February 26, 2023: Major Indices Down, 10-Year Treasury Yields Up

Last week, Dow Jones Industrial dropped 3% in its fourth straight weekly loss, S&P 500 lost 2.7%, and Nasdaq fell 3.3%. The US 10-year Treasury yield was up 12 basis points to 3.95%, its highest level since Nov. 10, and up 62 basis points from the recent stock market peak on Feb. 2. Venture capital firms raised US$20.6 billion for new funds in the fourth quarter, a 65% drop from the same period the year prior and the lowest fourth quarter capital raise since 2013, The Wall Street Journal reported. KKR-backed BMC plans IPO valuing it at up to US$15 billion. Shared micromobility giant Lime reports first profitable year, tests the waters for IPO. DOJ preps antitrust suit to block Adobe’s US$20 billion Figma deal. Nvidia shares rose nearly 9% despite precipitous declines in revenue and earnings per share compared to last year, as investors seemed relieved that the results weren’t worse. Block’s Cash app grows to 51 million users. Coinbase revenue falls 75% as trading slumps. Tesla rival Lucid’s stock slides 10% after it says it’ll make fewer electric cars than expected this year. After cutting 11,000 jobs last fall, Meta is reportedly set to execute what could be another major round of layoffs as it tries to trim expenses. Tencent is in talks with Meta to sell its Quest 2 virtual-reality headset in China. Microsoft limits Bing chat to five replies to stop the AI from getting real weird. Netflix cuts subscription prices in over 30 countries. In Canada, NowVertical announced the terms of its $5 million marketed public offering of units. Lighthouse Labs, TechNL each secure over $20 million in federal funding for tech upskilling programs. Vancouver-based Web3 company Dapper Labs is facing a lawsuit claiming that its NBA Top Shot Moments NFTs constitute unregistered securities. TELUS investigating leak of stolen source code, employee data.

NowVertical Group Inc. (NOW-TSXV) announces terms of $5 million marketed public offering of units.

The Company intends to issue up to 9,615,500 Units at a price of $0.52 per Unit (the “Issue Price”), for aggregate gross proceeds of up to $5,000,060. The Offering is led by Beacon Securities Limited (“Beacon”), on behalf of a syndicate of agents including Canaccord Genuity Corp. and Echelon Wealth Partners Inc. (together with Beacon, the “Agents”). Each Unit will consist of one subordinate voting share in the capital of the Company (a “Subordinate Voting Share”) and one Subordinate Voting Share purchase warrant (a “Warrant”) of the Company. Each Warrant will entitle the holder thereof to acquire one Subordinate Voting Share (a “Warrant Share”) at a price per Warrant Share of $0.80 for a period of 36 months following the Closing Date (as defined below). https://bit.ly/3ZkvP8J

Lighthouse Labs, TechNL each secure over $20 million in federal funding for tech upskilling programs.

Lighthouse Labs and TechNL are each receiving over $20 million in federal funding for their technology-focused education and training programs. This week, the Government of Canada announced a cumulative investment of up to $48.3 million to Lighthouse Labs and TechNL with the goal of bolstering employment in Canada’s information and communications technology (ICT) sector. Lighthouse Labs is getting $21.2 million, and TechNL has been promised $27.1 million. “The tech sector fuels the Canadian economy, and it’s critical that we match the rapid growth in the market with future-thinking training opportunities.” Coding school Lighthouse Labs said the capital it is receiving will go towards its ICT Boost project, meant to make its courses available to 1,700 Canadians at no cost. Some of the programs eligible for this initiative include Lighthouse Labs’ 12-week bootcamps for web development, data science, and cybersecurity. Since its inception in 2013, Lighthouse Labs claims it has introduced over 40,000 Canadians to coding and had over 2,700 graduates get careers as professional developers. https://bit.ly/3SryQlB

Future Fields raises $15.1 million to equip more industries with bioreactors made from flies.

Edmonton-based biotech startup Future Fields has raised $15.1 million in a seed extension funding round as it looks to help meet global demand for bioreactors by using common fruit flies. Future Fields did not disclose who led the round, but noted that Bee Partners increased its equity stake. The round also saw participation from Toyota Ventures, Builders VC, AgFunder, Amplify Capital, Milad Alucozai of BoxOne Ventures, Green Circle Foodtech, Siddhi Capital, and Climate Capital. A spokesperson for Future Fields told BetaKit that the $15.1 million figure includes a $5 million grant, and the rest is equity. http://bit.ly/3EAMNb3

Plum secures $8 million to help big businesses navigate tight labour market.

Kitchener-Waterloo-based Plum has closed over $8 million (US$6 million) in growth funding as the human resources tech startup looks to help more large enterprises place the right people in the right roles. Plum’s latest funding round closed last week and was raised via a convertible note. Pearson Ventures, the venture capital arm of United Kingdom-based education company Pearson, led the financing. The round also saw participation from fellow new investors JFF Ventures and Strada Education Network out of the United States. This EdTech-focused trio was joined by existing Plum investors Export Development Canada (EDC), Real Ventures, BDC Capital’s Women in Technology Venture Fund, Boston-based EduLab Capital Partners, and Chicago’s Impact Engine. The round brings Plum’s total funding to $19 million (US$14.5 million). http://bit.ly/41llifq

IrisCX secures $6.2 million to help home product, services firms provide video-based customer support.

Calgary’s IrisCX has closed $6.2 million (US$4.6 million) in equity seed funding from Minneapolis-based, B2B software-focused investor Arthur Ventures to expand its customer interaction platform and support its go-to-market efforts. IrisCX’s latest round, which closed in December, brings the startup’s total funding to $9.2 million (US$6.8 million). This includes $2.3 million (US$1.7 million) in pre-seed financing raised in 2021 from Heron Rock Fund, San Francisco’s Forum Ventures, and other undisclosed investors. IrisCX also participated in Stage 2 Capital’s accelerator program in July 2022, receiving an undisclosed investment from the American venture capital firm. Earlier this year, IrisCX also received $270,000 from PrairiesCan to enhance its platform using artificial intelligence. http://bit.ly/3ECGhAG

Round13 leads System-3’s $3.6 million round to mitigate bias in hiring leadership talent.

System-3 has raised $3.6 million in seed funding as part of the company’s efforts to mitigate inherent bias when hiring or promoting executive leaders. Round13 Capital led the Toronto-based startup’s round, which also included participation from undisclosed angel investors. http://bit.ly/3Z0r9VS

AAVAA closes $2 million to develop smart listening device.

Montréal-based startup AAVAA Technologies has secured a $2 million pre-seed funding round to continue developing its personal audio enhancement technology. The financing came from Anges Quebec, Anges Quebec Capital, Investissement Quebec, and TandemLaunch. Anges Quebec member and angel investor Guillaume Courtemanche will join AAVAA’s board as part of the investment. AAVAA is developing what it calls a “bionic ear” that combines sensors and integrated software to detect a person’s attention while using wearable devices. http://bit.ly/3koZOxv

Croptimistic acquires CropPro Consulting, secures $9.1 million from Forage Capital.

As more industries are accelerating their adoption of digitization and automation solutions, agtech startup Croptimistic aims to help farmers automate field work through maps. Earlier this month, Croptimistic announced its acquisition of its founders’ consulting company, CropPro Consulting, and revealed $9.1 million in Series B funding from Forage Capital Partners. In previous funding, Croptimistic raised a $5.2 million Series A round in 2021, comprising $3.5 million in equity from Forage and $1.7 million in funding from founders and institutional debt. Last year, Croptimistic received $1.1 million in federally-backed Canadian Agri-Food Automation and Intelligence Network funding for a $5 million project meant to bring academic and on-farm researchers, industry players, and smart farm staff together to develop new soil and crop technologies. http://bit.ly/3EzgitG

Dapper Labs faces lawsuit claiming NBA Top Shot NFTs are securities.

Vancouver-based Web3 company Dapper Labs is facing a lawsuit claiming that its NBA Top Shot Moments NFTs constitute unregistered securities. The proposed class action was first filed in 2021 in the Southern District of New York by NBA Top Shot Moments buyers. It represents part of a broader fight over how to classify crypto assets like NFTs. The plaintiffs allege that Dapper Labs violated US securities law by selling Moments to professional basketball fans without registering them with regulators. The lawsuit also alleges that Dapper improperly controlled the collectibles. http://bit.ly/3m6Kk1w

TELUS investigating leak of stolen source code, employee data.

Canada’s second-largest telecom, TELUS is investigating a potential data breach after a threat actor shared samples online of what appears to be employee data. The threat actor subsequently posted screenshots that apparently show private source code repositories and payroll records held by the company. TELUS has so far not found evidence of corporate or retail customer data being stolen and continues to monitor the potential incident. On February 17, a threat actor put up what they claim to be TELUS’ employee list (comprising names and email addresses) for sale on a data breach forum. “TELUS employes [sic] from a very recent breach. We have over 76K unique emails and on top of this, we have internal information associated with each employee scraped from Telus’ API,” states the forum post. https://bit.ly/3SvS4qb

Google tests blocking news content for some Canadians in response to government bill.

Google is blocking some Canadian users from viewing news content in what the company says is a test run of a potential response to the Liberal government’s online news bill. Also known as Bill C-18, the Online News Act would require digital giants such as Google and Meta, which owns Facebook, to negotiate deals that would compensate Canadian media companies for republishing their content on their platforms. The company said Wednesday that it is temporarily limiting access to news content for under four per cent of its Canadian users as it assesses possible responses to the bill. The change applies to its ubiquitous search engine as well as the Discover feature on Android devices, which carries news and sports stories. All types of news content are being affected by the test, which will run for about five weeks, the company said. That includes content created by Canadian broadcasters and newspapers. http://bit.ly/3ECcZSK

Fourth quarter venture fundraising fell to near-decade low.

Venture capital firms raised US$20.6 billion for new funds in the fourth quarter, a 65% drop from the same period the year prior and the lowest fourth quarter capital raise since 2013, The Wall Street Journal reported, citing data provider Preqin. The fundraising dip is not surprising. Limited partners, the institutions and wealthy individuals that invest in VC funds, have for months said that a slowdown is afoot after the stock sell-off in 2022 left their portfolios overexposed to venture. Last year was still a record year for venture fundraising, with U.S. firms hauling more than US$160 billion in total compared to 2021’s US$150 billion, according to financial data firm PitchBook. But the fourth quarter dip suggests there’s pain ahead for VC firms, particularly those planning to ask LPs for more money later in 2023. https://bit.ly/3xWQBzu

The 2023 MAD (Machine Learning, Artificial Intelligence & Data) landscape.

A very detailed look at the state of the ecosystem – with lots of detail in Part II, which dives into Market trends: Financings, M&A and IPOs (or lack thereof) — The very best public companies, such as Snowflake, Cloudflare or Datadog, trade at 12x to 18x of next year revenues (those numbers are up reflecting a recent rally at time of writing). Startups, therefore, have a tremendous amount of growing to do to get anywhere near their most recent valuations, or face significant downrounds (or worse, no round at all). Unfortunately, this growth needs to happen in the context of a slower customer demand. Many startups right now are sitting on solid amounts of cash, and don’t have to face their moment of reckoning by going back to the financing market just yet, but that time will inevitably happen, unless they become cash-flow positive. https://mattturck.com/MAD2023/

KKR-backed BMC plans IPO valuing it at up to US$15 billion.

BMC Software, a technology company owned by KKR & Co., has confidentially filed for an initial public offering, according to people with knowledge of the matter. The company, which could be valued at US$14 to $15 billion, has tapped Goldman Sachs Group Inc. as lead underwriter, said the people, who asked not to be identified because the information is private. An IPO could occur later this year if the market for new listings rebounds, though it’s possible that BMC could pursue other options, such as a sale, they said. http://bit.ly/3YXR28T

Lime reports first profitable year, tests the waters for IPO.

Shared micromobility giant Lime said it has achieved full-year profitability on both an adjusted and unadjusted EBITDA basis, which would make it an outlier in an industry that has struggled to break even, much less turn a profit. Lime reported adjusted EBITDA profitability of US$15 million and unadjusted profitability of US$4 million in 2022. The company said it adjusted for a one-time stock-based compensation expense, as well as “old depreciation that was embedded, which is less important than the future capex spend,” according to CEO Wayne Ting. The company expects to achieve free cash flow positivity this year or next, and once the macroeconomic environment becomes more favorable, Lime will move to enter the public markets. https://tcrn.ch/3SoTAdL

DOJ preps antitrust suit to block Adobe’s US$20 billion Figma deal.

The Justice Department is preparing an antitrust lawsuit seeking to block Adobe Inc.’s US$20 billion acquisition of startup Figma Inc., people familiar with the matter said. A case is expected to be filed as soon as next month, although the timing could slip, said one of the people, all of whom asked for anonymity to discuss the confidential probe. The deal needs approval from several antitrust authorities and the merger agreement allows for a possible extended regulatory review with an outside completion deadline of March 2024. Adobe had a meeting with the DOJ yesterday, according to another person. http://bit.ly/3ItVXr8

Nvidia shares surge despite steep revenue decline.

Nvidia shares rose nearly 9% despite precipitous declines in revenue and earnings per share compared to last year, as investors seemed relieved that the results weren’t worse. Their optimism stems from the fact that Nvidia’s graphics processing chips are considered one of the best options for training and operating machine learning models. Nvidia is already well-positioned as more companies move computing jobs to cloud providers, and the coming wave of generative AI-related companies and services makes its future look even more promising. Nvidia’s revenue for the three months to Jan. 29 dropped 21% to US$6.05 billion, while earnings per share declined 52% to US$0.57. For its full fiscal year, Nvidia reported sales of US$27 billion, which was flat compared to last year. Sales of chips for servers in data centers rose 11% to US$3.6 billion, while gaming chip revenue dropped 46% to US$1.8 billion. https://bit.ly/3xNXrYl

Block’s Cash app grows to 51 million users.

Block’s Cash App, the payment company’s consumer-facing unit, ended the year with 51 million active users, a 16% increase from 2021. Gross profit for Block’s Cash App unit rose 64% in the fourth quarter to US$848 million from the same period a year earlier, helped by more revenue from consumers using cards and other financial products beyond Cash App’s peer-to-peer payments offering. It was the first time since early 2021 that Cash App’s gross profit has been greater than that of the company’s Square unit, which helps businesses accept payments from customers. Payments volume growth through the company’s Square business slowed to 14% in the quarter, versus growth of 20% in the prior period. The Square unit saw a 22% increase in gross profit to US$801 million. (The gross profit figure strips out Block’s bitcoin trading and installment loan businesses.) https://bit.ly/3SwXJMQ

Coinbase revenue falls 75% as trading slumps.

Coinbase said revenue dropped 75% percent to US$629 million in the fourth quarter as crypto trading volumes plunged, and warned that mounting regulatory scrutiny following the collapse of FTX could hurt the crypto industry in the coming year. The crypto exchange has made a push in recent years to add services beyond trading, including by adding a staking service in which Coinbase pledges customer crypto to blockchains in exchange for a slice of the income these deposits generate. That business, launched in 2019, made up 10% of Coinbase’s overall revenue in the fourth quarter. But securities regulators have been ramping up scrutiny of staking and other crypto businesses including stablecoins. In a letter to shareholders, Coinbase defended its staking and stablecoin products and said it expects 2023 “to be a year of regulatory focus.” Coinbase has been able to offset some of the trading slump through its revenue-sharing agreement with stablecoin issuer Circle. Rising interest rates have meant more revenue from that partnership, since Coinbase earns a portion of the interest generated by assets backing the USDC stablecoin. While trading revenue slumped nearly 86% from the same period a year earlier, interest income surged to US$182 million from US$8 million. Interest income made up 30% of Coinbase’s overall revenue in the most recent quarter versus 0.3% a year earlier. https://bit.ly/3xWQNic

Tesla rival Lucid’s stock slides 10% after it says it’ll make fewer electric cars than expected this year.

Electric-vehicle maker Lucid Group’s stock price slumped ahead of Thursday’s opening bell after the Tesla rival released disappointing guidance for the year ahead. Shares fell 10.1% to US$8.97 in premarket trading after the luxury electric car manufacturer said it would make fewer cars than Wall Street expected this year. It also reported weak order numbers in its fourth-quarter earnings release, in a potential sign of faltering demand. In the results, published after the market close Wednesday, Lucid said it plans to produce between 10,000 and 14,000 vehicles this year. That’s well below the 21,815 projected by analysts. Demand for its luxury electric cars has taken a hit as rival Tesla’s grows thanks to aggressive price cuts. The EV maker reported a loss of US28 cents per share, narrower than the loss of 40 cents a share forecast. It missed on revenue, which grew quarter-on-quarter to almost US$258 million, but fell short of the US$303 million expected by analysts, according to Refinitiv. http://bit.ly/3YVqx3H

Meta reportedly plans next wave of job cuts after suggesting no more layoffs, Meta disputes details.

After cutting 11,000 jobs last fall, Meta is reportedly set to execute what could be another major round of layoffs as it tries to trim expenses. The news comes after CEO Mark Zuckerberg hinted in January another round could happen this year after previously saying in November that he didn’t foresee more cuts. Earlier this month we got a look at why Apple hasn’t had to cut jobs while tech giants like Meta and Amazon have slashed tens of thousands. One of the big factors was Meta and others almost doubling their workforces since 2019. Along with trends like the macroeconomic downturn, that resulted in Meta cutting roughly 13% of its staff last fall and it looks like the cuts aren’t over. http://bit.ly/3y7nZUF

Tencent in talks with Meta to sell Quest 2.

Tencent is in talks with Meta to sell its Quest 2 virtual-reality headset in China, the tech media company 36kr reported. The move makes sense given China’s tightly regulated videogame market, which requires foreign companies to work with a Chinese partner to distribute hardware and games. China previously banned game consoles for 15 years but ended the sales restrictions in 2015. The online publication said the arrangement would be similar to Tencent’s partnership with Nintendo for the Switch, which includes Tencent acting as the retail partner while also co-promoting localized Chinese versions of games for the platform. Talks have been ongoing for four months, and it isn’t clear when the Quest could go on sale in China, 36kr said. It added that the talks come after Tencent shuttered its mixed-reality unit due to challenges developing hardware and content. https://bit.ly/3EyxsaY

Generation Z now makes up 34% of iPhone owners in the US.

According to Financial Times’ Patrick McGee, Generation Z (individuals born in the mid-1990s to mid-2010s) now accounts for 34% of all iPhone owners in the US, with a whopping 76% of iPhone owners in the country aged 18-34. Apple is absolutely dominating the smartphone market for zoomers, commanding 83% of it compared to Samsung’s rather tame 10%, according to data from S&P’s 451 Research. In comparison, the Apple/Samsung split for older generations is fairly even. Back in September, Counterpoint Research data showed that Apple had surpassed Android devices to account for over 50% of smartphones sold in the US. McGee notes that Gen Z’s preference for the iPhone “helps explain how Apple’s share of the US market grew from 35% in 2019 to 50% in 2022.” “Apple has captured Gen Z in the US so thoroughly that American teens fear being electronically ostracized if they don’t own an iPhone,” he tweeted. The iPhone’s prevalence among younger generations and their loyalty to Apple aren’t localized to the US, either. Per a recent study conducted by Canalys in Western Europe, 83% of current iPhone users under the age of 25 plan to stick with Apple for their next phone — more than double the loyalty among Android users. https://bit.ly/3m0Dgnf

Microsoft limits Bing chat to five replies to stop the AI from getting real weird.

Microsoft says it’s implementing some conversation limits to its Bing AI just days after the chatbot went off the rails multiple times for users. Bing chats will now be capped at 50 questions per day and five per session after the search engine was seen insulting users, lying to them, and emotionally manipulating people. “Our data has shown that the vast majority of people find the answers they’re looking for within 5 turns and that only around 1 percent of chat conversations have 50+ messages,” says the Bing team in a blog post. If users hit the five-per-session limit, Bing will prompt them to start a new topic to avoid long back-and-forth chat sessions. http://bit.ly/3xMPwud

ChatGPT off limits to Wall Street.

Wall Street’s biggest banks are reminding staff not to use of OpenAI’s ChatGPT chatbot at work out of concern that doing so may inadvertently breach record keeping rules, Bloomberg reported on Friday. JP Morgan, Bank of America, Citi, Goldman Sachs and Wells Fargo, among others, have in recent days warned employees not to use unapproved third party software for work purposes, which includes OpenAI’s buzzy artificial intelligence tool. Banks are required to maintain complete copies of their internal records for regulatory purposes, and failure can result in large fines, such as the ones handed out to Morgan Stanley, JP Morgan and Deutsche Bank, among others, last year for failing to monitor employee use of private and encrypted messaging services, such as WhatsApp. While Bank of America, for instance, specifically referenced ChatGPT in a routine reminder sent to staff, according to the report, the lender is also known to maintain an approved list of software providers that restricts the use of non-approved tools. In that case, it wouldn’t be surprising to expect headlines that major financial institutions are banning Google’s ChatGPT competitor Bard, or Microsoft’s new AI-enhanced Bing search tool and its Edge browser next. https://bit.ly/3Io6wM4

China tells big tech companies not to offer ChatGPT services.

Regulators have told major Chinese tech companies not to offer ChatGPT services to the public amid growing alarm in Beijing over the AI-powered chatbot’s uncensored replies to user queries. Tencent Holdings and Ant Group, the fintech affiliate of Alibaba Group Holding, have been instructed not to offer access to ChatGPT services on their platforms, either directly or via third parties, people with direct knowledge of the matter told Nikkei Asia. Tech companies will also need to report to regulators before they launch their own ChatGPT-like services, the sources added. ChatGPT, developed by Microsoft-backed startup OpenAI, is not officially available in China but some internet users have been able to access it using a virtual private network (VPN). There have also been dozens of “mini programs” released by third-party developers on Tencent’s WeChat social media app that claim to offer services from ChatGPT. http://bit.ly/3Sq7s7r

Apple hits ‘major milestones’ in moonshot to bring noninvasive blood glucose monitoring to Apple Watch.

Apple’s efforts to bring glucose monitoring features to the Apple Watch have been reported on a few times over the years, but the company has reportedly had several major breakthroughs recently. Apple has hit “major milestones recently” and “now believes it could eventually bring glucose monitoring to the market.” Inside Apple, this is viewed as a “moonshot-style project,” and the work “dates back to the Steve Jobs era.” The goal of the project is to invent a way for “noninvasive and continuous blood glucose monitoring.” The eventual hope is to bring this functionality to the Apple Watch. According to today’s report, Apple previously hid its work on this project behind a “secretive health-care startup.” Bloomberg says that Apple now has hundreds of engineers working on this project as part of its “Exploratory Design Group.” http://bit.ly/3Iq1dfe

Tencent scraps plans for VR hardware as metaverse bet falters.

Tencent Holdings is abandoning plans to venture into virtual reality hardware, as a sobering economic outlook prompts the Chinese tech giant to cut costs and headcount at its metaverse unit, three sources familiar with the matter said. The world’s largest video game publisher had ambitious plans to build both virtual reality software and hardware at an “extended reality” XR unit it launched in June last year, for which it hired nearly 300 people. http://bit.ly/3m1PhJa

Meta begins selling blue badge on Instagram and Facebook as Zuckerberg borrows Musk playbook.

Facebook-parent Meta has launched a subscription service, called Meta Verified, that will allow users to add the coveted blue check mark to their Instagram and Facebook accounts for up to US$15 a month by verifying their identity, its chief executive Mark Zuckerberg said last Sunday, tapping a new revenue channel that has returned mixed success for its smaller rival Twitter. The subscription service, first rolling out in New Zealand and Australia starting this week, is priced at US$11.99 per month on the web or US$14.99 on Apple’s iOS and Google’s Android. Meta will allow users to verify their identity by using their government-issued ID cards Meta, whose shares have rebounded in recent weeks, is also reeling from a harsh markets response to its grand metaverse vision. The company, which has laid off about 11,000 employees in the past two months, has pledged to cut down its spendings on the metaverse ambitions. It’s reportedly planning another layoff round, soon. http://bit.ly/3knOaD3

Netflix cuts subscription prices in over 30 countries.

Netflix Inc. has reduced the cost of its service in more than three dozen countries in recent weeks, as it tries to appeal to customers around the world who have an ever-growing list of streaming options. The streaming company’s recent price cuts span Middle Eastern countries including Yemen, Jordan, Libya and Iran; sub-Saharan African markets including Kenya; and European countries such as Croatia, Slovenia and Bulgaria. http://bit.ly/41psas1

Streamers projected to spend US$8.5 billion globally on sports rights in 2023.

Subscription OTT services’ global spend on sports rights in 17 major markets around the world will reach US$8.5 billion in 2023 – up 64% versus 2022, projects Ampere Analysis. The research also predicts that the platforms share of total global spending on sports rights will leap to 21%, from 13% in 2022. Up to now, subscription OTT services’ spend on sports rights has lagged their investment in original TV and film content. In 2022, 28% of original content spending was from streaming platforms such as Netflix, Disney+, Prime Video and Apple TV+. https://bit.ly/3m4NJxR

Alibaba “optimistic” about recovery after 2% growth in December quarter.

Alibaba Group said its revenue grew just 2% in the quarter through December, as the Chinese e-commerce giant grappled with the country’s economic woes that were made worse by Beijing’s severe Covid-19 restrictions. Alibaba, whose sprawling business empire includes cloud computing and entertainment, said revenue from its core China commerce operations for consumers in the quarter declined 1% from a year earlier, reflecting the challenges. But the company is hoping for a recovery this year, after China in December reversed its zero-Covid policy and removed pandemic restrictions in an attempt to give its economy a much-needed boost. While Alibaba’s net profit for the quarter jumped 69% year one year, that was because its year-earlier profit figure was hit severely by a write-down on the value of its online entertainment business. Alibaba CEO Daniel Zhang said during a conference call with analysts that, after the change in China’s Covid policy, life is finally starting to get back to normal and merchants have a strong desire to make 2023 a “bumper year” to make up for last year. “We are optimistic about continued improvement,” he said. Alibaba’s struggles last year were not just because of economic headwinds but also because of fierce competition from rivals such as Pinduoduo, a discount shopping app whose revenue jumped last year thanks in part to Chinese consumers’ cost-consciousness amid an economic slowdown. The share price of PDD Holdings, which operates Pinduoduo, has surged 65% over the past six months. Another threat to Alibaba is ByteDance, which has turned its Douyin video app in China into a major e-commerce platform. https://bit.ly/3SvOT1u