Uber Technologies Inc. is selling its China operations to fierce rival Didi Chuxing, ending an expensive price war and freeing it up to focus on other markets and possibly an initial public offering.
The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has already lost $2 billion in China in two years there, people familiar with the matter have said, prompting investors to pressure the company to cut a deal. As part of the arrangement, Didi will invest $1 billion in Uber’s global company, people familiar with the matter said.
Uber has said that it’s profitable in the U.S. and Canada, but losses in developing markets have undercut that hard-fought progress. The huge losses in China have been one of the main sticking points holding up Uber’s potential IPO, according to people familiar with the matter.
“The biggest existential threat to Uber over the last two months was that in China they were losing capital in a way that potentially threatened the rest of their worldwide operations,” said Arun Sundararajan, a New York University professor. “The fact is that in the short term it may seen as a loss, but in the long run it’s a good move. Now they can focus on the rest of the world.”
With China settled, Uber can turn to other countries where it’s fighting for market share, such as Grab in Southeast Asia, Ola in India and Lyft Inc. in the U.S.
Didi is buying Uber’s brand, business and data in the country, the Chinese company said in a statement. Uber Technologies and Uber China’s other shareholders, including search giant Baidu Inc., will receive a 20 percent economic stake in the combined company. Didi founder Cheng Wei and Uber Chief Executive Officer Travis Kalanick will join each other’s boards.
“Didi Chuxing and Uber have learned a great deal from each other over the past two years,” said Cheng, who is also CEO, in the statement. “This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”
Didi’s valuation after the deal will be $35 billion, said people familiar with the matter, asking not to be named because the details aren’t public. Uber was last valued at almost $68 billion and the arrangement has “removed the big roadblock for an Uber IPO,” Sundararajan said. “Losing money in China would’ve given many pre-IPO investor pause.”
Last year, China’s ride-hailing leaders Didi and Kuaidi joined forces, creating a homegrown juggernaut to fight off Uber. The merged company Didi Chuxing brought together backers Alibaba Group Holding Ltd. and Tencent Holdings Ltd., the country’s most valuable internet businesses. Apple Inc. joined in this year with a $1 billion investment in Didi, in a round that valued the company at about $28 billion. The Chinese government passed a new rule last week that legalized ride-hailing services, paving the way for further expansion of these businesses.
Uber’s investors had been clamoring for the company to sell off its China assets and focus on more promising opportunities.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Kalanick wrote in a blog post obtained by Bloomberg before publication. “I have no doubt that Uber China and Didi Chuxing will be stronger together.”
The deal is subject to government approval. While the combination of the top two players in a market would often raise regulatory scrutiny, officials will have to determine the range of competition. “The ministry of commerce has to define the size of the market and see if the car-hailing business Didi and Uber are offering can be replaced by similar services,” said Deng Zhisong, senior partner at Beijing-based law firm Dentons. “If you count taxi services and public transportation, the car-hailing sector will not have a market share that significant.”
The purchase of Uber’s China business may complicate Didi’s alliance with other ride-hailing startups around the world. Didi had agreed to work with Lyft, Ola and Grab to create a global force to take on Uber. Grab CEO Anthony Tan said in a statement on Monday that the impending deal is a victory for Didi and underscores how the ride-hailing business favors domestic players.
In China, Uber ventured where few U.S. technology companies have succeeded. In 2005, Yahoo! Inc. made a similar deal, selling its businesses in China to Alibaba, along with a $1 billion investment — one of the Silicon Valley company’s best bets.
“China is such a tough market, in terms of regulation, competition and culture; they faced challenges on so many fronts,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “Cooperating with rather than fighting Didi might not be such a bad idea.”
While Uber will walk away from operations in China, it is taking a significant stake in the largest player there. By shedding its massive losses in China, the move could help Uber clear the path for an eventual initial public offering.
“Uber and Didi Chuxing are investing billions of dollars in China, and both companies have yet to turn a profit there,” Kalanick wrote in the blog post. “Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”
Global Gaming PC Sales Revenue to Hit $39.2bn in 2020, a 60% Jump in Five Years
Revenue of Global PC Games Jumps 60% in Five Years
The video games industry is one of a few sectors that have been booming in 2020, with millions of people spending more time indoors and online amid the COVID-19 pandemic. The increasing number of people choosing video games as their main at-home entertainment led to a significant jump in the sales of gaming equipment.
According to data presented by Safe BettingSites, global gaming PC sales revenue is expected to hit $39.2bn in 2020, a 60% jump in five years.
High-end Gaming PCs Account for Almost 50% of Global Sales
In 2015, the global gaming PC market hit $24.6bn in revenue, revealed the Jon Peddie Research data. High-end PC sales accounted for 45% of that value, followed by mid-range and entry-level gaming PCs with 30% and 25% market share, respectively.
During the next twelve months, the global gaming PC sales revenue jumped almost 23% to $30.2bn and continued growing ever since.
High-end gaming computers still represent the largest revenue stream of the global gaming PC market, expected to generate $18.5bn profit or 47% of total revenue in 2020.
Mid-range gaming PC sales is forecast to reach 34% market share this year, a 4% increase since 2015, and generate $13.4bn in revenue.
The revenue of the entry-level gaming computer segment is expected to jump 21.7% year-on-year to $7.3bn in 2020.
The Jon Peddie Research data also revealed that mid-range gaming PCs witnessed the most significant sales revenue growth, 76% between 2015 and 2020. High-end gaming computers follow, with a 72% revenue increase in that period.
Gaming PC Sales in EMEA Countries to Continue Booming in H2 2020
The growing number of people spending more time indoors and online amid the coronavirus lockdown caused a surge in sales of gaming PCs and laptops in Europe, the Middle East, and Africa, revealed the IDC Worldwide Quarterly Gaming Tracker data.
In the second quarter of 2020, the EMEA countries hit 2 million units sold, a 33% jump year-on-year. The increasing trend is set to continue in the third and fourth quarter of the year, resulting in 16.4% YoY growth and 8.2 million sold units for the full year 2020.
Gaming PCs are expected to account for over 36% of that figure, with nearly 3 million units sold by the end of the year. Statistics show that gaming laptops are set to rise to 5.23 million units sold in 2020, or 64% of the total unit shipment in the EMEA countries this year.
Dell Partners Other Firms to Establish Tech Centre in Nigeria
Dell, Other Tech Firms Partner to Establish Tech Centre in Nigeria
Dell Technologies said it has partnered other global tech giants to establish Tech Experience Centre that will bridge the gap to technologies for millions of people in Nigeria.
Dell Technologies Director, Central and West Africa, Nicholas Travers, in a statement, said the project expected to be launched on October 1, would help cut costs, reduce capital flight and boost technology adoption in the country.
Travers lauded TD Africa, Sub-Saharan Africa’s foremost tech, lifestyle and solutions distributor, for the landmark initiative.
“We believe the Tech Experience Centre will help reduce the decision making cycle and save huge costs and time of traveling to locations outside our continent to visit and experience these technologies at work.
“This is a fantastic initiative by TD Africa, perhaps the first of its kind in the region and we are proud to be part of it,” he said.
According to him, the project will go a long way in helping Dell Technologies showcase its suite of cutting-edge technologies.
“The launch of the Experience Centre will support the growth of technology in Nigeria and the West African region.
“Also, it provides a fantastic platform for Dell Technologies to showcase the very many technologies we offer,” Travers said.
Newly Founded Cybersecurity Startups Raise Over $31m in 2020
Cybersecurity Startups Raise Over $31m in 2020
According to data presented by the Atlas VPN team, there are 78 new cybersecurity companies founded in 2020 that cumulatively have raised over $31.6 million in funding year-to-date.
Only 15% of cybersecurity startups launched in 2020 secured funding. However, three companies alone collected nearly 96% ($30.3 million) of the total amount of investments.
The startup that scored the most significant investment is Beyond. It secured a total of $21 million in February of 2020, which accounts for more than 66% of total investments into newly launched cybersecurity startups this year.
A cybersecurity company with the second biggest investment is Sevco Security, which raised over $6.7 million in May of 2020.
Also, in the list of top three cybersecurity startups in terms of funding is Soc.OS. It received more than $2.5 million in investments in July this year.
Most of this year’s cybersecurity companies are from North America or particularly the US. They make up nearly 35% (27) of all the cybersecurity startups launched in 2020.
A number of new cybersecurity startups is shrinking each year
While the amount of cyber incidents is increasing and cyberattacks are becoming more sophisticated, the number of new cybersecurity startups is declining each year.
Historical data shows that in 2015 there were 490 cybersecurity companies launched. Together the startups raised over $3.1 billion in investments.
The year of 2016 saw a slightly smaller number of new cybersecurity companies. The launch of new startups in the cybersecurity field decreased by 0.8%, with 486 startups launched that year. The total amount of funding allocated to those startups, however, dropped in half, from $3.1 billion to $1.6 billion.
In 2017 the number of new cybersecurity startups plummeted again by 0.8%. There were 482 cybersecurity companies founded that year, which raised more than $1.3 billion in total — 17% less than in 2016.
The number of new cybersecurity startups dropped by more than a fifth in 2018 compared to the year before. A total of 382 cybersecurity companies were launched that year, which collected over $847 million in investments. The amount of funds invested in the cybersecurity startups also dropped by 35% compared to 2017.
Last year saw a 46% decrease in the launch of new cybersecurity startups. There were 207 these types of companies founded. Together they raised close to $229.5 million in investments — 73% less than the year before.
Finally, this year’s cybersecurity market has welcomed 78 newcomers — the number has shrunk by 62% compared to last year. However, 2020 is not over yet; hence we can expect the numbers of cybersecurity companies to increase slightly.
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