Lyft gained from Uber’s scandals, sees revenue triple


Lyft appears to have benefited from Uber’s tough year.

The U.S. rival has seen its revenue growth more than triple, according to a report from The Information.  The media outlet viewed financial reports, which showed Lyft brought in $483 million in revenue in the first half of 2017, compared to about $150 million in the same timeframe last year.

The company also greatly improved its margins, showing that losses narrowed from $283 million to $206 million. Lyft was losing about $4 per ride last year and now it’s losing $1.20.

Uber, on the other hand, has seen losses accelerating. Company documents show that it lost almost $1.5 billion in its most recent quarter, up from $1.06 billion in the previous period.

In the first half of the year, it lost about $2 billion on $3 billion in revenue. Uber’s food delivery service, UberEATS, was included.

From lawsuits to public outcry about its company culture, Uber had a year filled with scandals. It ultimately led to the resignation of CEO Travis Kalanick in June. Former Expedia CEO Dara Khosrowshahi took over in August.

Both Lyft and Uber are in the process of raising more funding to accelerate their businesses.

Episode 1 rolls out new $81m seed-to-Series A fund, despite Brexit headwinds


Episode 1 has been a stalwart of the early stage funding scene in London for the last few years, investing in successful startups like Carwow, Triptease and AimBrain. It’s now closed its second UK “seed-to-Series A” fund which generally aims to lead rounds of £500k to £2m. The fund is a £60m ($81m) Enterprise Capital Fund (ECF), raised with the support of the British Business Bank, the UK government’s economic development bank. Many UK funds are turning to the BBB in the wake of Brexit, which has effectively switched off the EU funding taps.

Several new institutions including Draper Esprit and ADV joined the ranks of the fund’s existing LPs. Draper Esprit, the publicly-listed VC firm based in London, announced its investment in Episode 1 back in October.

Episode 1 said the new fund is 60% bigger than its first fund, and was oversubscribed, despite the uncertainty caused by things like Brexit.

Founding Partner Simon Murdoch (pictured left) emphasizes that the “enormous amount of experience at Episode 1” — which includes his early stewardship of Amazon UK — is what attracts early stage founders to the fund. In June the fund invested in AimBrain, a London startup that offers “biometric identity” as a service to help fintech companies and other financial institutions fight fraud.

Murdoch told me: “The macro environment is moving around a lot. I’m not a fan of Brexit. It’s causing problems with startups with recruitment. But it’s better in early stage than being invested in big companies. There’s still plenty of innovation. Startups are still an exciting place to be, even with the current macro environment.”

“It’s very hard to raise a fund right now. Even though we’re still quite well known, it’s still hard to get money from ‘fund of funds’, so it’s great to see DE and ADV invest and we’ll see more of that patient capital become involved in the market, especially with Brexit.”

He added: “We are predominantly about Enterprise and Marketplaces. We’re shying away from B2C as it requires deeper pockets. We’ve done a number of AI/ML companies already. One key thing is the startup aiming at big markets. We are keen on mega-markets like property, cars, manufacturing. So we are focused on being ‘seed to Series-A’ specialists, where the entrepreneurs are often technical founders. The thing to do is look for great people.”

On ICOs he said: “ICOs are great for companies if they can raise money that way. But investors should be careful and only buy into ICOs where they are confident that the demand will outstrip supply in the future.”

Powering up

A car worker using a robotic suitImage copyright Ford
Image caption Wearable technology helps workers doing repetitive physical tasks

If you've watched the Iron Man film franchise, you'll know that a powered suit gives inventor Tony Stark superhuman strength to fight the bad guys.

But away from the the fictional world of blockbusting movies, robotic exoskeletons offer more prosaic and useful help for humans.

The military has been in on the act for years, using them to help soldiers carry more weight for longer periods of time. Meanwhile manufacturers have been busy creating robotic suits to give mobility to people with disabilities.

But now exoskeletons are becoming an important part of the scene in more conventional workplaces, mainly because of their unique offering.

"Exoskeletons act as a bridge between fully-manual labour and robotic systems. You get the brains of people in the body of a robot," says Dan Kara, research director at ABI Research.

"But there's more to it than that. You can tie the use of exoskeletons to business benefits that are very easy to quantify. The main one is a reduction in work-related injuries, and we know that outside the common cold, back injury is the main reason people are off work."

Image copyright Getty Images
Image caption Robotic suits are used to help people with disabilities improve their mobility

The motor industry has used robots for many years. But robots can't do everything, points out technical expert Marty Smets, of Ford's human systems and virtual manufacturing unit.

"In our plants, we see a need for both people and robots," he says.

Some Ford assembly line workers lift their arms up to 4,600 times a day - that's about a million times a year. That sort of repetition leaves many suffering from back-ache and neck pain.

Now, though, the company has equipped staff at two US assembly plants with a device called the EksoVest, from California-based Ekso Bionics. It helps take the strain by giving workers an extra 5-15lb (2.2-6.8kg) of lift per arm.

"Incredible is the only word to describe the vest," said Paul Collins, an assembly line worker at Ford Michigan assembly plant. "It has made my job significantly easier and has given me more energy throughout the day."

The company says it's already seeing a dramatic decline in work-related injuries and is now planning to introduce the exoskeletons at facilities in Europe and South America.

Image copyright Getty Images
Image caption Powered robotic arms can help make tasks easier

Currently, the industrial use of exoskeletons is relatively small - this year only a few thousand have been sold, says ABI's Kara. But, he says, the potential market could be in the millions.

The types of exoskeleton used for rehabilitation can cost more than $100,000 (£75,000), needing, as they usually do, to replace a user's muscles altogether. However, industrial versions can be far cheaper, at around $5,000.

They generally augment human strength rather than replace it and tend to enhance one part of the body only. They also often don't need any external power. Instead, they can deliver a 10-20% boost to the user's lifting power by transferring weight to the ground.

In Japan, exoskeletons are being used for heavy lifting in the shipbuilding industry as well as in large commercial construction projects.

Meanwhile, US retailer Home Depot is testing exoskeletons to help workers unload trucks and bring materials onto the floor.

Another early adopter is Lockheed Martin, which is using its own Fortis exoskeleton to allow workers to operate tools for much longer periods. It has a support structure that transfers the weight of heavy loads from the operator's body directly to the ground through a series of joints at the hips, knees and ankles.

It can also be used with an arm that supports the weight of a tool helps isolate vibration and torque kick - rotational force - from the user. Workers using the devices, says Lockheed Martin, report two-thirds less fatigue, with higher quality work, greater productivity and fewer musculoskeletal injuries.

Image copyright Sarcos
Image caption Sarcos robots can be operated remotely by a human wearing an exoskeleton

Other companies are producing powered industrial exoskeletons that are rather more like the suits from the movies. Sarcos, for example, offers three models, with the biggest - the Guardian GT (pictured) - handling more than 450kg with its 2m (7ft) arms.

"I think powered exoskeletons will become ubiquitous for industrial applications around the world. These devices will materially reduce occupational injuries while also dramatically improving productivity," says chief executive officer Ben Wolff.

"Additionally, these devices can extend the useful life of an aging work force, and can make jobs open for more people that previously could have only been handled by people of larger physical stature."

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Image copyright Getty Images

Other augmentation technologies are even stranger. Researchers at Cornell's Sibley School of Mechanical and Aerospace Engineering, for example, have developed a robotic "third arm" that attaches to the user's elbow. The group says it sees applications in package handling, warehouses, and even restaurants.

"A third arm device would enhance a worker's reach, and allow them to access objects without having to reach or bend. This would be useful in pick-and-place tasks where the worker is moving, such as retrieving packages from warehouse shelves," says researcher Vighnesh Vatsal.

"It would also provide support in assembly tasks in challenging environments such as construction sites, for instance by holding a work piece steady while a worker operates on it with power tools using their own hands."

In the longer term, industry experts say the price of exoskeletons will fall further, meaning they could move into many more areas of work. They could even find a place in private life, with applications in DIY, gardening and sports such as hiking.

So while we'll never be likely to be able to emulate the exploits of comic book heroes, exoskeletons could help with mundane household chores such as ironing. So not so much Iron Man - more "ironing man", perhaps?

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There’s an implosion of early-stage VC funding, and no one’s talking about it


Amid record amounts of capital raised by VCs worldwide, and a sharp rise in the number of private “unicorns” valued at $1 billion-plus, there has been a quiet, barely noticed implosion in early-stage VC activity worldwide.

The chart below is dramatic, and accurate. Since 2014, the number of VC rounds in technology companies worldwide has nearly halved, from 19,000 to 10,000, according to PitchBook. During that time, the drop in VC funding amount has been nowhere near as dramatic, highlighting that VCs are concentrating investment into fewer later-stage companies.

This is now a three-year trend, so cannot be “blamed” on macro or short-term factors. More worryingly, it comes at a time of unprecedented stock market valuations worldwide.

Global VC financing volume and value in technology companies

 This amounts to a crash in number of financings, and is the most extreme since 2001.

The crash has occurred in early-stage funding

The data shows by far the sharpest fall in activity has been in early- and seed-stage rounds. In fact, later rounds have remained fairly flat the last three years, and A and B rounds have fallen, but not nearly by as much.

Global financing volume into technology companies by stage

 The early-stage implosion is global

 The fall in financings has happened literally everywhere:

What caused this quiet implosion?

  • The era of funding apps is over – VC funding rounds grew dramatically after 2010 partly because of rebounding economic activity, but mainly in order to back a raft of B2C apps taking advantage of consumers’ emerging mobile-first behavior. With Android and iOS ecosystems well established, nearly every commercial segment saw a raft of new digital challengers, in everything from lifestyle to health, finance and a raft of special interest categories. Since 2014, early-stage funding for businesses with “mobile” in their description has fallen off a cliff.
  • SaaS funding has dropped sharply – In 2014, nearly 5,000 rounds backed companies describing themselves as “SaaS.” This year, that figure is down nearly 40 percent, to about 3,000. With so many SaaS companies having been created in the past 10 years, it’s hard to justify, let alone back, new SaaS startups, which are by now competing against established SaaS players, not legacy perpetual license vendors.

Global financings (value and volume) in SaaS

  • Even fintech has seen a quiet fall in activity – While nowhere near as dramatic as the fall-off in SaaS and mobile funding, fintech funding activity has dropped nearly 10 percent since 2014. Again, we believe this marks a natural maturation of many fintech segments, where winners have already emerged well-capitalized and new entrants in many fintech categories are fighting a costly uphill battle to grow quickly.
  • In general, VCs are doubling down on “winner take all” leaders – Since 2014, aggregate funding into late-stage rounds has hovered around $55 billion a year, though it will be somewhat lower this year. Today’s $1 billion private financing round was unheard of a decade ago. Recent $1 billion raisers Airbnb, Spotify, WeWork and Lyft have joined previous billionaire raisers, including Uber, Facebook, SpaceX and Flipkart, and point to a strong trend to concentrate “winner take all” funding into companies that have real potential to lead or dominate their segment.

Overall we believe 2012-16 was a bubble in early-stage funding driven by the fundamental platform shift to mobile. In easy hindsight, too many companies raised “concept” money, and an unprecedented number failed early and “failed fast.” The VC market for seed and early-stage failed with them, falling to half its size in three short years.

Arguably, post implosion, early-stage VCs have become more “rational” and we are unlikely to see the “spray and pray” approach that dominated a few short years ago. However, in absolute numbers, it also means there is far less capital available to early-stage companies today than a few years ago, and inevitably there will be a continued drop in the number of new startups, which cannot now rely on getting the first round raised easily in the current environment.

Whether the early-stage VC implosion is healthy or disastrous for the tech ecosystem remains to be seen.

Likely it will be a bit of both.

Featured Image: Jorg Greuel/Getty Images