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Tradeshift cuts headcount by three figures in effort to turn towards profitability

Last month Tradeshift, a platform for supply chain payments which has achieved unicorn startups in recent years, had some good news and some bad news. It announced a Series F funding round of $240 million in equity and debt, raised from a combination of existing and new investors. It’s now raised a total of $661M since it started in 2008 and investors include Goldman Sachs, Principal Strategic Investments and Wipro Ventures among others.

The new funding came, despite talk of a possible IPO last year. In effect, this new funding round was an admission by the company that it was delaying any IPO and setting the company “on a direct path to profitability in the near future,” which is exactly the kinds of noises many larger tech firms have made in the wake of the WeWork and Peleton issues with the public markets.

During that announcement CEO and co-founder Christian Lanng also admitted that the drive toward profitability would mean a cost-cutting exercise ahead of any possible IPO.

Lanng said this would likely mean reducing headcount in its expensive San Francisco offices, but reallocating resources and talent to locations where that is more affordable.

The company has many no formal announcement about the detail on that, but yesterday we got confirmation from the European tech press that the cuts were indeed starting to bite.

The Danish version of ComputerWorld reported that the staffing cuts have now run into 3 figures and were conducted in mid-January.

The cuts came from headcount at the company’s offices in Copenhagen, San Francisco and other offices.

Mikkel Hippe Brun, a co-founder of Tradeshift and head of the company’s Asian business, confirmed the information to Computerworld, but indicated that “there are still some consultations around the world, where we are subject to different rules about notifications and opportunities to raise objections.”

However, he said that the company still has more than 1,000 employees worldwide, which is “significantly more employees” than two years ago.

At the same time, the company has also brought in new executives from SAP, Oracle and Microsoft, among others, as the company tightens its belt, according to ComputerWorld.

Tradeshift has an impressive array of investors such as Goldman Sachs, although it’s notable that this doesn’t include any of the usual round of typical SaaS-oriented Valley VCs.

Tradeshift customers have included Air France KLM, Kuehne + Nagel International AG, DHL, Fujitsu, HSBC, Siemens, Société Générale, Unilever, and Volvo.

CFIUS Cometh: What this obscure agency does and why it matters to your fund or startup

On January 12, 2016, Grindr announced it had sold a 60% controlling stake in the company to Beijing Kunlun Tech, a Chinese gaming firm, valuing the company at $155 million. Champagne bottles were surely popped at the small-ish firm.

Though not at a unicorn-level valuation, the 9-figure exit was still respectable and signaled a bright future for the gay hookup app. Indeed, two years later, Kunlun bought the rest of the firm at more than double the valuation and was planning a public offering for Grindr.

On March 27, 2019, it all fell apart. Kunlun was putting Grindr up for sale instead.

What went wrong? It wasn’t that Grindr’s business ground to a halt. By all accounts, its business seems to actually be growing. The problem was that Kunlun owning Grindr was viewed as a threat to national security. Consequently, CFIUS, or the Committee for Foreign Investment in the United States, stepped in to block the transaction.

So what changed? CFIUS was expanded by FIRRMA, or the Foreign Risk Review Modernization Act, in late 2018, which gave it massive new power and scale. Unlike before, FIRRMA gave CFIUS a technology focus. So now CFIUS isn’t just an American problem—it’s an American tech problem. And in the coming years, it will transform venture capital, Chinese involvement in US tech, and maybe even startups as we know it.

Here’s a closer look at how it all fits together.

What is CFIUS?

Image via Getty Images / Busà Photography

CFIUS is the most important agency you’ve never heard of, and until recently it wasn’t even more than a committee. In essence, CFIUS has the ability to stop foreign entities, called “covered entities,” from acquiring companies when it could adversely affect national security—a “covered transaction.”

Once a filing is made, CFIUS investigates the transaction and both parties, which can take over a month in its first pass. From there, the company and CFIUS enter a negotiation to see if they can resolve any issues.

Sales of PCs just grew for the first time in six years

Don’t look now, but the PC might not be dead. According to Gartner, collector of marketshare and industry metrics, worldwide shipments of personal computers just experienced the first year-over-year growth since 2012. Shipments totaled 62.1 million units, which is a 1.4 percent increase from the same time period in 2017. The report states “experienced some growth compared with a year ago” but goes on to caution declaring the PC industry as in recovery just yet.

The top five PC vendors all experienced growth with Lenovo seeing the largest gains of 10.5% — though that could be from Lenovo completing a joint venture with Fujitsu. HP grew 6.1%, Dell 9.5%, Apple 3% and Acer 3.1%. All good signs for an industry long thought stagnate. This report excludes Chromebooks from its data. PC vendors experienced growth without the help of Chromebooks, which are the latest challenger to the notebook computer.

Gartner points to the business market as the source of the increased demand. The consumer market, it states, is still decreasing as consumers increasing use mobile devices. Yet growth in the business sector will not last, it says.

“In the business segment, PC momentum will weaken in two years when the replacement peak for Windows 10 passes.” said Mikako Kitagawa, principal analyst at Gartner said in the report. “PC vendors should look for ways to maintain growth in the business market as the Windows 10 upgrade cycle tails off.”

Consumers will likely continue, for the most part, to keep a computer around but since the web is the new desktop, the upgrade cycle for a causal user will keep getting longer. As long as a home has a computer that can run Chrome, that’s likely good enough for most people.