World's biggest IPO. Ford's majority stake. Blockchain across industries.
In January 2015, a TechCrunch headline read that Zenefits was “one of the fastest-growing SaaS businesses ever.” This week, Zenefits announced its 3rd CEO in a year, and a 3rd round of layoffs. A leaked internal memo showed that Zenefits would cut 430 employees (see This Week In Data, below).
The stumbles began early last year when Zenefits was caught using a computer program to cheat on regulatory requirements, but the turbulence has continued, including a downround and layoffs.
It’s interesting to see how hiring trended upward early under CEO David Sacks who took over after the regulatory scandal in February 2016. But then hiring began falling again by mid-2016 when Zenefits lost half its value, dropping to $2B from $4.5B in a June 2016 downround.
P.S. Yesterday’s newsletter shared a stat about donations to U.S. colleges with a subject line that read “Stanford beats Harvard.” Our mistake — Harvard beat Stanford. Sorry to all the Harvard folks we angered.
This week in data:
$2 trillion: Oil titan Saudi Aramco has hired New York-based boutique investment bank Moelis & Co. to advise on its IPO, as reported by Reuters, in what is expected to be the world’s biggest-ever initial public share offer that would value Aramco as high as $2 trillion. According to our research, Saudi Aramco Energy Ventures (SAEV), the venture arm of Saudi Aramco, is already the most active Saudi investor in private companies with a total of 20 investments that have taken place between 2012 and 2016.
45%: This week, HR tech company Zenefits appointed Jay Fulcher as its new CEO, replacing David Sacks. An internal memo also revealed it will cut 45% of its workforce — which translates to roughly 430 employees — according to this report. This move follows a troubled 2016, during which the company slashed its valuation after failing to hit revenue goals, as shown on our Downround Tracker.
$1B: Ford has taken a majority stake in Argo AI, a Pittsburgh-based startup with veterans of Google’s self-driving program and Uber on its team. Ford is spending $1B on the startup over the next 5 years, and the deal valued Argo north of $1B. This is the 8th $1B+ tech exit of 2017. Others include AppDynamics and OutFit7. See the search for $1B+ tech exits on CB Insights here.
27: Banking and payments aren’t the only industries that might be transformed by blockchain tech. We highlighted 27 industries where blockchain could be applied, from law enforcement to sports management to gun tracking, and more.
$21B: Investors closed out 2016 with a whimper, as both deal volume and dollars invested hit an 8-quarter low in Q4 with $21B invested across fewer than 2,000 deals, according to our 2016 MoneyTree Report in partnership with PwC. In addition, fewer unicorns were born last year than in the year prior.
$30M: Staples led the December 2016 Series C round of $30M to Managed by Q, the New York-based office management and cleaning startup, according to The Wall Street Journal. GV and RRE Ventures also participated. Publicly traded office supply retailer Staples has not made a disclosed investment in a startup since 2009.
3: Singapore-based Grab rolled out a private bus/minivan service, Grab Coach, in its home city. There are three types of coaches — 13 seaters, 23 seaters, and 40 seaters — according to this report. Grab is one of the most well-funded tech startups in the Asia-Pacific region and one of at least 9 ride-hailing companies valued at $1B+ globally (others include Uber, Didi, Lyft, Ola, Grab, BlaBlaCar, Careem, Gett, and Go-Jek).
10,000+: The number of inventors that are part of Xinova, a company that rents out the brainpower of scientists and researchers to large companies and organizations such as PepsiCo and Meat and Livestock Australia, among others. According to Bloomberg, Xinova’s inventors have developed a number of products — including flour made from coffee byproducts and storage tanks for a highly corrosive form of gas — for clients seeking creative assistance. The company is headed by Nathan Myhrvold, formerly of Microsoft, who has received criticism as a “patent troll” for aggressive litigation of patents.