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Station F: A symbol of France’s startup ambitions

Two years ago, the French people elected Emmanuel Macron as their 25th president. His pro-business policies and visions of transforming the slow-moving state into a European powerhouse of innovation helped make him the youngest leader of the nation. Sensing change in the air, Station F, which is said to be the world’s largest startup campus, launched in Paris to represent France’s tech renaissance.

Based in Paris’ 13th arrondissement, or district, Station F sits in an unused rail depot said to span the length of the Eiffel Tower. It is home to over 1,000 startups and offers incubator programs run by companies including Facebook, L’Oréal and Microsoft.

In addition to its working spaces, event areas and restaurant, Station F launched a co-living space in June. The space is the largest of its kind in Europe, according to the company, with the capacity to house 600 startup founders and employees. All of these elements combined have reportedly attracted a steady stream of tech juggernauts like Facebook COO Sheryl Sandberg and Twitter co-founder Jack Dorsey, as well as French dignitaries.

Perhaps a surprise to some, Station F is a private sector initiative rather than government-backed. It’s owned by Xavier Niel, the founder of telecommunications provider Illiad and international seed investor Kima Ventures. Having a high-profile backer is surely a huge benefit for Station F’s startups, especially when it comes to raising money. Several Station F businesses have secured millions of euros from investors.

Team Vitality reportedly landed a €20 million (around $22 million) investment from entrepreneur Tej Kohli in November; the esports company was developed under the tutelage of Naver, a South Korean search engine provider. In February, co-living space provider Colonies received €11 million in a round that included Idinvest Partners and Kima, per reports. And in April, cybersecurity company Alsid, which is part of aerospace giant Thales Group’s program, raised €13 million in a round led by Idinvest Partners.

 

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Fans at crisis club Bury turn out to clean up their stadium

Bury have been given until 5pm on Tuesday to secure their future, with current owner Steve Dale in talks with data analytics company C&N Sporting Risk over a potential takeover.

However, EFL executive chair Debbie Jevans has suggested that deadline could be extended if only “one per cent” of the deal remains to be completed.

Volunteers have been arriving at Gigg Lane this morning to help after an appeal from the club to help clean up the stadium.

“Whilst the EFL and our potential new owners proceed with their necessary paperwork and dealings, the club needs to prepare the Stadium in order for Saturdays EFL Sky Bet League One clash with Doncaster Rovers to take place.

“With Tuesday’s deadline firmly set, preparations for our first game of the season will commence at 9:00am on Tuesday morning.”

“Recent events, over the summer months, have left the club with just a skeleton staff and we must, therefore, call on voluntary help in order to get the Stadium ready.”

– Bury FC

Read More – www.itv.com

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IWG may launch US IPO, extending co-working space growth frenzy

International Workplace Group is considering an IPO in New York for its US-based operations, according to Sky News. Such a spinoff could reportedly be worth up to £3 billion (about $3.67 billion), nearly equal to IWG’s £3.64 billion (about $4.45 billion) market cap as of August 26. The company did not immediately respond to PitchBook’s request for comment.

The news came less than two weeks after WeWork released its S-1 document August 14, revealing 1H 2019 losses of over $900 million while holding a footprint comparable to IWG’s. As a result, IWG’s consideration of an IPO is perhaps a direct response to WeWork’s advance, evidenced by IWG’s insistence of only considering underwriters that are not involved with WeWork’s IPO, again per Sky News.

IWG isn’t the only player in this space making moves after WeWork’s S-1 reveal.

On Thursday, New York-based Industrious reeled in $80 million from Brookfield Property Partners and fitness club provider Equinox, among others. CEO Jamie Hodari expects the company to be profitable within a “few months,” according to Reuters. On Wednesday, New York-based Knotel announced it had pulled in $400 million at an over $1 billion valuation in a round led by Wafra.

Lesser-known competitors, such as The Yard, Convene, BHIVE Workspace, Alley, and The Wing, also stand to possibly beef up their game as WeWork’s IPO plays out.

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Cloudflare’s IPO filing at a glance: rising revenue, falling losses and risky customers

A day after WeWork’s blockbuster IPO filing appeared, another big VC-backed name has advanced to the next step in 2019’s IPO frenzy.

Web services unicorn Cloudflare has publicly released its S-1, planning to trade on the NYSE under the symbol NET. The company did not disclose the number of shares that would be offered and set a placeholder target of raising $100 million. Goldman Sachs, Morgan Stanley and JP Morgan are the lead underwriters.

Founded in 2009, the San Francisco-based cybersecurity and internet services provider grew relatively quickly in its early days, followed by something of a plateau in the past few years. Cloudflare was valued at $6.3 million after a $2.25 million Series A in 2009, and its valuation began steadily rising from there, jumping to $80 million in 2011, $1 billion in 2012 and $1.8 billion in 2015 following a $182 million Series D. The company stayed off the fundraising radar for four years, before raising $150 million this past March amid rumors of the impending public debut.

Key figures

A key challenge for Cloudflare is that it operates in a relatively saturated field, in contrast to some of the other VC-backed unicorns in relatively new industries. Cloudflare counts Cisco, Zscaler, Akamai, Amazon and Microsoft as just some of its competitors, resulting in comparatively more modest YoY growth rates than those in WeWork’s prospectus, for example.

 

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Despite signs of a potential recession, deal maker sentiment remains optimistic

Recent news about the yield inversion will probably have an effect on investor psyche. Inversions have historically predated recessions by as many as 24 months—one lag in particular (2005-2007) also included a significant rise in the S&P. In four of the last five recessions, the lag between inversion and the start of a recession has lasted at least a year.

It’s a bit different with market corrections, which in two of five cases have begun in three months or less. Another tidbit came earlier this year from Bain & Co.’s Hugh MacArthur, who noted “only three periods historically [where] private multiples generally exceed the public average: during the ‘Barbarians at the Gate’ era of the mid-1980s, during the exuberant runup to the 2008 global financial crisis, and now.”

The sky has been falling for a long time among prognosticators, and the “tea leaves” in the featured chart don’t give us much of a schedule to work with. At PitchBook, we’ve been trying to gauge investor sentiment through our PE Deal Multiples Survey. In our last survey, we asked respondents for their reasons for canceling or renegotiating their most recent transactions. Here are their responses:

Those answers painted an optimistic picture among dealmakers, with only 7% citing negative changes in market fundamentals. The two most-cited responses reflect a strong market—41% said they found adverse information during due diligence and 24% said another buyer swooped in with a better offer.

Even not-that-bad information found during diligence is legitimate grounds to rethink purchase prices. There isn’t a lot of room for error with today’s multiples, and we’ve heard plenty of anecdotes of deals taking upward of 12 months to close. Furthermore, there are lots of buyers trying to put their money to work, so overcautious dealmakers will lose out to higher bidders. Those two reasons accounted for 65% of our results.

We’re curious about your thoughts as dealmakers, and our newest survey is now live. All deal data is kept confidential and isn’t published on our database. Participants receive the full aggregated report and are entered into a $300 Amazon gift card drawing—and everyone gets a candid look of current market sentiment, which may shift in the next month, or year, or two years.

 

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CBS, Viacom enter streaming wars with $30B combination

In the latest example of major consolidation in the media industry, CBS and Viacom have officially agreed to conduct a long-awaited merger, creating a new company called ViacomCBS with a combined market cap of around $30 billion. The deal will merge CBS’s broadcast offerings and the Showtime network with MTV, Comedy Central, the Paramount film studio and other Viacom brands, adding a broad collection of new content to CBS All Access, the network’s existing streaming service.

As consumer tastes have evolved and in-home streaming has emerged as perhaps the dominant entertainment form of our time, many of the industry’s biggest players have turned to M&A to augment their offerings. It’s been a little more than a year since AT&T acquired Time Warner for $85 billion, adding brands like HBO and Turner to its stable. And earlier this year, Disney beat out Comcast to purchase a raft of TV and film assets from 21st Century Fox for approximately $71 billion, making major content additions ahead of the planned launch of its Disney+ streaming service. Disney also took control of Hulu earlier this year, valuing the streaming pioneer at $15 billion.

The newly formed ViacomCBS, though, will be considerably smaller than some of its streaming competition. AT&T and Disney both have market caps of over $240 billion, making them more than 8x the size of ViacomCBS. Netflix carries a market cap of more than $135 billion, even after its stock has slid in recent weeks in the wake of disappointing 2Q results.

The combination of Viacom and CBS has long been rumored, due largely to the very close ties between the two New York-based companies. They were in fact the same company until 2006, when media tycoon Sumner Redstone split them into two entities. Redstone and his National Amusements holding business have maintained control over both Viacom and CBS in the years since, with his daughter Shari Redstone assuming more power in recent years as her father has reportedly battled health issues.

Current Viacom president and CEO Bob Bakish will assume those same roles at the new ViacomCBS, while Joe Ianniello, the acting head of CBS, will remain in charge of CBS-branded assets. Ianniello has been the interim CEO at CBS since longtime leader Leslie Moonves stepped down last September following several allegations of sexual harassment.

 

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This day in buyout history: Blackstone closes its biggest fund ever—for now

Blackstone is currently raising its eighth flagship private equity fund, a monstrous pool of capital that’s already collected more than $22 billion in commitments and could ultimately total $25 billion, according to reports. When the vehicle closes, it might be the largest in the history of the private equity industry—and it will almost certainly be the biggest fund Blackstone has ever raised.

But for the moment, at least, a different vehicle holds that title. And it’s done so for exactly a dozen years, ever since August 8, 2007, the date the firm announced a final close for Blackstone Capital Partners V on $21.7 billion.

It was auspicious timing for multiple reasons. One was that the fund close came less than two months after Blackstone went public, raising more than $4.1 billion in a closely watched IPO that’s proved to be a transformative event in the firm’s history. Another was that it came shortly before the global economy began to turn, joining a wave of mega-funds that swept across the private equity industry in the months leading up to the financial crisis, including a $20 billion vehicle from Goldman Sachs.

And when you compare Blackstone’s fifth flagship effort with the vehicles that came before and after, it seems clear that the firm got at least a little caught up in the fundraising frenzy. It was a remarkable step-up in size of more than 3x from Blackstone Capital Partners IV, and both the firm’s fifth and sixth funds fell well short of that $21.7 billion figure. That’s contrary to the general industry trend of firms raising more cash for each successive flagship fund, particularly among private equity’s biggest players.

 

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Uber hemorrhages $5.2B in 2Q amid volatile day for ridehailing

Optimistic investors spent Thursday driving up the price of shares in Uber (NYSE: UBER) in anticipation of the company’s 2Q earnings. Once the results arrived, though, it was a very different story.

Uber reported an eye-watering 2Q loss of $5.2 billion on Thursday, part of an earnings report that came almost three months to the day after the ridehailing company went public in a long-awaited IPO that raised $8.1 billion. The report sent the company’s stock sliding in after-hours trading, giving up most of its gains from earlier in the day. Uber closed Thursday at $42.97, up more than 8%, but it dipped to below $38 in early after-hours trading before quickly bouncing back to above $40.

That $5.2 billion loss included $3.9 billion in one-time compensation expenses related to the company’s IPO, so the damage isn’t as severe as it might initially appear. But that leaves about $1.3 billion in other losses, compared to $878 million in total losses for 2Q 2018.

Uber also reported revenue of nearly $3.2 billion, a YoY uptick of 14%. That’s reportedly the slowest quarterly growth figure the company has ever publicly disclosed, which is both a testament to how explosive its previous growth has been and a potential warning sign to investors of Uber’s ability (or lack thereof) to maintain that steady expansion.

Uber unveiled its 2Q earnings one day after Lyft (NASDAQ: LYFT) did the same. The numbers were a bit more promising for the slightly smaller ridehailing company, with revenue of $867.3 million (up 72% YoY) and a net loss of $644.2 million, compared to $178.9 million during 2Q 2018. Notably, Lyft changed its previous estimates of how much money it will lose for the whole of 2019, revising its projection from nearly $1.18 billion down to $875 million.

 

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Office set to close up to half its 100 UK stores

Shoe retailer Office is planning to close up to half of UK stores at it reckons with the decline of business on the high street.

The South African-owned company is working up plans to close dozens of its 100 stores as their leases expire during the next few years, according to a report by Sky News.

Office is said to have decided against using a company voluntary agreement (CVA) to implement the closures.

An Office spokesperson said the retailer has “no immediate plans to close down stores”.

 

Read more -www.cityam.com

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Just Eat £9bn merger plan sends shares soaring

The prospect of a multibillion-pound bidding war for Just Eat sent shares in the FTSE 100-listed business surging by more than a fifth on Monday.

Just Eat agreed terms with its Dutch rival Takeaway.com in a deal that would create one of the world’s biggest online food delivery companies.

When announced, the £9bn combination valued Just Eat shares at 731p and the UK company’s share capital at £5bn.

Speculation about a rival bidder pushed Just Eat shares comfortably above the offer terms. The UK company’s shares closed up 22.7% at 780p.

Under the terms of the agreement, Just Eat shareholders would receive 0.09744 Takeaway.com shares for each Just Eat share and would own 52.2% of the combined group. It would be headquartered in Amsterdam and listed on the London Stock Exchange, with a “significant part of its operations” in the UK.

Analysts speculated there could be a counterbid, possibly from the Berlin-based Delivery Hero or the South African internet and media company Naspers.

There have been a flurry of deals in the fast-growing online food delivery market, with competition heating up from Uber Eats and Deliveroo. Just Eat bought the UK firm HungryHouse in January 2018, and in December Takeaway.com acquired Delivery Hero’s food delivery business in Germany.

Analysts at Jefferies thought the most likely counter-bidder would come from outside the industry, such as Japan’s SoftBank, Amazon or private equity.

A bid from Uber Eats or Deliveroo would raise competition issues, and these could also affect Amazon. After it became the lead investor in a $757m (£451m) financing round in Deliveroo in May, Amazon was ordered by the UK’s Competition and Markets Authority to halt any integration efforts pending an investigation into potential breaches of competition rules.

Combined, Just Eat and Takeaway.com had 360m orders worth €7.3bn in 2018 and strong positions in the UK, Germany, the Netherlands and Canada.

Under the plans, Takeaway.com’s boss, Jitse Groen, would become chief executive of the new company. It would be chaired by the Just Eat chairman, Mike Evans, while the Takeaway.com chairman, Adriaan Nühn, would be vice-chairman. The Just Eat chief financial officer, Paul Harrison, would take on the same role for the combined group, and its interim chief executive, Peter Duffy, would leave.

Groen has described the UK as one of the best three markets in Europe, along with the Netherlands and Poland. Takeaway.com was founded in 2000 and operates in 10 European countries as well as Israel and Vietnam, but it does not have a presence in the UK. The two companies have little geographical overlap apart from Switzerland.

Analysts at Barclays said: “Just Eat shareholders would be getting the best operator in the space to run the business – a notable shift from missed execution from management in the last few years.”

Just Eat has come under pressure from its activist shareholder Cat Rock Capital to merge with Takeaway.com, in which the US hedge fund also holds a stake.

 

Read More – www.theguardian.com