Apple sales bounce back in China as Huawei loses smartphone crown

Huawei’s smartphone rivals in China are quickly divvying up the market share it has lost over the past year.

92.4 million units of smartphones were shipped in China during the first quarter, with Vivo claiming the crown with a 23% share and its sister company Oppo following closely behind with 22%, according to market research firm Canalys. Huawei, of which smartphone sales took a hit after U.S. sanctions cut key chip parts off its supply chain, came in third at 16%. Xiaomi and Apple took the fourth and fifth spot respectively.

All major smartphone brands but Huawei saw a jump in their market share in China from Q1 2020. Apple’s net sales in Greater China nearly doubled year-over-year to $17.7 billion in the three months ended March, a quarter of all-time record revenue for the American giant, according to its latest financial results.

“We’ve been especially pleased by the customer response in China to the iPhone 12 family,”
said Tim Cook during an earnings call this week. “You have to remember that China entered the shutdown phase earlier in Q2 of last year than other countries. And so they were relatively more affected in that quarter, and that has to be taken into account as you look at the results.”

Huawei’s share shrunk from a dominant 41% to 16% in a year’s time, though the telecom equipment giant managed to increase its profit margin partly thanks to slashed costs. In November, it sold off its budget phone line Honor.

This quarter is also the first time China’s smartphone market has grown in four years, with a growth rate of 27%, according to Canalys.

“Leading vendors are racing to the top of the market, and there was an unusually high number of smartphone launches this quarter compared with Q1 2020 or even Q4 2020,” said Canalys analyst Amber Liu.

“Huawei’s sanctions and Honor’s divestiture have been hallmarks of this new market growth, as consumers and channels become more open to alternative brands.”

Huawei sells budget phone unit Honor to state-backed firms, distribution partners

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Today’s big tech earnings in a mere 700 words

Today was yet another day of earnings from tech’s biggest names. To keep you up to speed without burying you in an endless crush of numbers we’ve pulled out the key data from each of the major reports.

In each you will also find a link to their earnings reports. What does all of the data from the week’s earnings downloads mean for startups? We’ll have a full roundup on that front tomorrow morning, so stay tuned.

Here’s what you need to know:

• Facebook crushed financial expectations, missed slightly on users. Shares of Facebook are up around 5% after it reported its recent financial results. Facebook had a somewhat two-part report. The first piece of its results was a huge financial beat; the second was that it missed ever-so-slightly on active usage. Investors are weighing the former more heavily than the latter. In numerical terms, Facebook had been expected to report $23.67 billion in revenue. Instead, it posted $26.17 billion. And its earnings per share beat expectations by $0.93 per share, or just under 40%. Facebook is a controversial company with known issues. But turning in better than expected financial results is not one of them.

• Shopify smashed expectations, again. Its shares spiked, again. The post-IPO Shopify story of the Canadian e-commerce infra player kicking the heck out of expectations continued today. Investors had expected Shopify to post $865.48 million in total Q1 2021 revenue. Shopify managed $988.6 million instead. And it beat profit expectations by a multiple. What drove the Shopify results? The company’s so-called “Merchant Solutions” business, which grew by 137%, faster than the company’s aggregate 110% growth rate in the quarter. Merchant Solutions at the company encompasses its payments, shipping, and capital services, among other elements of its business.

• Apple shares rose after the company reported strong growth across its product categories. Apple, like Facebook, demolished investor expectations for its most recent quarter. In the three-month period ending March 27, 2021, Apple produced revenues of $89.6 billion and earnings per diluted share of $1.40 were miles ahead of an expected $77.35 billion in revenue and $0.99 in diluted EPS. What drove the huge win? Growth in every single product category that the company reports, compared to the year-ago period. iPhone sales totaled $47.94 billion, compared to a year-ago result of $28.96 billion. And the company’s key services business line grew from $13.35 billion to $16.90 billion over the same temporal interval. For the nerds in the room, Apple’s net income as a percentage of gross profit in the quarter was just over 62%. Wow.

• Spotify shares fell sharply after it reported slower-than-anticipated user growth. In financial terms, Spotify had a pretty good quarter. It met revenue expectations (around €2.15 billion), and lost less money per share than was anticipated. However, the music streaming company’s user base only reached 356 million in the first quarter of the year, the low end of Spotify’s 354 million to 364 million guidance, and under the market’s expectation of just over 360 million. Its shares were off around 12% today. Why did Facebook shares rise after its usage miss, while Spotify’s fell? Facebook crushed financial expectations. Spotify merely met them. And Facebook’s user base miss appears smaller than what Spotify detailed.
• GrubHub grew its revenues and losses ahead of its acquisition. GrubHub, which is in the final stages of being digested by JustEat Takeaway, brought in more money in the first quarter than in the same period a year ago, but also lost more money too. Here’s the breakdown: Revenue grew 52% year-over-year to $550.6 million thanks to all that pandemic-driven demand for delivery. GrubHub also reported a negative Adjusted EBITDA of $9.3 million. GrubHub blamed its adjusted EBITDA results on several factors, including temporary fee caps (which it opposes), increased delivery driver costs caused by short-term driver supply imbalances from surging demand, extreme winter weather in numerous parts of the country and, to a lesser degree, the issuance of stimulus payments that caused some drivers to temporarily reduce hours in March. Active diners rose 38% year-over-year to 33.0 million, another positive sign for the company. But alas, its net loss grew to $75 million, or a loss of $0.81 per diluted share compared to a net loss of $33.4 million or a loss of $0.36 per diluted share in the same year-ago period.

You can catch up on Microsoft and Alphabet earnings, among others, here.

 

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Alchemy raises $80M at a $505M valuation to be the ‘AWS for blockchain’

Blockchain developer platform Alchemy announced today it has raised $80 million in a Series B round of funding led by Coatue and Addition, Lee Fixel’s new fund. The company previously raised a total of $15.5 million, so the latest financing brings its total raised to $95.5 million since it launched in 2017.

The latest round caught our attention for a few reasons.

First, the company, which describes itself as the backend technology behind the blockchain industry, went from public launch to a $505 million valuation in a matter of just eight months. During that time, Alchemy says it powered over $30 billion in transactions for tens of millions of users all over the world. Second, the startup says it also already powering the majority of the NFT industry.

And finally, its investors in the round include a high-profile mix of institutions and individuals such as DFJ Growth, K5 Global, the Chainsmokers, actor Jared Leto and the Glazer family (owners of the Tampa Bay Buccaneers and Manchester United). They joined existing backers including Yahoo co-founder and former CEO Jerry Yang, Pantera Capital, Coinbase, SignalFire, Samsung, Stanford University, Google chairman and Stanford University President John L. Hennessy, Charles Schwab, LinkedIn co-founder Reid Hoffman and others.

Sources with inside knowledge of Alchemy’s operations tell TechCrunch that the company has already grown its business more than eightfold since it signed the Series B term sheet. They also said Alchemy had over $300 million of investor demand wanting to enter the round and is being inbounded to do another financing at “many times” the current valuation.

TechCrunch talked with Alchemy co-founders Nikil Viswanathan (CEO) and Joe Lau (CTO) about the raise and their passion for the startup’s mission was clear. As is its explosive growth.

“We realized that in order for space to thrive and build to its full potential, we needed to build a developer platform layer for blockchain,” Viswanathan told TechCrunch.

Alchemy’s goal is to be the starting place for developers considering to build a product on top of a blockchain or mainstream blockchain applications. Its developer platform aims to remove the complexity and costs of building infrastructure while improving applications through “necessary” developer tools.

The startup powers a range of transactions across nearly every blockchain vertical, including financial institutions, exchanges, billion-dollar decentralized finance projects and multinational organizations such as UNICEF. It has also quickly become the technology behind every major NFT platform, including Makersplace, OpenSea, Nifty Gateway, SuperRare and CryptoPunks.  

“Every time you open DoorDash, you’re using Amazon’s infrastructure,” Lau said. “Every time you interact with an NFT, you’re using Alchemy. It’s being powered by Alchemy underneath the hood.”

While the pair would not provide hard revenue figures, the company – which operates as a SaaS business – says it increased its revenue by 600% in 2020.

For inside players, Alchemy’s efforts are paving the way for the whole industry. 

“The cryptoeconomy is innovating faster than any technological movement that came before it, and Alchemy has been a key driver of that,” said Coinbase President and COO Emilie Choi. “Alchemy enables developers to build the rich ecosystem of applications necessary for mainstream blockchain adoption.”

Pantera Capital’s Paul Veradittakit describes Alchemy as “the Amazon Web Services (AWS) of the blockchain industry” that is “enabling the vision of a decentralized web.”

“While in Web 2.0, Microsoft, Apple and AWS are three of the most valuable companies in the world because they are the developer platform powering the computer and internet industries, Alchemy is primed to do the same for the blockchain,” he said.

Is rising usage driving crypto’s recent price boom?

The company believes the comparison to AWS is fair, noting that: “Just as AWS provides the platform that powers Uber, Netflix and much of the technology industry, Alchemy powers infrastructure for many large players in the blockchain industry.”

Alchemy plans to use its new capital to expand its developer platform to new blockchains, fuel global expansion and to open new offices in the U.S. and globally. The startup is based in San Francisco and is planning to open an office in New York.  

“We are going to use the funds to support new chains with our developer platform,” Viswanathan said. “We also expect to 5x the team this year.”

But to be clear, Alchemy prides itself on being lean and mean.

“We just went from 14 to 22 employees,” Lau said. “We have intentionally wanted to keep the team as small as possible.”

The blockchain space has been the subject of increased investor interest as of late.

In March, BlockFi, which describes itself a financial services company for crypto market investors, announced it had closed on a massive $350 million Series D funding that valued it at $3 billion. Also last month, Chainalysis, a blockchain analysis company, revealed the close of $100 million in Series D financing, which doubled its valuation to over $2 billion.

Crypto boom continues as Chainalysis raises $100M, doubles valuation to over $2B

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Kids-focused fintech Greenlight raises $260M in a16z-led Series D, nearly doubles valuation to $2.3B

Greenlight, the fintech company that pitches parents on kid-friendly bank accounts, has raised $260 million in a Series D funding round that nearly doubles its valuation to $2.3 billion.

The funding comes just months after the Atlanta-based startup landed $215 million in funding at a $1.2 billion valuation. With the latest round, Greenlight has now raised over $550 million.

Andreessen Horowitz (a16z) led its Series D, which also included participation from return backers TTV Capital, Canapi Ventures, Wells Fargo Strategic Capital, BOND, Fin VC, Goodwater Capital, as well as new investors Wellington Management, Owl Ventures and LionTree Partners.

Since it launched its debit cards for kids in 2017, the company has managed to set up accounts for more than 3 million parents and children, who have saved more than $120 million through the app. That’s up from 2 million parents and kids having saved $50 million at the time of its September 2020 raise.

Overall, Greenlight says it has “more than tripled” YoY revenue, more than doubled the number of parents and kids on its platform and doubled the size of its team within the past year. 

Image Credits: Greenlight

“Greenlight has quickly emerged as a leader in the family finance category,” said Andreessen Horowitz general partner David George, who will join Greenlight’s board of directors, in a written statement. “Greenlight was built to help parents raise financially-smart kids, and with its breakthrough combination of easy-to-use money management tools and educational resources, the company is well-positioned to become one of the most loved and trusted brands for families around the world.”

The company pitches itself as more than just a debit card, with apps that give parents the ability to deposit money in accounts and pay for allowance, manage chores and set flexible controls on how much kids can spend. In January, Greenlight introduced its educational investing platform for kids — Greenlight Max. Through that platform, kids can research stocks with analysis from Morningstar and actually make real investments in companies like Apple, Tesla, Microsoft and Amazon as long as their parents approve.

As TechCrunch previously reported, it’s a potentially massive business that can lock in a whole generation to a financial services platform, which is likely one reason why a whole slew of companies have launched with a similar thesis. There’s Kard, Step, Till Financial and Current pitching similar businesses in the U.S. and Mozper recently launched from Y Combinator to bring the model to Latin America. (Step and Current also announced big rounds today, while Till Financial announced its seed round last week. Notably, a16z also led Current’s raise).

“Our vision at Greenlight is to create a world where every child grows up to be financially healthy and happy,” said Tim Sheehan, co-founder and CEO of Greenlight. “Today’s financing will enable us to bring even more value to families as we continue to introduce new innovative products that shine a light on the world of money.”

 Greenlight says it will use the new capital to accelerate product development to add more financial services to its platform as well as to invest further in strategic distribution partnerships and geographic expansion. It also plans to hire another 300 employees over the next two years, with an emphasis on engineers.

Atlanta gets a billion-dollar startup business as Greenlight’s family-focused fintech nabs $215 million

 

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Daily Crunch: iOS 14.5 brings privacy changes and more

Apple’s latest software upgrade brings a big change, Roku accuses Google of anti-competitive behavior and Brex raises a big funding round. This is your Daily Crunch for April 26, 2021.

The big story: iOS 14.5 brings privacy changes and more

Apple released the latest version of its mobile operating system today, which includes the much-discussed App Tracking Transparency feature, allowing users to control which apps are sharing their data with third parties for ad-targeting purposes.

Other new features include Watch unlocking (which could help users avoid the annoying “I can’t unlock my phone with my masked face!” phenomenon), new emojis and more.

The tech giants

Roku alleges Google is using its monopoly power in YouTube TV carriage negotiations — Roku is alerting its customers that they may lose access to the YouTube TV channel on its platform after negotiations with Google went south.

Lyft sells self-driving unit to Toyota’s Woven Planet for $550M — Under the acquisition agreement, Lyft’s so-called Level 5 division will be folded into Woven Planet Holdings.

Apple commits to 20,000 US jobs, new North Carolina campus — Apple this morning announced a sweeping plan to invest north of $430 billion over the next five years.

Startups, funding and venture capital

Brex raises $425M at a $7.4B valuation, as the corporate spend war rages on — The company has also put together a new service called Brex Premium that costs $49 per month.

Founded by Australia’s national science agency, Main Sequence launches $250M AUD deep tech fund —  Main Sequence’s second fund will look at issues including healthcare accessibility, increasing the world’s food supply, industrial productivity and space.

Mighty Networks raises $50M to build a creator economy for the masses — The company is led by Gina Bianchini, the co-founder and former CEO of Ning.

Advice and analysis from Extra Crunch

Founders who don’t properly vet VCs set up both parties for failure — Due diligence isn’t a one-way street, and founders must do their homework to make sure they’re not jumping into deals with VCs who are only paying lip service to their value-add.

How Brex more than doubled its valuation in a year — An interview with CEO Henrique Dubugras about that giant funding round.

There is no cybersecurity skills gap, but CISOs must think creatively — Netskope’s Lamont Orange doesn’t buy the idea that millions of cybersecurity jobs are going unfilled because there aren’t enough qualified candidates.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

How one founder partnered with NASA to make tires puncture-proof and more sustainable — This week’s episode of Found features The SMART Tire Company co-founder and CEO Earl Cole.

What the MasterClass effect means for edtech — MasterClass copycats are raising plenty of funding.

Hear about building AVs under Amazon from Zoox CTO Jesse Levinson at TC Sessions: Mobility 2021 — We’ll hear more about Zoox’s mission to develop and deploy autonomous passenger vehicles.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Apple’s App Tracking Transparency feature has arrived — here’s what you need to know

iOS 14.5 — the latest version of Apple’s mobile operating system — is launching today, and with it comes a much-discussed new privacy feature called App Tracking Transparency.

The feature was first announced nearly a year ago, although the company delayed the launch to give developers more time to prepare. Since then, support for the feature has already gone live in iOS and some apps have already adopted it (for example, I’ve seen tracking requests from Duolingo and Venmo), but now Apple says it will actually start enforcing the new rules.

That means iPhone owners will start seeing many more privacy prompts as they continue using their regular apps, each one asking for permission to “track your activity across other companies’ apps and websites.” Every app that requests tracking permission will also show up in a Tracking menu within your broader iOS Privacy settings, allowing you to toggle tracking on and off any time — for individual apps, or for all of them.

What does turning tracking on or off actually do? If you say no to tracking, the app will no longer be able to use Apple’s IDFA identifier to share data about your activity with data brokers and other third parties for ad-targeting purposes. It also means the app can no longer use other identifiers (like hashed email addresses) to track you, although it may be more challenging for Apple to actually enforce that part of the policy.

Image Credits: Apple

There’s been intense debate around App Tracking Transparency in the lead up to its launch. The pro-ATT side is pretty easy to explain: There’s a tremendous amount of personal information and activity that’s being collected about consumers without their consent (as Apple outlined in a report called A Day in the Life of Your Data), and this gives us a simple way to control that sharing.

However, Facebook has argued that by dealing a serious blow to ad targeting, Apple is also hurting small businesses that depend on targeting to affordable, effective ad campaigns.

The social network even took out ads in The New York Times, The Wall Street Journal and The Washington Post declaring that it’s “standing up to Apple for small businesses everywhere.” (The Electronic Frontier Foundation dismissed the campaign as “a laughable attempt from Facebook to distract you from its poor track record of anticompetitive behavior and privacy issues as it tries to derail pro-privacy changes from Apple that are bad for Facebook’s business.”)

Others have suggested that these changes could do “existential” damage to some developers and advertisers, while also benefiting Apple’s bottom line.

The full impact will depend, in part, on how many people choose to opt out of tracking. It’s hard to imagine many normal iPhone owners saying yes when these prompts start to appear — especially since developers are not allowed to restrict any features based on who opts into or out of tracking. However mobile attribution company AppsFlyer says that early data suggests that opt-in rates could be as high as 39%.

Apple shares more details about its imminent App Tracking Transparency feature

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iOS 14.5 goes live with Watch unlocking, tracking transparency and kissing emojis

At its big event last week, Apple tipped off the forthcoming arrival of the latest point update to iOS. Today 14.5 goes live for all users, and it’s shaping up to be one of the bigger updates to the mobile operating system in a bit.

Mask-wearers will be able to unlock their iPhone with the Apple Watch

The most long-awaited update from a purely user standpoint is probably the ability to unlock the phone using an Apple Watch. It’s another useful addition for the company’s wearable, but more importantly, it comes after a year of frustrated mask wearers hoping for a work around for face unlock.

Image Credits: Apple

When wearing a mask, the handset will default to the Watch (once watchOS 7.4 is installed), sending a notification to the wearable, along with a haptic buzz.

Apple’s App Tracking Transparency feature has arrived — here’s what you need to know

A big new arrival on the security side, as well, with the addition of app tracking transparency. Anthony wrote about the feature in a post earlier this month, noting,

Apple will actually start enforcing its new rules, meaning that iPhone users will probably start seeing a lot more requests. Those requests will appear at various points during the usage of an app, but they’ll all carry a standardized message asking whether the app can “track your activity across other companies’ apps and websites,” followed by a customized explanation from the developer.

So, get ready for a lot of pop-up notifications – but for a good cause.

Image Credits: Apple

Also arriving:

• A ton of new emojis. We’ve got kissing couples, fiery hearts and additional gender inclusivity.
• Updates to Siri, including an additional voice (there is no default voice now) and the ability to dial an emergency number.
• AirTag support!
• Apple Podcasts app redesign
• Fitness+ can now be streamed to devices with AirPlay 2 enabled
• Reminders can be date, priority and title
• Updates to voice control accessibility
• Users can directly report traffic incidents to Apple Maps, using Sir commands like, “There’s a crash up ahead” and “There’s something on the road.”
• The News+ tab gets reorganized to make it easier to find relevant stories and publications.

Here’s everything Apple announced at its ‘Spring Loaded’ event

 

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