SoftBank, Sequoia China back this ERP startup enabling China’s online exporters

Thanks to cross-border e-commerce platforms, China continues to be a major exporter of consumer goods for the world in the online shopping age. It’s not just marketplaces like Amazon and AliExpress that are enabling Chinese businesses to sell abroad. Behind the scene, a group of startups are making the software that allows exporters to more easily figure out what to sell and how to sell.

Dianxiaomi, roughly translated as ‘shop assistant’, is one of these ecommerce SaaS providers. The company just secured $110 million in a Series D funding round led by SoftBank Vision Fund II and Sequoia Capital China. Other prominent investors, including Tiger Global Management, GGV Capital, and Huaxing Growth Capital, also participated.

The financing lifts the company’s total investment to $210 million in 2022 alone.

Dianxiaomi is strategically located in Shenzhen, the capital of export-oriented ecommerce activity in China. The city that’s home to Huawei, Tencent, and DJI is also known to house the most Amazon sellers in the world.

Dianxiaomi started out with a convenient tool that allowed sellers to list their products already sold on Taobao, Alibaba’s marketplace for Chinese consumers, on Wish with “one click”, said its founder and CEO Du Jianyin, a former R&D engineer at Baidu, in an interview.

From there, Dianxiaomi went on to create a suite of enterprise resource planning (ERP) software for Chinese vendors on Wish, Amazon, eBay, AliExpress, Shopee, Lazada and the like. The target users are small and medium-sized sellers with 5,000 orders per day or less, the company told TechCrunch.

The SaaS provider itself is expanding overseas as well. It’s launched localized ERP products for sellers in Southeast Asia and Latin America, respectively. Globally, it claims to be serving 1.5 million users and has partnered with some 50 ecommerce platforms. In Southeast Asia, it has amassed 430,000 users that are selling within the booming region.

The company plans to open offices in Indonesia, Malaysia, and the U.K., where it looks to build a team of 20-100 staff to carry out customer service, operations, and other tasks in each country.

Landing in Southeast Asia is an obvious choice for many Chinese entrepreneurs, who see similar opportunities in the region as they did in their home market a decade ago.

“At its rapid growth rate, [Southeast Asia] is a bit like China from ten years ago. Second, the region is culturally similar with a big ethnically Chinese population, who can help promote the products. And third, orders from Southeast Asia have been growing at over 100% a year,” the CEO noted in the interview.

The financing for Dianxiaomi is one of the few deals that SoftBank has sealed this year in China, which for long was a major destination for the investment powerhouse. But amid a slowing economy and regulatory uncertainties, the company said last year that it would take a more “cautious” approach to backing Chinese startups.

In January, SoftBank and Sequoia Capital China injected funding into a similar venture called Shoplazza, a Canada- and Shenzhen-based company that powers direct-to-consumer brands with online store management tools.

Helbiz reports revenue increase but dwindling cash reserves

Helbiz started out as a shared micromobility company but has since expanded to include ghost kitchens, media streaming and, most recently, a taxi service. The company reported its second-quarter earnings Monday after the bell. The startup was the first scooter operator to go public via the SPAC route, and many in the industry wish it wasn’t so after consistently meh earnings reports.

Since Helbiz’s public debut in August 2021, its earnings reports have shown a company that burns through dwindling cash reserves, doesn’t pull in enough revenue to make up for its high costs of operations and keeps pivoting away from core operations into new, and sometimes strange, business units.

While Helbiz’s revenue has increased slightly quarter over quarter and year over year, Monday’s report tells a similar story.

Before we dig into the financials, a little context. In late June, Helbiz signed a letter of intent to buy Wheels, another shared micromobility operator, by the end of the year. In the midst of this, there were multiple times when Helbiz employees in U.S. and Serbian offices had to wait for delayed payments. Sources told TechCrunch that aside from late paychecks, Helbiz is suffering from chronically late scooter shipments and a general lack of company structure.

Despite lackluster earnings, Helbiz’s stock is trading higher than its public market rival Bird, which also announced earnings today. Today, at $1.43 after hours, Helbiz is up 12.6%. That is largely attributable to Helbiz CEO Salvatore Palella’s acquisition of 252,636 shares of the company at an average price of $3 — a transaction that is valued at $757,908. Also, that number is still a far cry from the $10.92 at which Helbiz opened.

Helbiz’s Q2 2022 Financials

Helbiz closed out the second quarter with $4.4 million in revenue, which is up 46% from the same period last year and 33% from last quarter. Mobility, or shared micromobility rides, made up more than half of the second quarter’s total revenue at $2.7 million, up from $1.6 million in Q1.

Helbiz reported around 1.2 million rides in Q2, which is nearly double its Q1 rides, but only a slight increase YoY. Unlike Bird, Helbiz doesn’t appear to report the number of vehicles it has on the ground, nor its rides per vehicle per day.

The remaining $1.7 million in revenue came from “the incremental contribution from Media and Kitchen,” said Helbiz chief financial officer Giulio Profumo in a statement.

During Q3 2021, Helbiz launched Helbiz Live, a sports streaming platform that is currently showing Italy’s Series B soccer, NCAA football and basketball, and MLB games. Helbiz expects to generate $6 million during the first Series B season, some of which must have already been realized in Q2 2022.

Around the same time that Helbiz launched Live, it also introduced Helbiz Kitchen, a ghost kitchen delivery service. The company was coy about how much revenue the new service has brought in, but Kitchen apparently delivered something. Helbiz said in the first half of the year, revenue nearly doubled sequentially. Of course, doubled from zero isn’t exactly a massive achievement.

“Importantly, growth was solid in our core mobility business and we are improving margins as we bring down mobility cost of revenue,” said Profumo. “Even with our cost-control focus, we are investing effectively and efficiently in talent, advertising, marketing, and R&D to sustain our pace of expansion.”

Helbiz’s operating expenses did decrease slightly QoQ, but at $20.8 million, they nearly doubled YoY. Loss from operations was down at $16.4 million from $18 million in Q1, but Helbiz’s net loss of $19.7 million is about flat QoQ.

The company finished the quarter with $2.5 million in cash, which is up from $1 million last quarter, but way down from $21 million during the same period last year. Helbiz had to raise $10 million this quarter via a new issue of convertible notes. In July and August, Helbiz also raised another $5 million to fund its “multiple growth opportunities,” according to Profumo.

The first half of the year saw Helbiz use about $4.7 million in cash to fund its micromobility operations. The company paid $3.5 million to vehicle manufacturers as deposits for e-bikes, e-scooters and e-mopeds, vehicles that Helbiz expects to be delivered throughout the year. And while Helbiz’s acquisition of Wheels will be mainly stock, Helbiz put down a $1 million deposit to enter into the letter of intent, and invested $100,000 in operating licenses, which it has categorized as intangible assets.

“Looking forward, we will deploy more vehicles, pursue more micro-mobility licenses, and drive expansion in Asia Pacific,” said the CFO. Helbiz recently launched shared e-scooter operations in Australia and expanded its existing fleets in the U.S. and Italy.

The company provided no guidance for the third quarter or the full year.

Mycel’s mushroom-based biomaterials sprout $10M in funding

Mycel, a South Korean startup making fungal-based biomaterials that can replace leather and meat, said it has raised $10 million (13 billion WON) in a pre-Series A round of funding.

Co-founder and CEO of Mycel Sungjin Sah told TechCrunch that the company uses mycelium, a root-like structure of mushroom, to make leather substitutes that can be used in car seats and luxury cosmetic products, and fashion products like shoes, clothes and bags. Mycel is in talks with global cosmetic brands to co-develop the mycelium-based leather products as well as cosmetics ingredients, Sah said, adding that it aims to commercialize its mushroom leather in 2023.

The Seoul-headquartered startup will use this new funding to open a production plant in South Korea for scaling the manufacture of its fungal-based biomaterials and double its headcount to 42 employees, Sah said in an interview with TechCrunch. The spin-off company from Hyundai Motor’s in-house startup program was founded in 2020 by former Hyundai Motor employees Sah, Sungwon Kim (COO) and Yunggon Park (CSO).

Mycel isn’t the only company using mycelium to make leather. There are at least eight companies across the globe using mycelium to make leather, per the 2021 Material Innovation Initiative report. These mycelium-based materials innovators have attracted investors to ramp up mushroom- and plant-derived leather. A San Francisco-based startup called MycoWorks raised $125 million in a Series C round early this year, while Bolt Threads also secured $253 million at a 1.15 billion valuation in September 2021. Ecovative Design also closed $60 million in March 2021.

Investors in Mycel’s latest financing round include Korea Development Bank, Industrial Bank of Korea, Hyundai Motor’s Zero 1 Fund, also known as ZER0 1NE 2 Fund, Stone Bridge, We Ventures and Spring Camp. Its pre-money valuation is approximately $40 million (50 billion WON), according to Sah.

The global wholesale market of next-generation fabrics to replace leather, silk, down, wool, fur and exotic skins with plant-based, microbe-derived, mycelium, recycled and other sustainable materials is projected to reach approximately $2.2 billion by 2026.

A range of fashion brands is searching for next-gen materials to partner with, per the 2021 MII report. In July, Global luxury brand Stella McCartney, which has been working with Bolt Threads since 2017, launched a limited run of 100 mushroom-derived leather bags. Additionally, Hermes collaborated with MycoWorks to make a handbag using mushroom-derived leather.

Mycel

Image Credits: Mycel’s Myco leather

Mycel is also competing in the alternative protein space with fungi-based food developers like Mycorena and Quorn.

On top of the mushroom leather, Mycel develops a fungi-based biomaterial that can be used as an alternative protein to disrupt the meat sector — this biomaterial, which is different from Mycel’s mycelium in the leather, is a fungus but technically not mushrooms, Sah clarified. Back in 2020, the startup tried to pivot to its main biomaterial product for alternative protein, which was experiencing a boom in early 2020 in South Korea. But the company now develops biomaterials for both mushroom-based leather substitutes and alternative proteins, Sah explained.

The company aims to enter Singapore with its fungi-based biomaterial that will be used in alternative proteins as early as next year, Sah noted.

Mycel

Image Credits: Myco protein

Tech industry reacts to Adam Neumann’s a16z-backed return to real estate

WeWork co-founder and former chief executive Adam Neumann’s career arc has felt synonymous with the rise and eventual fall of unicorn dreams. The entrepreneur, whose fall from grace has attracted global interest, just found a ladder in the form of a check from storied venture capital firm Andreessen Horowitz.

Andreessen Horowitz announced on Monday that it has written its largest single check to-date into Neumann’s new startup, Flow. The stealthy startup is trying to reinvent real estate (again), but instead of commercial properties, which WeWork focused on, Neumann is looking into revolutionizing rental properties. Horowitz’s check, reportedly upwards of $350 million, values the not-yet-launched company at over $1 billion, according to The New York Times. (Andreessen Horowitz declined to comment beyond the blog post, and Flow did not respond immediately to request for comment.) It is unclear how the deal is structured between equity financing or debt financing.

While details remain sparse, the development has met with a range of opinions from early-stage investors, whose entire job it is to back outlier founders with high chances of success. Some say that this is the exact point of the venture asset class — backing bold founders — while others note that Neumann’s second chance comes as women and founders of color struggle more than ever to get starter capital.

Is it really all about track record?

Neumann’s track record at WeWork can be viewed differently depending on who you ask. Much has been made of the cultural malaise at the company. Neumann spent investor cash on copious amounts of booze for the office, a school for his wife’s vanity project and a wave pool, but when the business finally imploded ahead of its long-planned IPO, Neumann wasn’t the one left holding the bag.

The company saw its valuation plummet from $47 billion at its peak to ~$8 billion under Neumann’s tenure. WeWork laid off thousands of employees party because of his own fiscal imprudence, and he was eventually forced out as CEO by his own investors in 2019. They still paid him handsomely to leave, though — his exit package was worth more than $1 billion.

Post-game analysis of WeWork’s failed IPO attempt focused on some of the more far-fetched parts of his vision, from reporting “community-adjusted EBITDA” to announcing his intent to “elevate the world’s consciousness.”

But the company did eventually make its public debut through a SPAC in late 2021, albeit at a much lower valuation and to markedly less fanfare. Despite the public criticism, early WeWork investors still benefited from backing the company, Rare Breed Ventures founder McKeever Conwell, whose firm backs seed and pre-seed companies, told TechCrunch.

“At the end of the day, Adam is a white guy who started a company and got a multibillion-dollar valuation. Now, was there some trickery in there? Sure. Some things he did wrong? Sure. But I think what people forget is, if you were an early investor, which we weren’t, you still got paid,” Conwell said.

Conwell said that given the weight that VCs place on a founder’s network at the seed stage, it’s understandable why a firm like a16z would want to place their trust in a founder like Neumann, at least when it comes to building a multibillion-dollar real estate business — something he’s done before.

“If we look at the history of entrepreneurs, of successful tech founders, many of these founders’ largest outcomes aren’t their first thing. It’s like their third, or fourth or fifth company [that succeeds],” Conwell said.

Particularly during tough economic times, as Conwell pointed out on Twitter, asset allocators tend to pile money into what they view as “safe” investments. That’s exactly what a16z seems to be doing with its bet on Neumann, he added.

“Firms like Andreessen are only going to be focused on a small pocket [of opportunities] in which they know they know how to make money … It’s a playbook. They know that works, it’s a playbook they can sell to their investors. It’s a playbook that they never change. It doesn’t matter, because if they don’t change it, they’re still winning,” Conwell said.

The vision

As far as visions go, renovating the rental real estate market isn’t a unique idea. With over $100 million in venture capital investment, Common is a co-living company that plays property manager to a suite of apartments and homes. The startup, ironically, operates one of the former WeLives, which was WeWork’s dorm-like take on rental properties.

Co-founder Brad Hargreaves, who stepped back as chief executive of the company less than two weeks ago, told TechCrunch over e-mail that “whatever you think of Neumann, WeWork was innovative and defined the category.”

“I believe we’re going to see more ‘asset-heavy’ venture deals happen,” Hargreaves continued. “VCs (if you can even call them that these days) have plenty of capital to deploy, and it’s clear that massive change in some industries won’t come through light-touch software innovation alone,” Hargreaves said.

At the same time, Hargreaves hinted that Neumman’s new deal is rich. He said that the check size is a “hell of a preference stack to layer over this kind of company,” pointing out how Alliance Residential, which owned 110,000 apartment units, was bought for $200 million by Greystar. FSV, which offers property management services, is valued at only $6 billion and owns 1.5 billion units and dozens of brands. He thinks that it’s likely the deal is not structured like a traditional venture deal, although it’s unclear what percent of the check would be debt funding versus equity financing.

Kate Brodock, CEO of Switch and general partner at the W Fund, called the deal “disgusting.”

“This is one of the biggest, most notable films out there and I just cannot understand,” Brodock said in an interview with TechCrunch. “This is just like somebody woke up and they were like, how many boxes can I check that just moves us backwards?”

Allison Byers, the founder of Scroobious, a platform that aims to diversify startups and make founders more venture backable, described feeling a muted rage.

“There’s this undertone of acceptance and almost learned helplessness. Or like trauma we’ve all experienced so much it doesn’t make the same impact anymore,” she said to TechCrunch over Twitter DMs. “This all seems new and horrendous to those who have opened their eyes to the systemic issues of VC funding over the past couple years, but we’ve been dealing with it forever.”

Byers added: “It’s really just a matter of fact and I can’t let it consume my day [because] I’ve got my normal load of female founder shit to do.”

 

Daily Crunch: Meta backs SMB e-commerce app launched by former Facebook engineering manager

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello, Crunchers! Wait, that’s kind of a weird nickname, as if you’re munching on granola. What should we call y’all?

Never mind that. Tomorrow, we’re running a Twitter Spaces where Jacquelyn and Anita are talking about what’s new in the world of crypto with Ryan Selkis. It’s at 1:00 p.m. PDT, and you can easily set yourself a reminder here.

Have an awesome week!  — Christine and Haje

The TechCrunch Top 3

  • It’s getting hot in here: Software aimed at helping small businesses take online orders is on fire right now, and Meta is fanning the flames with a new investment in Take App — the Singapore-based startup that is providing simple tools for merchants to create a website and begin taking orders via WhatsApp, Paul reports.
  • Picturing Jared Leto’s next move: WeWork founder Adam Neumann didn’t have to look too far for his next investment check. Andreessen Horowitz just handed him $350 million for his new company, Flow, a residential real estate company, Anita writes. This amount, we are told, is the largest individual check a16z has ever written…and it went to Neumann, who the firm backed in May for another of his companies, Flowcarbon. If you’re shocked, you are not alone.
  • A little .bit country, a little .bit rock ‘n’ roll: Four Tencent veterans started .bit to become the universal identification system in web3. After registering over 110,000 accounts in the past year, the startup is now armed with $13 million in new funding and a goal of promoting .bit for decentralized autonomous organizations, Rita writes.

Startups and VC

Perhaps a surprise story on a tech site, but we closed out the week with some levity last week, as a bunch of our writers got into a discussion about what the best Taylor Swift song is. Because of course, our #watercooler discussion spills out onto the site from time to time.

Manhattan and Brooklyn are teeming with activity. It’s electrifying to be there after years spent relatively locked down, Connie writes, and asks herself if it might be time for companies in San Francisco to call employees’ bluff.

More news and analysis from your friendly neighborhood team of tech reporters:

The subscription pie is getting bigger: How to leverage usage-based billing

Pie on table with a slice cut out; usage-based billing

Image Credits: Alexey Dulin / EyeEm (opens in a new window) / Getty Images

More than half of all SaaS companies plan to roll out usage-based billing by next year, according to Chargeable CMO Sanjay Manchanda.

To help founders capitalize on this trend, he wrote a TC+ guest post identifying some of the ways companies are evolving as they strive to copy the success of firms like Twilio, Snowflake and Frog.

“Subscriptions are not going anywhere,” says Manchanda. “They have been around since at least the 17th century for a good reason — people like them.”

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

Big Tech Inc.

VinFast is stepping on the gas pedal, or shall we say electric pedal, to give those who preorder one of its vehicles a $7,500 rebate even though the U.S. government changed its federal tax credit rules regarding electric vehicles, which makes the deduction a bit more difficult to get, Haje reports.

And the car talk doesn’t stop there. Porsche is now joining other car makers in signing solar energy deals, Jaclyn writes. The luxury car maker signed a 25-year deal with Cherry Street Energy in Georgia just days after Ford announced its deal for solar energy.

Max Q: Testing, testing

Hello and welcome back to Max Q. In this issue:

  • Northrop Grumman and Firefly Aerospace want to make the Antares rocket all-American
  • How Muon Space is locking in customers
  • News from SpaceX, OneWeb and more

Northrop Grumman taps Firefly Aerospace to upgrade its Antares rocket to American-built engines

Northrop Grumman has announced that it will partner with startup Firefly Aerospace to build an all-American version of its workhorse Antares rocket, which currently flies with Russian-built RD-181 engines. Due to the continuing war in Ukraine, Russia halted all sales of its rocket engines to the United States in March this year.

The new Antares will be outfitted with seven of Firefly’s Miranda engines, as well as “composites technology for the first stage structures and tanks,” according to the press release. The two companies will also collaborate on an all-new medium launch vehicle.

Northrop Grumman antares rocket on launch pad

Northrop Grumman’s Antares rocket on the launch pad. Image Credits: Northrop Grumman

Muon Space plans a ‘turnkey solution’ for custom Earth observation satellites

Plenty of companies want to operate in space, but few have or need the expertise to do so. They want an eye in the sky but not a satellite company. Muon Space is one of several startups looking to put others into space but with a special expertise in Earth observation and building the full stack, from satellite bus to data on the ground. It has raised $25 million to do so, and locked down a few early big customers.

“People are reinventing large portions of the stack required to collect data from space,” Muon’s CEO and co-founder Jonny Dyer explained. “When we look across the spectrum of different new phenomenologies and missions, many of these companies are developing their own spacecraft, and obviously their own ground segments and data, so they can address a particular vertical market. We think that doesn’t make sense.”

Image Credits: Muon Space

More news from TC…

…and beyond

  • Benchmark Space Systems acquired electric propulsion tech from Alameda Applied Sciences Corporation, which it will use to create a hybrid chemical-electric propulsion system.
  • Capella Space revealed a new generation of synthetic aperture radar satellites that the company says will have higher-quality image resolution and upgraded payload downlink antennae, for launch in early 2023.
  • D-Orbit signed a contract with Swiss nanosatellite company Astrocast to launch 20 Astrocast sats over multiple launches, for an agreement lasting three years.
  • Eta Space and Helios want to develop an oxygen production and liquefaction plant on the moon. Helios, based in Israel, says it developed a reactor capable of extracting oxygen from lunar regolith, while Eta Space would liquify and store the oxygen in cryogenic tanks.
  • The European Space Agency is in preliminary talks with SpaceX to use Falcon 9 rockets to fill the gap left by Russia’s Soyuz and ongoing delays of Arianespace’s Ariane 6 rocket.
  • The U.S. Federal Communications Commission denied a bid by SpaceX for nearly $900 million in rural internet connection subsidies for its Starlink service, because the company “failed to demonstrate that the providers could deliver the promised service.”
  • Galactic Energy, a Chinese launch company, conducted its third successful flight of the Ceres-1 rocket from the Jiuquan Satellite Launch Center in the Gobi Desert.
  • India’s Small Satellite Launch Vehicle experienced a critical anomaly during its maiden flight, resulting in a complete loss of payload. The Indian Space Research Organization said it was assembling a committee to analyze the issue and provide recommendations for future missions.
  • Lockheed Martin Ventures will be doubling its fund from $200 million to $400 million, and a notable portion of that additional money will go to space technologies, executives said.
  • NanoAvionics is expanding its product line with two satellite buses, one capable of hosting payloads up to 145 kilograms and another up to 22 kilograms.
  • The NASA Authorization Act is now law. The legislation, part of the CHIPS Act, does not allocate funds to the space agency but sets goals and outlines programs. Read more details here. 
  • NASA is looking for another launch provider for its TROPICS satellites, after Astra (the previous launch provider NASA selected) announced it would suspend all launches on its Rocket 3 to further develop a much larger rocket.
  • SpaceX carried nearly 160,000 kilograms and 473 spacecraft to orbit in the second quarter, leading the world in launch tonnage by a very large margin, according to a BryceTech report.
  • SpaceX launched 52 Starlink satellites from Kennedy Space Center, its 35th launch so far this year.
  • Virgin Orbit is assessing potential launch sites in South Korea, in partnership with South Korean investment group J-Space. The aim is to use Virgin’s LauncherOne System to launch small satellites from that country.

Max Q is brought to you by me, Aria Alamalhodaei. If you enjoy reading Max Q, consider forwarding it to a friend. 

Bird burns $310M but sees revenue bounce back

Shared micromobility company Bird has had a tumultuous second quarter. The company announced plans to dismantle its retail business, shut down operations in unprofitable markets, had a corporate shakeup involving Bird’s CEO Travis VanderZanden stepping down as president, laid off close to 140 employees and got a warning from the New York Stock Exchange for trading too low.

Bird, one of two public micromobility companies that debuted via a special purpose acquisition, presented its Q2 earnings for the year after the bell, showing an increase in revenue year over year and quarter over quarter, but also an increase in spending that doesn’t yet square up to the moves Bird has made to reduce costs.

“Absent temporary distortions caused by the pandemic these longer-term trends point to the attractive demographic tailwinds for this industry as consumer spending preferences shift from goods to services,” said VanderZanden on Monday’s earnings call. “That said, we have to contend with any evolving macro environment, including significant near-term inflation pressures on discretionary spending and resulting lower consumer sentiment and adjust our cost structure to be agile to economic headwinds.”

Bird’s stock is up 3.72% after hours, trading at $0.65.

Bird’s Q2 2022 financials

Bird just missed Wall Street analyst expectations of $80.96 million in revenue, instead bringing in $76.7 million for the quarter. This is an increase of 28% from the same quarter the previous year. It’s also a massive improvement from Bird’s Q1 revenue of $38 million, which is to be expected, given spring and summer are usually any micromobility company’s most profitable seasons.

From quarter to quarter, the number of rides about doubled to 14.5 million, with average rides per vehicle per day at 1.5x. While that’s an increase from last quarter’s 1x average rides per vehicle per day, many experts say a shared micromobility company should really be averaging 2x rides per vehicle per day to turn a profit. And in the warmer seasons, that number should be much higher. Bird’s total number of rides did increase, but so did the sheer number of vehicles Bird put on the ground. Bird had 109,900 vehicles deployed in the second quarter of 2022, compared to 69,500 last year and 78,900 last quarter.

Gross margins as a percentage of sharing revenue were down slightly at 27%, compared to 28% in the prior year period, but up from their Q1 lows of 9%. Ride profit is also up annually and quarterly, at $38.4 million — up from $27.9 million last year and $13 million last quarter. Bird attributed this improvement to “further optimization” of the fleet manager revenue share, as well as operational efficiencies. No doubt the rollout of Bird’s newest vehicle, the Bird Three, has led to longer battery and vehicle life; however, many industry experts say Bird will continue to spend too much on overhead for not building e-scooters with swappable batteries, which can help streamline the costs and time associated with charging and rebalancing scooters.

One would imagine Bird’s moves to sunset its retail unit would lower Bird’s operating expenses, but alas, spending actually increased QoQ from around $100 million in the first quarter to $317.9 million in Q2. While general and administrative costs remained flat at around $85 million, Bird attributes this increase in expense to $216 million in “impairments of assets,” as well as the costs of shifting away from product sales. This put Bird into an operating loss of $331.2 million, compared to almost $97 million last quarter, when Bird did not report any impairment of assets on its balance sheet. Bird closed out the quarter with a net loss of $310.4 million, versus $43.7 million in Q2 2021.

It also doesn’t look like we’re seeing the cost savings from all those layoffs on the balance sheet just yet. While balance sheets don’t explicitly point to employee salaries, those costs are usually included in total current liabilities. In the first quarter, that number was $160 million. Instead of that number shrinking as a result of decreased staff wages, it actually increased in the second quarter to $230 million.

It’s not entirely clear to us what’s happening there, but Shane Torchiana, Bird’s new president, said many of the cost savings from restructuring will show up in the third quarter.

Bird closed out the quarter with $57 million in cash, up from $35 million in the first quarter, but down $128.6 million in the second quarter of last year.

Bird’s outlook

Bird’s guidance for the full year remained the same after the company revised its guidance last quarter. The company expects revenue between $275 million and $325 million for 2022 — Torchiana did caution that if trends were to remain consistent with Q2, Bird expects its full-year revenue to fall on the lower end of that spectrum. Bird’s expectation of an annual run-rate cost savings of at least $80 million will mostly be realized in the third quarter, according to Torchiana.

“Most of that cost savings will come as a result of reducing expenses associated with our product sales business and reducing our corporate overhead,” said Torchiana.

The company also expects to achieve its first quarter of positive adjusted EBITDA in the third quarter of 2022, as well as for the full fiscal year 2023.

DoorDash partners with Meta to test delivery of Facebook Marketplace items

DoorDash has confirmed that it has teamed up with Facebook Marketplace to make that awkward exchange of items with a stranger a bit easier. The company said DoorDash Drive, its business-to-business service that provides drivers to merchants through their own website or app, is now in the early stages of testing a service that will allow DoorDash drivers to pick up and drop off Facebook Marketplace items to customers.

DoorDash and Facebook’s parent company Meta are currently offering the test in several cities in the United States, giving many drivers another opportunity to earn money. Items that are eligible for delivery are Marketplace items that can fit in the trunk of a car and must be located up to 15 miles away. DoorDash drivers are expected to make deliveries within 48 hours or less.

The partnership between DoorDash and Meta attempts to achieve DoorDash’s mission to expand into delivering more products other than food. DoorDash has already expanded to delivering toiletries, prescriptions, household essentials, clothing, cosmetics and more. The company has partnered with Rite Aid, Bed Bath & Beyond, JCPenney and Sephora, among other retailers.

“DoorDash is always thinking about new ways to provide for the communities we serve. With access to unparalleled convenience and opportunity through a platform, we continually explore and test new innovations,” the company wrote in a statement.

This service benefits a seller who may not feel comfortable inviting a stranger into their home to retrieve an item or vice versa. It is also a helpful option for a buyer that is unable to travel, doesn’t own a vehicle that is large enough or has trouble picking things up.

It also helps DoorDash continue to compete with Uber Eats, which recently launched a nationwide delivery offering. DoorDash already introduced nationwide shipping nine months prior. Last month, Amazon partnered with DoorDash’s rival Grubhub to offer Prime members a free membership to Grubhub+ for one year.

This new collaboration with DoorDash would help Facebook Marketplace widen its local delivery options. Today, Facebook Marketplace only lets larger items be delivered through Dolly, an on-demand delivery company. The catch with Dolly is that it is limited to 45 or more cities across the United States. Meta allows Marketplace sellers to ship out items directly to buyers, as well.

Meta is experiencing difficulty with getting young people to use Facebook, with only 32% of teens from 13 to 17 years old using the social platform, according to a recent Pew Research Center study. The alliance with DoorDash could be its attempt to reach younger users since Marketplace is among the few Facebook features that is popular with Gen Z, a source told The Wall Street Journal.

DoorDash has also been testing a package return feature since March, allowing customers to return items to the post office, UPS or FedEx.

Earlier this month, DoorDash announced its second-quarter results, reporting year-over-year growth of 23% in the total number of orders delivered, bringing the total to a record of 426 million delivered orders.

In January, DoorDash co-founder and CEO Tony Xu joined Meta’s board of directors.

YouTube may launch a channel store for streaming services, report says

YouTube may be looking to launch an online channel store for streaming services through the YouTube app, positioning itself in direct competition with Amazon, Roku, and Apple, three tech giants that each offer its own streaming subscription hubs.

As reported by the Wall Street Journal, sources say the company has been working on its channel store for 18 months and plans to roll out the offering this fall. YouTube is apparently in talks with several entertainment companies and is discussing sharing subscription revenue with streaming partners.

The company declined to comment to the Wall Street Journal. TechCrunch also reached out to YouTube for comment but has not yet received a response. (We’ll update if that changes.)

If YouTube were to get a marketplace for streaming services, it would make it easier for subscribers to purchase multiple services through a single app. While YouTube TV already offers its subscribers a way to add services like HBO Max to their streaming package, the new channel store would allow consumers to subscribe to separate streaming services through the main YouTube app.

The move makes a lot of sense for YouTube. Instead of spending tons of money on original content (remember YouTube Originals?), the tech company can provide access to other streaming services and still generate revenue. YouTube would act as a middleman between streamer and subscriber, taking a percentage of the subscription fee.

Plus, with around 2 billion viewers a month, a YouTube channel store would be an enticing partner for streaming services that want to reach more subscribers via the popular entertainment app.

YouTube isn’t the only media company looking to make revenue with streaming services. Roku now provides a premium Paramount+ subscription on the Roku Channel. Today, Walmart announced that it partnered with Paramount+ to give Walmart+ subscribers a Paramount+ Essential subscription at no extra cost.

Walmart+, the retailer’s Prime competitor, will add Paramount+ access as a new perk

Walmart is partnering with Paramount Global to offer its streaming service, Paramount+, to members of Walmart’s own free shipping program and Amazon Prime rival, Walmart+. The deal was first confirmed by The Wall Street Journal on Monday afternoon, following recent news of the retailer’s discussions with major media companies about such an arrangement.

Walmart has now officially announced the news of its agreement but did not say when access to the steaming service would roll out to Walmart+ members.

However, the retailer said the deal will see Walmart+ members gaining access to Paramount+ Essential Plan subscription — an added $59 value — while its own membership pricing would stay the same.

Introduced in 2020, the $98 per year Walmart+ subscription includes a variety of benefits, including free same-day delivery, fuel discounts, free shipping from Walmart.com, in-home delivery, contact-free checkout with Scan & go, and early access to deals. Walmart also has a partnership with Spotify to offer members 6 months of Spotify Premium for free.

In addition to the annual fee, consumers can opt to pay for Walmart+ at a rate of $12.95 per month for the same perks.

Last week, The New York Times reported Walmart had been in discussions with several major media companies about a possible bundle deal with Walmart+. According to The NYT, Walmart had spoken to Paramount, Disney, and Comcast about bundling its shipping membership program with either Paramount+, Disney+/ESPN+/Hulu, or Peacock, respectively.

The new partnership with Paramount not only provides Walmart with a more competitive offering to rival Amazon Prime — which includes the streaming service Prime Video — it could also help boost lagging Walmart+ subscriptions.

An August 2022 report by Consumer Intelligence Research Partners (CIRP) found that Walmart+ membership subscriptions had plateaued and were now on a slight decline on a quarter-over-quarter basis. It said that as of this July, 11 million customers in the U.S. were Walmart+ members, the same as in the April 2022 quarter and up from 9 million customers in the July 2021 quarter. But the report indicated the membership program had yet to grow in 2022.

“For the last three quarters, membership has remained constant at 11 to 11.5 million customers,” noted CIRP co-founder Josh Lowitz. Before this, he added, “Walmart+ membership had increased steadily since Walmart introduced the program in September 2020, with COVID-19 pandemic shoppers signing up.”

Walmart has not officially disclosed how many of its customers are now Walmart+ subscribers. CIRP, however, estimated that Walmart+ penetration was at 25% for the July 22 quarter, meaning 25% of Walmart.com customers reported being a Walmart+ member. This was up from 17% of Walmart.com customers in the July 2021 quarter, the analysts said. (The firm’s forecasts are based on surveys, in this case of some 500 U.S. consumers who made purchases during the May-June 2022 period.)

A different study by Morgan Stanley, referenced by the Journal, estimated Walmart+ had grown to around 16 million members.

For Paramount+, an agreement to distribute through Walmart+ would provide its own competitive advantage amid an increasingly crowded streaming landscape where it has to go head-to-head with top services like Netflix, Disney+, HBO Max, Apple TV+, and Peacock. Earlier this month, Paramount said the Paramount+ service had grown to 43 million subscribers and had a longer-term goal of reaching 100 million subscribers by 2024.

Walmart was not able to immediately comment on The WSJ’s reporting but we understand it to be accurate. We’ll update when we have more.

Update 8/15/22, 4:18 PM ET: Walmart has officially confirmed the news.

This is not the first time Walmart has entered into the streaming market. The company acquired the on-demand video service Vudu in 2010 but sold it to Comcast’s Fandango in 2020. It also invested in interactive video company Eko and partnered with Roku in June to bring shoppable ads to the streaming media platform.