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Wall Street hugs Affirm as it starts life as a public company

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And we’re off to the races!

Last night, Affirm priced its IPO above its raised range at $49 per share, a sign that the public markets remain hungry for new listings. Provided that Affirm today trades similarly to how it priced, we could be looking at a 2021 IPO market that resembles last year’s heated results.


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That’s good news for a host of companies looking to follow in the financial technology unicorn’s footsteps.

Poshmark prices tonight and trades tomorrow. And with Qualtrics in the wings along with Coinbase, Roblox set to direct list, and Bumble said to file as well, we’re heading into another busy IPO quarter. Affirm’s first-day trading results will therefore hold extra importance, even if its pricing augurs well for IPOs more generally.

Affirm first targeted $33 to $38 per share before raising its range to $41 to $44 per share. Pricing at $49 is a victory. Briefly, why, and then a thought about what’s next for the IPO market.

Affirm

What does Affirm sell? First, per its S-1 filings, it charges merchants a fee to “convert a sale and power a payment.” That sounds like software revenues, albeit not in the recurring manner of a SaaS company.

Second, Affirm earns from “interest income [from] the simple interest loans that we purchase from our originating bank partners.” And, it offers virtual cards to consumers via its app, allowing it to generate interchange revenues.

We care about all of that as it’s important to realize that Affirm is not a software company in the context that we usually think about them, namely software as a service, or SaaS.

This matters when we consider how the market values Affirm; the more richly Affirm is valued in revenue-multiple terms by its new, $39 per-share IPO price, the more bullish we can presume the IPO market is.

What are Affirm’s gross margins? A great question, and one that is surprisingly hard to answer. If you read its final S-1 filing, you’ll find that all its chatter concerning “contribution profit” has been removed. This is a shame to some degree as contribution profit — and margin — were Affirm’s closest shared cognate to gross margin.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Facebook’s ‘oversight’ body overturns four takedowns and issues a slew of policy suggestions

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Facebook’s self-regulatory ‘Oversight Board’ (FOB) has delivered its first batch of decisions on contested content moderation decisions almost two months after picking its first cases.

A long time in the making, the FOB is part of Facebook’s crisis PR push to distance its business from the impact of controversial content moderation decisions — by creating a review body to handle a tiny fraction of the complaints its content takedowns attract. It started accepting submissions for review in October 2020 — and has faced criticism for being slow to get off the ground.

Announcing the first decisions today, the FOB reveals it has chosen to uphold just one of the content moderation decisions made earlier by Facebook, overturning four of the tech giant’s decisions.

Decisions on the cases were made by five-member panels that contained at least one member from the region in question and a mix of genders, per the FOB. A majority of the full Board then had to review each panel’s findings to approve the decision before it could be issued.

The sole case where the Board has upheld Facebook’s decision to remove content is case 2020-003-FB-UA — where Facebook had removed a post under its Community Standard on Hate Speech which had used the Russian word “тазики” (“taziks”) to describe Azerbaijanis, who the user claimed have no history compared to Armenians.

In the four other cases the Board has overturned Facebook takedowns, rejecting earlier assessments made by the tech giant in relation to policies on hate speech, adult nudity, dangerous individuals/organizations, and violence and incitement. (You can read the outline of these cases on its website.)

Each decision relates to a specific piece of content but the board has also issued nine policy recommendations.

These include suggestions that Facebook [emphasis ours]:

  • Create a new Community Standard on health misinformation, consolidating and clarifying the existing rules in one place. This should define key terms such as “misinformation.”
  • Adopt less intrusive means of enforcing its health misinformation policies where the content does not reach Facebook’s threshold of imminent physical harm.
  • Increase transparency around how it moderates health misinformation, including publishing a transparency report on how the Community Standards have been enforced during the COVID-19 pandemic. This recommendation draws upon the public comments the Board received.
  • Ensure that users are always notified of the reasons for any enforcement of the Community Standards against them, including the specific rule Facebook is enforcing. (The Board made two identical policy recommendations on this front related to the cases it considered, also noting in relation to the second hate speech case that “Facebook’s lack of transparency left its decision open to the mistaken belief that the company removed the content because the user expressed a view it disagreed with”.)
  • Explain and provide examples of the application of key terms from the Dangerous Individuals and Organizations policy, including the meanings of “praise,” “support” and “representation.” The Community Standard should also better advise users on how to make their intent clear when discussing dangerous individuals or organizations.
  • Provide a public list of the organizations and individuals designated as ‘dangerous’ under the Dangerous Individuals and Organizations Community Standard or, at the very least, a list of examples.
  • Inform users when automated enforcement is used to moderate their content, ensure that users can appeal automated decisions to a human being in certain cases, and improve automated detection of images with text-overlay so that posts raising awareness of breast cancer symptoms are not wrongly flagged for review. Facebook should also improve its transparency reporting on its use of automated enforcement.
  • Revise Instagram’s Community Guidelines to specify that female nipples can be shown to raise breast cancer awareness and clarify that where there are inconsistencies between Instagram’s Community Guidelines and Facebook’s Community Standards, the latter take precedence.

Where it has overturned Facebook takedowns the board says it expects Facebook to restore the specific pieces of removed content within seven days.

In addition, the Board writes that Facebook will also “examine whether identical content with parallel context associated with the Board’s decisions should remain on its platform”. And says Facebook has 30 days to publicly respond to its policy recommendations.

So it will certainly be interesting to see how the tech giant responds to the laundry list of proposed policy tweaks — perhaps especially the recommendations for increased transparency (including the suggestion it inform users when content has been removed solely by its AIs) — and whether Facebook is happy to align entirely with the policy guidance issued by the self-regulatory vehicle (or not).

Facebook created the board’s structure and charter and appointed its members — but has encouraged the notion it’s ‘independent’ from Facebook, even though it also funds FOB (indirectly, via a foundation it set up to administer the body).

And while the Board claims its review decisions are binding on Facebook there is no such requirement for Facebook to follow its policy recommendations.

It’s also notable that the FOB’s review efforts are entirely focused on takedowns — rather than on things Facebook chooses to host on its platform.

Given all that it’s impossible to quantify how much influence Facebook exerts on the Facebook Oversight Board’s decisions. And even if Facebook swallows all the aforementioned policy recommendations — or more likely puts out a PR line welcoming the FOB’s ‘thoughtful’ contributions to a ‘complex area’ and says it will ‘take them into account as it moves forward’ — it’s doing so from a place where it has retained maximum control of content review by defining, shaping and funding the ‘oversight’ involved.

tl;dr: An actual supreme court this is not.

In the coming weeks, the FOB will likely be most closely watched over a case it accepted recently — related to the Facebook’s indefinite suspension of former US president Donald Trump, after he incited a violent assault on the US capital earlier this month.

The board notes that it will be opening public comment on that case “shortly”.

“Recent events in the United States and around the world have highlighted the enormous impact that content decisions taken by internet services have on human rights and free expression,” it writes, going on to add that: “The challenges and limitations of the existing approaches to moderating content draw attention to the value of independent oversight of the most consequential decisions by companies such as Facebook.”

But of course this ‘Oversight Board’ is unable to be entirely independent of its founder, Facebook.

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Workday nabs employee feedback platform Peakon for $700M

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Workday started the work day with some big news today. It’s acquiring employee feedback platform Peakon for $700 million in cash.

One thing we have learned during the pandemic is that organizations need to find new ways to build stronger connections with their employees, and that’s precisely what Peakon provides. “Bringing Peakon into the Workday family will be very compelling to our customers — especially following an extraordinary past year that has magnified the importance of having a constant pulse on employee sentiment in order to keep people engaged and productive,” Workday co-founder and co-CEO Aneel Bhusri, said in a statement.

Without the ability to have face-to-face meetings with employees, managers have struggled throughout 2020 to understand how COVID, working from home and all the trials and tribulations of the last year have affected the workforce.

But this ability to check the pulse of employees goes beyond this crisis period. Managers of large organizations know that the bigger and more spread out your firm becomes, the more challenging it is to understand what’s happening across the company. The company uses weekly surveys to ask specific questions about the organization. For them it’s all about getting good data, and so far customers have used the platform to ask over 153 million questions since inception six years ago.

Peakon CEO and co-founder Phil Chambers sees Workday as a logical partner. “Workday excels at helping enable customers to leverage their data. Together, we’ll be able to help drive greater productivity, talent development and employee retention for our customers — and unify how employees interact with their organizations,” he said in a Workday blog post announcing the deal.

Peakon was founded in Copenhagen in 2014 and has raised $68 million along the way, according to Crunchbase data. Its most recent round was a $35 million Series B in March 2019. The deal is expected to close by the end of this quarter subject to typical regulatory review.

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Shopalyst aims to make e-commerce advertising more effective

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Indian startup Shopalyst has officially launched a new platform that it calls the Discovery Commerce Cloud, which it says can help brands take full advantage of digital advertising.

Co-founder and CEO Girish Ramachandra told me that Shopalyst was created to allow for “one seamless journey for the shopper” across advertising and e-commerce — something he said current systems are not currently designed to support.

The startup’s first product was a “universal buy button,” and Ramachandra said that has “naturally progressed” into a broader set of tools for cross-platform advertising, which Shopalyst has been beta testing for the past year.

The Discovery Commerce Cloud consists of five modules, which Ramachandra said work best together but can also be purchased separately. That includes:

  • a market intelligence product with information about what consumers are searching for and what’s popular on media and e-commerce platforms
  • an audience intelligence product to target ads based on audience interest, behavior and purchase intent
  • a Universal Ads Manager to deliver ads across Google Ads, DV360, Facebook, Instagram, Amazon Ads, Twitter and TikTok
  • a landing page builder that can support instant checkout on a brand’s own direct-to-consumer site, comparison shopping across e-commerce marketplaces, instant delivery or a physical store locator
  • real-time metrics that measure the full customer funnel
Shopalyst header

Image Credits: Shopalyst

Ramachandra also noted that the ads created in the Universal Ads Builder optimized to each platform, with dynamically generated creative based on audience data. And by using the landing page builder, brands are also able to gather new data about the audience’s “shopping actions.”

“In the past, [brands] didn’t have shopping actions, because retailers don’t share that data back with them,” he said. “That is all changed. Now they’re able to acquire first-party data [from Shopalyst], which will help them use the right advertising in future campaigns.”

Shopalyst customers include Unilever, Nestle, Diageo, Nivea, L’Oreal and Estee Lauder. And while the startup was initially focused on its home market of India, the platform is now available across 30 countries.

Shopalyst also says that in beta testing, campaigns run through the Discovery Commerce Cloud have seen up to a 3X improvement in targeting relevance, a 5X increase in audience attention and an 8X increase in ad-activated shopping trips.

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