Good morning, hello, hi.
New money: Chris Urmson, former head of self-driving cars at Google (now Waymo), has revealed details about his stealthy startup, Aurora Innovation, to my colleague Kirsten Korosec. He’s working alongside Sterling Anderson and Drew Bagnell, formerly of Tesla and Uber. They’re starting out with $3 million of their own money and $3.1 million from their advisors. Here’s Kirsten on their business model:
Aurora isn’t interested in manufacturing cars; nor does it want to be a volume producer of the many sensors—such as cameras, radar, and light detection and ranging radar known as LiDAR—that these autonomous vehicles need to detect and perceive the world around them. Instead, the founders see a market need for creating the underlying technology for self-driving cars and helping automakers and others build the services and systems on top of it.
Aurora’s value lies in the design of the sensor and the understanding of what computation needs to be embedded into the main brain for the car, as well as the software and data products. (Read more here.)
That puts Aurora in direct competition with Waymo, which is currently suing Uber and Anthony Levandowski, the person who led Google’s self-driving car efforts prior to Urmson. Yesterday Levandowski stepped aside from his role leading Uber’s self-driving car efforts, in a sign that does not bode well for the defense.
IPO: Two notable debuts today– Carvana and Cloudera. They both priced their shares at $15. For Cloudera, that’s $1 above the announced range. For Carvana, that’s right in the middle of the range. The boost still isn’t enough for Cloudera to come close to its last private valuation, but remember, it’s not quite as bad as it looks.
Exit: BC Partners has fully exited its investment Swedish telecom company Com Hem, selling its 18.5% stake to Kinnevek. (See more details below.) BC invested in 2011; it is one of the firm’s largest equity investments from its ninth fund. It took the company public in 2014, and this sale means the firm has earned more than 2x its money.
“Great company, terrible stock”: This feels a bit ironic. Activist hedge fund ValueAct has taken a $750 million investment in KKR; the firm believes KKR’s stock is worth twice its current level. ValueAct’s Mason Morfit said the firm’s trading levels — 3.5x expected 2018 earnings, is “a valuation you put on a business that’s going out of business in the next three or four years.” His pronouncement gave KKR’s stock a tiny boost. Jen Wieczner reports:
ValueAct thinks KKR is worth $37 a share—more than double its stock price of $18 when Morfit began his presentation. KKR stock traded as high as $19 a share later in the morning. By the afternoon, KKR shares were still up more than 4%, or about $18.50 each—their highest point in nearly two years.
Profits: Yesterday I included Dropbox’s announcement that it now has EBITDA. Expect to see more of these profitability announcements as companies reset the narrative from “insane valuation” to something more akin to “viable business.” Here’s another such headline from yesterday: “From Burning Millions to Turning Profitable in Seven Months — How HotelTonight Did It.”
Quote of the day: “It should be a CEO search, not COO.” – Jon Swartz of USA Today. (Uber has reportedly interviewed executives from Disney, CVS and Walmart for the job.)
• Hunter Harrison, CEO of CSX, will get $84 million even if he quits.
• Starbucks to add ore “funky” drinks following unicorn frappe. (My vote – Zombie frappe!)
• Alphabet earnings: Cloud, Pixel are the next revenue drivers. Restructuring made the company faster.
…AND ELSEWHERE
U.S. economy off to a slow start this year. Could Apple and Amazon kill the Icelandic language? Fined for the crime of writing “I am an engineer.” How to curb the use of overseas tax havens. Trump’s tax plan and the mountain of debt. Trump tax plan silent on carried interest. All the things run by George Soros. Too much money chasing too few deals in China. An auto mechanic shortage. How Sheryl Sandberg’s manifesto drives Facebook. The reporter who took Bill O’Reilly down. The science of awkwardness.
• Domo, an American Fork, Utah-based business management platform, raised $200 million in Series D funding. Blackrock led the round, and was joined by Capital Group and Glynn Capital Management. Existing investor GGV Capital participated. The deal values…