Archives: Media Mentions

Lyft offers up new perk-driven membership called Lyft Pink

November 1, 2019

As most ConsumerAffairs readers know, ridesharing services have been on a rollercoaster ride for the last few years. One market observer thinks that this move might be just the thing Lyft needs to get it off that roller coaster.

“This is in line with the company’s original mission to replace car ownership with car renting/sharing,” Santosh Rao, Head of Research at Manhattan Venture Partners, told ConsumerAffairs.

“With a ubiquitous, end-to-end inter modal transportation offering, Lyft believes that it can usher in a world where people will not need to own a car and all the hassles that go with it — cost being the biggest one — and focus more on living their lives more fully.”

It’s too early to tell if and how much Pink might affect Lyft’s bottom line, but the signs are pointing in a positive direction for the company.

“With three strong sequential quarters right off the gate, a rational pricing environment, strong unit economics in its core market, and compelling operating leverage in the model with a clear path to profitability, we remain bullish on the Lyft story,” Rao said.

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How ordinary investors can grab their slice of the burgeoning shadow market for private tech companies

October 28, 2019

“If you turned back the clock 15 years, and you wanted to invest in a high-growth business, you would go to the Nasdaq,” says Jared Carmel, co-founder of Manhattan Venture Partners, an investment fund that negotiates private stock sales.

“Today, that hyperbolic growth that you would normally see within the first 10  years of the company is behind them [when they go public].

For the traditional public market investor, whether you’re an institution or a retail investor, there has been little opportunity.

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The Big Money in Startups Comes From Investing Before the IPO

October 23, 2019

“The overall level of interest in doing investments ahead of IPOs is insane—it’s through the roof,” says Andrea Walne, a partner at Manhattan Venture Partners LLC, which focuses on this market. “People feel as though they can lock in the same value as the VCs they admire and respect.” Her business card reads “Tomorrow’s IPOs Today,” with a trademark symbol above the phrase.

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Why is Boeing investing in Richard Branson’s rocket plane?

October 10, 2019

Still, some analysts say the market is out there. Santosh Rao, the head of research at Manhattan Venture Partners, says that airline passengers already spend $407 billion on flights lasting more than 10 hours each year. If space companies can win 5% of that business, there’s a $20 billion market. But average fares for those flights are $2,500, so a ticket to ride on a spacecraft will need to fall drastically from current levels.

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SoftBank’s plans for second mega-fund hit by WeWork debacle

October 7, 2019

“I think that it’s incredibly likely that they’ll postpone their plans for … fundraising efforts around Vision Fund 2,” said Andrea Lamari Walne, a Silicon Valley-based partner at Manhattan Venture Partners, which facilitates secondary transactions.

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The IPO market is rebelling against many of 2019’s money-losing unicorns. Here’s what’s scaring investors away — and what it means for the future.

October 3, 2019

Slack and Spotify directly listed on the New York Stock Exchange in recent years, and the home-share company could inspire more unicorns to copy the tactic.

No matter the path to markets, firms are seeing greater public scrutiny toward their financial figures. The “honeymoon phase” of post-IPO pops “is going to go away,” Manhattan Venture Partners head of research Santosh Rao said.

Companies will need “a clear path to profitability” if they want to transition from private funding to public markets, he added, stating that private funding rounds will hinge more on bottom-line performance and projected public performance.

“Toward the later rounds, private investors will have to be more rational in what they’re willing to pay,” Rao said in an interview. “The company has to be able to withstand public market scrutiny, which will only get more intense after this round of IPOs.”

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WeWork IPO Filing Withdrawn as Roadshow Leads to a Dead End

October 1, 2019

And for others like Santosh Rao, head of research at Manhattan Venture Partners, We Co. will likely have to start from scratch with their filing. He suggests the way the prospectus is set up currently is “absolutely a no-go.”

Indeed, for others like Manhattan Venture Partners’ Rao, the major investors in We (like JP Morgan and SoftBank) are somewhat stuck.

“I’m sure [the financing] can be renegotiated,” Rao told Fortune. “At this point, … I think that the bankers have invested a lot already, so they’re not going to abandon ship at this point, they will stay the course. It may be renegotiated, maybe on different terms, and maybe they have to pay a higher rate … but it’ll get done. It’s in the best interest of the banks.”

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‘The Cheap Money Era’: 2019’s IPOs Have Delivered Some Harsh Lessons to Venture Capital

September 30, 2019

Indeed, those like Aggarwal believe many of these unicorns were “given a little bit of a free hand.” She maintains investors are going to be keeping a closer eye on private companies’ business plans and losses—and Santosh Rao, head of research at Manhattan Venture Partners, suggests that, especially after Uber’s and Lyft’s “hype and then bust,” investors have become very cautious. “Now they’re reading the fine print, they’re not just looking at the revenues,” he says.

“I think [private investors are] going to realize that there’s not going to be that big bump that you get at the IPO, there’s no guarantee,” Rao says. “Because some people come in late, either they should have a very long time horizon, or they think they’re going to get a big pop at the IPO, … but I think now you’ll see that the incremental investor in the later rounds will be more cautious, will know that the exits may not be rewarding, or the upside may be limited when they go out, so they’ll have to either wait or make sure that the company has a solid business model [and] that it can withstand the scrutiny of the public market that is going to be very intense.”

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Investors push back on IPOs with high valuations, murky path to profitability

September 27, 2019

“The valuations are broken,” Santosh Rao, Managing Partner at IPO research firm Manhattan Venture Research told me. “What are the bankers thinking? Private valuations are way out of sync with what the public is willing to pay.”

The other major issue that is resurfacing: lack of profitability. Peloton, for example, lost $296 million on $915 million in revenues. It’s not clear how many years it will take to become profitable, part of a long string of companies that are very good at burning cash but not great at generating profits any time in the near future.

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Fitness startup Peloton’s shares fall 7% in market debut

September 27, 2019

Investors and experts tracking recent IPOs said several startups thinking of going public in the next 12-18 months would be extremely wary of the recent backlash against loss-making firms and may end up staying private longer.

“Companies will start prioritizing what the market is telling them they’re worth in the secondary market,” said Andrea Lamari Walne, a Silicon Valley-based partner at merchant bank Manhattan Venture Partners.

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Fitness startup Peloton’s shares fall 7% in market debut

September 27, 2019

“Companies will start prioritizing what the market is telling them they’re worth in the secondary market,” said Andrea Lamari Walne, a Silicon Valley-based partner at merchant bank Manhattan Venture Partners.

In secondary markets, investors buy and sell shares of a private company among themselves.

“Companies are taking a very hard look at secondary transactions as an indicator of the possible performance leading into whatever form of public company they’re going to be,” she added.

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Investors push back on IPOs with high valuations, murky path to profitability

September 26, 2019

“The valuations are broken,” Santosh Rao, Managing Partner at IPO research firm Manhattan Venture Research told me. “What are the bankers thinking? Private valuations are way out of sync with what the public is willing to pay.”

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Can WeWork survive?

September 25, 2019

Investors, rivals, and even many employees are applauding Neumann’s departure, and many would certainly agree with the latter part of the former CEO’s quote. “Enough of this ‘saving the world business,’” says Santosh Rao, who covers pre-IPO startups as head of research at Manhattan Venture Partners—making reference to Neumann’s stated ambition that We’s mission has been to elevate the world’s consciousness. “Investors are saying, ‘Show me the money.’”

But ousting Neumann doesn’t fix We’s troubles. The company has $1.3 billion in long-term debt (as of June 30, 2019) and $47 billion in lease obligations over the next 15 years. As of August, it had $2.5 billion in cash. Its IPO prospectus revealed that the company loses a dollar for every dollar it makes.

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NOTEBOOK – One Good Read:Can WeWork survive?

September 25, 2019

WeWork CEO Adam Neumann is out and Fast Company asks, “Can WeWork Survive?” Neumann, who remains non-executive chairman and We’s largest individual shareholder, told employees in an all-staff memo Tuesday that “our business has never been stronger, but since the announcement of our IPO, too much of the focus has been placed on me.” Neumann’s departure was welcomed among Investors, rivals and many employees. “Enough of this ‘saving the world business,’” says Santosh Rao, who covers pre-IPO startups as head of research at Manhattan Venture Partners — making reference to Neumann’s stated ambition that We’s mission has been to elevate the world’s consciousness. “Investors are saying, ‘Show me the money.’”

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WeWork’s CEO drama has one industry insider calling it an ‘Elon Musk situation’

September 24, 2019

“Startups deserve to have the visionary on board,” Santosh Rao, head of research at Manhattan Venture Partners, told Business Insider on Tuesday. “But this is a weird situation. He will be there but he’s not going to run the company.”

“It’s almost like an Elon Musk situation,” he continued. “The company runs on his charisma and vision, so I think this is a good middle ground.”

Earlier this month, Manhattan Venture Partners, an investment firm and research shop that focuses on later stage, Pre-IPO companies, initiated coverage on WeWork shortly after its IPO documents were filed with US regulators. In its report, Rao said WeWork was worth about $28 billion, about half of the company’s originally targeted value.

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2019 is an IPO bonanza: Investors going bananas over cloud companies going public

September 23, 2019

“This has been the year when cloud-based companies and on-demand services came of age,” Santosh Rao, head of research at Manhattan Venture Partners, told Fortune.

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Manhattan Venture Partners speaks to TIMES NOW on Indo-US relationship.

September 23, 2019

PM has done a great job: Santosh Rao, Partner & Head of Research, Manhattan Venture Partners tells TIMES NOW on Indo-US relationship.

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Airbnb says it will go public next year

September 23, 2019

Airbnb is also pulling in more money from its tourism business, with more than 40,000 tours and “experiences” booked in over 1,000 cities.

All of this travel has led to over $100 billion in economic impact across 30 countries, the company said.

This growth hasn’t come without controversy, and Airbnb’s success will depend on its ability to continue to thread the needle between government regulation over the company’s impact on housing prices and the creation of vacant apartments and homes that are only investment properties that increase Airbnb’s housing stock.

The company’s imminent public offering is good news for investors like Andreessen Horowitz, Manhattan Venture Partners, Sequoia Capital, TCV, Firstmark and Altimeter Capital, which have collectively invested roughly $4.4 billion into the company, according to Crunchbase.

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Impossible Foods will make its grocery store debut in California

September 23, 2019

Andrea Lamari Walne of Manhattan Venture Partners, which owns $15 million worth of Impossible shares, says she’s never seen such skyrocketing popularity among investors. She believes Impossible Foods has a brighter future over its rivals.

“Impossible is showing they’re clearly a stronger bet over Beyond Meat, because of consumer demand and their growth trajectory,” said Walne.

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It’s official: Airbnb to go public in 2020

September 23, 2019

The exact size of Airbnb’s IPO is unknown, given that it has raised at least $4.4 billion coming into it and was last valued at $31 billion in 2017, a figure likely far higher today. But it’s a reasonable guess that the public offering will be a big one. It won’t be as big as that of Uber Technologies Inc., which floated on a valuation of $82.4 billion earlier this year, but it will certainly be up there.

Whatever the number, the winners will be Airbnb’s investors, which include Andreessen Horowitz, Manhattan Venture Partners, Sequoia Capital, TCV, Firstmark and Altimeter Capital.

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Why Amazon is ‘going all out’ to find new talent at its job fairs, according to one analyst

September 18, 2019

“30,000 is a big number, but Amazon needs a lot of people,” Santosh Rao, Head of Research at Manhattan Venture Partners, told Yahoo Finance’s The Ticker this week.

Amazon has more than 650,000 employees worldwide, with the number likely to rise. This spring, Amazon posted the first job openings for its Northern Virginia location. The company aims to fill 400 positions there by the end of the year, with 25,000 people expected to be employed in the next 12 years.

“They’re going all out, being proactive, preemptive you could say, ahead of the holiday season,” Rao said. “But more than that, to establish their business in the new verticals.”

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Uber, Lyft per-driver costs in California could jump 30% under gig work law

September 17, 2019

Santosh Rao, head of research at Manhattan Venture Partners, said if costs go up for Uber and Lyft and the ride-hailing companies have to pay for employee benefits, they will hire fewer drivers but those drivers will work longer hours.

Flexibility is key with gig economy companies, Rao added, since otherwise it might as well be a traditional job.

“It’s not about economic stability. It’s about flexibility with economic incentives,” Rao said in an interview. “People like flexibility.”

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WeWork and Saudi Aramco Pose Big Tests for JPMorgan’s Resurgent Underwriting Business

September 13, 2019

“There is a public relations situation that needs to be managed; the last thing [JPMorgan] wants is to be called greedy and a mercenary,” says Santosh Rao, head of research at Manhattan Venture Partners, a boutique merchant bank focused on pre-IPO companies. “But they will definitely make it work, because the stakes are very high and there is the chance of repeat business.”

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New Venture Studio Aims To Put DraftKings In The Driver’s Seat For Sports Tech Innovation

September 13, 2019

DraftKings tabbed their former Chief Marketing Officer, Janet Holian and veteran venture capitalist and athlete/celebrity investment adviser, Rashaun Williams to spearhead the new venture. Williams, who manages a $300 million-dollar fund for Manhattan Venture Partners and who was also an integral part in hip hop legend, Nas’ Queensbridge Venture Partners has been amassing a massive network of current and former athletes interested in tech and venture capital for a number of years. As he puts it, “DraftKings and I were running on two parallel tracks, me on the athlete network side and of course DraftKings being one of the biggest and most successful sports tech companies of all time. We ended up meeting during NBA All-Star Weekend in February and came to the realization that 1+1=5, which is how DRIVE was born.”

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The startups that hack your devices, WeWon’t, and Goldman Sachs ruffles feathers

September 9, 2019

Graham Rapier talked to Santosh Rao, head of research at Manhattan Venture Partners, who explained why he thought WeWork’s original valuation was way too high.

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