Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate Clark and Alex Wilhelm dug into the latest, namely big news on the fund front from folks you know, two China-based companies going public on domestic exchanges and what’s next in the long-running sagas of getting Uber and Slack public.

First up, Kate talked us through the latest at Kleiner Perkins and Mary Meeker’s new growth fund, called Bond Capital. Alex has some more great context on that here, for interested parties; Kate has more here.

Next, we turned to the F-1 filings of Luckin Coffee and DouYu, two China-based companies joining the list of firms from the country that have chosen to go public here in the United States. With Luckin’s filing, we have a fascinating look into the costs of building a hyper-growth company; as you can imagine, Luckin is running pretty steep deficits, but is adding revenue incredibly quickly on a year-over-year basis. DouYo is fascinating for a different reason, namely that it only recently began generating gross profit. And in 2018, when it did begin to create some margin to cover its operating costs, it didn’t make much.

DouYu works in the live-streaming and esports worlds, places where Twitch and Huya (another China-based company that went public in the States) have found success.

Finally, we had two domestic public offerings to dig into. Slack, an exit we’ve long anticipated, is supposed to drop its S-1 today. If that’s the case Alex and Kate will be back at their mics to bring you the highlights from that filing. And then there’s Uber .

To cap off a fun show, we chatted through the impending Uber debut. We expect the company to set a price range tomorrow, but if early reports are correct, the firm could be sandbagging a bit in hopes of raising its price next week. Lyft reports earnings on May 7, giving Uber a somewhat tight window to jump through if it wants to control its own narrative. (If Lyft’s earnings fall short, for example, and Uber hasn’t gone public by that point, it could be forced to lower its own pricing.)

That’s all we have for now. We’ll probably be back later today with an Equity shot. Stay cool!

Source: Tech Crunch Startups | Mary Meeker’s new fund, two IPOs from China and what’s next for Uber and Slack?

Uber, the transportation-on-demand behemoth, today filed its much-anticipated updated S-1, where it announced that it would be pricing its initial public offering at $44-50 per share.

Selling 180 million common shares, Uber plans to raise between $7.9 billion and $9 billion ahead of its public debut on the NYSE, valuing it at $84 billion — squarely in the middle of the $80-90 billion that was projected as late as yesterday. With the greenshoe, shareholders selling shares in the IPO, it could raise as much as $10.4 billion.

Separately, there were two surprise announcements in the S-1. First, PayPal said it would make a $500 million investment in the company in a private placement, as part of an extension of the partnership between the two, where they will develop new digital wallet services. Second, Uber said it expects to post a loss of between $1 billion and $1.1 billion for the first quarter of this year, a huge swing from net income of some $3.7 billion a year ago.

PayPal has been working with Uber providing payment services since 2013 and is its lead processing partner in the U.S. and Australia (but not the only one globally).

This is the second big pre-IPO investment that Uber has announced this month. Last week, it announced a strategic $1 billion investment from SoftBank, Toyota and auto parts maker Denso, which valued the company at $7.25 billion.

The $500 million placement is being made at the same valuation as the IPO price range, Uber said.

“In April 2019, we entered into a stock purchase agreement with PayPal, Inc. (‘PayPal’), pursuant to which PayPal will purchase $500 million of our common stock from us in a private placement at a price per share equal to the initial public offering price,” Uber notes. “The sale of the shares in the private placement is subject to certain closing conditions, including the closing of this offering and certain regulatory approvals. Concurrently, and subject to the closing of the private placement, we and PayPal extended our global partnership through the execution of an addendum to our existing commercial agreement. We and PayPal intend to explore future commercial payment collaborations, including the development of our digital wallet.”

“This is another significant milestone on our journey to be a platform partner of choice, helping to enable global commerce by connecting the world’s leading marketplaces and payment networks,” said PayPal president and CEO Dan Schulman in a statement. This is the second-biggest investment ever made by PayPal since its eBay spin-out. The biggest is MercadoLibre in Latin America, in which PayPal invested $750 million in March.

In addition to the 180 million shares in the IPO, Uber notes that the underwriters have the option to purchase up to an additional 27 million shares of common stock from the selling stockholders solely to cover over-allotments, if any.

Additionally, Uber notes that it requested the underwriters to reserve up to 5.4 billion shares — three percent of the 180 million — through a directed share program to certain qualifying drivers in the United States.

Bumpy and long road ahead

Uber’s pricing is more than three times the amount of Lyft’s $2.34 billion IPO, making it one of the largest IPOs in the U.S. since Alibaba’s debut on the public markets in 2014.

But the company has a long road ahead of it in its efforts to bring the business into profitability. The S-1 contains preliminary figures for the most recent quarter that ended March 31, and in them Uber said it expects its net income to be a net loss, with the range of between negative $1 and $1.11 billion. As a point of comparison, Uber’s positive net income in the same period a year ago was $3.748 billion.

Uber noted that the “expected net loss” came from several areas. First and foremost, it’s spending a huge amount of money on what it describes as incentives and promotions — that is, offers both to drivers to keep working for Uber rather than, say, Lyft, and for passengers to continue riding with Uber — marketing in the face of heavy competition from Lyft and a variety of local competitors in other markets.

On top of that, Uber noted that the positive bump in the quarter a year ago came from its sales of operations in Southeast Asia (to Grab) and Russia (to Yandex), plus an unrealized gain of $2 billion on an investment in Didi.

“Our incentive and promotion spend varies widely from period to period and within various markets based on competitive dynamics and other factors,” Uber notes. It doesn’t note exactly what these dynamics factors might be, but they potentially include spend levelled by competitors for the same ends, as well as seasonal surges that might bring about specific promotions, and so on.

Uber also noted that monthly active platform consumers went up to 93 million from 70 million a year before, while revenues were up to between $3 billion and $3.1 billion, versus $2.6 billion a year ago.

In 2018, Uber reported 2018 revenues of $11.27 billion, net income of $997 million and adjusted EBITDA losses of $1.85 billion. Uber, which filed for its IPO two weeks ago, will list on the New York Stock Exchange in May.

More to come.

Source: Tech Crunch Startups | Uber prices IPO at -50, to raise .9-9B, PayPal takes 0M stake in strategic partnership

London-based startup Wheely has raised a $15 million Series B round led by Concentric with Oleg Tscheltzoff, Misha Sokolov and other investors also participating. The company wants to build an Uber competitor focused on the luxury market.

It’s a bit ironic when you think about it as Uber started as a luxury company. But everybody knows someone with horrific Uber stories. That’s why Wheely is building a reliable and predictable ride-hailing experience.

The company is currently live in London, Moscow and St. Petersburg — Paris is coming this summer. It works with 3,500 drivers and it currently has a run rate of $80 million in gross bookings.

Wheely doesn’t try to reinvent the wheel as the company works with third-party partners and doesn’t employ its drivers. Similarly, the company takes a 20 percent cut on each ride.

But the startup insists on its strict recruitment process. For instance, you can’t become a Wheely driver from day one. The company requires at least three years of previous chauffeur driving experience. You also need to pass multiple tests including driving tests and etiquette tests. Only one in four UberBlack drivers pass the exam.

There are currently three different classes — a normal one with Mercedes-Benz E-Class cars, a fancy one with Mercedes-Benz S-Class cars and a van category with Mercedes-Benz V-Class vehicles.

Minimum rides cost £12 with the entry-level class, £16 in an S-Class and at least £40 for a van. You then pay more depending on distance traveled and time spent in the car.

And it’s been working well as Wheely now represents around 11 percent of gross bookings in London. Given that each ride is more expensive than a traditional ride-hailing ride, it makes sense that Wheely already captured a good chunk of the money pie. Now let’s see if the company can find enough cities with affluent people to scale its business.

Anton Chirkunov – Founder of Wheely.

Source: Tech Crunch Startups | Wheely raises million for its luxury ride-hailing app

RosieReality, a startup out of Zürich developing consumer augmented reality experiences, has raised $2.2 million in seed funding led by RedAlpine. Other backers include Shasta Ventures, Atomico Partners Mattias Ljungman and Siraj Khaliq (both of whom invested in a personal capacity), and Akatsuki Entertainment Fund.

Founded in early 2018, RosieReality’s first AR experience is designed to ignite kids interested in robotics and programming. The smart phone camera-based app is centred around “Rosie,” a cute AR robot that inhabits a “Lego-like” modular AR world within which you and your friends are tasked with building and solving world-size 3D puzzles.

The kicker: to solve these 3D-puzzle games requires “programming” Rosie to move around the augmented reality world.

“By developing Rosie the Robot, we created the first interactive and modular world that exclusively lives in your camera feed,” RosieReality co-founder and CEO Selim Benayat tells TechCrunch. “We use this new computational platform to enable kids to creatively build, solve and share world-sized puzzle games with friends and families – much like modern-day Lego”.

Describing Rosie the Robot’s typical users as teens that “like the challenge of intricately crafted puzzles,” Benayat says part of the inspiration behind the AR game was remembering how as a kid he used to love spending time building stuff and then inviting friends over to show them what he’d built.

“Kids today are not that different,” he argues, before adding that AR makes it possible for them to have the same tangible and contextual sensation while giving them a bigger outlet for their creativity.

“We see the camera as a tool to teach and enable [the] next generation of creators. For us gaming is the ultimate creative, social and educational outlet,” says the RosieReality CEO.

Source: Tech Crunch Startups | RosieReality, a Swiss startup using AR to get kids interested in robotics and programming, scores £2.2M seed