WeWork co-founders Miguel McKelvey and Adam Neumann in happier days. Photo: supplied
Happy 1st of the month.
Welcome to RBA decision day and the start of Q2 FY20.
Here’s what’s happening in tech today.
1. It no longer works for WeWork.
The We Company, aka WeWork, announced overnight that it will withdraw its US initial public offering prospectus, ending what just a few weeks ago was touted as a US$47 billion float.
The attempt to go public has cost CEO Adam Neumann his job, along with several execs close to the co-founder, including his wife Rebekah. Meanwhile, chief investor SoftBank is doing its best to not suffer a massive haircut on the US$10+ billion they’ve ploughed into the co-working space venture for a 30% stake that could be worth less than $5 billion.
The end of the IPO also creates a new problem for WeWork, which had plans to borrow $US6 billion from banks on the condition that the float injected $US3 billion into the business.
While this part of the adventure ends, the fun part is only just beginning for a new management team dealing with $US47bn in lease payments due over the next 15 years, revenue commitments of just $4bn, and annual losses in excess of $1.6bn.
Why does it matter here? Because WeWork operates 20 sites in Australia, half of them in Sydney. Watch this (coworking) space.
2. Stackla’s Facebook lockout has cost former All Blacks captain David Kirk $12 million.
Kirk, the former Fairfax boss who nowadays runs ASX-listed VC fund Bailador Technology Investments Ltd (ASX:BTI), revealed late last week that Stackla’s US legal action seeking a temporary restraining order (TRO) against Facebook and Instagram blocking their access to data was denied by the District Court in California.
Stackla is an AI-powered user-generated content marketing platform, harnessing content from fans and users of businesses, from sports to retail.
The judge said Stackla could file a motion for a preliminary injunction and suggested the parties meet commercially to
resolve the issue.
“As a result of the above court ruling, and Stackla continuing to have no access to the Facebook and Instagram platforms for the time being, Bailador has made the decision to write-down the value of its investment in Stackla to $nil,” the VC firm said in a statement to the ASX.
Bailador’s minority stake in Stackla was worth $12.6 million.
“Bailador remains supportive of Stackla, its management team and employees, and we hope for a positive resolution to this matter as soon as practicable,” Bailador said.
3. Early-stage VC fund Investible has a new $22 million toy.
The Sydney-based fund set out to raise $20 million for its first venture capital fund, and landed $22m. The fund plans to make around 15 new investments a year and has already made 12. Its first investment, Peter Manettas Seafood, completed a subsequent raise at a valuation five times the initial raise.
The fund will focus primarily on Australian startups, but has already made bets in the US, Canada, Israel and NZ, including Dexibit, a data analytics solution for visitor attractions, big data-powered travel platformHotelmize, and diversity-focused jobs network WORK180. It runs in parallel to the invitation-only network of sophisticated angel investors, Club Investible.
4. A Visa-backed UK fintech is going on a massive hiring spree.
The four-year old digital-only, app-based bank will be looking for around 3500 staff amid plans to expand into 24 new markets following a deal with Visa.
Revolut is currently in Europe and Australia, with Reuters reporting that it will look to launch in the US and Singapore this year, then Canada and Japan, and Latin American and Asia, Reuters reports.
The Visa deal means at least 75% of all Revolut cards will have Visa branding. The fintech venture currently has more than 8 million customers.
5. NAB’s cloud evangelist has walked.
NAB’s executive general manager of business enabling technology, Yuri Misnik, who was leading the bank’s push to the cloud, resigned on Monday.
He’d been shifting more than 300 applications to Amazon Web Services, and The SMH reports that NAB chief technology and operations officer Patrick Wright wrote to staff saying Misnik “has decided to leave NAB to pursue the next stage of his career.” More here.
BONUS ITEM: Shares in Brisbane fintech Change Financial jumped 332% after Mastercard made it just the second company in 20 years to approved as a registered payments processor.
Hopefully they didn’t rush out and spend all of that windfall. The shares are down 31% in trade today.