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Postmates cuts losses in Q2 as it heads towards tie-up with Uber

Popular food delivery service Postmates is in the process of merging with Uber in a blockbuster $2.65 billion deal that would see it join forces with its food delivery competitor, Uber Eats. The deal remains under antitrust scrutiny, and has not yet been approved for closing. The deal is expected to close in the first half of 2021.

However, a new SEC filing posted after hours this Friday gives us a glimpse into how Postmates is faring in the new world of global pandemics and sit-in dining closures across the United States.

Postmates posted a loss of just $32.2 million in Q2, compared to a loss of $73 million in Q1, nearly cutting its cash burning in half. That compares to Uber Eats’ results, which showed a loss of $286 million in the first quarter of 2020 and a loss of $232 million in the second quarter — an improvement of roughly 20%, according to Uber’s most recent financial reports.

Altogether, Postmates lost $105.2 million in the first half of 2020, compared to a loss of $239 million in the same period of 2019.

Uber through its filing today also disclosed the cap table for Postmates in full detail for the first time. On a fully diluted basis, the largest shareholder in Postmates is Tiger Global, which owns 27.2% of the company. Following up is Founders Fund with 11.4%, Spark Capital with 6.9% and GPI Capital with 5.3%. At Uber’s $2.65 billion all-stock deal, that nets Tiger Global roughly $720 million and Founders Fund roughly $302 million, not including some stock preferences and dividends that certain owners of the company hold.

While Postmates and Uber continue to go through the antitrust review process at the federal level, the companies also face legal pressure in their own backyards. Uber noted in its filing today that it and Postmates face headwinds due to California’s AB 5 bill, which is designed to give additional employment protections to freelance workers. However, the company notes that such litigation “may not, in and of itself, give rise to a right of either party to terminate the transaction.”

Twilio’s contact center products just got more analytical with Ytica acquisition

Twilio, a company best known for supplying a communications APIs for developers has a product called Twilio Flex for building sophisticated customer service applications on top of Twilio’s APIs. Today, it announced it was acquiring Ytica (pronounced Why-tica) to provide an operational and analytical layer on top of the customer service solution.

The companies would not discuss the purchase price, but Twilio indicated it does not expect the acquisition to have a material impact on its “results, operations or financial condition.” In other words, it probably didn’t cost much.

Ytica, which is based in Prague, has actually been a partner with Twilio for some time, so coming together in this fashion really made a lot of sense, especially as Twilio has been developing Flex.

Twilio Flex is an app platform for contact centers, which offers a full stack of applications and allows users to deliver customer support over multiple channels, Al Cook, general manager of Twilio Flex explained. “Flex deploys like SaaS, but because it’s built on top of APIs, you can reach in and change how Flex works,” he said. That is very appealing, especially for larger operations looking for a flexible, cloud-based solution without the baggage of on-prem legacy products.

What the product was lacking, however, was a native way to manage customer service representatives from within the application, and understand through analytics and dashboards, how well or poorly the team was doing. Having that ability to measure the effectiveness of the team becomes even more critical the larger the group becomes, and Cook indicated some Flex users are managing enormous groups with 10,000-20,000 employees.

Ytica provides a way to measure the performance of customer service staff, allowing management to monitor and intervene and coach when necessary. “It made so much sense to join together as one team. They have huge experience in the contact center, and a similar philosophy to build something customizable and programmable in the cloud,” Cook said.

While Ytica works with other vendors beyond Twilio, CEO Simon Vostrý says that they will continue to support those customers, even as they join the Twilio family. “We can run Flex and can continue to run this separately. We have customers running on other SaaS platforms, and we will continue to support them,” he said.

The company will remain in Prague and become a Twilio satellite office. All 14 employees are expected to join the Twilio team and Cook says plans are already in the works to expand the Prague team.

Twitter ‘smytes’ customers

Twitter today announced it was acquiring the “trust and safety as a service” startup Smyte to help it better address issues related to online abuse, harassment, spam, and security on its platform. But it also decided to immediately shut down access to Smyte’s API without warning, leaving Smyte’s existing customers no time to transition to a new service provider.

The change left Smyte’s current customer base stranded, with production issues related to the safety of their own platforms.

Needless to say, many were not happy about this situation and took to Twitter to register their complaints.

According to Smyte’s website, its clients included Indiegogo, GoFundMe, npm, Musical.ly, TaskRabbit, Meetup, OLX, ThredUp, YouNow, 99 Designs, Carousell, and Zendesk – big name brands that used Smyte’s feature set in a variety of ways to combat fraud, abuse, harassment, scams, spam, and other security issues.

While Twitter had earlier told TechCrunch that it would be “winding down” Smyte’s business with existing clients, what that apparently meant was that it was going to announce the acquisition, then effectively shut off the lights over at Smyte and leave everyone in the lurch.

According to reports from those affected, Smyte disabled access to its API with very little warning to clients, and without giving them time to prepare. Customers got a phone call, and then – boom – the service was gone. Clients had multi-year contracts in some cases.

And again, to reiterate, Smyte is a provider of anti-abuse and anti-fraud protections – not something any business would shut off overnight.

In npm’s case, it even led to a production outage.

Twitter declined to comment, but we understand it was making phone calls to affected Smyte customers today to match them with new service providers.

The decision to smite smyte an existing customer base the minute the startup joined Twitter isn’t a good look for either company, and is especially ironic in light of Twitter’s promises of “trust and safety” improvements in the months to come.

Trust, huh?

That’s how it works?

Holy shit Twitter bought Smyte and immediately shut it down. We had a 3 years contract with them and they just disappeared overnight. No communication at all, they just turned their servers off, closed our shared support channel and walked away. What the actual fuck

— Giacomo Gatelli (@arthens) June 21, 2018

»Trust and safety as a service«, they said. Now @Twitter owns @HelloSmyte, and trust is down the drain. Shutting down their services immediately, not giving their customers any grace period to adjust. Thought #Smyte was better than that #massivedisgrace 😡https://t.co/ttXmLNg3qb

— Ekaterina Damer (@ekadamer) June 21, 2018

Wait…so did @HelloSmyte just shut down it’s service entirely today with no warning after @Twitter bought them? What about their customers that rely on them for advanced moderation and the safety of their platforms? #smyte

— Michael Ehinger (@MichaelEhinger) June 21, 2018

A vendor notified us of their acquisition at 6am this morning and shut down their APIs 30 minutes later, creating a production outage for npm (package publishes and user registrations). The sheer unprofessionalism of this is blowing my mind.

— Laurie Voss (@seldo) June 21, 2018

It takes weeks to negotiate and sign an acquisition. You didn’t find out at 6am. You couldn’t give us a week? Even a couple of hours to take your service out of our critical path and avoid an outage? Fucking shocking behavior.

— Laurie Voss (@seldo) June 21, 2018

Damage is done already anyway. We had the same experience; luckily we were only using them in an async capacity so it didn’t take us offline.

— Jeff Goldschrafe (@jgoldschrafe) June 21, 2018

#smyte pic.twitter.com/SAPnHxdyMU

— theredwarrior (@theredwarrior) June 21, 2018

from https://t.co/oarjqaRFlr:

“Twitter tells us that Smyte will wind down its operations with those customers including Indiegogo, GoFundMe, npm”

🤔🤔🤔🤔https://t.co/5iCSzLP5D1

— Adam Perry (@dika10sune) June 21, 2018

Hey @HelloSmyte , it’s a massive bummer that you couldn’t give your customers any notice before turning everything off. Is there anything you can do to help us out?

— Dennis Hotson (@dennishotson) June 21, 2018

Thanks for just shutting off service at 615am this morning with 7 minutes notice.

— Curtis Schofield (@curtisjennings) June 21, 2018