (CMA) has formally cleared a big investment by Amazon into Deliveroo, the country's leading food delivery startup, after previously putting the deal on hold to make way for investigations over potential antitrust issues resulting from the investment. The CMA says it made the decision to finally greenlight the investment after concluding that a 16% stake that Amazon was purchasing in Deliveroo will not substantially affect competition in the country's food delivery market. However, the regulatory agency warns of possible future investigations if Amazon moves to increase its stake in Deliveroo. The investment of concern here is a $575 million funding round led by Amazon.

With the investment secured, Deliveroo has now clinched a total of $1.5 billion in funding since its inception.





Lordstown Motors Eyes Reverse Listing

Lordstown Motors, an electric vehicle upstart based out of Lordstown, Ohio, has announced that it's reached a deal to go public on the Nasdaq stock exchange via a merger with DiamondPeak Holdings, a 'blank check' company, or better known as special purpose acquisition company (SPAC). The merger will add roughly $675 million to Lordstown's balance sheet and is intended to come with a valuation of $1.6 billion. The $675 million figure includes $500 million in committed investments from investors including General Motors, Fidelity, Wellington Management, and BlackRock.

Something very peculiar about Lordstown Motors is its relatively short span of existence, having been founded just a year ago. Lordstown made a splash last year by acquiring a 6.2 million-square-foot automotive manufacturing facility from automaker General Motors, which had earlier vacated the facility. The acquisition itself was unique, given that General Motors actually loaned Lordstown the sum of $40 mi…

Brief: Cisco Scoops Up Modcam

Networking hardware giant Cisco has announced that it's acquired Modcam, a Swedish video analytics startup, particularly scooping up the company to bolster its Meraki smart camera product. Modcam has developed a solution that enables cameras to be used for precision locationing and journey pathing within confined physical spaces, primarily targeted at retailers. Cisco, whose Meraki smart camera capabilities already include motion and object detection, says Modcam technology will enable them to be even better.

Since its inception, Modcam is known to have raised some $7.6 million in funding. Investors in the company include the likes of Spintop Ventures, Robert Bosch Venture Capital, and Northvolt CEO Peter Carlsson. The price Cisco paid for the company isn't disclosed.





Take-Two Interactive's Q2 Results

Gaming studio Take-Two Interactive has announced its financial results for the second quarter of this year, indicating $831 million in revenue, up 54% year-over-year despite the company not releasing any new game during the quarter. Revenue for the quarter was buoyed by games such as NBA 2K20, Red Dead Redemption 2, and Grand Theft Auto V as well as mobile games from its subsidiary Social Point. Net income for the quarter came at roughly $89 million, up 91% year-over-year. As at the end of the second quarter, Take-Two had $2.3 billion in cash and short-term investments.

Forecast

For the third quarter of this year, Take-Two is forecasting revenue of between $750 million to $800 million. For the entire year, the gaming company is forecasting revenue of between $2.8 billion to $2.9 billion and a net income of between $349 million to $380 million.