Ride-services company Lyft has raised $600 million in fresh funding, fuel for the company’s growth as it continues to compete fiercely with larger rival Uber.
Lyft said on Tuesday it closed the widely anticipated funding round, which had been in progress for weeks.
The $600 million came mostly from large global investment funds rather than startups’ traditional funding source of venture capital. The round values the company at $7.5 billion, a sharp increase from the $5.5 billion valuation at Lyft’s last financing more than a year ago.
In January 2016, Lyft raised $1 billion, half of which came from General Motors.
Both the funding total and the valuation exceed previous targets. Last month, a source close to the company said Lyft was aiming to raise $500 million at a valuation of $6 billion to $7 billion.
The funding comes from previous investors including Japanese internet company Rakuten Inc and investment fund Janus Capital Group Inc, and first-time Lyft investors including private equity firm KKR & Co., large asset manager Baillie Gifford, and one of Canada’s largest pension funds, the Public Sector Pension Investment Board.
The funding round is an example of the broader trend of how pension funds, sovereign wealth funds, family offices and large asset managers that have traditionally invested in public companies are now putting more of their money into private tech startups in hopes of better returns.
Lyft is Uber’s main competitor in the United States, although Lyft has trailed Uber in market share in most regions of the country. The company has heavily invested in growth, and so far this year has expanded its service to 100 new cities, bringing the total number of cities in which Lyft operates to 300.
After a 12-year partnership with Sony Music’s Arista Nashville imprint, Carrie Underwood has signed a new worldwide record deal with Universal Music Group, it was announced Tuesday. The seven-time Grammy winner will team up with Capitol Records Nashville as part of UMG for the next phase of her career.
“Already a top tier force in country music, Carrie’s vast talents and creative bravery show that she is an artist who is prepared to take on a wide range of artist challenges,” Mike Dungan, Universal Music Group Nashville chairman and CEO, said in a statement.
The country superstar skyrocketed to fame immediately after winning American Idol in 2005 and has gone on to sell 64 million records worldwide and record over two dozen No. 1 singles. Her debut, Some Hearts, has sold over seven million copies in the U.S. alone, according to Nielsen Music. Subsequent studio albums include Carnival Ride (2007), Play On (2009), Blown Away (2012) and Storyteller (2015). Each topped Billboard’s Top Country Albums chart, and the middle three earned No. 1s on the overall Billboard 200 chart as well.
Recently, the country star celebrated her 100th appearance at the Grand Ole Opry and is gearing up to work on a sixth album.
Aside from Capitol Records Nashville, the UMG family of country labels includes EMI Records Nashville, MCA Nashville and Mercury Nashville. Underwood’s new label groupmates include such fellow superstars as Dierks Bentley, George Strait, Chris Stapleton, Luke Bryan and Lady Antebellum, to name a few.
Earlier this month, at SXSW, Adidas teased it was working on new, “open” digital fitness products. And today we’re getting a clearer picture of its strategy, thanks to the introduction of All Day, an app for iOS and Android that’s designed for “versatile” athletes. What this means, according to Adidas, is that the application will focus on a series of health aspects: movement, nutrition, mindset and rest. This isn’t just about hardcore workout sessions, as is the case with most fitness apps.
All Day features a collection of written and video tutorials, which show you anything from quick yoga moves to “green” recipes, and uses your smartphone to track distance covered and calories burnt throughout your day. Adidas says right now the app is focused on women, since data it collected suggest they are the key users in the wellness space, though there will be additional content geared toward men later on.
The app can pair with Apple’s Health Kit and Google’s Fit platforms, making it easier to keep track of your data. Adidas is releasing a beta of All Day today for iOS and Android, but you’ll want to sign up quick if you want to try it out because access will be limited. The sportswear giant says the app will have its full rollout later this summer.
Tensions between Netflix and Hollywood are escalating after the streaming-video company was accused of making attempts to poach executives from Fox 21 Television Studios. Netflix is is expected to spend more than $6 billion on original and acquired programming this year. Photo: Stranger Things (Netflix)
The streaming-video service is hogging talent and pushing up prices, spurring pushback from rival TV producers who once saw it as a partner; 70 new titles this year
Tara Flynn, a rising star at a TV production unit of 21st Century Fox, walked into her boss’s office last August and told him she was quitting and joining streaming-video giant Netflix Inc.
The news was not well-received.
“Netflix is public enemy No. 1,” said Bert Salke, the head of Fox 21 Television Studios, where Ms. Flynn was a vice president, according to a Netflix legal filing.
When Netflix finalized Ms. Flynn’s hire a few weeks later, Fox sued, accusing it of a “brazen campaign” to poach Fox executives. In response, Netflix argued Fox’s contracts are “unlawful and unenforceable.”
The ongoing legal battle is just one sign of the escalating tensions between Netflix and Hollywood as the streaming-video company moves from being an upstart dabbling in original programming to a big-spending entertainment powerhouse that will produce more than 70 shows this year. It is expanding into new genres such as children’s fare, reality TV and stand-up comedy specials—including a $40 million deal for two shows by Chris Rock. The shift has unnerved some TV networks that had become used to Netflix’s original content being focused on scripted dramas and sitcoms.
Netflix’s spending on original and acquired programming this year is expected to be more than $6 billion, up from $5 billion last year, more than double what Time Warner Inc.’s HBO spends and five times as much as 21st Century Fox’s FX or CBS Corp.’s Showtime. It spent close to $10 million an episode on “The Crown,” a period drama about a young Queen Elizabeth II.
Its shock-and-awe spending—combined with that of Amazon and other new players—is driving up costs industrywide and creating a scarcity of people and equipment.
“You just can’t compete with someone coming in with fresh money, low overhead and a lot less baggage than you,” said Darrell Miller, an entertainment lawyer at Fox Rothschild LLP. One veteran television executive likened Netflix’s onslaught to Genghis Khan’s.
TV stars are demanding “movie star” salaries of some $250,000 per episode when they previously were content with half that, according to studio executives. Competition for “A” team camera crews, sound engineers and postproduction specialists is fierce.
“It’s a feeding frenzy to get the best people,” said Jeff Greenberg, a prominent casting director.
TV networks and studios helped fuel the rise of what is now a competitor. When streaming video led to a plunge in DVD sales about a decade ago, licensing shows to Netflix was seen as a new way to cash in and extend the financial life of expensive programming. With Netflix now seen as a direct rival for original programming, some media companies are cutting back on those licensing deals, including Discovery Communications Inc. and Scripps Networks Interactive.
“We of course have flare-ups because we compete for people, we compete for projects,” said Netflix Chief Content Officer Ted Sarandos. But “we are in this together” with media companies, he said.
About 20 other 21st Century Fox employees not under contract have recently jumped to Netflix, a person familiar with the matter said. Netflix also recently plucked away Stacey Silverman, a senior executive at Comcast Corp.’s NBCUniversal Television, as well as executives from Sony Corp. and Walt Disney Co., among others.
Faced with spiraling costs, TV chiefs are redoubling efforts to discover new writers, show creators and less-expensive stars. Scripps created an HGTV show called “Home Town” starring a fix-it couple found on Instagram, and it has several in the works with YouTube stars. NBCUniversal said it would make shows with BuzzFeed based on popular web video and news content.
Producers and agents are beginning to talk about the downsides for talent of being on Netflix shows and movies—for example, by saying they don’t get the promotion they deserve on Netflix’s crowded shelf of content—but many Hollywood stars still relish the chance to be in a Netflix original. Netflix tends to offer more money up front along with a more flexible filming schedule due to fewer episodes, and several of its shows have won critical accolades and industry buzz.
Some TV industry executives and Wall Street skeptics question whether the company can add enough subscribers, especially in international markets, to support its breakneck spending pace and justify a $60 billion market capitalization that values Netflix at more than 300-times its 2016 earnings. Netflix’s overall subscriptions grew 25% in 2016 from the previous year to nearly 94 million.
MoffettNathanson analyst Michael Nathanson estimates Netflix this year will have negative free cash flow—a measure of profitability—of about $2 billion due to elevated spending on original shows, which require a higher upfront outlay than library deals.
Netflix has financed the spending by borrowing money, increasing its debt burden more than 17-fold since 2012 from $195.8 million to $3.4 billion.
Investors and Netflix executives are focused on subscriber growth over any other metric and have been encouraged by a surge in international customer additions over the past couple of quarters. Last quarter, it added 5.12 million subscribers abroad, beating expectations. Shares are up 44% in the past year.
Netflix’s desire for domination is on display in its push into comedy. It has gone after big name stand-up comics that used to call HBO home, including Chris Rock, Louis C.K. and Amy Schumer, with an aggressiveness not seen since CBS’s famed talent raids on NBC in the late 1940s, when it wooed away radio stars such as Jack Benny and Edgar Bergen. Mr. Rock’s $40 million payday is more than double what he was getting at HBO, according to people familiar with the terms.
Mr. Sarandos, the content officer for Netflix, declined to comment on Mr. Rock’s deal.
Tune of The Week
Sony has unveiled Xperia Touch, a $1,600 interactive projector that converts any flat surface into a 23-inch touchscreen, and a smartphone model with a super-slow motion camera and 4K screen.