Top tech startup news for Thursday, February 2, 2023: Alphabet, Lavender, Meta, Triple Whale, and Twitter
Good evening! Below are some of the top tech startup news stories for today, Thursday, February 2, 2023.
Google’s search business drops along with YouTube ad sales amid a slowdown in advertising
The global economic slowdown is here and no company is immune from it, not even Alphabet Google. Today, the internet ad behemoth reported its fourth-quarter financials after the bell Thursday. The company missed on both the top and bottom lines. The tech giant reported that its Google search ad business declined in the fourth quarter to $42.6 billion, down 2% year over year.
Its video platform unit didn’t fare well either as YouTube saw its ad revenue declined 8 percent year over year to $7.96 billion. According to Refinitiv, total Alphabet’s revenue during the fourth quarter was $76.05 billion versus the $76.53 billion expected. YouTube advertising revenue was $7.96 billion versus the $8.25 billion expected. Google Cloud revenue was $7.32 billion versus the $7.43 billion expected and traffic acquisition costs (TAC) were $12.93 billion versus the $13.32 billion expected, according to StreetAccount estimates.
Meanwhile, Alphabet said it would take a one-time hit of between $1.9 billion and $2.3 billion, mostly in the first quarter of 2023, to cover the layoffs of 12,000 employees it announced in January.
UK fintech startup Zopa Bank raises $92 million to accelerate growth – Top Startups 2023 | Startups News (techstartups.com)
Zopa, a UK-based digital banking startup that started as a peer-to-peer lender, has raised 75 million pounds ($92.40 million) as the company pivots to becoming a digital bank. The round was backed by existing investors excluding major backer Softbank.
In a statement on Thursday, Zoma said the latest funding “cements” its status as a unicorn with a valuation of $1 billion. Zopa will use the fresh funds to go grow its current products as well as expand into the small business lending space.
In conjunction with the funding news, Chief Executive Jaidev Janardana said the company is postponing its plan for an initial public offering (IPO) until a future date due to the challenging economic time. “During a challenging economic time, this is validation of our economic performance,” Janardana said.
The IPO “was never a destination,” Janardana said. “It’s a milestone on the way. We’re looking for the right opportunity.”
Janardana also said that the company is also considering raising an additional 25 million pounds to 100 million pounds of Tier-2 debt later in the year to shore up its balance sheet, adding that the plans are contingent on the cost of debt.
We covered Zopa back in 2021 after it raised a $300 million investment led by Softbank Vision Fund 2, a venture arm of Japanese conglomerate SoftBank Group. However, Softbank sits out of the current round due to a record loss.
Founded in 2005 by Dave Nicholson, Giles Andrews, James Alexander, Richard Duvall, and Tim Parlett, Zopa started out as a pioneer in p2p lending before it transitioned to online lending. Today, Zopa Bank and its P2P business run alongside each other. To date, Zopa has lent out over £6 billion to over half a million people across the UK.
After raising $27.7 million in Series A funding about a year ago from investors including a Warby Parker co-founder, the Columbus, Ohio-based Triple Whale has added another $25 million to grow its Shopify data platform, bringing its fundraising tally to $52.7 million.
Since its launch two years ago, Triple Whale has grown 1,400% year-over-year growth, with over 5,000 brands now using its platform to connect the dots that are not otherwise possible via the Shopify website. So, what’s behind Triple Whale’s success?
Today, Shopify is used by online sellers in over 175 countries around the world and over 4.4 million e-commerce sites are built with Shopify, according to data from Builthwith. So, it’s no surprise that a vast majority of Shopify users need an ecosystem of tools to not help them manage all aspects of running their stores but to make sense of the data generated from their sales.
Although Shopify provides some analytics and metrics, however, merchants need tools to bring all the data into one place, which in turn helps merchants improve their conversion numbers and get better insights required for their marketing campaigns.
That’s where Triple Whale comes in. Triple Whale’s analytics platform provides tools to help brands manage all aspects of running their stores including an all-in-one, easy-to-access tool to help them locate key metrics and derive instant insights into the performance of their advertising campaigns.
To further meet the demands for its service, Triple announced today it has closed a $25 million Series B round from NFX and Elephant, with strategic participation from Shopify. The fresh funding is on top of the $27.7 million raised in March 2022, which consisted of a $24M investment led by Elephant VC, alongside a previously undisclosed $2.7M seed round led by NFX, and an additional $1M raised with notable participation from individual investor Shaan Puri.
Lavender is a two-year-old New York-based startup that uses AI to combine everything you need to easily write emails that get replies. With its AI-powered email marketing engine, you get real-time AI-driven coaching on your email, research your prospect without leaving your inbox, confirm their email is valid, check if your email will land in SPAM, see how it looks on mobile, plus much more.
In just two years, Lavender has become a go-to platform for sales development reps (SDRs) and account executives (AEs) from the world’s largest companies use Lavender to boost opens and double replies.
Today, Lavender announced it has raised $13.2 million in a Series A funding round led by Norwest Venture Partners. Other backers include Signia Venture Partners and a seed round led by Signia with contributions from CapitalX, Position Ventures, and various angel investors.
Lavender will use the fresh capital infusion to grow its staff of 16 and continue to expand and fill “key roles” throughout the rest of the year. The company has raised a total of $14.2 million to date.
Lavender was founded in 2020 by William Ballance (CEO) and Will Allred. Prior to founding Lavender, the two co-founders were working on Sorter, a tech platform that applied personality and communication psychology to marketing campaigns. Just before launch, the pandemic hit, and with little funding remaining, they pivoted and repackaged Sorter which later became Lavander.
Meta stock surges 20% after Zuckerberg hints at more layoffs; stock more doubled in just 3 months from $89 to $188
Shares of Meta soared on Thursday by more than 20 percent after the social media giant reported better-than-expected fourth-quarter revenue of $32.17 billion. Analysts were expecting revenue of $31.53 billion, according to Refinitiv. The social giant was rewarded by investors as Meta stocks surged to $180.41 as the market opened, making it one of its best days ever.
The latest stock surge is not so much about Meta beating market expectations. It has more to do with another round of layoffs. During the earnings call, Meta CEO Mark Zuckerberg said the social-media giant will make 2023 the “year of efficiency” — and hinted that more layoffs could be in the offing. Wall Street also reacted positively to news that Meta would initiate a new round of share buybacks.
Following the good earnings news, Meta announced a $40 billion stock buyback. This is not the first time Meta has done a stock buyback. In 2021, Meta spent $45 billion on stock buybacks at $330 a share. The company still has a long way to recoup its loss even at the current stock price of $188.
On November 9, Facebook’s Meta laid off 13% of its total workforce, or more than 11,000 employees after losing $700 billion of its value over a risky metaverse bet.
Meta said the affected employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months. Zuckerberg also said the company spent around $3.7 billion in 2022 in paying out severance as well as terminating office leases.
Twitter to charge developers for API access as part of Musk’s push to bring the social platform to profitability
Twitter will start charging developers for API access in a push to generate additional revenue as the company tries to monetize more of its services just a few months after Elon Musk took ownership of the company. The announcement is part of Musk’s push to bring the social platform to profitability.
In a post this morning, Twitter said starting February 9, it would charge developers to use its API. The company added that developers would no longer have free access to its API, both v2 and v1.1. Instead, Twitter would introduce a paid basic tier. Twitter did not specify how much it would charge.
“Starting February 9, we will no longer support free access to the Twitter API, both v2 and v1.1. A paid basic tier will be available instead,” Twitter said.
Twitter also explained that “over the years, hundreds of millions of people have sent over a trillion Tweets, with billions more every week.”
Just six days after taking control of Twitter, the self-titled “Mr. Tweet” said the platform is currently losing “over $4M/day.” As part of the effort to cut costs, Musk also laid off about 50% of the company’s approximately 7,500 employees. Musk acquired Twitter in October 2022 in a $44 billion deal