on March 29, 2017
When asked about his relationship with major media conglomerates, Netflix CEO Reed Hastings often says that competition is good for the industry. Yet while Spotify may want to reach profitability, it first has to reach a position of strength relative to its largest rivals, argues Santosh Rao, who heads up research at Manhattan Venture Partners, the venture capital firm. “Spotify could be profitable even now, even with this structure, but they are spending a lot on marketing and other services to try to expand their offerings,” Rao said in an interview.
on March 20, 2017
MuleSoft (MULE) , the second tech unicorn to go public this year after Snap (SNAP) , had an extremely auspicious start on Friday, opening trading at $25.02 a share and closing at $23.75 per share, just about 40% higher than its initial offering price of $17. “The ‘IPO pop’ is in line with my expectations. Given the proliferation of applications within enterprises and MuleSoft’s offering that helps to connect them and work with them, we believe MuleSoft sits in the sweet spot of spending,” said Santosh Rao, head of research at Manhattan Venture Partners.
on March 20, 2017
Indeed, under the leadership of Chesky, Adweek’s Digital Executive of the Year, Airbnb has grown at a rapid clip. Last year, the company became profitable for the first time and now has a total valuation of around $31 billion. Santosh Rao, a research analyst at Manhattan Venture Partners, credits Chesky as one of the “pioneers” bringing the sharing economy into the mainstream.
on March 17, 2017
Snapchat’s slowing user growth in the face of growing competition from dominant social network Facebook (FB) and its Instagram mobile service. “Snap is a good company, but you need to take a lesson from Twitter (TWTR),” Santosh Rao, research analyst at New York’s Manhattan Venture Partners, told IBD.
on March 8, 2017
Samsung’s partnership with India’s largest mobile wallet player Paytm is also likely to serve as a big push for the South Korean tech giant’s entrance into the Indian digital payment market. “The timing of the launch is very good given the ‘shock’ to the cash economy following demonetization. It is much easier to get people to download and use the Samsung Pay feature,” said Santosh Rao, head of research at Manhattan Venture Research. “India’s digital payments market is expected to reach $500 billion by 2020 on the back of 1.2 billion mobile subscribers, which makes it a compelling opportunity to tap into.”
on March 3, 2017
Alibaba.com Singapore E-Commerce, one of Alibaba’s 40 significant subsidiaries and consolidated entities, gained another 36.3% stake in Paytm E-Commerce, adding to the 40% stake it already holds with Ant Financial Services Group, Alibaba’s finance arm. “It is a very logical and strategic investment and a deeper commitment in this space. Alibaba’s strategy is to expand its footprint and minimize its country risk. China is still its core market but it has slowed,” said Santosh Rao, head of research at Manhattan Venture Research.
on March 3, 2017
Investors and analysts believe that Snap could not have chosen a better time to come to the market. The U.S. tech IPO market declined to its lowest level in a decade in 2016, registering only 16 public offerings for total proceeds of $1.8 billion, a far cry from the $8.4 billion recorded in 2015, according to PwC. “I think this is a great time for IPOs, there is a window that’s opened up, there’s animal spirits back in the market, there’s a risk-on environment right now,” said Santosh Rao, head of research at Manhattan Venture Research.
on March 2, 2017
So should young investors take a gamble with Snapchat? It might be wise to wait and see how the stock does instead of buying it on the first day. Some investors think Snap’s valuation is too high. “The biggest problem you have with the old investment adage of ‘buy what you know’ is that the private markets have become much more efficient at valuing companies. [And] in cases like Snap, overvaluing companies,” said Jared Carmel, managing partner with Manhattan Venture Partners, a firm that focuses on private companies. Carmel added that “Millennials have proven to be fickle.”
on February 28, 2017
Santosh Rao, head of research at Manhattan Venture Research, echoes that sentiment. “In terms of corporate governance, I don’t like it. It’s too much power in one hand,” Rao says. He also acknowledges that companies like Facebook and Google are shifting in this direction and argues that allows the firms to remain focused on their long-term strategy. “These company founders are trying to keep control. To some extent, I don’t have a problem with that. In the case of Facebook, [Mark] Zuckerberg kept all the control and made a lot of the decisions on his own; it helps them make acquisitions faster, to move faster without giving up too much control. It helps growth companies pivot to new things and acquire new companies. So in that sense, it’s good. They are still in the innovative phase in their companies, in the evolution. I have no problem with that as long as they deliver.”
Venture Bytes is a monthly insight report highlighting topical ideas, current trends and emerging opportunities in the global technology landscape