Posts in category Business


Business

SnapRoute Snags $25M With AT&T, Microsoft Backing

SnapRoute, a developer of open source networking software, announced that it has raised $25 million in Series A financing led by Norwest Venture Partners with new support from AT&T and Microsoft Ventures. SnapRoute, founded by CEO Jason Forrester and other former Apple engineers, plans to use the funding to speed up the development of open source networking software for Fortune 500 firms.

Read more 0 Comments
ApprovedBusinessBusiness and finance

America’s booming pet health-care business

AT THE 42,000-square-foot clinic in Hollywood that is owned by VCA, an animal-hospital chain, you may find a Pomeranian on a course of stem-cell therapy or a Shih Tzu having a hip replacement. There is even an underwater treadmill for cats. As pets are treated more and more like members of the family, so they are getting more health care. That also means they are racking up bigger vet bills for their owners.

That is the backdrop to the purchase in January of VCA by Mars, a firm best known for selling chocolate and sweets, for $9.1bn. Analysts whistled at the 31% premium Mars offered on VCA’s share price at the time, but they also agreed that the deal reflects the industry’s vitality. Spending on animal clinic visits in America has increased from a total of $13.7bn in 2012 to almost $16bn last year.

The deal is not as out of character for Mars as it may appear. Sales of chocolate are declining. The company is second only to Nestlé in the market for pet food in America, but competition from sellers on Amazon has sent the firm towards animal health. It was in 2007 that Mars bought Banfield Pet Hospital, then VCA’s largest rival. Since then…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

The market for alternative-protein products

MOST people like to eat meat. As they grow richer they eat more of it. For individuals, that is good. Meat is nutritious. In particular, it packs much more protein per kilogram than plants do. But animals have to eat plants to put on weight—so much so that feeding livestock accounts for about a third of harvested grain. Farm animals consume 8% of the world’s water supply, too. And they produce around 15% of unnatural greenhouse-gas emissions. More farm animals, then, could mean more environmental trouble.

Some consumers, particularly in the rich West, get this. And that has created a business opportunity. Though unwilling to go the whole hog, as it were, and adopt a vegetarian approach to diet, they are keen on food that looks and tastes as if it has come from farm animals, but hasn’t.

The simplest way to satisfy this demand is to concentrate on substitutes for familiar products. “Meat” made directly from plants, rather than indirectly, via an animal’s metabolism, is already on sale for the table and barbecue. Impossible Foods, a Californian firm, has deconstructed hamburgers, to work out what gives them their texture and…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Beating Apple, Xiaomi and the gang in China

DONGGUAN, a southerly Chinese city near Hong Kong, is better known for cranking out cheap trinkets than for producing high-end equipment of any kind. And yet, amid the grit and grime is a gleaming low-rise factory producing some 50m smartphones a year for OPPO, a firm started by China’s BBK Electronics but which is now run independently.

Inside, as well as the usual assembly lines and serried workers, the factory has dozens of staff in quality engineering and testing, conducting 130 different tests on OPPO’s phones before they are released to the market. Such zealous pursuit of quality would be expected of factories that produce phones for Apple—the world-class facilities run by Taiwan’s Foxconn in nearby Shenzhen house similar teams. But it is unusual at a firm that makes relatively inexpensive handsets for the local market.

OPPO, and its sister firm, Vivo, also a child of BBK, started out in 2004 and 2009 respectively, making cheap and cheerful phones like plenty of other obscure Chinese manufacturers. They probably didn’t even register on Apple’s radar. Xiaomi was the Chinese handset-maker to watch; urban sophisticates, enticed by…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

TVs: the next testing scandal?

Plug and pay

VOLKSWAGEN, a German carmaker, has been disgraced for designing clever software that allowed it to cheat on emissions tests for diesel cars. A different scandal, with shades of the VW affair, has been building up in America’s television market. South Korea’s Samsung and LG, along with Vizio, a Californian firm, stand accused of misrepresenting the energy efficiency of large-screen sets. Together, they sell over half of all TVs in America.

In September 2016 the Natural Resources Defence Council (NRDC), an environmental group, published research on the energy consumption of TVs, showing that those made by Samsung, LG and Vizio performed far better during short government tests than they did the rest of the time. Some TVs consumed double the amount of energy suggested by manufacturers’ marketing bumpf. America’s Department of Energy (DoE) has also conducted tests of its own that have turned up big inconsistencies.

Not all TV-makers are at fault: the NRDC found no difference in energy-consumption levels for TVs made by Sony and Philips. But class-action lawsuits have already been filed against the…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Logistics companies fear the return of hard borders

DURING the day, Leipzig’s airport is quiet. It is at night that the airfield comes to life. Next to the runway a yellow warehouse serves as the global sorting hub for DHL, a delivery firm owned by Deutsche Post of Germany. A huge extension, which opened in October, means it can sort 150,000 parcels each hour, says Ken Allen, DHL’s CEO. It was built as business soared. But the express-delivery industry faces a new challenge: the return of trade barriers due to the protectionist bent of Donald Trump and because of Brexit.

The slower-moving shipping and air-cargo business has long been in the doldrums as a result of slow overall growth in trade in recent years. Yet the rise of cross-border e-commerce has still meant booming business for express-delivery firms. On January 31st UPS revealed record revenues for the fourth quarter of 2016; FedEx and DHL are expected to report similarly buoyant results next month. Since 2008 half of the increase in express-delivery volumes has come from shoppers buying items online from another country.

Falling trade barriers have greatly helped them. When DHL and FedEx were getting going, in the 1970s,…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

The challenges for ExxonMobil’s new boss

WITH an institutional culture that lies somewhere between the marines and the boy scouts, ExxonMobil tends to avoid personality cults. Even so, it is surprising how little is known about Darren Woods, the chief executive who last month succeeded Rex Tillerson, America’s new secretary of state. Mr Woods’s Wikipedia biography is a few lines long. Rather than reveal the year of his birth, ExxonMobil just says he is 52. Never mind: the most significant fact about him is that he comes from the refining and chemicals side of the business, which hums along so efficiently that ExxonMobil is widely considered the world’s best “integrated” oil company. Yet it is upstream—the exploration and production part—where his hardest tasks lie.

On January 31st the company reported another year of plunging profits, which have buffeted its share price since 2014 (see chart). It earned less in a year than it used to earn in a quarter, and also less than Exxon made before its $80bn merger with Mobil in 1999. Profits among its “Big Oil” peers have likewise been clobbered by falling oil prices over the past two and a half years. It is also not…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Snap’s IPO will be the largest in years

WHEN Snapchat first became popular in 2013, many thought the messaging app would disappear almost as quickly as its vanishing messages. Instead, it has become one of the most intriguing internet firms to emerge in years. When Snap, Snapchat’s parent company, goes public at an expected valuation of $20bn-25bn—the IPO is expected in March—its market debut will be the most closely watched since Alibaba, a Chinese e-commerce giant, floated in 2014. Snap’s offering documents may be filed publicly as soon as this week.

Snapchat has captivated youngsters in the West with its quickly disappearing content and playful features. It appears to have connected with youth more successfully than older rivals such as Facebook (or its messaging service, WhatsApp). Users share digitally enhanced photos and videos of themselves vomiting rainbows and morphing their faces into animal masks. Around 41% of Americans aged 18 to 34 use the ephemeral messaging service every month, and 150m people globally spend time on it every day. 

Older grown-ups should pay attention too. Snapchat is experimenting with new technologies, such as augmented reality (AR) and…Continue reading

Read more 0 Comments
BusinessBusiness and finance

Silicon Valley’s criticism of Donald Trump

EARLY in 2016 Schumpeter went to a dinner with one of Silicon Valley’s luminaries, a man of towering intelligence and negligible humility. Asked about the upcoming election, he scoffed: it didn’t matter who America’s president was. Politics had become irrelevant, he said. Technology firms, and their leaders, would carry on fashioning brilliant products and generally carrying out God’s work on Earth, regardless of who occupied the White House. Cue smirks and more Hawaiian Kampachi all round.

Now Silicon Valley has thrust itself into a presidential stink. Technology groups were the first among big firms to slam Donald Trump’s executive order of January 27th, which temporarily bans people from seven mainly-Muslim countries in the Middle East from entering America. Tim Cook, Apple’s boss, criticised it to employees. Mark Zuckerberg at Facebook said he was “concerned”. Sundar Pichai, CEO of Google, told staff he was “upset” on the day of the order, and a day later the firm’s co-founder, Sergey Brin, was spotted among hundreds of protesters at San Francisco airport.

Just a month earlier all these technology firms and more…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Bridge International Academies gets high marks for ambition but its business model is still unproven

AT THE Gatina branch of Bridge International Academies, on the outskirts of Nairobi, Nicholas Oluoch Ochieng has one eye on his class of five-year-olds and the other on his tablet. On the device is a lesson script. Every line is written 7,000 miles away, in Cambridge, Massachusetts. There an American team analyses 250,000 test scores every ten days from Bridge’s 405 Kenyan schools, and then uses the data to tweak those parts of a lesson where pupils find themselves stumped. Teachers, if they are instructing the same grade level, give identical lessons, and timetables are standardised, too. So when Mr Ochieng’s pupils read from their books, the same words should be reverberating off the walls of each Bridge nursery. 

That chorus should soon grow louder. Founded in 2008, Bridge has grown into one of the world’s largest groups of for-profit schools—and the largest targeting poor pupils. It has 100,000 pupils spread across Kenya, Liberia, Nigeria, Uganda and India. Bridge says it aims to teach 10m children—the size of Britain’s pupil population—within the next decade.

Bridge’s ambitious target sets it apart from the low-cost…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Political dating sites are hot

Looking for a bit of Trumpy pumpy

AFTER Donald Trump was elected president, Maple Match, an online dating app which connects Canadians and Americans, was inundated with people signing up. The app promised to make it easy for Americans to find a Canadian partner to save them from the “unfathomable horror” of a Trump presidency. Joe Goldman, the app’s Texas-based founder, says it has taken on the perceived ethos of Canada: welcoming, open and tolerant. “We’re building bridges when people are talking about building walls and our users like that.”

TrumpSingles.com is forging connections, too. Its founder, David Goss, wants to make it easier for Trump supporters to find each other. The site’s earliest users were in Los Angeles, New York and Philadelphia, which are Democratic strongholds. Now its users are in every state. They are also signing up from abroad, including in Britain and in Russia. Mr Goss and his team personally approve each of the site’s 26,000 users to weed out trolls. The site was able to increase its monthly fee from $4.95 to $19.95 in December following Mr Trump’s election victory. It enjoyed a…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Qualcomm is again under attack for living large off its patent portfolio

“SHOULD five per cent appear too small, be thankful I don’t take it all.” The Beatles wrote “Taxman” in 1966 to protest at Harold Wilson’s exorbitant “supertax” rates. Critics of Qualcomm, the world’s biggest chip-design firm, would say the lyric is a clue to the company’s business practices. Its methods have attracted a barrage of legal complaints. The latest came on January 25th, when Apple, a smartphone maker, sued it in China for abusing its clout in mobile processors and demanded 1bn yuan ($145m) in damages. Just days earlier Apple had filed a similar lawsuit in California asking for $1bn.

America’s Federal Trade Commission (FTC) issued a separate complaint against the firm this month. In late December, the equivalent body in South Korea fined it a whopping $853m, which hurt its quarterly results, announced this week. These cases follow two similar ones in 2015: Chinese regulators imposed an even higher fine, of $975m; and the European Commission found Qualcomm guilty of having sold chips below cost to hurt rivals.

Qualcomm is no household name, but most people with mobile phones use its technology….Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Formula One’s new American owner gives Bernie Ecclestone the heave-ho

FOR nearly 40 years, he showed skill and stamina at the wheel of Formula One (F1). But this week Bernie Ecclestone ran out of track. The sport’s new owner, Liberty Media, was at pains to portray its replacement of him as chief executive (by Chase Carey, a former president of Rupert Murdoch’s 21st Century Fox) as smooth. But the straight-talking octogenarian has never been one to stick to the script: he complained he had been “forced out”.

Liberty, which is controlled by John Malone, a billionaire, agreed to buy the sport last year, in a deal worth $8bn; the deal was completed on January 23rd. That provided an exit for CVC, a private-equity group which had purchased control in 2006. Mr Ecclestone gets the title of “chairman emeritus” as a sop—he said he doesn’t know what the title means—and will, said Liberty, “be available” to advise the board.

His exit was not a total surprise, though the timing had been unclear; he had talked about remaining involved in running F1 for another two to three years. Liberty may wish to draw a line under the Ecclestone era as a precautionary measure. F1 was often mired in litigation during…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

How to build a nuclear-power plant

THE Barakah nuclear-power plant under construction in Abu Dhabi will never attract the attention that the Burj Khalifa skyscraper in neighbouring Dubai does, but it is an engineering feat nonetheless. It is using three times as much concrete as the world’s tallest building, and six times the amount of steel. Remarkably, its first reactor may start producing energy in the first half of this year—on schedule and (its South Korean developers insist) on budget. That would be a towering achievement.

In much of the world, building a nuclear-power plant looks like a terrible business prospect. Two recent additions to the world’s nuclear fleet, in Argentina and America, took 33 and 44 years to erect. Of 55 plants under construction, the Global Nuclear Power database reckons almost two-thirds are behind schedule (see chart). The delays lift costs, and make nuclear less competitive with other sources of electricity, such as gas, coal and renewables.

Continue reading
Read more 0 Comments
ApprovedBusinessBusiness and finance

Why American bosses have become giddy, last-minute fans of Donald Trump

IN AN effort to understand their new reality, many American bosses have been studying “The Art of the Deal”. Donald Trump’s autobiography, published in 1987, begins by describing his working week, which mainly consists of frequent calls with his stockbroker, sitting in his office as other businesspeople pay him lavish tribute, and drinking tomato juice for lunch.

If Mr Trump’s routine is anything like the same today, he must be delighted. The broker has good news: the S&P 500 index has returned 6% since his election and on January 25th the Dow Jones Industrial Average closed above 20,000 for the first time. There have been chief executives-a-plenty lavishing praise on him both in public and in private. Their devotion seems extraordinary. Before the vote, many of the same C-suiters lambasted him as a menace to capitalism and much else.

One theory is that executives are simply terrified of Mr Trump. But many are supportive of him in private, too. They offer two explanations: that they can’t help but respond to his personal charm offensive to big business, and that they are persuaded that there is some substance there. Consider the…Continue reading

Read more 0 Comments
BusinessBusiness and financeIncoming

McDonald’s is going for healthier fare and greater digitisation

IN A newly released film, “The Founder”, the character of Ray Kroc promises that the startup he had taken over from the McDonald brothers “can be the new American church”. Portrayed by Michael Keaton as a turbo-charged egomaniac whose scruples diminish as his success increases, Kroc understood the power of branding, the advantages of franchising and the attraction of speed in food retailing. McDonald’s is now one of the country’s biggest food chains, with more than 14,200 outlets.

The domestic market is still its most important one, despite the firm’s massive global presence. When it reported this week that global sales had dropped by only 5% in the fourth quarter, the number beat expectations. News of a drop in sales in America of just 1.3% was received more gloomily. Hopes had risen because of the previous six consecutive quarters of domestic growth. At the end of 2015 and in early 2016 the chain had reaped the rewards of introducing the popular all-day breakfast in America. A year or so later, Egg McMuffins and sausage biscuits have shed some of their allure.

Still, Steve Easterbrook, the firm’s British boss, who took over…Continue reading

Read more 0 Comments