Nextdoor’s decision to go public through a special purpose acquisition company was largely the result of favorable pricing compared with a traditional IPO, said Bill Gurley, a partner at Benchmark and an early investor in the neighborhood social network.
Gurley has been among the most vocal supporters of direct listings, another IPO alternative in which companies go public without selling shares at a steep discount to new investors. He said the average IPO in 2020 came with a 57% cost of capital.
“SPACs are remarkably cheap compared to mispriced IPOs,” Gurley told CNBC’s “TechCheck” on Friday.
Nextdoor announced plans earlier this week to pursue a SPAC sponsored by an affiliate of Khosla Ventures, Vinod Khosla’s investment firm. In a SPAC, a so-called blank check company raises capital through a public offering and then shops around for a potential target, which becomes the operating entity after the transaction closes.
The pace of new SPACs slowed earlier this year after smashing a record in 2020 and setting a new high in the first quarter of this year. The pullback came after the SEC issued accounting guidance that would classify SPAC warrants as liabilities instead of equity instruments.
However, activity has resumed. In addition to Nextdoor, fintech company Circle, space companies Planet Labs and Satellogic and solar power firm Heliogen all announced deals this week. Still, the proprietary CNBC SPAC Post Deal Index, which is composed of the largest SPACs that have announced a target or those that have already completed a SPAC merger within the last two years, is down 3.8% in 2021, after tumbling in February and March.
Nextdoor’s transaction will bring in $686 million and value the company at $4.3 billion. Benchmark first invested in 2011 at a post-money valuation of just over $30 million, according to PitchBook.
The company says its site is now used in more than 275,000 neighborhoods around the world and in nearly 1-in-3 U.S. households. It allows users to organize events, sell or give away items and alert neighbors to danger. Earlier this year, Nextdoor debuted an anti-racism notification after long facing criticism for racist comments on its platform.
In 2018, Nextdoor hired Sarah Friar, who was finance chief at Square, as its new CEO, replacing the company’s founder, Nirav Tolia. Before that, Friar spent over a decade at Goldman Sachs.
Gurley said Friar ran all the numbers and closely considered an IPO before making the ultimate decision.
“Sarah Friar is an extremely experienced CEO with tons of Wall Street experience, both having worked at an investment bank and as CFO of a public company,” Gurley said. “She dual-tracked it, was looking at the IPO and just said I have more control and get better economics by going the SPAC route.”
Investing to fix the labor shortage
Gurley appeared on “TechCheck” alongside Sumir Meghani, the co-founder and CEO of Instawork, an online jobs marketplace. Instawork on Thursday announced it raised $60 million in a financing round led by Craft Ventures.
The start-up connects workers in the restaurant, hospitality and retail industries with hourly jobs at companies in need of labor. The transaction comes a week after Suzanne Clark, CEO of the U.S. Chamber of Commerce, told CNBC that the biggest problem facing American businesses is hiring enough qualified workers. She pointed to a lack of skilled labor, Covid-era jobless benefits, insufficient access to child care, and work visa restrictions.
“Our professionals make nearly double minimum wage,” Meghani said. “Our best professionals can make even more than that. They can get paid instantly when they clock out of a shift. We’re rewarding quality on Instawork with faster pay, higher pay but most of all flexibility.”
Gurley, who was one of the earliest backers of Uber, said Benchmark is focusing heavily on the category and has made about eight investments in “these types of marketplaces.”
— CNBC’s Pia Singh contributed to this report.
WATCH: U.S. Chamber of Commerce CEO on infrastructure outlooks
Alibaba to split into 6 units and explore IPOs; shares pop 9%
Alibaba has faced growth challenges amid regulatory tightening on China’s domestic technology sector and a slowdown in the world’s second-largest economy. But analysts think the e-commerce giant’s growth could pick up through the rest of 2022.
Kuang Da | Jiemian News | VCG | Getty Images
Alibaba said Tuesday it will split its company into six business groups, each with the ability to raise outside funding and go public, in the most significant reorganization in the Chinese e-commerce giant’s history.
Each business group will be managed by its own CEO and board of directors.
Alibaba said in a statement that the move is “designed to unlock shareholder value and foster market competitiveness.”
Alibaba’s shares popped more than 9% in pre-market trade in the U.S.
The move comes after a tough couple of years for Alibaba which has faced slowing economic growth at home and tougher regulation from Beijing, resulting in billions being wiped off its share price. Alibaba has struggled with growth over the past few quarters.
Alibaba is now looking to reinvigorate growth with the reorganization.
The business groups will revolve around its strategic priorities. These are the groups:
- Cloud Intelligence Group: Alibaba CEO Daniel Zhang will be head of this business which will house the company’s cloud and artificial intelligence activities.
- Taobao Tmall Commerce Group: This will cover the company’s online shopping platforms including Taobao and Tmall.
- Local Services Group: Yu Yongfu will be CEO and the business will cover Alibaba’s food delivery service Ele.me as well as its mapping.
- Cainiao Smart Logistics: Wan Lin will continue as CEO of this business which houses Alibaba’s logistics service.
- Global Digital Commerce Group: Jiang Fan will serve as CEO. This unit includes Alibaba’s international e-commerce businesses including AliExpress and Lazada.
- Digital Media and Entertainment Group: Fan Luyuan will be CEO of the unit which includes Alibaba’s streaming and movie business.
Each of these units can pursue independent fundraising and a public listing when they’re ready, Zhang said.
The exception is the Taobao Tmall Commerce Group, which will remain wholly-owned by Alibaba.
$600 billion wipeout
Around $600 billion of value has been wiped out since Alibaba’s share price peak in October 2020. Since then, the Chinese government has cracked down on private technology businesses, introducing a slew of regulation and increasing scrutiny on the practices of domestic giants.
Alibaba’s fintech affiliate Ant Group was forced by regulators to cancel its mega public listing in November 2020. And in 2021, Alibaba was fined $2.6 billion as part of an antitrust probe.
Alibaba is now looking to reinvigorate growth. The company has grown into a giant that encompasses businesses from e-commerce to cloud computing to streaming and logistics.
The company sees the creation of the six businesses as a way to be nimbler.
“This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes,” Zhang said in a statement.
The reorganization also comes at a time when there are signs that Beijing is warming back up to technology businesses, as the government seeks to revive economic growth in the world’s second-largest economy.
Jack Ma, Alibaba’s outspoken and charismatic founder who was out of the public eye and travelling abroad for several months, has returned to China, in a move perceived as an olive branch from Beijing.
4G internet is set to arrive on the moon later this year
Nokia hopes to install a data network on the moon sometime in 2023, an executive told reporters.
Thomas Coex | AFP via Getty Images
Nokia is preparing to launch a 4G mobile network on the moon later this year, in the hopes of enhancing lunar discoveries — and eventually paving the path for human presence on the satellite planet.
The Finnish telecommunications group plans to launch the network on a SpaceX rocket over the coming months, Luis Maestro Ruiz De Temino, Nokia’s principal engineer, told reporters earlier this month at the Mobile World Congress trade show in Barcelona.
The network will be powered by an antenna-equipped base station stored in a Nova-C lunar lander designed by U.S. space firm Intuitive Machines, as well as by an accompanying solar-powered rover.
An LTE connection will be established between the lander and the rover.
The infrastructure will land on the Shackleton crater, which lies along the southern limb of the moon.
Nokia says the technology is designed to withstand the extreme conditions of space.
The network will be used within Nasa’s Artemis 1 mission, which aims to send the first human astronauts to walk on the moon’s surface since 1972.
The aim is to show that terrestrial networks can meet the communications needs for future space missions, Nokia said, adding that its network will allow astronauts to communicate with each other and with mission control, as well as to control the rover remotely and stream real-time video and telemetry data back to Earth.
The lander will launch via a SpaceX rocket, according to Maestro Ruiz De Temino. He explained that the rocket won’t take the lander all the way to the moon’s surface — it has a propulsion system in place to complete the journey.
Anshel Sag, principal analyst at Moor Insights & Strategy, said that 2023 was an “optimistic target” for the launch of Nokia’s equipment.
“If the hardware is ready and validated as it seems to be, there is a good chance they could launch in 2023 as long as their launch partner of choice doesn’t have any setbacks or delays,” Sag told CNBC via email.
Nokia previously said that its lunar network will “provide critical communication capabilities for many different data transmission applications, including vital command and control functions, remote control of lunar rovers, real-time navigation and streaming of high definition video.”
One of the things Nokia is hoping to achieve with its lunar network is finding ice on the moon. Much of the moon’s surface is now dry, but recent unmanned missions to the moon have yielded discoveries of ice remnants trapped in sheltered craters around the poles.
Such water could be treated and used for drinking, broken up into hydrogen and oxygen for use as rocket fuel, or separated to provide breathable oxygen to astronauts.
“I could see this being used by future expeditions to continue to explore the moon since this really seems like a major test of the capabilities before starting to use it commercially for additional exploration and potential future mining operations,” Sag told CNBC.
“Mining requires a lot of infrastructure to be in place and having the right data about where certain resources are located.
We’ll need more than just internet connectivity, if we’re ever to live on the moon. Engineering giant Rolls-Royce, for example, is working on a nuclear reactor to provide power to future lunar inhabitants and explorers.
WATCH: Three decades after inventing the web, Tim Bernersr-Lee has some ideas on how to fix it
Elon Musk says only verified users will show up in Twitter’s recommendation feed in further shake-up
Elon Musk Twitter account seen on Mobile with Elon Musk in the background on screen, seen in this photo illustration. On 19 February 2023 in Brussels, Belgium.
Jonathan Raa | Nurphoto | Getty Images
Elon Musk said that only verified accounts will appear in Twitter’s recommendation feed, as the billionaire further shakes up the social media platform.
Twitter’s “For You” tab shows users tweets from people they don’t follow, but that are recommended to them by the social media firm’s algorithm. To date, this has showed accounts from any Twitter users, whether they are verified or not.
But Musk announced in a tweet late Monday that, going forward, only verified accounts will show up in the “For You” section of the site.
Musk claims the move “is the only realistic way to address advanced AI bot swarms taking over.”
Musk also said that only verified users will be able to vote in polls.
Since buying Twitter last year, Musk has sought to shake up the way the company does verification. Before Musk’s acquisition, Twitter used to verify users with a blue check mark as a way to identify the account matches the person or company it says it is. This process was free and applied to celebrities, journalists, government officials and organizations.
Musk introduced a subscription service last year called Twitter Blue that allows a user to pay $8 per month to be verified and obtain the blue check mark.
Twitter said last week that it would begin to wind down its “legacy verified program” and remove “legacy verified” check marks on Apr. 1. The company is prompting people with the legacy checkmarks to sign up for the Twitter Blue subscription service.
Musk has been trying to find ways to generate new revenue streams at Twitter, with paid verification being a flagship policy. But the company has reportedly lost a huge amount of value.
Musk told employees last week that Twitter is now valued at $20 billion, according to an email sent to employees and seen by the New York Times. That is down more than 50% from the $44 billion Musk paid for company last year.
Technology2 years ago
Game consoles were once banned in China. Now Chinese developers want a slice of the $49 billion pie
Sports5 months ago
‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
Politics1 year ago
Have the last few wobbly weeks seen a turning point for Johnson as PM?
Sports2 years ago
Team Europe easily wins 4th straight Laver Cup
Politics1 year ago
Yvette Cooper promoted and Lisa Nandy to shadow Gove on levelling up brief in Labour reshuffle
Business6 months ago
Liz Truss’s ‘favourite’ economist says chancellor ‘took his eye off ball’ and ‘overstepped the mark’ with mini-budget
Politics1 year ago
Govt minister says she ‘doesn’t believe’ Stanley Johnson inappropriately touched MP
Videos6 months ago
World leaders come together for Queen Elizabeth’s funeral