Morning Report: Unicorn-darling Snap sets a new set of record lows after Facebook, its former suitor, continues to war against its smaller rival.
Here’s the story: A smaller, cooler company with an eye for design (that many have ripped off) is under attack by an incumbent power that long-ago spent its tank of cool, coasting on sheer irreplaceability instead.
No, we’re not talking about Apple vs. Microsoft decades ago. Today, we’re talking about Snap and Facebook. (Recurring thought: Tech, like time, is a flat circle.) And like that old fight, it’s ugly.
Today, in regular trading, Snap, this year’s biggest IPO and thus our most critical unicorn, set new lows, trading — as of the time of writing — for just $12.72 per share. That’s down from the firm’s IPO price of $17, far below its first day open of $24, and magically off from its 52 week high of $29.44.
Why? To wit, TechCrunch:
Instagram Stories has blossomed from a Snapchat clone into an integral part of the world’s largest dedicated visual communication app in the first year since its launch. Half of the businesses on Instagram produced a story in the last month, and it’s boosted the app’s average usage to 32 minutes per day for those under 25, and 24 minutes per day for those 25 and up.
In short, Facebook is working overtime to snag Snap’s audience. Snap is watching a stodgier, more-corporate experience sap its momentum. For a company as cool as Snap, that must chafe.
Also, forget politics, it’s tech that’s petty:
I haven’t managed to congeal the following into fully-formed thoughts, but there’s something happening in tech that I can’t quite explain, but I think will become more apparent when the market turns. It’s something akin to the fact that platform players (Microsoft, Alphabet, Amazon, Facebook, and Apple) feel increasingly powerful. They are also, as we know, increasingly wealthy. What impact the concentration of power has in tech will have on innovative companies going up against the Big 5 sans platform support will be interesting. (Hell, we’re even seeing proxy financial battles in the bikesharing space. Essentially, platform companies are using startups to whack one another indirectly. That can’t be affordable long-term.)
Regardless, Snap is feeling the bite of Facebook’s ambition. However, the company can reset the narrative with a stellar set of quarterly results.
From the Crunchbase Daily:
Where the Midwest is best for startups
- The Midwest is gaining ground in terms of startup formation and funding, but activity levels vary widely among metro areas, a Crunchbase News analysis finds. Chicago is far ahead of every other Midwestern city, followed by Minneapolis and Detroit. See all the region’s major city rankings here.
Impossible Foods chows down on $75M
- Sink your teeth into this. Impossible Foods, maker of a veggie burger engineered to taste like real beef, has raised $75 million in a new funding round led by Temasek and joined by Open Philanthropy Project, Bill Gates, Khosla Ventures and Horizon Ventures. The six-year-old, Silicon Valley-based company has raised over $250 million to date.
Snap said to eye drone purchase
- Snap is in talks to acquire drone developer Zero Zero Robotics for between $150 million and $200 million, according to several media reports. China-based Zero Zero is best known for the Hover Camera drone, designed for taking aerial selfies.
Illustration: Li-Anne Dias</em