Uber reimagines bet on scooters, leads $170M investment in Lime

Check out the valuation drop on Lime scooters. Now lets watch for all the other VC funded business valuation declines. This will not be the last revaluation downward.... Aivars Lode

Lime has raised $170 million in a round led by Uber, giving the electric scooter startup a much-needed breather to manage pandemic-fueled losses.

As part of the agreement, Lime also acquired the ridehailing giant's bikesharing division, Jump, and will continue to integrate its mobile app integration with Uber.
"This deal enables Uber to reduce operating costs associated with its Jump bikes business, which should help the company navigate the downturn in the near-term," said PitchBook emerging tech analyst Asad Hussain.
The new funding round would value Lime at $510 million, as first reported by The Information. That would be a 79% drop from the startup's $2.4 billion valuation after a funding round last August, according to PitchBook data. Lime did not disclose its current valuation.
Existing investors including Alphabet, GV and Bain Capital Ventures also participated in the funding round
News of the funding comes a day after Uber announced plans to lay off around 3,700 full-time employees with CEO Dara Khosrowshahi forgoing his base salary for the rest of the year.
A week ago, Lime laid off 13% of its global workforce, its second round of cuts this year. The company laid off 14% of its employees and ceased operations in 12 cities worldwide in January as it looked to achieve profitability in 2020. 
"Micromobility will be vital to the new world affected by COVID-19 and we are already seeing this as cities begin to move again," Ting said in the statement announcing the deal. Ting, who was Lime's head of global operations and strategy, served as Khosrowshahi's chief of staff prior to joining Lime in 2018.
However, VC deals for micromobility companies are likely to record a significant drop in the second quarter of 2020, according to a recent PitchBook report. The challenging funding environment will also result in sizable valuation haircuts to some companies, with deal terms increasingly in favor of investors.
Uber's stock closed up 11% Thursday in the wake of the announcement.

Hussain said the deal also provides Uber with a degree of upside optionality to buy Lime in the future—assuming the San Francisco-based company is able to successfully rebound coming out of this crisis. Lime's new CEO, Wayne Ting (pictured), appears to think it will.

By Priyamvada Mathur - Pitchbook

KKR still hunting for deals despite $1.3B loss during Q1

As per my recent comments on private equity (see blog from 5 May on Apollo), here are some more PE firms reporting losses... Aivars Lode


KKR became the latest publicly traded private equity shop to reveal the negative impact of the coronavirus outbreak on its portfolio Wednesday. But with $58 billion in dry powder, the famed investor known for opportunistic buying doesn't expect to stay sidelined.

KKR reported a net loss of $1.3 billion in the first quarter, a stark contrast to the $701 million in net income from last year's Q1. Much of that decline was due to markdowns of existing investments because of pandemic-fueled market turmoil. KKR's losses were of a similar scope to those of its publicly traded peers during the first three months of 2020: Blackstone lost roughly $1.1 billion, Apollo Global Management shed $2.3 billion and The Carlyle Group lost $612 million.

Apollo loses $2.3B, but credit unit provides hope

For the Private Equity guys this will not be the last fund that does not provide the expected returns. This is consistent with my commentary over the last 2 years. Also let's not sing their credit unit's praises just yet. Let's look at that in six months time.... Aivars Lode

Apollo Global Management offered more proof Friday that not even private equity is safe from the pandemic's economic assault, reporting a $2.3 billion net loss that makes it the worst hit of any publicly traded PE firm to post first-quarter earnings so far.

Apollo recorded unrealized mark-to-market losses of about $1.3 billion on its investment in Athene Holding, the Bermuda-based insurance conglomerate it helped create in 2009, while the firm's robust credit business helped buoy revenue numbers. Of the $5.2 billion in capital that Apollo deployed in the first quarter of 2020, some $3.4 billion was out of its credit arm. On an investor call, co-founder Josh Harris said he expects distressed opportunities to increase in the next two years
Additionally, total capital deployment accelerated at about double the pace of normal quarters, reaching about $40 billion in the first quarter, with an additional $10 billion in April. The firm is currently investing out of its ninth flagship fund, a $24.6 billion vehicle that has shifted from traditional private equity investments to a nearly all distressed-for-control credit strategy.

Rally Over? The Point Is ‘Smoot’. Why The 1930s Continues To Be A Bear Track To Follow.

Worth a read and to reflect where the market is likely to go. The comparison with today and the Depression is eerily similar.... Aivars Lode

The Dow’s movement is still mimicking 1931 very closely. Tariff talk doesn’t help

You have probably heard that “history doesn’t repeat, but it often rhymes.” Well, the further we travel through 2020 (even if we can’t travel much the way we are accustomed to), history is turning into quite a poet.

Recently I brought to your attention some economic similarities that occurred a long time ago, but which I truly believe have relevance today. Because at it’s core, human behavior doesn’t change radically. We are wired a certain way. And, since markets move based on decisions made by humans (and increasingly by human-inspired algorithms), we simply can’t ignore parallels to past periods in economic and market history.

Markets and Tariffs and Bears, oh my!

The table below simply says this: there is a remarkable similarity between how 1931 (2 years after the “Crash of 1929”) played out and the way this version of a recession/depression-era economy is developing. In fact, one thing I left out of my recent piece on the subject was a mention of the Smoot-Hawley Tariff Act, in which the United States slapped tariffs on about 20,000 imported goods. This occurred in 1930, one year before the market went from tenuous to, well, not so good. Sound familiar?