Peloton CEO Under Pressure: Activist Investor Calls for Change

Daily Crunch: January 24, 2022

A daily summary of TechCrunch’s most significant and impactful stories can be delivered directly to your inbox each day at 3 p.m. PST. You can subscribe here.

Greetings, and welcome to today’s Daily Crunch for January 24, 2022. It’s proving to be a challenging day for many, impacting individuals globally.

Asset values, both established and emerging, experienced a decline worldwide. Consequently, there’s widespread uncertainty regarding future developments.

Startup Funding Remains Robust

Despite broader market conditions, a substantial number of startup funding rounds are anticipated. This influx of capital is expected to continue.

We can provide insight into what lies ahead. The immediate future will see a considerable volume of investment activity within the startup ecosystem. – Alex

Key Takeaway: While global markets face volatility, the startup landscape remains active with ongoing funding opportunities.

TechCrunch's Top 3 Updates

Here's a quick rundown of the most significant tech news as of today, focusing on key developments and market shifts.

Peloton Faces Leadership Pressure

An activist investor is advocating for a change in leadership at Peloton. The company, which experienced a surge in popularity during the pandemic, is now struggling with declining stock values.

The investor's proposals include replacing the current CEO, exploring a potential sale of the company, or implementing a combination of both strategies.

Meta's Entry into Supercomputing

Meta, formerly known as Facebook, is making a substantial investment in supercomputing technology. The company aims to secure a position among the world’s top 10 supercomputer facilities.

This move could provide Meta with the computational resources needed to improve data accuracy and reporting for its partners and customers.

Market Selloff and Startup Investment

A widespread selloff impacted various asset classes, including stocks and cryptocurrencies. However, shares in less liquid startup companies are currently experiencing increased demand.

The extent to which the public market downturn will affect funding for early-stage startups remains uncertain, but a shift in investment climate is evident.

It is anticipated that the repercussions of the current market conditions will eventually be felt in later startup funding rounds.

Startups/VC

Mark Cuban is supporting a new venture aimed at alleviating financial strain related to prescription medications. While my perspective on the pharmaceutical industry remains unchanged, this startup intends to revolutionize the consumer pharmacy experience.

The company plans to sell drugs at cost, plus a 15% margin – a relatively small profit for pharmaceutical products. It will be interesting to observe the impact of this approach.

Innovative Startup Names

A noteworthy startup name has emerged: Pestle. This company is developing an application to assist with recipe management, shopping lists, and other culinary requirements.

Individuals regularly responsible for meal preparation understand the challenges of repetitive menus, uninspired ingredient combinations, and the general lack of creativity in cooking. Pestle, potentially evolving into "Mortar and Pestle" with a physical location, could offer a solution for home cooks.

Deliverect Secures Funding

Deliverect has successfully raised $150 million, resulting in a valuation of $1.4 billion. This investment reflects confidence in the company’s strategy of creating a unified platform.

The platform aims to streamline the complex processes involved in online ordering and delivery for restaurants, particularly in a post-pandemic environment.

Anyplace: Remote Work Solutions

For those with flexible lifestyles – without the constraints of pets, children, or location-dependent employment – remote work offers significant freedom. However, suitable workspaces can be difficult to find while traveling.

Anyplace is addressing this need by offering furnished apartments equipped with fully functional home offices for rent, providing a convenient solution for remote professionals.

Consolidation in the Rapid Food Delivery Sector

Although I personally do not mind the delivery times associated with services like Uber Eats, many consumers desire faster service. Consequently, instant-delivery startups have gained traction, attracting substantial investment.

We are now witnessing consolidation within this sector, exemplified by Gorillas’ acquisition of Frichti, forming a new German-French entity. This combination presents an intriguing development.

Startup News Roundup by Manish Singh

Concluding today’s startup coverage, we highlight a collection of reports from Manish Singh, a prolific journalist in the startup space. His recent articles provide valuable insights:

• Swiggy’s Growth: Indian food delivery leader Swiggy has secured $700 million in funding, achieving a valuation of $10.7 billion – a significant increase from its $5.5 billion valuation less than a year ago.
• Ola Electric’s Valuation: Ola Electric’s value has risen to $5 billion following a $200 million funding round. The company is focused on developing affordable electric scooters for consumers.
• Public Market Performance: Despite the positive momentum in startup funding, the stock prices of Indian tech companies that went public last year – Paytm, Zomato, PolicyBazaar, and Nykaa – have reached record lows.

This illustrates a complex landscape where private valuations can diverge from public market performance.

Successful Japanese Market Entry for Our SaaS Startup – No Local Office Required

Expanding a product into a new international market presents significant challenges, particularly when language and cultural nuances are unfamiliar. However, investors consistently anticipate continued growth.

Bitrise, a platform-as-a-service provider, CEO Barnabas Birmacher detailed the strategies his team employed to successfully penetrate the Japanese market.

Rather than exclusively depending on strategic alliances, a proactive approach was taken. The team undertook trips to Japan prior to the official launch to facilitate events and establish direct connections with potential early users.

Conventional advertising and media strategies were bypassed in favor of innovative tactics. A manga artist was commissioned to illustrate a comic strip centered around a mobile application developer.

Furthermore, exclusive “Japan-first” merchandise was created for distribution, and a life-sized mascot costume was designed for use at industry conferences.

According to Birmacher, in a TechCrunch+ article, “The costume was left with a client, and now individuals are seen wearing it during social gatherings.”

(TechCrunch+ is a membership program designed to empower founders and startup teams. Registration is available here.)

Key Strategies for Market Penetration

• Direct Engagement: Prioritizing in-person interactions with potential customers through events.
• Cultural Relevance: Utilizing culturally significant mediums like manga to connect with the target audience.
• Unique Branding: Creating memorable and shareable brand experiences through custom merchandise and a mascot costume.
• Bypassing Traditional Marketing: Focusing on organic reach and community building instead of conventional advertising.

These methods allowed Bitrise to establish a foothold in the Japanese market without the need for a physical office or extensive local marketing spend.

The focus on building relationships and creating a unique brand identity proved to be instrumental in their success.

Big Tech Inc.

The convenience of over-the-air updates in modern vehicles, such as those offered by Tesla, is undeniable. However, recent events highlight the potential risks associated with software vulnerabilities.

A security researcher successfully gained remote access to numerous Tesla vehicles globally. This breach stemmed from security flaws within an open-source logging tool frequently utilized by Tesla owners, inadvertently exposing their cars to internet access.

Google Faces Scrutiny

Google is currently navigating legal challenges both within the United States and in Europe. In the US, the company is accused of misleading users regarding data sharing practices.

Simultaneously, European regulators are examining Google’s proposed discontinuation of support for third-party tracking cookies in Chrome. This action followed a formal complaint lodged with the European Commission by German publishers.

NBC and TikTok: A Strategic Partnership

NBC is looking to leverage the popularity of TikTok to enhance viewership of the forthcoming Olympic Games. The network hopes to associate itself with the platform’s appeal to a younger demographic.

This strategy reflects a broader trend among established brands seeking to revitalize their image by aligning with trending social media platforms.

Apple's Payment System Dispute

Apple’s historical control over its app ecosystem has evolved over time. Initially restricting third-party applications, the company later embraced them, resulting in substantial revenue growth.

Currently, several nations are demanding that Apple permit third-party payment systems within apps. Apple has expressed strong opposition to these requirements.

As a result of non-compliance with a prior order in the Netherlands, Apple was recently issued a fine of €5 million (approximately $5.6 million). This order mandated the allowance of third-party payment technology for local dating applications.

TechCrunch Experts

Did you manage to stay current with TechCrunch’s reporting on growth marketing and software development from the previous week? A recap of that coverage can be found here if you missed it.

TechCrunch is currently seeking recommendations for skilled growth marketers. Expertise in areas like SEO, social media, and content creation is highly valued.

Seeking Growth Marketing Recommendations

If you are a growth marketer yourself, please share this survey with your clients. We are interested in gathering feedback regarding their positive experiences collaborating with you.

Client testimonials are crucial to understanding the impact of effective growth marketing strategies. Your clients’ insights will help identify top professionals in the field.

• We are looking for marketers proficient in SEO techniques.
• Social media marketing expertise is also highly desirable.
• Strong content writing skills are essential.

The survey aims to highlight the value that growth marketers bring to their clients’ businesses. Participation from both marketers and their clients is encouraged.