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This morning Coinbase, an American cryptocurrency exchange, released an S-1 filing ahead of its direct listing. The company’s public debut has been hotly anticipated thanks to recent activity amongst bitcoin and other blockchain-based assets, the company’s controversial political positions, and its spiking valuation on private exchanges.
Coinbase’s financials show a company that grew rapidly from 2019 to 2020. More than that, the company also crossed the threshold into unadjusted profitability; it’s common amongst quickly-growing tech companies to lean more heavily on adjusted profit and other more flattering metrics.
In 2019 Coinbase $30.4 million against $533.7 million in revenue. In 2020 the company’s net income rose to $127.5 million against $1.28 billion in revenue.
The crypto unicorn grew just over 139% in 2020, a massive improvement on its 2019 results. The company’s scale and growth help us understand why some investors are bidding its value up to as much as $100 billion on the private markets.
Coinbase has highly variable revenues. The company posted revenues of $190.6 million in Q1 2020, a number that dipped to $186.4 million in the second quarter. Then Coinbase’s topline accelerated in Q3 2020 to $315.4 million, and $585.1 million in the final quarter of 2020.
It’s easy to see why Coinbase is moving forward with its direct listing now; the company just posted an excellent quarter.
In that outsized fourth-quarter period, Coinbase generated operating income of $226.6 million, and net income of $176.8 million. Those represent high-quality profitability improvements from preceding periods, and provide Coinbase with attractive end-of-year profit margins.
The cryptocurrency exchange generates the vast majority of its revenues from transaction revenues, as anticipated. Coinbase also has a comparatively modest “subscription and services” revenue category, which was worth around $20.7 million in Q4 2020 revenues.
Finally, Coinbase swun from operating cash flow negative in 2019 to incredibly cash-flow positive in 2020. However, the $3.0 billion in positive operating cash flow that Coinbase generated last year includes “$2.7 billion related to cash from the change in custodial funds due to customers,” diminishing the number to a more understandable scale.
This is a first look, but Coinbase is a quickly growing, profitable unicorn that looks more than ready for its direct listing. The question ahead of investors is merely how to value Coinbase’s revenue growth as it does track with broader market interest in cryptocurrencies, a historically fluid quantity.
China’s Xiaomi had dominated the Indian smartphone market for three consecutive years until recently losing the top spot to Samsung. It has played by the Indian government’s rulebook to support domestic manufacturing, making smartphones in India rather than shipping them from its home country of China. Now it is further ramping up production in India by adding two new supply chain partners, BYD and DBG, the company said in an announcement on Thursday.
The move comes at a time when the Indian government is applying more pressure on Chinese tech companies. Along with TikTok, dozens of other popular Chinese apps were banned in India last June over national security concerns.
So far the hardware companies have remained largely unaffected, but worsening India-China relations won’t likely bode well for Chinese companies that are wooing Indian consumers. Xiaomi and its Chinese competitors Vivo, Oppo and Oppo-affiliated Realme together commanded as much as 64% of the Indian market in the third quarter of 2020.
This is probably the time for Chinese firms to demonstrate to the Indian government how they could make contributions to the local economy. Under the new production partnerships, Xiaomi will be able to significantly ratchet up its output in India, the company said.
The tie-up with BYD and DBG also reflects a growing trend of Chinese manufacturers setting up overseas plants to cope with rising labor costs back home and increasingly hostile trade policies against China. BYD is China’s largest electric carmaker with a long history of making electronics parts, while DBG has been a major supplier to Chinese telecom firms including Huawei. DBG has set up a production plant in Haryana and has increased Xiaomi’s local production by about 20%. BYD’s facility in Tamil Nadu is scheduled to begin operation by H1 this year.
Prior to its deals with BYD and DBG, Xiaomi was already making 99% of its smartphones in India through Apple’s long-time contract manufacturers, the Taiwanese giant Foxconn and California-based Flex.
Xiaomi also stressed that it sources locally, buying mother-boards, batteries, chargers and other components from domestic suppliers like Sunny India and NVT, which together account for over 75% of the value of its smartphones.
Separately, Xiaomi’s India business has onboarded a new partner, Ohio-based Radiant Technology, to make its smart TVs, which have been a bestseller in India. Local electronics company Dixon currently makes its smart TVs.
Xiaomi’s localization effort has led to a 60,000-strong team in India, six years after it first landed in the country, including staff in production, sales, and logistics. The company prides itself on boosting local employment. As Manu Kumar Jain, managing director for Xiaomi India, pointed out in toay’s announcement, the company added 10,000 employees in India last year. “When organizations were downsizing their workforce, we were focused on putting together the building blocks for our growth in the India market – our employees.”
Source: https://techcrunch.com/2021/02/25/xiaomi-india-localization/
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Pet tech company Fi today announced that it has raised a $30 million Series B. The round, led by Chuck Murphy of Longview Asset Management, follows a $7 million Series A raised back in 2019. The round values the startup at north of $200 million.
The New York-based startup specializes in connected dog collars, releasing its Series 2 device late last year. The second-gen version of the product brings some key hardware improvements to the pet tracking device, including battery optimization that gives up to three months of life on a charge (with an average of around 1.5, according to the company).
The device relies on Wi-Fi and Bluetooth, sending users a notification when a dog has traveled outside an AI-determined geofenced area.
The company has experienced solid growth since launching in March 2019, and says demand for its product continued to grow in spite of the COVID-19 pandemic. It’s still a fairly small operation, but Fi is working on growing its availability in the U.S. The product was made available on the mega-pet online retailer Chewy in Q4 of last year.
“There’s such a huge market in the U.S. that we’re just scratching the surface,” founder and CEO Jonathan Bensamoun tells TechCrunch. “We want to stay focused here. And really make this a household product. The number one limitation to growth is that people just don’t know we exist or that the category exists.”
The company says discussions with large brick and mortar pet retailers are currently “up in the air.” In addition to research, the funding round will go toward marketing and exploring additional retail partnerships to help grow the product’s footprint.
“We’ve been tracking Jonathan and the team at Fi for over a year now and have been incredibly impressed with their execution and rapid growth rate,” AVP partner Courtney Robinson says in a statement offered to TechCrunch. They have established themselves as the clear leader in the emerging category of connected collars, with a device that blows away the competition in terms of design, battery life, and accuracy.”
Source: https://techcrunch.com/2021/02/25/connected-pet-collar-company-fi-raises-a-30m-series-b/
The sustainability focused shoe maker Allbirds has taken another step to green its supply chain with a small $2 million investment in a new company called Natural Fiber Welding.
Announced this morning, the investment in Natural Fiber Welding will see Allbirds bring a vegan leather replacement option to customers by December 2021. It’s a natural addition for a company that has always billed itself as focused on environmental impact in other aspects of its apparel manufacturing.
Allbirds these days is far more than a shoe company and Natural Fiber Weldings suite of products that include both a purportedly tougher cotton fiber made using the company’s proprietary processing technology and a plant-based leather substitute.
Those materials could find their way into Allbirds array of socks, shoes, tshirts, underwear, sweaters, jackets, and face masks. Natural Fiber Welding already touts a relationship with Porsche on its website, so Allbirds isn’t the only company that’s warmed to the Peoria, Ill.-based startup’s new materials.
With the addition of Allbirds Natural Fiber Welding has raised roughly $15 million, according to data from Pitchbook. Other investors in the company include Central Illinois Angels, Prairie Crest Capital, Ralph Lauren Corp. and Capital V, an investment firm focused on backing vegan products.
Allbirds is far from the only clothier to make the jump to plant-based materials in the past year. The buzzy clothing company Pangaia invested $2 million into a company called Kintra which is making a bio-based polyester substitute in December.
By the far the biggest startup name in the sustainable fashion space is a company like Bolt Threads, which has inked deals with companies including Stella McCartney, Adidas, and the owner of the Balenciaga fashion house (among others).
Other startups that have raised significant capital for plant-based fabrics and materials are companies like Mycoworks, which raised $45 million last year from backers include John Legend, Natalie Portman along with more traditional investors like WTT Investment Ltd. (Taipei, Taiwan), DCVC Bio, Valor Equity Partners, Humboldt Fund, Gruss & Co., Novo Holdings, 8VC, SOSV, AgFunder, Wireframe Ventures and Tony Fadell.
With Natural Fiber Welding’s products Allbirds is boasting about a significantly reduced environmental footprint for its leather-like material. Natural Fiber Welding claims its material reduce the associated carbon footprint by 40 times and uses 17 times less carbon in its manufacturing than synthetic leather made from plastic.
The company does say that the plant leather will use natural rubber, an industry with its own history of human rights abuses, that’s also trying to clean up its act.
“For too long, fashion companies have relied on dirty synthetics and unsustainable leather, prioritizing speed and cost over the environment,” says Joey Zwillinger, co-founder and co-CEO of Allbirds, in a statement. “Natural Fiber Welding is creating scalable, sustainable antidotes to leather, and doing so with the potential for a game-changing 98% reduction in carbon emissions. Our partnership with NFW and planned introduction of Plant Leather based on their technology is an exciting step on our journey to eradicate petroleum from the fashion industry.”
TechCrunch has reached out to Allbirds for additional comment, but had not received a reply at the time of publication.
