A startup called Portobel is working to help food producers shift their businesses so they can support direct-to-consumer deliveries.
Portobel is backed by Heroic Ventures and led by Ranjith Kumaran, founder or co-founder of file-sharing company Hightail (acquired by OpenText) and loyalty startup PunchTab (acquired by Walmart Labs).
Kumaran told me that he and his co-founders Ted Everson and Itai Maron started out with the goal of improving the delivery process by using low-cost, internet-connected devices to track each order. As they began testing this out — primarily with dairy companies and other producers of perishable goods — customers started to ask them, “Hey, you can monitor these things, can you actually deliver these things, too?”
So last year, the company started making deliveries of its own, which involved managing its own warehouses and hiring its own drivers. Kumaran said the resulting process is “a machine that turns wholesale pallets into direct-to-consumer deliveries.”
He also emphasized that the company is taking safety precautions during the pandemic, ensuring that all of its warehouse workers and drivers have masks and other protective equipment, and that the drivers use hand sanitizer between deliveries.
Portobel currently operates in the San Francisco Bay Area and Los Angeles/Orange County. Kumaran said the COVID-19 pandemic has only accelerated the demand for the startup’s services, with the number of households it serves tripling since April.
That might sound a little surprising, since supermarkets were basically the one store that customers are still visiting regularly. Plus, there are a range of grocery delivery options.
However, Kumaran suggested that the D2C model is better for both producers and consumers. Producers get recurring orders for larger packages of food. And for consumers, “If you buy straight from the wholesale producer … everything’s in stock.”
As for delivery, he said that when you buy your groceries online, things are being packed and dispatched at your local store.”
“All those things about selection and availability, put those aside — the modern grocery store is not set up for efficient e-commerce delivery,” he added. “They need to block the aisles to pick up product, there’s no dedicated place to dispatch deliveries. That’s kind of why, if you’ve tried [grocery delivery], there are unpredictable delivery windows. It’s a challenge for these guys to scale online.”
Portobel’s customers include San Francisco-based grocery company Moo Cow Market. In a statement, Moo Cow founder Alexandra Mysoor said, “The pandemic has propelled retail as we knew it into a new wave, blending and merging all past and current forms of commerce. That’s where companies like Moo Cow Market enter and can scale and grow thanks to services like Portobel.”
A recapitalization reckoning
If you’re an angel who invested in a startup that was meant to go public in 2014, you might be getting a little bit impatient. High-risk, high-reward investing has lost its shine in this environment: the stock market is a mess these days, and you want your cash back.
Enter recapitalization events, where startups restructure their entire cap table to squeeze out old investors, bring on new ones and shift the way equity and debt is managed. For investors, it’s a killer way to enter a company on friendlier terms than normal (read: desperation), and a nice way to get liquidity on a startup you’re betting on.
For founders, it’s rarely good news, as departing investors is not a metric they’re going to add to the pitch deck. As one investor said on background, the spur of coronavirus-related recapitalization events shows “hella dilution for desperate times.”
That’s what makes Workhuman’s transparency with its recent recapitalization event all the more enticing.
Last year, the human-resources platform brought in $580 million in revenue from customers like LinkedIn, Cisco, J&J and other clients. In April, business grew 40%. Co-founder and CEO Eric Mosley says business has grown five times in size since the company pulled back from its 2014 plans to IPO. Workhuman hasn’t raised a single venture round since 2004 (and doesn’t plan to any time soon).
Being conservative has paid off; although Workhuman has operated for nearly two decades, Mosley says he thinks the company is still at the “tip of the iceberg.” The company recently had a recapitalization event to sell the stakes of its earliest investors, who cut a $200,000 check more than 20 years ago.
Rackspace preps IPO after going private in 2016 for $4.3B
After going private in 2016 after accepting a $32 per share, or $4.3 billion, price from Apollo Global Management, Rackspace is looking once again to the public markets. First going public in 2008, Rackspace is taking second aim at a public offering around 12 years after its initial debut.
The company describes its business as a “multicloud technology services” vendor, helping its customers “design, build and operate” cloud environments. That Rackspace is highlighting a services focus is useful context to understand its financial profile, as we’ll see in a moment.
But first, some basics. The company’s S-1 filing denotes a $100 million placeholder figure for how much the company may raise in its public offering. That figure will change, but does tell us that firm is likely to target a share sale that will net it closer to $100 million than $500 million, another popular placeholder figure.
Rackspace will list on the Nasdaq with the ticker symbol “RXT.” Goldman, Citi, J.P. Morgan, RBC Capital Markets and other banks are helping underwrite its (second) debut.
Similar to other companies that went private, only later to debut once again as a public company, Rackspace has oceans of debt.
The company’s balance sheet reported cash and equivalents of $125.2 million as of March 31, 2020. On the other side of the ledger, Rackspace has debts of $3.99 billion, made up of a $2.82 billion term loan facility, and $1.12 billion in senior notes that cost the firm an 8.625% coupon, among other debts. The term loan costs a lower 4% rate, and stems from the initial transaction to take Rackspace private ($2 billion), and another $800 million that was later taken on “in connection with the Datapipe Acquisition.”
The senior notes, originally worth a total of $1,200 million or $1.20 billion, also came from the acquisition of the company during its 2016 transaction; private equity’s ability to buy companies with borrowed money, later taking them public again and using those proceeds to limit the resulting debt profile while maintaining financial control is lucrative, if a bit cheeky.
Rackspace intends to use IPO proceeds to lower its debt-load, including both its term loan and senior notes. Precisely how much Rackspace can put against its debts will depend on its IPO pricing.
Those debts take a company that is comfortably profitable on an operating basis and make it deeply unprofitable on a net basis. Observe:
Image Credits: SECLooking at the far-right column, we can see a company with material revenues, though slim gross margins for a putatively tech company. It generated $21.5 million in Q1 2020 operating profit from its $652.7 million in revenue from the quarter. However, interest expenses of $72 million in the quarter helped lead Rackspace to a deep $48.2 million net loss.
Not all is lost, however, as Rackspace does have positive operating cash flow in the same three-month period. Still, the company’s multi-billion-dollar debt load is still steep, and burdensome.
Returning to our discussion of Rackspace’s business, recall that it said that it sells “multicloud technology services,” which tells us that its gross margins will be service-focused, which is to say that they won’t be software-level. And they are not. In Q1 2020 Rackspace had gross margins of 38.2%, down from 41.3% in the year-ago Q1. That trend is worrisome.
The company’s growth profile is also slightly uneven. From 2017 to 2018, Rackspace saw its revenue expand from $2.14 billion to $2.45 billion, growth of 14.4%. The company shrank slightly in 2019, falling from $2.45 billion in revenue in 2018 to $2.44 billion the next year. Given the economy that year, and the importance of cloud in 2019, the results are a little surprising.
Rackspace did grow in Q1 2020, however. The firm’s $652.7 million in first-quarter top-line easily bested in its Q1 2019 result of $606.9 million. The company grew 7.6% in Q1 2020. That’s not much, especially during a period in which its gross margins eroded, but the return-to-growth is likely welcome all the same.
TechCrunch did not see Q2 2020 results in its S-1 today while reading the document, so we presume that the firm will re-file shortly to include more recent financial results; it would be hard for the company to debut at an attractive price in the COVID-19 era without sharing Q2 figures, we reckon.
How to value Rackspace is a puzzle. The company is tech-ish, which means it will find some interest. But its slow growth rate, heavy debts and lackluster margins make it hard to pin a fair multiple onto. More when we have it.
Warren se lleva serie B de US$22.5 millones con QED Investors
Contxto – Invertir no debería ser solo para los Gordon Gekkos. Están surgiendo startups que hacen que la administración de activos sea más simple, transparente y accesible. Pero para eso, necesitan la ayuda de otros inversionistas. Un ejemplo excelente es la plataforma de corretaje brasileña, Warren. Hoy (10), la fintech anunció que cerró R$120 millones (~US$22.5 […]
The post Warren se lleva serie B de US$22.5 millones con QED Investors appeared first on Contxto.
Contxto – Invertir no debería ser solo para los Gordon Gekkos. Están surgiendo startups que hacen que la administración de activos sea más simple, transparente y accesible.
Pero para eso, necesitan la ayuda de otros inversionistas. Un ejemplo excelente es la plataforma de corretaje brasileña, Warren.
Hoy (10), la fintech anunció que cerró R$120 millones (~US$22.5 millones) en su serie B. QED Investors lideró la transacción y a él se unieron Kaszek Ventures, Chromo Invest, Ribbit, MELI Fund, WPA y Quartz.
La startup utiizará los fondos para desarrollar su tecnología y para lanzar nuevos productos. Asimismo, Warren aumentará su fuerza de trabajo durante los próximos 12 meses.
¡Información exclusiva, data y análisis semanales sobre el ecosistema tecnológico de Latam directo a tu correo!
Warren quiere transparencia
Generalmente, los agentes tradicionales le cobran a sus clientes una comisión por cada transacción que manejan. ¿No suena tan mal verdad?
Desafortunadamente, para cualquiera que ya haya constituido su portafolio es evidente que este sistema de pago merma mucho sus ganancias.
Pero la fintech Warren tiene un enfoque diferente.
Los emprendedores André Gusmão, Tito Gusmão y Rodrigo Grunding crearon su plataforma de corretaje de inversiones a finales del 2014 y lanzaron oficialmente en 2017. La meta era y continúa siendo que el proceso de invertir sea tan transparente como sea posible.
- Artículo relacionado: VC en Brasil: La guía definitiva del capital de riesgo en Brasil 2020
Entonces, en lugar de cobrar una comisión por cada intercambio completado, la startup les cobra a los usuarios solo una tarifa administrativa por la cantidad total invertida anualmente.
Este cambio es lo que convenció a QED Investors.
“Creemos que la gestión del patrimonio en Brasil está pasando por una revolución. Los inversionistas ya reconocen el daño que las altas comisiones ocasionan en sus portafolios”, dice Lauren Morton, socia en QED.
“Warren siempre se ha enfocado en la transparencia y en el cliente de una forma que no tiene precedentes en el mercado brasileño. Estamos emocionados”.
Por el momento, la fintech tiene R$2,000 millones (~US$375 millones) en activos administrados pero espera alcanzar los R$10,000 millones (~US$1,800 millones) para finales del próximo año.
Artículos relacionados: ¡Tecnología y startups de Brasil!
Traducido por Alejandra Rodríguez
Alphabet Scoop 095: Understanding Pixel 4a, 4a 5G, and Pixel 5… and a Nest speaker
First Crucible, now New World: Amazon delays another tentpole game after early feedback
Ciudad de México usará semáforo epidemiológico por colonia
¿Máquinas con sentido común?
Vuelven Los Ángeles de Charlie
¿Cuál es la edad ideal para emprender?
Apple2 days ago
Hands-on with 50+ new iOS 14 beta 2 changes and features [Video]
Apple2 days ago
iOS 14 features real-time headphone audio level measurement, here’s how to enable it
Apple2 days ago
Apple confirms Apple Silicon Macs will support Thunderbolt connection
Politics2 days ago
Pleno del IFT, y no presidente interino, será quien designe o remueva personal dentro del órgano regulador
Entertainment1 day ago
The DeathAdder V2 Mini is Razer’s latest shrunken gaming mouse
Entertainment1 day ago
Sony reveals the PS5 game box design
Politics2 days ago
Detienen a César Duarte, exgobernador de Chihuahua, en Estados Unidos
Market2 days ago
Mezcla Mexicana de Exportación avanza 0.64% y cierra en 37.69 dólares por barril