August 27, 2023: New Tech IPOs Despite Mixed Markets

Last week, markets were mixed, Dow Jones fell 0.45%, S&P 500 was up 0.8%, and Nasdaq rose 2.3%, after ending three-week losing streaks. Major indexes did see reversals on Thursday despite blowout Nvidia results, and stocks rebounded on Friday despite hawkish comments from Fed chief Jerome Powell. Nvidia’s financial performance in the July quarter blew past its earlier projections. Shares rose nearly 10% in after-hours trading. Data and marketing automation company Klaviyo on Friday became the latest tech company to try to join the public markets. Instacart just filed for its IPO and revealed a plan to sell US$175 million in stock to PepsiCo. Arm, which is owned by SoftBank, filed for its initial public offering Monday. Arm is one of the most important companies in technology. Its chip designs are found in nearly all the world’s smartphones, including Apple iPhones and most Android devices. In Canada, Sophic Clients Legend Power Systems, UGE International and Renoworks Software reported recent financial results. Sophic Client Clear Blue Technologies will report financial results on Tuesday. “Our focus this quarter remained around advancing sales opportunities and we currently have new late-stage large deals with very strong financial viability,” said Randy Buchamer, Legend Power Systems CEO. “The handful of late-stage deals could bring over $10 million in new potential bookings near term with the long term total pipeline now north of $100 million. The Company also closed a non-brokered $2.5 million financing. UGE ended Q2 with 3.8 MW of operating assets that contributed US$183.6K of energy generation revenue (+126% y/y) with 93% gross margins. The Company also closed its previously announced overnight marketed offering of debentures (the “Green Bonds”) for aggregate gross proceeds of US$5,749,655. The Offering was conducted by a syndicate of underwriters led by Canaccord Genuity, and iA Private Wealth.

Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) reports Q3 (Jun) F2023 financial results.

Revenue was $470 thousand versus $1.02 million in Q3 F2022. Adjusted EBITDA loss of $884 thousand versus a $1.24 million loss in Q3 F2022. Net loss of $1 million versus a $1.49 million loss in Q3 F2022. Cash of $522 thousand, no debt, and $2.22 million in working capital at June 30, 2023. The Company completed a non-brokered private placement for gross proceeds of $2,541,080. You can find the press release here. “Our focus this quarter remained around advancing sales opportunities and we currently have new late-stage large deals with very strong financial viability,” said Randy Buchamer, Legend Power Systems CEO. “The handful of late-stage deals could bring over $10 million in new potential bookings near term with the long term total pipeline now north of $100 million. More recently we completed a non-brokered financing for $2.5 million that bolsters the balance sheet and sets the Company up financially to execute on the strong pipeline of business we see coming into the end of this year and 2024.” https://bit.ly/3PclVDW

Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) announces closing of final tranche of Non-Brokered Private Placement pursuant to the Listed Issuer Exemption.

Legend Power has closed a second and final tranche of a non-brokered private placement (see press release dated August 8, 2023), pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Exemption”), by issuing 1,432,000 units at a price of $0.18 per Unit for gross proceeds of $257,760. Under both tranches, the Company issued a total of 14,117,113 Units for aggregate gross proceeds of $2,541,080 (see first tranche closing press release dated August 1, 2023). https://bit.ly/45ChtUy

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) reports Q2 2023 financial results.

UGE continued to grow its business of developing, building, financing, and operating commercial and community solar facilities, achieving notice to proceed (“NTP”) on 2.7MW of projects in the quarter, adding to the 10.1MW of projects that reached NTP in the first quarter, and moving a further 0.5MW into construction. Project backlog grew to 356 MW compared with 187 MW on June 30, 2022. Key financial results for the six months ended June 30, 2023 included: Ended Q2 2023 with 3.8 MW of operating assets that contributed US$183.6K and US$290.9K of energy generation revenue with 93% and 91% gross margins for the three- and six-month periods ended June 30. This represents an increase of 126% and 132% respectively in recurring revenue over the prior year. UGE is in the early stages of scaling its operational portfolio, which over time will see recurring revenue become the Company’s dominant source of revenue. Realized total revenue of US$297.5K and US$819.2K, representing declines of 49% and 13% for the three- and six- month periods, respectively, as compared to the same periods in 2022. This decline is associated with the run-off of the Company’s legacy third party EPC and engineering contracts. Total gross margins were 84% and 57% compared with 45% and 43% in 2022, as higher margin recurring revenue becomes a bigger share of overall revenues. The net loss and adjusted net loss for the quarter was US$4.0M, compared with US$1.4M for the same quarter of 2022, as a result of continued investment in developing UGE’s project portfolio. Cash used in operations was US$5.5M, cash provided by financing activities was US$21.9M, and cash used in investing activities was $15.6M. The cash balance at June 30, 2023 was US$3.0M. https://bit.ly/3snXhat

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) closes US$5.882 million overnight Marketed Offering of Project Development Green Bonds.

UGE International has closed its previously announced overnight marketed offering of debentures (the “Green Bonds”) having an aggregate principal amount of US$5,882,000, for aggregate gross proceeds of US$5,749,655. The Offering was conducted by a syndicate of underwriters led by Canaccord Genuity Corp., acting as lead underwriter and sole bookrunner, and iA Private Wealth Inc., pursuant to the terms of an underwriting agreement dated August 21, 2023 among the Company and the Underwriters. The Green Bonds are denominated in United States dollars, and issued at a price of US$977.50 per US$1,000 principal amount. The Green Bonds will mature on September 30, 2027 and will bear interest at a rate of 9% per annum, payable semi-annually in United States dollars in arrears commencing March 31, 2024. The Green Bonds are secured against a pool of the Company’s projects that have reached UGE’s stage 3.1 or higher. Net proceeds from the Offering will be utilized for the development of solar and energy storage projects of UGE and its subsidiaries. Computershare Trust Company of Canada will act as the trustee for the Green Bonds. https://bit.ly/45EYzwi

Sophic Client Renoworks Software Inc. (RW-TSXV, ROWKF-OTC) announces profitable second quarter 2023 financial results.

Financial highlights for the second quarter of fiscal 2023: Quarterly revenue of $1,719,087, down 3% from the prior year’s $1,770,960. Deferred Revenue of $1,375,094 for the quarter ended June 30, 2023, versus $1,413,786 for the year ended December 31, 2022. Recurring revenue of $557,491 versus $458,822 for the same period in 2022, a 12% increase. Gross margin of 71% versus 67% in the second quarter of 2022. Net income of $30,442 compared to a net loss of $57,529 in the second quarter of 2022. At June 30, 2023, the Company had 40,664,635 common shares issued and outstanding. The Company’s strategic focus on enriching its offerings with AI-driven solutions reflects its enduring commitment to enhancing its customer experience. The Company continues to make steady progress in expanding the adoption of its Renoworks Pro contractor solutions through direct sales and more importantly a network of strategic partners. In the quarter further advancements were made in broadening market reach and establishing strong collaborations that can impact the industry. Renoworks’ Adjusted EBITDA for the three-months ended June 30, 2023, was $53,895, indicating a noteworthy increase of $43,713 compared to Adjusted EBITDA of $10,182 for the corresponding period in 2022. This positive trajectory underscores the Company’s ongoing efforts to optimize platform and operational efficiency and performance. https://bit.ly/3P7vPa0

Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) to report 2023 second quarter financial results and host conference call on Tuesday, August 29, 2023.

Clear Blue will host a conference call that same day, at 11:00 a.m. Eastern Time, to review the Company’s performance and answer questions. Those interested can register here. https://bit.ly/3YKOOu8

Early-stage VC funding and mega-deals carry Canada to second largest Q2 on record.

As Canadian tech companies and investors continue to contend with tough economic conditions, the sector just posted its second largest Q2 on record for VC funding, per the Canadian Venture Capital and Private Equity Association (CVCA). In the second quarter, and cumulative first half of 2023, Canada saw a rebound following a weak Q1. During Q2, CVCA reports that $2.8 billion was put into Canadian tech startups across 170 deals. By dollars invested, this total represents a 140% jump q/q and a 45% increase y/y. This also makes Q2 2023 the second-largest second quarter on record for Canadian VC funding next to Q2 2021. In contrast to the US, which saw its lowest quarter since Q2 2020. As CVCA director of data and product David Kornacki told BetaKit, a few factors drove this Q2 rebound, including “the continued strength of pre-seed, seed, and early-stage companies,” and a proliferation of mega-deals worth over $50 million apiece. During H1 2023, 17 mega-deals accounted for nearly half of all dollars invested, including a pair of $200-million-plus financings during Q2, noted Kornacki. https://bit.ly/45nEquQ

Magnet Forensics acquires digital-media startup Griffeye to help investigate child abuse online.

Magnet Forensics announced that it has acquired Griffeye, a startup that it claims is a world leader in digital-media forensics for child sexual abuse investigations. This is Magnet Forensics’ first acquisition since it was acquired itself and delisted from the Toronto Stock Exchange in April. American private-equity firm Thoma Bravo struck a deal in January to buy Kitchener-Waterloo-based Magnet for $1.8 billion. Magnet Forensics said it was not disclosing the terms of the acquisition, only that the deal closed on Aug. 10, 2023. https://bit.ly/45BQXun

Ideogram launches with $22.3 million for generative AI text-to-image platform like DALL-E.

Toronto-based artificial intelligence (AI) startup Ideogram, which offers generative text-to-image technology, has launched its platform with $22.3 million in seed funding. American venture-capital (VC) firm Andreessen Horowitz (a16z) and Index Ventures led the round, with participation from AIX Ventures, Golden Ventures, and Two Small Fish Ventures. https://bit.ly/3QUQaR3

Blanka raises $2.7 million to simplify launching beauty brands.

Vancouver-based Blanka, which offers a platform for private labelling beauty and wellness products, has secured $2.7 million in all-equity and all-primary seed funding to help “anyone with an idea” launch their own beauty brand. Blanka’s seed round was led by Dundee Venture Capital, with participation from Storytime Capital and Disruption Ventures. https://bit.ly/44tQR6V

TikTok to remove Shopify (SHOP-NYSE, SHOP-TSX) ‘Storefront’ integration, pushing merchants to use TikTok Shop.

Social media giant TikTok is sunsetting its Shopify-integrated Storefront feature, which enables Shopify merchants to sync their product catalogues to TikTok. The move comes as TikTok looks to own the shopping experience on its popular video-sharing app and convince sellers to switch over to its in-house e-commerce platform, TikTok Shop. Per TikTok’s website, the TikTok Storefront integration will be removed on Sept. 12. In addition to Shopify sellers, TikTok Storefront could also be integrated with online stores on other platforms, including BigCommerce, Lightspeed Commerce-owned Ecwid, and Square, which means that merchants using these platforms to showcase and sell products will also lose access to the Storefront feature. Meanwhile, despite government threats to ban the app, TikTok has been investing heavily in TikTok Shop in the United States (US) as it looks to replicate the success of Chinese e-commerce platforms like Shein and Temu by selling made-in-China goods to US consumers. TikTok Shop is expected to lose over US$500 million from hiring, building a delivery network, and subsidizing merchants in the US, where it has reportedly faced difficulties enlisting US merchants. As TikTok Storefront ends, Shopify has added another integration to its platform: Solana Pay. Shopify already integrates with other crypto payment applications, including Coinbase Commerce, BitPay, and Crypto.com. https://bit.ly/45mRKPX

Nvidia projects 170% revenue growth in October quarter.

Nvidia’s financial performance in the July quarter blew past its earlier projections as demand boomed for its specialized server chips for artificial intelligence. Revenue rose 101% to US$13.5 billion from the same period a year earlier, significantly higher than the 64% growth Nvidia projected for the quarter when it held a conference call with analysts three months ago. Shares rose nearly 10% in after-hours trading. Data center chip revenue, the part of the business focused on powering AI, made up 76% of revenue, and the company’s sales in China—where the U.S. government has restricted the sale of Nvidia’s most advanced chips—made up 20% to 25% of sales, which the company said was the normal historical range. Free cash flow in the July quarter jumped to an eye-popping US$6 billion compared to US$824 million in the same quarter a year earlier. Perhaps more importantly, the company projected 170% revenue growth in the current quarter, which ends in October. That suggests Nvidia’s manufacturing partners are producing an ever-increasing amount of its graphical processing units. CFO Colette Kress said supply of the company’s chips for AI will ramp quarter over quarter, but stopped short of specifics on how that might impact a recent shortage of cloud servers with available graphics processing units. https://tinyurl.com/yy9rb5ca

Klaviyo files to go public in latest sign of life for IPO market.

Data and marketing automation company Klaviyo on Friday became the latest tech company to try to join the public markets. Klaviyo said that it plans to list on the New York Stock Exchange under the symbol “KVYO,” according to paperwork filed with the Securities and Exchange Commission. Klaviyo follows grocery-delivery service Instacart’s long-awaited IPO filing, also submitted on Friday. The companies are trying to pry open an IPO window that has been mostly shut since late 2021. In December of that year, software vendor HashiCorp and Samsara, which develops cloud technology for industrial companies, went public, but there have been few significant venture-backed tech IPOs since. Chip design giant Arm, which is owned by Japan’s SoftBank, filed for a Nasdaq listing on Monday. In its prospectus, Klaviyo reported net income of US$15.2 million for the first six months of the year, compared with a net loss of US$24.6 million during the same period a year ago. It had revenue of approximately US$321 million for the first half of the year, vs. about US$208 million in the first six months of 2022. One of Klaviyo’s biggest backers and sources of business is Shopify. The Canadian e-commerce giant owns roughly 11% of Klaviyo’s shares, and invested US$100 million in the company last August. As of the end of 2022, about 77.5% of Klaviyo’s annualized recurring revenue, or value of its existing paid subscriptions, was derived from customers who also use Shopify, the company said. https://tinyurl.com/hjrnybvz

Instacart just filed for its IPO and revealed a plan to sell US$175 million in stock to PepsiCo.

Instacart is one step closer to going public. Instacart’s stock will trade on the NASDAQ Global exchange under the ticker “CART.” The company has reportedly considered going public multiple times in the last few years, including after a run-up in demand for grocery delivery in early 2020 as a result of the pandemic. Instacart will also sell US$175 million in Series A preferred stock to beverage giant PepsiCo as part of a private placement, according to the document. The company said it works with 1,400 retail, convenience store, and grocery brands including Publix, Costco, Aldi, CVS, Michael’s, Walgreens, Walmart, and 7-Eleven. Instacart said its average order value was US$110 in 2022. In total, Instacart works with 80,000 stores. Its main competitor DoorDash, which entered the grocery delivery space in 2020, works with more than 100,000 non-restaurant stores. As of June 30, 2023, it has 5.1 million Instacart + members. By comparison, DoorDash’s membership program, dubbed DashPass, had over 15 million subscribers by the end of 2022. https://tinyurl.com/2t4tnfrx

Instacart revenue rose 30% despite weak delivery growth.

Instacart increased revenue more than 30% to about US$1.4 billion in the first half of this year, The Information reported last Saturday, but the volume of groceries and other goods it delivered barely budged. The mixed nature of the results is sure to be an issue for investors considering its initial public offering, expected next month. The grocery delivery firm’s revenue growth came from its ad business, which accounted for 30% of revenue last year and likely a bigger share now, and Instacart keeping more of the dollars spent on each grocery order. The ad business, in particular, helps with Instacart’s profit margins, as advertising sales is typically a high margin business. Even so, signs that the grocery delivery business is not growing much will likely be an issue for investors in the coming weeks. Instacart’s private valuation has fallen from US$39 billion in early 2021 to around $10 billion now. The big question is where public market investors value the firm when it goes public. https://tinyurl.com/36z85xyx

What ARM’s expected debut means for the IPO market and SoftBank.

Arm, which is owned by SoftBank, filed for its initial public offering Monday. The firm’s stock market debut will be a major test for the IPO market, which has more or less closed off from new listings due to rising interest rates which have hammered appetite for risky assets in the last year or so. Arm is one of the most important companies in technology. Its chip designs found in nearly all the world’s smartphones, including Apple iPhones and most Android devices. Its debut will be a big deal for an IPO market that’s been in the doldrums since 2022, but the company’s listing has big implications for SoftBank as well. SoftBank has been attempting to bounce back from a grim tech market by reining in on its growth-focused investments and pivoting its focus to artificial intelligence, the hot topic of the hour in tech. https://tinyurl.com/msfe65t7

Shares of digital mortgage company Better plunge after SPAC deal.

Shares of digital mortgage lender Better Home & Finance tanked 93% on their first day of trading after the company went public via a merger with a special purpose acquisition company. The deal gives Better access to about US$565 million of funding for its operations, largely through convertible debt from SoftBank, as it navigates a difficult path for mortgage lenders. Better stock closed Thursday at US$1.15, down from US$17.44 on Wednesday when the stock was trading as the SPAC, known as Aurora Acquisition. According to a securities filing, the vast majority of Aurora’s shareholders opted to exchange their shares for cash ahead of the deal, leaving the newly public Better with a small number of shares outstanding, which could add to volatility in the stock price. Better and Aurora hashed out a plan to go public in 2021, but a series of controversies, legal issues at Better and a stock market swoon delayed the deal until after the SEC ended a probe into Better’s pre-IPO behavior and Aurora’s investors greenlit the deal. SPAC deals have become more rare after a boom in 2021 turned into a bust, with the stocks of many companies that went public via SPAC tanking amid investor scrutiny. Meanwhile, mortgage lenders like Better are struggling with interest rates at 20-year highs. Refinancings are all but dead, and housing stock is low and expensive, hampering home purchases. Better CEO Vishal Garg called it “the bottom of the abyss” in an interview with The Information. Better is looking to use the new infusion of capital to invest in what it is already doing, but also to potentially forge new partnerships with companies it can lend through and perhaps acquire other firms, according to people familiar with the matter. https://tinyurl.com/59b22yc3

Coinbase buys minority stake in USDC issuer Circle.

Coinbase has taken a minority stake in Circle, the crypto payments firm and issuer of the USDC stablecoin. The companies, which splits interest revenue generated from USDC holdings, did not disclose the size of the stake nor how much Coinbase invested. Centre Consortium, a Circle- and Coinbase-led nonprofit that managed USDC, is shutting down as part of the deal. In a joint press release, Coinbase and Circle said a separate organization like Centre is “is no longer needed” to govern USDC due to “growing regulatory clarity for stablecoins in the U.S. and around the world.” Earlier this month, PayPal announced it was issuing its own stablecoin, PayPal USD, the first time a major payments firm has launched a stablecoin. https://tinyurl.com/357vrb3r

IBM sells Weather Channel app and Weather.com to Francisco Partners.

IBM said Tuesday it is selling The Weather Company assets, including The Weather Channel mobile app and Weather.com, to private equity firm Francisco Partners for an undisclosed amount. The Wall Street Journal had reported in April that the business could fetch more than US$1 billion. Francisco Partners plans to expand the business beyond weather forecasting and into the health and wellness space, according to a statement. The private equity firm bought IBM’s Watson Health assets last year in a deal that was reportedly valued above US$1 billion. As part of The Weather Channel deal, IBM will hold onto its sustainability software business and continue to use The Weather Company’s data for that software. IBM bought The Weather Channel assets, excluding The Weather Channel’s cable channel, from Comcast and private equity firms Bain and Blackstone in 2015. The group later sold the TV channel to media executive Byron Allen. https://tinyurl.com/2f5rs6z7

Salesforce leads investment in Hugging Face, doubling startup’s valuation.

Salesforce is leading a roughly US$200 million financing round in Hugging Face, one of the most highly valued startups helping businesses use artificial intelligence, at a valuation north of US$4 billion, according to two people with knowledge of the situation. The new round more than doubles the New York-based startup’s valuation from its last fundraising in May 2022. The funding by Salesforce suggests it may view Hugging Face as a potential future acquisition. While Salesforce is best known for software used by sales professionals and for the Slack chat app, it also sells an array of services for software developers. https://tinyurl.com/yr9rzuuz

Zoom’s shares rise on strong earnings, big customer growth.

Zoom’s shares rose more than 7% in extended trading after the videoconferencing provider reported a sharp increase in earnings and a modest increase in revenue growth compared to last year, prompting it to slightly raise its annual sales forecast. While the results were a far cry from the jet-fueled earnings Zoom reported during the pandemic, it seems that investors’ confidence in the company is returning, even though a few key growth indicators—like the number of new enterprise customers and the amount they expanded their spending over the past 12 months—were down compared to last quarter. Zoom’s revenue for the three months to July 31 grew 3.6% to over US$1.1 billion compared to last year, while its net income was US$182 million and US$0.59 a share, up from US$45.7 million and US$0.15 per share last year. Zoom’s free cash flow grew 26% to US$289.4 million from last year. https://tinyurl.com/bdh4hesx

Peloton shares drop 22% after posting wider-than-expected loss, falling sales due to Bike recall, seasonality.

Peloton reported its results Wednesday for a quarter its CEO warned would be among its most challenging. The connected fitness company posted a wider-than-expected loss but beat sales expectations. Peloton’s shares plunged off the news, closing 22% lower. https://tinyurl.com/4rrh8kp7

Meta launches own AI code-writing tool: Code Llama.

Meta has released a tool called Code Llama, built on top of its Llama 2 large language model, to generate new code and debug human-written work, the company said. Code Llama will use the same community license as Llama 2 and is free for research and commercial use. Code Llama, Meta said, can create strings of code from prompts or complete and debug code when pointed to a specific code string. In addition to the base Code Llama model, Meta released a Python-specialized version called Code Llama-Python and another version called Code Llama-Instrct, which can understand instructions in natural language. According to Meta, each specific version of Code Llama is not interchangeable, and the company does not recommend the base Code Llama or Code Llama-Python for natural language instructions. https://tinyurl.com/4ek2syye

ESPN considers charging US$35 for new streaming service.

ESPN is considering charging between US$20 and US$35 a month for its new streaming service, The Information reported Thursday. Such a price range could make it the most expensive streaming service in the U.S. The new service would show the same marquee programming as ESPN’s cable channel, unlike the existing ESPN+ streaming service which shows niche sports and which would likely be a part of the new offering. Amazon has had early talks with Disney about working on the streaming version of ESPN it is developing, the report also said. Amazon could take a minority stake in ESPN. https://tinyurl.com/3ntu4bzx

Microsoft to sell streaming rights for Activision-Blizzard games.

In an attempt to appease UK regulators who initially blocked its US$69 billion acquisition of Activision Blizzard, Microsoft said on Tuesday that it has struck a new deal to sell the streaming rights to Activision’s games to the game publisher Ubisoft after the deal closes. The agreement means that Microsoft won’t be able to make Activision’s popular titles like Call of Duty exclusively available to stream on the Xbox store, which was a key concern flagged by the UK’s Competition and Markets Authority. (Ubisoft can still license the games back to Microsoft to sell them on the Xbox store, but will own the rights to the games in perpetuity). The UK regulator, which previously blocked Microsoft’s attempt to acquire Activision Blizzard, will review the new terms of the proposed deal and make a decision by October 18, CMA chief executive Sarah Cardill said in a statement, adding that “this is not a green light.” The UK’s approval is seen as the final hurdle Microsoft needs to clear before closing the deal, after it successfully rebuffed a lawsuit by the US FTC last month seeking an injunction to block the deal. https://tinyurl.com/4af345ha

European law is about to take effect for big tech.

Big tech companies have to start complying with new European rules, under the Digital Services Act, as early as this week, The Wall Street Journal reported. A separate set of rules under the Digital Markets Act is also shortly to come into force. The Digital Services Act affect each of the big tech companies. The WSJ report said to comply, Google was working on a screen that gives smartphone users a clearer choice about internet browsers to use, to increase competition for Google’s Chrome browser, while Apple is working on a way for iPhone users to instal apps outside the Apple app store. The Digital Markets Act, meanwhile, will prevent big tech companies favoring their own services or products on their platforms. It will also bar tech firms, like Meta Platforms, from tracking users across the web for advertising, something Apple’s software changes have already limited. https://tinyurl.com/5n6muc6v

Meta’s Threads begins rolling out on the web, as Zuckerberg takes more direct aim at Elon Musk’s X.

The site, Threads.net, is not live for everyone yet and may still just show a link to download the mobile app. A Meta spokesperson said the company will be “rolling out” the web version of Threads for the general public “over the next few days.” Meta said that, in the coming weeks it will be improved to look more like the mobile app. While Threads was quick to sign on users after it was introduced in July, the app saw a drop-off in growth and engagement the following week as its limitations became apparent. Meta CEO Mark Zuckerberg said in early August that the company was working on a web version of Threads as well as a search function, underscoring efforts to make the app more compelling. Advertisers and influencers previously told CNBC that Threads needs more features like a search tool and a way to access the app from desktop computers to be a serious challenger to X, formerly known as Twitter. Influencers and power users on X often use the desktop version of the app to post comments and share content throughout the day. https://tinyurl.com/mtn2x3hb