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| | August 7, 2016 | |
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| | I’d be lying if I said my week didn’t start off with a bang when rumors surfaced—and were soon confirmed—that Uber was selling off its Chinese business to local rival Didi Chuxing in a $35 billion deal. If you need a reminder, Uber and Didi had been battling it out for quite some time, both sinking billions of dollars to aggressively sign up users and drivers. In some ways, the news was surprising. Uber is well known for its ambitions, so bowing down to a competitor feels uncharacteristic of the company. At the same time, the reasons for selling were immediately clear: Uber had spent $2 billion to expand, and yet was severely lagging behind Didi, not to mention new national regulation that took it out of its gray zone. It just had to put an end to the pain. But what of the other acquisitions and rumors of sales this week—are they white flags too? Quip, a four-year-old startup best known for its alternative product to Google Drive or Microsoft’s Office365, sold to Salesforce for at least $582 million this week as well. The company was still small but seemingly a quietly rising star. It’s not clear why it chose to sell but co-founder and CEO Bret Taylor is no stranger to acquisitions. Facebook bought his previous startup, FriendFeed, in 2009 and made him CTO until he left in 2012 (post-IPO). Some have suggested that Salesforce made Quip an offer it couldn’t refuse, mainly to scoop up Taylor. That wouldn’t be hard to believe as he’s in high demand—just a month prior, he joined Twitter’s board. But then we have Jet, the ambitious company that’s taking on Amazon. This week, the Wall Street Journal reported that Wal-Mart was looking to buy the company for $3 billion. Aside from whether it’s true, the biggest question is why. Is it a bailout, as some have suggested? Jet has raised a lot of money to aggressively compete with Amazon, but has it worked? Maybe it hasn’t, and the company is indeed looking for a bailout. But maybe it has decided to quit while it can get a good price because who knows what the future holds. Whatever the case, these companies probably believe they’ll be better off in the long run. With an unforgiving public stock market and continuous talks of bubbles and an impending downturn, we’ll likely see more and more startups taking that route.
Kia Kokalitcheva P.s.: Here’s a great reminder of the original meaning of “disruptive” companies, before it became a marketing buzzword. This is the Startup Sunday edition of Data Sheet, Fortune's daily tech newsletter, edited by reporter Kia Kokalitcheva. You may reach me via Twitter, email, or an entirely new platform that your startup developed. Feedback welcome. | |
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| | Everyone's Talking About | |
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| | Quip. Salesforce paid $582 million ($750 million by some accounts) for the startup whose main product is an alternative to Google Drive or Microsoft's Office 365. Now, the biggest question is how Salesforce with integrate Quip's product into its own suite of cloud-based business tools without angering Quip's passionate users. (Fortune) (TechCrunch) | |
| | Unicorn Watch | |
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| | Uber China and Didi Chuxing will merge. Uber's Chinese operations will merge with the local leader in a $35 billion deal. (Fortune) Airbnb is raising $850 million at a $30 billion valuation. A new legal filing confirm earlier rumors that the home-sharing company is raising new funds. (Bloomberg) How Uber and Lyft fared in July. Lyft has grown over the summer, but it hasn't caught up to Uber. (Fortune) | |
| | The Week In Startups | |
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| | Accompany Wants to Be Your Mobile Chief of Staff. (Fortune) This Startup Wants to Bring Microsoft Windows to Virtual Reality. (Fortune) Birchbox's Investors Are Giving the Startup a $15 Million Lifeline. (Recode) This Company Want to Sell You Cars In Virtual Reality. (Fortune) This Startup Just Got Permission to Launch the First Private Moon Mission. (Fortune) Hampton Creek Ran Undercover Project to Buy Up Its Own Vegan Mayo. (Bloomberg) Apple acquires Turi in major exit for Seattle-based machine learning and AI startup. (GeekWire) A Giant Shopping Mall Company Is Turning to 10 Startups to Breathe New Life Into Retail. (Recode) Medium Nabs Embed.ly to Add to Its List of Publisher Tools. (TechCrunch) Comma.ai Open-Sources the Data It Used For Its First Successful Driverless Trips. (TechCrunch) | |
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| | Words of Wisdom | |
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| | "The classic startup culture is to try to squeeze 40 years of work into one or two years, so that you can get to economic independence. [...] A lot of great founders get stuck in the hedonic treadmill — get the exit, buy a Ferrari, impress friends, and then rinse and repeat." — Garry Tan, investor and entrepreneur, on the common reason some startup get acquired. (Product Hunt) | |
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