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| Robinhood Lays Off 23% of Staff, Closes Two Offices in Fresh Round of Cuts | | By Erin Woo | Source: The Information | Robinhood is cutting 23% of its staff, CEO Vlad Tenev told employees in an all hands meeting on Tuesday afternoon, marking the stock and crypto trading app’s second major layoff this year. The layoffs will be concentrated in operations, marketing and program management, Tenev said in a blog post. Robinhood also plans to close offices in Charlotte, N.C., and Tempe, Ariz., a Robinhood spokesperson confirmed. “Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022,” Tenev wrote. “In this new environment, we are operating with more staffing than appropriate.” Robinhood enjoyed strong user and revenue growth last year as the meme stock craze and soaring crypto prices stoked customer trading activity. But it’s seen an abrupt reversal of fortune as markets have cooled. In April 2022, Robinhood laid off 9% of its staff, which had ballooned to 3,800 employees from 700 in 2020. Days later, the company reported first-quarter net revenue of $299 million, down 43% from the same quarter a year earlier. On Tuesday, Robinhood also reported its second quarter earnings, one day earlier than planned. Total net revenue over the quarter increased to $318 million, while monthly active users dropped to 14 million in June, Robinhood’s lowest user count since the fourth quarter of 2020. Robinhood’s stock price has tumbled 50% this year. | |
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| Uber Posts Positive Cash Flow as Ride Hailing Rebounds | | By Akash Pasricha | Source: The Information | Uber said Tuesday revenue for the second quarter more than doubled to $8.1 billion from the same period last year, driven by a rise in its ride-hailing business to pre-pandemic levels. While the company posted a net loss of more than $2.6 billion, it generated $382 million in free cash flow. The stock closed up 18% higher on Tuesday. The company said its mobility segment’s revenue increased 120% to nearly $3.6 billion. In another sign of recovery, airport trips accounted for 15% of gross bookings, in line with the proportion before the pandemic. Uber’s food delivery business, which took off during the pandemic shutdowns, increased 37% to $2.7 billion. However, the delivery segment’s 3.7% operating profit margins, compared to ride-hailing’s 22%, continue to make it a minimal contributor to the company’s bottom line. Uber CEO Dara Khosrowshahi said in his prepared remarks the company is “at an inflection point in our profitability and [free cash flow] generation.” The company also said it expected gross bookings to increase next quarter by 29%-34% year over year, excluding the impact of exchange rates. Even with the day’s gain, Uber’s stock price of $29.25 remains well below its 2019 IPO price. The company’s quarterly results also benefited from a change in its UK business model that adjusts how it accounts for revenue, increasing ride-hailing revenue and delivery revenue by $983 million and $711 million, respectively. | |
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| Hackers Steal Over $150 Million Worth of Crypto from Startup Nomad | | By Aidan Ryan | Source: The Information | Nomad, a startup that runs a protocol that bridges different blockchains, lost over $150 million on Monday to hackers who targeted the network. Hackers were able to drain most of the network’s funds and the security breach was the eighth largest crypto theft of all time, according to the blockchain analytics firm Elliptic. Nomad, which raised a $22 million seed round at a $225 million valuation in April, is backed by Polychain Capital, Hack VC, Circle Ventures and others. “An investigation is ongoing and leading firms for blockchain intelligence and forensics have been retained,” said a Nomad spokesperson in an email. “Nomad has notified law enforcement and is working around the clock to address the situation and provide timely updates. The hack is the latest that has targeted a bridge, which allows token conversions across blockchains. Over $1 billion was stolen from bridges in 2022, according to Elliptic. | |
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| Michael Saylor Steps Down as MicroStrategy CEO | | By Aidan Ryan | Source: The Information | Michael Saylor, the CEO of software firm MicroStrategy, is stepping down as CEO next week and will become executive chairman, the company announced on Tuesday. Saylor “will focus on “innovation and long-term corporate strategy” and continue to oversee MicroStrategy’s bitcoin buying strategy, the company said. Phong Le, the firm’s president, will assume the role of CEO and join MicroStrategy’s board of directors. Saylor will retain his role as chairman of the board. Saylor is known for his bullish stance on bitcoin, which makes up a significant portion of MicroStrategy’s cash reserves. The firm had roughly 130,000 bitcoins on its balance sheet as of June 30, which was worth roughly $2 billion at the time—roughly half what the company paid for it. | |
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| Game Software Firm Unity in Talks to Spin Off China Unit | By Juro Osawa | Source: Reuters  | San Francisco-based Unity Software, which makes software used to design videogames, is in talks to spin off its China unit, Reuters reported. The talks come as tech companies operating in both the U.S. and China are coming under more political and regulatory pressure from both countries. Unity has sought strategic investors to join the potential spin-off deal, according to Reuters. A spin-off could make it easier for the Chinese unit to navigate regulations and continue its expansion in the world’s largest videogame market. In recent years, the U.S. government has stepped up its scrutiny of business operations that could involve technology transfers or data sharing between the U.S. and China. China’s government, meanwhile, has raised concerns about U.S.-listed companies that operate in China, fearing that the U.S. or other governments could gain access to tech companies’ data on Chinese users. | |
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| Instagram’s Adam Mosseri Will Move to London Temporarily | | By Kaya Yurieff | Source: The Financial Times | Instagram head Adam Mosseri will temporarily relocate to London to recruit more staffers as competition with TikTok heats up, the Financial Times reported. News of the move comes after Mosseri said last week that Instagram would scale back the number of recommended posts in users’ feeds and pause its test of full-screen photos and videos, which made the app feel more like TikTok. The feed test drew backlash from high-profile Instagram users, including the Kardashians. London is Instagram and Facebook parent company Meta Platforms’ largest engineering base beyond the U.S., with more than 4,000 employees, a company spokesperson said. The decision for Mosseri to move was in part because he wanted to live in the U.K. capital, according to FT’s sources. “Given the global nature of his role, Adam will be temporarily based out of London later this year,” a Meta spokesperson told The Information, noting that the London office already has a dedicated Instagram product team “with people focused on building long term solutions for creators.” Mosseri became head of Instagram in 2018 after the app’s co-founders Kevin Systrom and Mike Krieger left the company. | |
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| Marketing Startup Klaviyo Bags $100 Million Shopify Investment | | By Malique Morris | Source: The Information | Shopify is making another push into digital advertising. The e-commerce software giant is investing $100 million in marketing software firm Klaviyo, said a person familiar with the matter. Shopify also announced that it will make Klaviyo the recommended email marketing feature for its premium service, Shopify Plus. The news comes three months after Shopify unveiled a new product called Shopify Audiences, which allows merchants to use Shopify’s data to find prospective buyers around the internet. The Audiences launch comes as the digital advertising industry reels from Apple’s April 2021 privacy changes, which made it harder for merchants to target ads to potential shoppers on sites like Facebook and Instagram. Klaviyo, which has been listed in Shopify’s app store since 2017, provides software that automates email and text message campaigns for brands like Glossier. The company, which also serves merchants on Shopify rivals BigCommerce and Adobe’s Magento, has benefited from the Apple changes as merchants place greater emphasis on reaching existing customers directly to encourage them to make more purchases. As The Information previously reported, Shopify could help its customers and build out more of its own revenue by pushing even deeper into advertising. One place it could do this is on its marketplace Shop app, where the company could offer sponsored search listings. Shopify’s vice president of product acceleration, Brandon Chu, said the e-commerce giant hasn’t ruled out adding sponsored search listings to the Shop app. “Our goal with Shop is we want it to be the best shopping destination, period,” he said. Whether that comes in the form of sponsored posts or improving search on the app, “we are going to iterate toward that,” he added. | |
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