M&A

Zynga acquires Turkey’s Peak Games for $1.8B, after buying its card games studio for $100M in 2017

Posted by | Europe, Exit, Gaming, M&A, Startups, TC | No Comments

Today, some news of a huge acquisition out of Turkey that represents the first billion-dollar-plus exit for a startup out of the country. Social gaming company Zynga confirmed that it is buying Istanbul-based Peak Games, the company behind popular Candy-Crush-style mobile gaming apps Toon Blast and Toy Blast, for $1.8 billion — $900 million in cash, and $900 million in Zynga shares.

Interestingly, this is the second time that Zynga has made a Peak Games acquisition. In 2017, it purchased the company’s mobile card games business for $100 million (more on that below).

The news caps off a short period of speculation about an upcoming deal, with local tech publications like Webrazzi calling the sale (and correct price) last month.

Peak’s investors had included European VCs Earlybird and Hummingbird Ventures — both active backers of startups in emerging markets in the region — and Endeavor Global (the nonprofit that invests via its Endeavor Catalyst fund). Sidar Sahin, the founder and CEO, had been the company’s biggest shareholder.

As with all M&A in the world of gaming, Zynga is getting a couple of big gains out of this sale.

The first is picking up two very popular titles/franchises that it doesn’t have do develop from scratch (in hopes of investing R&D budget in what it hopes but can’t guarantee will be a hit). Toon Blast and Toy Blast together total more than 12 million DAUs. And on top of that, those two games are some of the highest-grossing among all in Apple’s App Store, ranking among the top-10 and top-20 games in the past two years, Zynga noted in its announcement.

It’s not just about adding popular games content, but expanding Zynga’s advertising business as well. Significantly, Peak Games’ primary users are outside of Zynga’s home market of the US, representing a real growth opportunity for the company to cross-sell other games. Zynga says that bolting on Peak’s games network to its own will boost its number of mobile daily active users by 60%, which mean a lot of scaling up for its ad network.

Of course, sustaining both of those titles and their respective franchises as hits for the long run is not a given — the world of gaming regularly sees blockbusters fizzle out when the next big thing comes along — although these “forever franchises” with their steady popularity have a strong play to be exactly that.

However, the long play is also where the third big asset comes in: talent. Peak has 100 employees working on its current franchises and other games. So while the back ends (and revenues) may be getting combined, Zynga says Peak’s people will stay put and continue to work under the Peak brand on the existing franchises as well as on new projects that are already in development.

Zynga says the deal will close in the third quarter of 2020, and it’s updated its guidance already on the news, sending its stock up more than 5% in pre-market trading. Specifically, Zynga today said it believes the deal will bump up revenues by $40 million for the year, to $1.840 billion.

A startup so nice, Zynga bought it twice

The deal is notable not just because of what it’s adding to Zynga today, but because it highlights some interesting history between the two companies.

Back in November 2017, Zynga acquired one division of Peak Games, its mobile card games studio, for $100 million in cash.

The deal included games like Spades Plus and Gin Rummy Plus, respectively the largest spade and rummy mobile games in the world at the time; and games that were popular in Peak’s home market, 101 Okey Plus and Okey Plus. And according to analysis from Apptopia, it looks like Zynga was set to recoup the money it paid out by 2019, meaning that business is now profitable.

The remainder of Peak Games is another story. If Zynga tried to buy the whole business two years ago, it might have been that Peak was reluctant to sell its remaining two titles — its own Candy Crush crushers — Toon Blast and Toy Blast for anything near $100 million. And with good reason, since (as Zynga itself pointed out) they went on to become some of the consistently highest-grossing games in all of the App Store.

In the intervening period, Zynga tried to create its own rivals, namely Wonka’s World of Candy, but it’s never been as big of a hit as the others. (Apptopia’s Adam Blacker today told me, after I published this piece, that in fact Wonka’s World has made but a tiny fraction of the revenue of Peak’s titles.)

Hence, two years on, Zynga possibly finally found the “right price” for the whole of Peak Games.

“We are honored to welcome Sidar and team to Zynga. Peak is one of the world’s best puzzle game makers and we could not be more excited to add such creative and passionate talent to our company,” said Frank Gibeau, Chief Executive Officer of Zynga, in a statement. “With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline. As a combined team, we are well positioned to grow faster together.”

“This is a monumental partnership not only for Zynga and Peak, but for the whole mobile gaming industry,” said Sidar Sahin, founder and Chief Executive Officer of Peak, in a statement. “Both companies share a common vision — to bring people together through games. Peak’s culture is rooted in relentless learning and progress, so as we embark on this new chapter in our journey together with Zynga, we remain as committed as ever to our unique culture. We’re very excited for our combined future and what we will accomplish together.”

Zynga and games business strategies aside, this is also a huge deal for Turkey’s tech ecosystem.

Turkey has been a steady presence straddling both the European and MENA markets (much as Turkey’s wider economy and political presence does), but so far with little impact in terms of exits and activity that extend outside of the region.

This acquisition is a testament to the exciting companies and talent that are being developed in the market, and is of course yet another sign of how big tech companies based out of more established centres like the Bay Area will continue to take bigger leaps to tap talent ever further afield, in their ongoing consolidation push and search for both business and audience growth.

One impact of the COVID-19 pandemic has been that many are starting to see a much faster decentralisation in the world of technology. People are working remotely, and some are even planning to move away from tech hubs; and deals are getting done not in person but over videoconferencing links. This acquisition also demonstrates how that is also playing out in the world of M&A, too.

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Republic acquires Fig, adding games to its startup crowdfunding platform

Posted by | Crowdfunding, fig, Gaming, M&A, TC | No Comments

Crowdfunding platform for startups Republic has acquired crowdfunding platform for games Fig, joining forces to help creators get their ideas off the ground. Users of each service will be happy to know they’ll continue as-is for the foreseeable future.

The model of publicly accessible micro-equity has proven an effective one, and both platforms have recent successes under their belts. Startups of a wide variety have raised hundreds of thousands on Republic, while Fig has had a great year with games like the critically acclaimed (and popular) Outer Wilds and What the Golf.

The scale of the sites is small compared with Kickstarter and Indiegogo, but the projects are more carefully curated and, although they are all crowdfunding platforms, the Republic/Fig model is different, awarding equity rather than product. Or in addition to product — who can resist wanting to have their own weird new Intellivision console?

The terms of the acquisition were not disclosed, but the general idea is to merge the two sites without compromising either. Ideally both will see an increased audience, and users will see an increased variety of projects to potentially back. Gaming is a growing area of investment, especially niche indie games that might be the next big unexpected hit, so Republic saw Fig as a natural extension of its existing platform.

“One of the best things going for Fig is how successful they’ve been in making positive returns for investors. Capital raised is used to develop the game, games are sold, and sales revenue is shared with investors,” said Republic Funding Portal CEO Chuck Pettid in a statement sent to TechCrunch. “Most private investments take 7-10 years for investors to get meaningful returns. Fig has accelerated that outcome and even boasts 3 straight years (2017, 2018 and 2019) of positive returns for investors. There isn’t another crowdfunding platform in the world that can say that.”

Fig’s CEO, Justin Bailey, will stay on as a board member at Republic and help guide the intelligent integration of the two sites.

“Fig will continue on and over time will slowly become a part of Republic,” he said. “Republic will keep the core parts of Fig’s community publishing platform and then add in its ingredients such as its commitment to diversity which will create an even stronger platform for indie game developers. In the end, Fig’s mission is to help support independent developers and making games possible that wouldn’t be.”

Both CEOs went out of their way to mention that the sites especially value underserved and underrepresented groups, which may find crowdfunding the only way to collect enough capital to pursue an idea. “More than half of the campaigns featured on Republic have come from underrepresented founders,” said Pettid. “In the past few years, the tech and video game industry has pushed the diversity message, but not enough is being done.”

Bailey noted that the pandemic has led to a major disruption of traditional investment methods. Crowdfunding is already successful, but in the modified post-coronavirus world it may be even more valid.

“Developers should always be rethinking how to raise funding,” he said. “Innovation and creative thinking leads to the best campaigns, and we will be there to assist them.”

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T-Mobile officially completes merger with Sprint, CEO John Legere steps down ahead of schedule

Posted by | john legere, M&A, Mergers and Acquisitions, Mike Sievert, Mobile, sprint, T-Mobile, TC | No Comments

After months of regulatory maneuvering, T-Mobile and Sprint officially completed their $26 billion merger today. The new combined parent company is called T-Mobile and will now trade on the Nasdaq under the ticker symbol TMUS with Sprint no longer trading on the NYSE.

For consumers, it will seemingly take a little time before the effects of the transition are meaningfully felt. T-Mobile did not comment on the future of the Sprint brand in today’s announcement, but they have previously promised that subscribers will have access to “the same or better rate plans” for three years as part of the deal.

Alongside news of the merger being finalized, T-Mobile shared that its CEO transition is taking place early. John Legere was supposed to stay on until the end of April, but Mike Sievert has been appointed CEO a month early, effective immediately. Sievert was previously T-Mobile’s COO.

Legere has led T-Mobile since 2012, mounting a turnaround at the company framing the service as a low-cost alternative to the duopoly of AT&T and Verizon. (Disclosure: TechCrunch is owned by Verizon Media, but this does not affect our coverage.) The company’s years-long “Un-carrier” marketing push often featured Legere and his antics prominently.

Legere is still on the company’s board of directors, but he’ll be stepping down at the end of his term through June.

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Online marketplace OfferUp raises $120M, acquires top competitor letgo

Posted by | Apps, buying, eCommerce, funding, Fundings & Exits, letgo, M&A, marketplace, Mobile, OfferUp, olx group, online shopping, Recent Funding, Selling, Startups, TC | No Comments

OfferUp, a top online and mobile marketplace app, announced this morning it’s raising $120 million in a new round of funding led by competing marketplace letgo’s majority investor, OLX Group, and others. As a part of the deal, OfferUp will also be acquiring letgo’s classified business, with OLX Group gaining a 40% stake in the newly combined entity.

Other investors in the new round include existing OfferUp backers Andreessen Horowitz and Warburg Pincus. The funds will be put toward continued growth, product innovation and monetization efforts, OfferUp says.

The round will close with the closing of the acquisition, which is expected to take place sometime in May. To date, OfferUp has raised $380 million.

The acquisition will see two of the largest third-party buying and selling marketplaces — outside of Craigslist, eBay and Facebook Marketplace, of course — become a more significant threat to the incumbents. Together, the new entity will have more than 20 million monthly active users across the U.S. For consumers, the deal means they’ll no longer have to list in as many apps when looking to unload some household items, electronics, furniture or whatever else they want to sell.

“My vision for OfferUp has always been to build a company that helps people connect and prosper,” said Nick Huzar, OfferUp CEO, in a statement about the acquisition. “We’re combining the complementary strengths of OfferUp and letgo in order to deliver an even better buying and selling experience for our communities. OLX Group has unparalleled expertise and clear success with growing online marketplace businesses, so they’ll be a great partner as we continue to build the widest, simplest, and most trustworthy experience for our customers.”

OfferUp also acknowledged that mid-pandemic is an odd time to announce such a deal — especially at a time when the COVID-19 outbreak is affecting its own employees, its partners, and the buying and selling community itself. And this will continue for some time.

However, Huzar positions the deal as one that will allow the business to grow, despite the current state of affairs.

“This news helps us to continue to innovate and grow, in spite of these challenging times, and continue to deliver on that promise,” Huzar noted, in a company blog post.

For now, the OfferUp and letgo apps will remain separate experiences and no disruptions to any sales will be made. Consumers will also be able to download both apps to iOS and Android devices for the time being, too.

But soon, both sets of users will gain access to a larger network of buyers and sellers, along with nationwide shipping options, and trust and safety problems. We understand this will involve allowing users of both sets of apps to see more posts and interact with more buyers and sellers — so some sort of merging of the two networks is at play here. There will be additional changes to improve the user experience for all users in the future, as well, but the company isn’t sharing details on that today.

Letgo is bringing to the table an app with more than 100 million worldwide downloads, so there is a potential to reactivate some of the lapsed users who aren’t currently shopping or selling on its marketplace today. The two apps were often neck-and-neck in terms of their app store category rankings, though on iPhone OfferUp has maintained a slight lead. (See App Store and Google Play charts below.)

However, letgo’s business outside of North America will be separately owned and operated as part of the OLX Group, the companies said.

“Letgo and OfferUp have always shared the same core vision for how large America’s secondhand economy can become — harnessing tech innovation to bring about an extraordinarily positive impact on consumers’ wallets and also on the environment,” said letgo co-founder Alec Oxenford. “Bringing our apps together moves us much closer to that vision,” he added.

Prior to this deal, OfferUp had seen a number of executive departures, including the exit of Engineering lead and VP Peter Wilson in 2017, VP of Product Chloe Harford in 2018, VP of Employee Experience Deb Nielsen in 2018, subsequent VP of Employee Experience Sarah Bilton in 2019, and Chief Experience Officer Jerry Howe in January 2020. CFO Rodrigo Brumana has also left, which was previously unreported. The company’s interim CFO is Chief Growth Officer Ian Fliflet, and OfferUp is actively hiring for a new CFO, we’re told.

Huzar characterizes these changes as part of the challenges with growing a startup and getting the right people into place.

“As the company grows up, so must leaders and so must the culture. I think a lot of times when you’re scaling businesses…you go through evolutions where leaders really need to evolve and change,” he says. “If you look to Bill Carr, for example, our COO, you know he helped build out Amazon Video from nothing to over 2,000 employees. We had nobody in the halls of OfferUp that had seen that scale before,” Huzar added.

There’s some admiration for Amazon’s culture, as well.

“There are clearly things that Amazon has done very well — like their ability to innovate at scale is unbelievable,” Huzar says. “We do think people [who] come out of Amazon have great startup DNA. They’re very scrappy. They dive deep into the business and understand things. They can think big. There’s a lot of value I think from that business that I really appreciate,” he added.

OfferUp also just hired former ChannelAdvisor VP Mark Vandegrift as head of e-commerce this month, as the company focuses on growth and scale.

But not all employees have been on board with these exec shakeups. More than a handful of employee reviews on Glassdoor and chatter on networking app Blind speak to various company culture issues, women being treated inequitably, negative office politics, and attrition — including among senior management.

In addition to the COVID-19 crisis, OfferUp may have needed to merge to scale and compete with the marketplace giants. User growth was slowing, for instance — the userbase was 42 million annual users in 2018 that only grew to 44 million in 2019. Presumably, slower revenue growth had followed. (Huzar declined to speak to current revenue and valuation.)

A combination of OfferUp and letgo could help to strengthen numbers outside of coastal cities, like Seattle, L.A., and Miami, where OfferUp was historically strong. Letgo was stronger in other parts of the country, like the Midwest, Huzar says. OfferUp will also bring its shipping business to letgo, which could be particularly helpful now as people are looking to sell household items for extra cash.

The deal is still subject to regulatory approval. If given, the combined businesses will be operated by OfferUp, headquartered in Bellevue, Wash. Huzar will continue to be CEO of OfferUp and chairman of the board. Oxenford, meanwhile, will join the board and serve as a senior advisor to OLX Group and Prosus.

Because the deal is still in the process of closing, the companies can’t speak to any team changes, including potential layoffs as a result of overlapping positions or other redundancies, we’re told.

Updated 3/25/20, 4:00 PM ET with additional quotes and background, following Huzar interview. 

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Unity acquires Dublin-based deep learning startup Artomatix

Posted by | Artomatix, Battlefield, Gaming, M&A, Startup Battlefield, TC, unity | No Comments

Unity has acquired AI game developer tools startup Artomatix.

The Dublin startup builds developer tools that allow game studios to more easily create deep learning-enhanced textures that scale more convincingly.

Developers can use the startup’s ArtEngine platform to bring real-world materials to their game worlds, adapting the visual patterns to their 3D worlds more quickly than existing toolsets while eliminating seams and irregularities. ArtEngine uses AI to identify visual flaws in replications and saves developers from having to endlessly tweak environments.

 

The company launched at TechCrunch Disrupt SF back in 2015. Artomatix went on to raise just over $12 million in grants and funding from VCs, including from Enterprise Ireland, Suir Valley Ventures, Manifold Partners and Boost Heroes.

Artomatix’s team will continue to operate out of their Dublin offices. Unity did not share an acquisition price.

Unity, which boasts that more than half of new games are built using its engine, is an obvious suitor for Artomatix’s technology. The engine has continued to grow more powerful in recent years, but bulking up in capabilities has increased complexity and left developers with lengthy render times.

If Artomatix’s technology can help game designers create the art used to populate digital environments, Unity can begin to push more workflow through AI-assisted tools and save developers time.

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Tilting Point acquires mobile game Star Trek Timelines

Posted by | disruptor beam, Gaming, M&A, Media, Mobile, star-trek-timelines, Tilting Point | No Comments

Tilting Point announced this morning that it has acquired Star Trek Timelines, a free-to-play character collection game, from the game’s developer Disruptor Beam. It has also hired Disruptor Beam team members to create a new studio, Wicked Realm Games.

This follows Disruptor Beam‘s shuttering of its other titles, Game of Thrones Ascent and The Walking Dead: March to War. Moving forward, the company says it will be focused on its Disruptor Engine tools for mobile game development and operations.

Tilting Point, meanwhile, had previously acquired the game Languinis and the monetization startup Gondola, but President Samir El Agili told me that this is the first time the company has acquired both a game and the development team behind it. CEO Kevin Segalla described this as an extension of Tilting Point’s “progressive publishing” model, where the company first works with developers on user acquisition, then develops a deeper business relationship over time.

In fact, Timelines — which Tilting Point says has been downloaded 8 million times and earned over $100 million — was one of the first games supported by the company’s user acquisition fund. And through those efforts, the Tilting Point team came to believe that there’s still plenty of opportunity for growth.

“We spent a good amount of time over the past year-and-a-half to two years helping the team scale the game to success, helping them bring a user to the game using our ability to do user acquisition, as well as improving the game itself in terms of our operations,” El Agili said. “What we have seen over this time is that Star Trek Timelines is a very impressive game, its users are very sticky.”

He noted that Tilting Point is increasing the size of the team working on Timelines from nine at Disruptor Beam to 19 at Wicked Realm Games, which will be led by Disruptor Beam’s former CTO David Cham.

The studio, El Agili said, will be “100% integrated from a financial standpoint, but they’re still going to be very independent in the way they operate.” And while Wicked Realm will be focused on Timelines for the near future, there are “more ideas that we can build with them.”

Segalla also said that as a result of the deal, Tilting Point is essentially becoming the first Disruptor Engine customer.

“Tilting Point has been a great partner to us and have proven that they care about the game and its community and there’s no one better to take Star Trek Timelines to the next level,” said Disruptor Beam CEO Jon Radoff in a statement. “We are also excited that Tilting Point will be one of our first live customers for our live-ops technology and that we will be continuing our working relationship.”

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Facebook acquires the VR game studio behind one of the Rift’s best titles

Posted by | Facebook, Gaming, M&A, Oculus Rift, Sanzaru Games, TC, Virtual reality | No Comments

Facebook is aiming to build on its VR hardware launches of 2019 with an investment in virtual reality software.

Facebook announced today that it has acquired Bay Area VR studio Sanzaru Games, the developer of “Asgard’s Wrath,” considered by many enthusiasts to be one of the Oculus Rift’s best games. Terms of the deal weren’t disclosed, but the studio will continue to operate its offices in the U.S. and Canada with “the vast majority” of employees coming aboard following the acquisition, Facebook says.

The 13-year-old game studio has created a total of four titles for the Oculus Rift, including “Asgard’s Wrath” and “Marvel Powers United VR,” both of which were at least partially funded by Oculus Studios. Sanzaru has also made a number of titles on console and mobile systems, releasing games structured around their own IP alongside licensed titles for properties like Sonic and Spyro.

Following Facebook’s acquisition of Beat Games in November, the Sanzaru Games purchase showcases Facebook’s continued interest in propping up VR game studios and aligning them around their interests while allowing them to operate independently. While Beat Games’ “Beat Saber” was considered a more mass market title, Sanzaru’s “Asgard’s Wrath” represented a play toward courting serious gamers with a lengthier first-person adventure title.

Facebook has already injected billions of dollars into its VR ambitions and, as the company hopes to build out the content ecosystems of hardware it released last year (including the Oculus Quest and Oculus Rift S), there is little to suggest that their rate of investment will slow in the near future.

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As Morgan Stanley buys E-Trade, Robinhood preps social trading

Posted by | Apps, E-Trade, Finance, M&A, Mobile, morgan stanley, online brokerage, Robinhood, Social, Startups, stock trading, TC, Vlad Tenev | No Comments

Before it was worth $7.6 billion, the original idea for Robinhood was a stock-trading social network. At my kitchen table in San Francisco in 2013, the founders envisioned an app for sharing hot tips to a feed complete with a leaderboard of whose predictions were most accurate. Once they had SEC approval, they pivoted toward the real money maker: letting people buy and sell stocks in the app, and pay to borrow cash to do so.

Now, seven years later, Robinhood is subtly taking the first steps back to its start. Today it’s launching Profiles. For now, they let users see analytics about their portfolio, like how concentrated they are in stocks versus options versus cryptocurrency, as well as across different business sectors. Complete with usernames and a photo, Profiles let you follow self-made or Robinhood-provided lists of stocks and other assets.

Profiles could give Robinhood’s customers the confidence to trade more, and create a sense of lock-in that stops them from straying to other brokerages that have dropped their per-trade fees to zero to match the startup, like Charles Schwab, Ameritrade and E-Trade, which was acquired for $13 billion today by Morgan Stanley, as reported by The Wall Street Journal.

The Profile features certainly sound helpful. They could reveal that your portfolio is too centered around tech, media and telecom stocks, or that you’re ignoring cryptocurrency or corporations from your home state. Lists also makes it easier to track specific business verticals, save stocks to buy when you have the cash or set aside some for deeper research. Robinhood pulls info from FactSet, Morningstar and other trusted sources to figure out which stocks and ETFs go into sector lists, or you can make and name your own. Profiles and lists begin to roll out to all users next week.

But what’s most interesting is how profiles lay the foundation for Robinhood as a social network. It’s easy to imagine letting users follow other accounts or lists they create. The original Robinhood app let users make predictions like “17% increase in Facebook share price over the next 11 weeks,” with comments to explain why. It showed users’ prediction accuracy, their average holding time for assets, a point score for smart foresight and community BUY or SELL ratings on stocks.

If Robinhood rebuilt some of these features, it might lessen the need for an expensive financial advisor or having enough cash to qualify for one with a different brokerage. Robinhood could let you crowdsource advice. “We understand the connotation of taking something from the rich and giving it to the poor. Robinhood is liberating information that’s locked up with professionals and giving it to the people,” Robinhood co-founder and co-CEO Vlad Tenev told me back in 2013.

Robinhood would certainly need to be careful about scammy tips going viral. Improper safeguards could lead to pump and dump schemes where those late to buy in get screwed when prices snap back to reality.

But embracing social could leverage some of its strongest assets: the youthfulness of its user base and the depth of connection to its users. The median age of a Robinhood customer is 30, and half say they’re first-time investors. Being able to turn to friends or experts within the app might convince them to pull the trigger on trades.

Most online brokerages are somewhat undifferentiated beyond differences in pricing, while their clunky, unstylized products don’t generate the same brand affinity as people have for Robinhood. Unsatisfied users could bail for a competitor at any time. Robinhood’s users are accustomed to social networking and the way it locks in users, because they don’t want to abandon their community.

When I asked Robinhood Profiles’ product manager Shanthi Shanmugam directly about whether this was the start of more social trading features, they suspiciously dodged the question, telling me, “When thinking about how to reflect who you are as an investor, we looked at how other apps represent you and it felt natural to leverage a design that felt more like a profile. When helping people group their investment ideas, it was easy to envision this as a playlist you might find on your favorite music app.”

That’s far from a denial. Offering social validation for trading could help Robinhood earn more from its customers despite their small total account balances. While Robinhood might have more than 10 million accounts versus E-Trade’s 5.2 million and Morgan Stanley’s 3 million, E-Trade’s average account size is $69,230 and Morgan Stanley’s is $900,000, while a survey found most of Robinhood’s held $1,000 to $5,000.

That all means that Robinhood earns less on interest sitting in users’ accounts than the old incumbents. But Robinhood earns the majority of its money on selling order flow and through its subscription Robinhood Gold feature that lets users pay monthly so they can borrow cash to trade with. Profiles and lists, and then eventually more social features, could get Robinhood’s users trading more so there’s more order flow to sell and more reason for them to buy subscriptions.

“Democratizing access is about lowering fees, minimums and other barriers people face — like confidence. Profiles and lists make finance easier to understand and more familiar for people,” says Shanmugam. More social features built safely, more reassurance, more trading, more revenue. Robinhood has raised $910 million. But to outgun larger competitors like the newly assembled Morgan Stanley/E-Trade that’s matched its zero-fee pricing, Robinhood will have to win with product.

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Twitter acquires Stories template maker Chroma Labs

Posted by | Apps, Exit, Instagram Boomerang, M&A, Mobile, Social, Startups, TC, Twitter | No Comments

Is “Twitter Stories” on the way? Or will we just get tools to send prettier tweets? Well now Twitter has the talent for both as it’s just acquired Chroma Labs. Co-founded by Instagram Boomerang inventor John Barnett, Chroma Labs’ Chroma Stories app let you fill in stylish layout templates and frames for posting collages and more to Instagram Stories, Snapchat, and more.

Rather than keeping Chroma Stories around, Twitter will be splitting the Chroma Labs squad up to work on its product, design and engineering teams. The Chroma Stories iPhone app won’t be shut down, but it won’t get more updates and will only work until there’s some breaking change to iOS.

Thrilled to welcome the amazing @Chroma_Labs team including @picturejohn, @alexli, @joshuacharris to @Twitter.

They’ll join our product, design, and eng teams working to give people more creative ways to express themselves on Twitter 🎨💬

— Kayvon Beykpour (@kayvz) February 18, 2020

“When we founded Chroma Labs in 2018, we set out to build a company to inspire creativity and help people tell their visual stories. During the past year, we’ve enabled creators and businesses around the world to create millions of stories with the Chroma Stories app” the Chroma Labs team writes on its site. “We’re proud of this work, and look forward to continuing our mission at a larger scale – with one of the most important services in the world.”

We’ve reached out to Twitter for more details on the deal and any price paid. [Update: Twitter confirms this is an acquisition, not just and acquihire of the team as it first appeared, though Chroma Stories is shutting down. It refused to disclose the terms of the acquisition, but said all seven employees of Chroma Labs are coming aboard. The team will be working on the Conversations division at Twitter, and the deal is meant to boost its talent, leadership, and expertise for serving public discussions. A Twitter spokesperson also confirms that Chroma will shut down its .business and future versions of the app will not be available.]

Founded in late 2018, Chroma Labs had raised a seed round in early 2019 and counted Sweet Capital, Index Ventures, and Combine VC as investors. Barnett’s fellow co-founders include CTO Alex Li, who was an engineering manager on Facebook Photos and Instagram Stories; and Joshua Harris was a product design manager on the Oculus Rift and Facebook’s augmented reality filters.

With Chroma Stories, you could choose between retro filters, holiday themed frames, and snazzy collage templates to make your Storie look special amidst the millions posted each day. Sensor Tower estimates Chroma Stories had 37,000 downloads to date. That tepid reception despite the app’s quality might explain why the team is joining Twitter.

By snatching up some of the smartest talent in visual storytelling, Twitter could give its text-focused app some spice. It’s one of the few social apps without a Stories product already, and its creative tools are quite limited. Better ways to lay out photos in tweets could make Twitter more beautiful and less exhausting to sift through. That might make it more appealing to teens and help it boost its user count, which now lags behind Snapchat.

Twitter has become the world’s public record for words. The Chroma Labs talent might make it the real-time gallery for art and design as well.

[Update 3:05pm Pacific: Twitter confirms that this is a full acquisition of the Chroma Labs company, not just an acquisition as we originally printed.]

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Sprint/T-Mobile merger gets federal judge approval

Posted by | M&A, Mobile, sprint, T-Mobile | No Comments

The U.S. mobile landscape is on track to look a whole lot different. A hotly contested $26 billion deal between T-Mobile and Sprint just got the go ahead from a U.S. district court judge. The merger would combine the country’s third and fourth largest mobile carriers, effectively reducing the number of key carriers from four down to three.

Critics of the deal, including attorneys general from more than one dozen states, have expressed concern that such a deal would diminish competition in the market. T-Mobile and Sprint, on the other hand, have argued that such a deal would actually make the market more competitive and give a combined company a better chance of battling with (TechCrunch parent company) Verizon and AT&T on the 5G front.

U.S. District Judge Victor Marrero, it seems, sided with the latter. He lauded T-Mobile’s business practices in a statement. “T-Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes,” Judge Marrero wrote.

The deal has already cleared a number of key hurdles, including Justice Department approval. Involved states, however, are considering an appeal. “From the start, this merger has been about massive corporate profits over all else, and despite the companies’ false claims, this deal will endanger wireless subscribers where it hurts most: their wallets,” NY Attorney General Attorney Letitia James said in a statement.

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