[HN Gopher] Italy gets its first unicorn as Scalapay raises $497...
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Italy gets its first unicorn as Scalapay raises $497M from Tencent
Author : simonebrunozzi
Score : 235 points
Date : 2022-02-24 08:35 UTC (14 hours ago)
(HTM) web link (sifted.eu)
(TXT) w3m dump (sifted.eu)
| unixhero wrote:
| Why is this interesting, "gets it first unicorn" , "unicorn
| spotted"...
| Toine wrote:
| Because we're in a gigantic bubble where money is pouring so
| massively into so many startups that every metric is completely
| twisted/reversed, valuations are completely disconnected from
| reality, and the social validation they get from buzzwords on
| LinkedIn is more important than actual value delivered.
|
| TLDR : madness
| ericls wrote:
| Oops
| eole666 wrote:
| Yay, hundreds of millions of chinese dollars invested in a brand
| new italian payment company doing nothing really new... So
| exciting, so unicorn.
|
| And almost nobody is talking about what Scalapay actually do, not
| in the article, not in here. How is this payment platform
| different than the other ones ? What tech are they using ? Is
| crypto-currency involve ? Do they actually propose apps on
| android and iOS to do payment for shop owners ? Is it nice to use
| ? What the point of paying everything in 3 times ? What will they
| do with 497 millions dollars ? You could create 497 payment
| companies with that money.
| pxeger1 wrote:
| Unregulated loans, everybody's favourite 100% ethical fintech
| niche...
| jph wrote:
| Congratulations Scalapay! IMHO Italy has a significant startup
| advantages, thanks to plentiful infrastructure in the cities, a
| dynamic culture that combines creativity and processes, and a
| sizeable economy.
|
| I recently visited Milan-Florence-Rome and these feel to me very
| much like the startup scene in San Francisco in the mid-1990s,
| ready to grow fast and big. I believe the missing ingredient is
| more VC startup ecosystem help, from incubators through Series A.
| If you're interested in this area, I'd love to connect because I
| see opportunities to grow the talent and money in Italy instead
| of having it leave for London & NYC.
| qsort wrote:
| Honestly our insane taxation is holding us back. My salary is
| embarassing, but it's not even the company's fault, I'm costing
| my company ~2.5x what I make. The job market is perma-bearish
| and has been so since before I was even born.
| agopaul wrote:
| Well, that feels like a gross oversimplification. Other
| countries have tax brackets not too different from Italy's
| (eg. Germany), and Italy is not too high in the charts of
| cost of labour.
|
| Economists would argue that it's a mixture of things: high
| taxes, low productivity, broken justice system, slow and
| intricate bureaucracy that does not really work, etc.
|
| I bet that if Italy's economy would be based on high value-
| added industries (like France and Germany), less people would
| complain about high taxes.
| qsort wrote:
| > high taxes, low productivity, broken justice system, slow
| and intricate bureaucracy that does not really work
|
| All of those things are absolutely true. I mentioned taxes
| because taxation at 46% of the GDP (pre-covid) is just
| ridicolous.
| toqy wrote:
| I don't know why you guys want to be America so bad.
| Nobody I personally know that has had the chance to move
| to the EU has ever returned. Roughly a sample size of 5,
| but you get the point.
| sharikous wrote:
| Sample size of 3. Nobody who moved to America returned to
| Europe
| dopidopHN wrote:
| Sample of one: can't wait for my wife to be done with
| stuff here, so we can pack our stuff and go back in
| Europe. I will leave a salary that I will never even
| remotely approach in France.
|
| But quality of life... oh man quality of life. Or
| education, I don't want my kids to deal with education
| here.
|
| But y'all are lovely.
| CalRobert wrote:
| When I sat down and did the math I realized moving from
| northern California to Ireland in 2013 has had a total
| opportunity cost of something like $1-$2 million, and
| that's conservative.
|
| There are plenty of things to like about the EU but let's
| not kid ourselves, America is pretty nice if your goal is
| to be wealthy (and most people want that, even if they
| won't admit it).
|
| The Americans the EU would be best for are, for the most
| part, the ones who can't get a visa.
| asdadsdad wrote:
| Ah! The good old EU vs US discussion - always comes back!
| asdadsdad wrote:
| Summary - if you're "meant" to be rich, i.e. you do what
| it takes, you'll probably be anywhere in the world. Is
| life in Europe more interesting, cultured, and
| sophisticated than living in nyc and vacationing in
| florida? probably.
| CalRobert wrote:
| Maybe? I don't know. Europe is a continent. I like my
| field in Ireland but it lacks a lot of what NYC would
| have to offer.
| asdadsdad wrote:
| like what?
| CalRobert wrote:
| Tacos, hackerspaces, museums, Doro wat....
| wil421 wrote:
| Everyone I know has returned. Sample size of ~8.
| toqy wrote:
| It's also not the general consensus I find by reading
| peoples experiences across various platforms online. I
| went to school for a year in Germany and greatly enjoyed
| it.
|
| Of course I expect a different opinion from the top 3%
| income tech bro libertarian bent of the HN user base. But
| I haven't seen a compelling reason here to think life for
| the average American is better than it is for someone in
| the EU.
| CalRobert wrote:
| You're right - for the average American it's worse. But
| average Americans can't move to the EU, for the most
| part.
|
| For high earners the EU comes with a jaw-dropping price
| tag. The effective tax rate on a 200k income in Finland
| is over 50% for instance. In the US even the _marginal_
| tax rate is nowhere near that.
| boulos wrote:
| Actually, the marginal tax rate on $1M in California is
| over 50% (37 federal plus 13.3 state).
|
| For 200k (euros), that's $250k or so which is 35% federal
| (single filer), 9.3% California for 44.3%. (Which I would
| argue isn't that far off).
|
| It would probably be more useful to compare effective tax
| rates and what you get for them. In the US, Social
| Security applies to the first $147k now (so on $250k
| that's 3.6% effective), but you also get a small
| retirement income. In Finland, I assume people get
| services in exchange for those taxes that you might be
| paying for in the US (e.g., healthcare, childcare,
| education, and retirement income), so you can't just
| compare using "what are relative tax rates like?" as a
| question.
|
| tl;dr: taxes and services are nuanced!
| dopidopHN wrote:
| Exactly. Yes my salary in France was more than half my
| salary in the US.
|
| But a very large chuck of the difference are
| "cotisations" a word that does not exists in English and
| is often inaccurately translated to "taxes".
|
| Those cotisations is money I will get back once old,
| sick, or un-employed. It can't be spend on buying new
| fighter jet or fixing the roads.
| CalRobert wrote:
| Very true - the other side to this is it's a _LOT_ harder
| to get to 200k+ in Europe than in California.
|
| Anyway, I like the EU, but it still is a harder place to
| build wealth on the whole. Where I am you pay tax on
| _unrealized_ gains in ETF's (called deemed disposal), CGT
| is high (33%), and you get much less advantage saving for
| retirement than in the US.
|
| On the other hand, if I lose my job, unemployment
| benefits more than cover our monthly expenses if we pare
| back a bit. Our overhead is low.
|
| If it tells you anything I went back to California to
| start a company. Then, after someone drove a car in to my
| wife and the cop lied about her statement and she was
| lucky not to get a huge bill (it was the first few months
| of Obamacare before the horrific deductibles came in),
| AND she took her 1 week of vacation and that was it for
| the year, we decided to hell with that and moved back to
| the EU.
| lotsofpulp wrote:
| The maximum out of pocket expense for 2021 is $17k or so
| for a family, and even in CA, maximum premiums should be
| ~$25k per year for a family of 4, maybe closer to $30k if
| parents are age 55+.
|
| At a million dollars of salary, that is not going to make
| a difference to anyone, especially because most of the
| $30k premiums will be paid by employer, so you are left
| spending $20k out of pocket maximum including your
| portion of the premiums.
|
| I would just add $15k for a single person / $30k for a
| family to tax expenses to compare relative taxes for an
| employer person in US vs EU.
| CalRobert wrote:
| I never argued anything different, though million dollar
| pay is very, very rare.
| lotsofpulp wrote:
| I was trying to give an idea of what horrific deductible
| would be. Probably less than $5k per year, and out of
| pocket maximum less than $10k even for a family.
| Healthcare expenses are not material to employees of tech
| companies...as long as they remain employees.
| dopidopHN wrote:
| I never looked at the actual rate but I just did my taxes
| here in the US.
|
| And I was surprised to see that on average I pay almost a
| net month of salary. ( I pay 10k in 2021 so far, I will
| get a small return )
|
| While in France, I was paying a month of my salary as
| well. ( roughly 3k / year )
|
| Listening to French media, I thought I was moving to a
| tax heaven while going here. Meh. I kinda pay the same
| thing.
|
| Except I don't get any benefit and half my salary needs
| to be stashed away to important, non negociable futur
| use. ( while that part is done for me in France
| automatically though socialized taxes )
|
| I understand why you guy don't like taxes thought : you
| really don't get much back.
| thinkindie wrote:
| sorry but I don't buy that much this argument anymore. I'm
| Italian living in Germany, I see exactly the same kind of
| issues that are holding back Italy economy (minus endemic
| organised crime) but still Germany has a far stronger
| economy.
|
| You have high taxes, slow and intricate bureaucracy (it
| took more than 3 months to complete the house purchase
| process in Germany whereas in Italy is far faster), low
| productivity, tax evasion, etc etc but somewhat Germany
| works slightly better than Italy that generates far better
| results in the end.
| agopaul wrote:
| I'm also an Italian living in Germany and I know what you
| mean. But I wasn't referring to the myth of Germany
| productivity, which is debatable. The argument is not
| anecdotal, rather it is just based on the numbers (eg.
| GDP per hour worked, among others).
| okokwhatever wrote:
| amen
| kfk wrote:
| Taxes are a problem but the work culture is also an issue. I
| tried to setup shop in Italy last year and it was... a mess.
| People not joining calls, broken English, a very concerning
| lack of trust in general from job candidates. I was offering
| market or higher than market wages. I ended up hiring more in
| our base in Krakow. It's getting harder to find people in
| Krakow but the work culture is on another level and English
| good across the board. Net IT salaries in Poland are more or
| less comparable to Italian ones, the overall cost difference
| is max ~20% for senior roles, so yeah taxes, but not enough
| to explain the "hold back" honestly.
| withinboredom wrote:
| The work ethic in Italy is ... interesting. In my
| experience, they get their shit done when they say it will
| be done, not when you say it should be done. They enjoy
| time with family, and time away from work (when I say
| enjoy, I mean they will make time for it, even in the
| middle of an American defined work day). I've never had an
| issue with the Italians I've worked with and I've truly
| enjoyed spending time with them.
| lultimouomo wrote:
| I think one issue is that market wages (or reasonably
| higher than market ones) for developers are so low that
| good talent will simply not be interested in your offer,
| especially if you are a small company (in which case you
| can at least play the "job security" card, which I think
| has a lot of weight here).
|
| Setting up shop or working as a freelancer just pays so
| much better.
| HWR_14 wrote:
| > My salary is embarassing, but it's not even the company's
| fault, I'm costing my company ~2.5x what I make.
|
| That's not horrifically abnormal. A 2x multiplier on salary
| is considered standard in the US for the cost to an employer.
| If you make 20% less than a US counterpart, the company is
| breaking even.
| gnicholas wrote:
| Wonder if we should start inflation-indexing the cutoff for
| unicorn status...
| Ecco wrote:
| Does anyone have any info on the early days of this company? They
| apparently announced a 40M seed round in 2021 but were actually
| founded in 2019.
| simonebrunozzi wrote:
| To be fair, the first "tech" Unicorn was I.Net in year 2000. At
| the time of IPO it was worth ~EUR1.5B.
|
| The term "Unicorn" hasn't been coined yet back then.
|
| Source: my business partner was the co-founder of I.Net.
| captaincaveman wrote:
| Sounds like there is a story in here, so what happened to
| I.net?
| slumber86 wrote:
| Also Prima.it has got 1B+ founding a couple years ago. Unicorns
| in Italy are rare but are some.
| ABS wrote:
| Prima raised $100+M in their Series A in 2018, I don't think
| the official valuation was ever disclosed
| gpderetta wrote:
| The rest of the article qualifies the statement with a "since
| the dotcom boom".
|
| And BTW, congrats although 20 years late :)!
| N19PEDL2 wrote:
| AFAIK Yoox is the first Italian unicorn after the dotcom
| boom.
| kome wrote:
| true. YOOX is totally a unicorn.
|
| and before the boom: tiscali.
| lnxg33k1 wrote:
| As italian with a direct experience both times with it, I
| think Tiscali is an order of magnitude better now than
| when it was a unicorn, maybe these investements require
| profits so that companies need to cut on quality?
| kome wrote:
| sorry if i'm totally misinformed, but isn't tiscali on
| the verge of bankruptcy? the stock looks really really
| bad: https://finance.yahoo.com/quote/TIS.MI/
| lnxg33k1 wrote:
| I wasn't aware of that, I was speaking as a user, maybe
| they're having an hard time to re-conquer customer's
| trust, but right now their connection is quite stable and
| fast
| hwers wrote:
| Is it allowed to express concern about china gaining incentive
| influence through investments like this on HN?
| nicoburns wrote:
| It is, but you I would be interested in what kind of nefarious
| things you think China might concretely do with that influence.
| lnxg33k1 wrote:
| If they give me a million I can give them some influence too
| AussieWog93 wrote:
| I wouldn't worry about it too much.
|
| I complain about China here all the time, and the worst that
| has happened is a particular Hong Kong-based Frenchman
| disagreeing with me. ;)
| durnygbur wrote:
| The business scenario on their landing page is... take a loan to
| buy a piece of clothing... Instead of making the clothes cheaper
| for end consumer, now the consumer can indebt themselves to buy
| something sold with 5000% markup. Here is your 1 year payment
| plan for 50ml bottle of Schramani perfumes.
| giorgioz wrote:
| Yes I also believe it's a terrible service no-one should use!
| If you can't afford luxury products don't buy them yet! I made
| the same critic on swedish startup Klarna:
| https://news.ycombinator.com/item?id=28139376
| ABS wrote:
| depop was funded in Italy, in an Italian incubator/accelerator,
| and moved the HQ to London a year later after getting seed
| investment from Italian investors so could be argued to be an
| Italian unicorn of sort.
|
| But before depop I'm not sure why people keep ignoring/forgetting
| about YOOX?
| jd115 wrote:
| Here, let me correct the naive title for you: "China gets its
| first Italian unicorn"
| wejick wrote:
| Meanwhile Mooney VR46 just launched their motoGP bike
| ilrwbwrkhv wrote:
| So basically copy Klarna?
| Taurenking wrote:
| jollybean wrote:
| American firms like Tiger are starting to back off these crazy
| valuations.
|
| This is not a very big company, this is one of those huge
| multiple type valuations we've seen of the 'SoftBank' type.
|
| Tencent also put $50M in Kit a while back at a sky high
| valuation.
|
| I think this is really about a lot of excess Chinese owned US/EU
| currency looking for a place to park, and so valuations are still
| lofty in this way.
|
| Tiger Global et. al. have said they are pulling back from the
| later stage huge buy ins and this is the opposite of that.
| s_dev wrote:
| Not that comfortable with Tencent starting to acquire up so many
| European digital companies. I'm not sure profit is their only
| motivation here.
|
| I feel like in a decade us Europeans will be sitting around
| wondering why we sold off promising startups to China like we did
| US tech companies the previous decade.
| johndfsgdgdfg wrote:
| ChemSpider wrote:
| Barrin92 wrote:
| I've been using TikTok for a while and is that claim based or
| anything? I've been fed cat videos and unless that is now
| subliminal communist propaganda I have to say Chinese firms
| and American firms seem to have only one goal, which is to
| get me to click on more stuff
|
| given that the party is seemingly trying to dismantle them to
| the best of their ability I'm inclined to think even they
| agree
| msrenee wrote:
| I'm more worried about what information may be leaving my
| phone if I install the app.
| toqy wrote:
| Any reason to believe it's not the same as when you
| install any other app and grant it various permissions?
| Or are you insinuating that TikTok is exploiting the
| platforms and getting data it shouldn't have access to?
| mbesto wrote:
| https://en.wikipedia.org/wiki/Boiling_frog
| Shadonototra wrote:
| > US tech companies use their power to censor some boobs and
| nipples
|
| and competitors! let's not forget alstom, alcatel, nokia and
| many more
| pastacacioepepe wrote:
| > US tech companies use their power to censor some boobs and
| nipples, China will use their power in much more horrible
| ways.
|
| That is a hopefully just naive (uninformed?) statement. US
| tech companies use their power already for censoring
| political parties/views, sell security/espionage technology
| to dictatorships/authoritarian governments, have invented
| dopamine exploiting dark patterns to keep their users
| captive, have a natural tendency for growing into a monopoly,
| lobby/threaten governments against the public interest and a
| lot more.
| willcipriano wrote:
| At the states direction no less: https://townhall.com/tipsh
| eet/katiepavlich/2021/07/21/white-...
| mkdirp wrote:
| Way to read that. And way for them to phrase it. The
| White House is trying to combat disinformation, not
| conservative outlets. It seems obvious but sadly most of
| the disinformation comes from conservative outlets.
|
| Going to the homepage of that website though, it is clear
| what their narrative is:
|
| > _Trudeau's Canadian Fascism Is a Bigger Threat to
| America Than Putin_
|
| Yeah okay.
| AussieWog93 wrote:
| >It seems obvious but sadly most of the disinformation
| comes from conservative outlets.
|
| I'm not even sure that's true; just that conservative
| people aren't as used to being censored.
|
| Plenty of bizarro left-wing shit about Coronavirus, 5G
| and evil conspiracies.
| mkdirp wrote:
| > Plenty of bizarro left-wing shit about Coronavirus, 5G
| and evil conspiracies.
|
| Please do tell me how 5G boils your blood or something,
| and how Coronavirus doesn't exist, or some other silly
| little thing.
| willcipriano wrote:
| I'd be more skeptical but this wouldn't be the first time
| Biden was in the white house and conservative groups were
| targeted: https://www.nbcnews.com/news/world/irs-
| apologizes-targeting-...
| toshk wrote:
| That's one thing. Chinese companies can't be seen as
| different from the government. You can blame the US for a
| lot of things, but it doesn't come close to the atrocities
| the Chinese government commits on a daily basis.
| trasz wrote:
| Let me remind you that the country with the highest
| percentage of imprisoned people is USA, not China.
| "Incomparable atrocities" is mostly just US state
| propaganda.
| wongarsu wrote:
| Chinese companies can't be seen as different from their
| government, US companies can't be seen as different from
| their advertisers.
|
| The Chinese ones are arguably worse right now, but that's
| due to a difference in current attitudes of their
| censors, not because one of them is somehow free from
| pressure.
| ironSkillet wrote:
| The difference is that the Chinese government can apply
| pressure via violence and arbitrary enforcement of laws,
| whereas advertisers can...decide to take their money
| elsewhere. Which is worse and more likely to lead to
| abuse?
| trasz wrote:
| US government is pressuring US companies in the exact
| same way, Snowden proved that.
| JumpCrisscross wrote:
| The existence of Snowden, and his being alive and not
| dead, proves a salient difference.
| trasz wrote:
| He's only alive because he was able to flee to Russia.
| JumpCrisscross wrote:
| > _only alive because he was able to flee to Russia_
|
| This is disingenuous. America hasn't resorted to polonium
| tea tactics in the modern era. Chelsea Manning is injured
| but free.
| trasz wrote:
| Indeed, America drones people instead. Orders of
| magnitude more people.
| toshk wrote:
| You have no idea. Human lives mean nothing in China
| trasz wrote:
| [citation needed]
| pastacacioepepe wrote:
| What China did doesn't even come close to the amount of
| atrocities, interferences in foreign politics,
| unwarranted wars caused only by the imperialist mindset
| of the US.
|
| Please, read. There is so much to learn that it would
| probably take years for someone to learn in detail
| everything the US (and the other western powers, -the
| "good" guys-) have done.
|
| These are just the official war crimes:
| https://en.wikipedia.org/wiki/United_States_war_crimes
|
| These are just 7 of the legitimate governments the US
| have overthrown:
| https://foreignpolicy.com/2013/08/20/mapped-
| the-7-government...
|
| More in Africa: https://www.bbc.com/news/world-
| africa-36303327
|
| This one is dear to me, the CIA activity in Italy to
| interfere with our democratic process:
| https://en.wikipedia.org/wiki/CIA_activities_in_Italy
|
| You can also check the list of the human right violations
| committed by the CIA: https://en.wikipedia.org/wiki/Human
| _rights_violations_by_the...
|
| Let's forget about Guantanamo eh?
|
| Bonus: The cost of the post 9/11 US wars in the middle
| east: https://watson.brown.edu/costsofwar/costs/human
| JumpCrisscross wrote:
| Your citations are honest. But past performance doesn't
| guarantee the future. It just informs it.
|
| Most of America's worst was in its post-War and
| imperialist eras. China is entering its own imperialist
| era.
|
| If you're upset about American meddling in Italian
| politics through the 1960s, you've surely seen who's been
| bankrolling the current crop. In Italy, in the
| Philippines and elsewhere.
| azth wrote:
| Exactly. Haven't people learned from what's literally happening
| right now? Why wouldn't China taking over Taiwan be next if
| they see what's happening?
| nicoburns wrote:
| Would it be good if profit was their only motivation? IMO the
| main problem with this is precisely that it ends up sending
| control of profits abroad. Of course, that's true with any
| multinational company. Anything else beyond profiteering can
| always be reversed by simply taking back control of the company
| in the worst case. Ownership is always with the grace of
| governments.
| mc32 wrote:
| I think the preference is that the acquiring companies aren't
| subject to extrajudicial influence by their governments where
| one might be cautious of Chinese or Russian ownership because
| their governments have embeds in these companies.
|
| So it's usually safer to have a Korean, Japanese, W European
| or Anglophone company take a stake. Obviously, all companies
| have some ties with their governments but the difference is
| degree and independence as well as a non-rubber stamping
| judiciary. Revolving doors can be an issue but it's much less
| an issue than actual gov officials embedded in companies.
| nicoburns wrote:
| But safer from what exactly? What is the risk from having
| foreign government personnel embedded in a company?
| mc32 wrote:
| I think that should be self-evident.
| dahfizz wrote:
| > Anything else beyond profiteering can always be reversed by
| simply taking back control of the company in the worst case.
| Ownership is always with the grace of governments.
|
| Lol. You think it would be so simple for Italy to take
| control of a Chinese owned company? You think they could just
| do that at the snap of their fingers, with no repercussions?
| nicoburns wrote:
| I think it depends where the actual operations were. If
| most of the staff and physical assets were European based
| then absolutely. China pretty much already do this with
| companies operating in China.
| chii wrote:
| > Would it be good if profit was their only motivation?
|
| yes, because the profit in the future would be priced into
| this sale today - presumably owned by italian.
|
| This means the funds could be reinvested in a different
| company today - a new start up perhaps - which creates more
| profit in the future.
|
| The problem with buying control for more than just profit (or
| regardless of profit) is that those who are buying control is
| seeking to control more than just commercial interest. If an
| unfriendly gov't were to instruct such holders to perform
| certain tasks, they would comply.
| andrewjl wrote:
| > Ownership is always with the grace of governments.
|
| Not when said asset is a movable one.
| netcan wrote:
| >> I'm not sure profit is their only motivation here.
|
| Not disagreeing or trying to get capital P political, just
| giggled a bit at "not profit" being the ominous factor. "Only
| in it for the profit" is now, perhaps, the devil we know.
|
| More seriously, I get the point you are making. I don't know
| what I think of it all, honestly. There could be arguments in
| both directions. Maybe I'm overly considering the current
| crisis in Ukraine, but doesn't having holdings in the west
| disincentivize conflict and rifts? At some point along a
| conflict ladder, foreign assets get seized.
|
| Maybe it's good to be exchanging hostages. I suppose it's just
| ambiguous/arguable what counts as who's hostage.
| JumpCrisscross wrote:
| > _doesn 't having holdings in the west disincentivize
| conflict and rifts?_
|
| WWI and China's accession to the WTO say no.
| ovi256 wrote:
| > Europeans will be sitting around wondering
|
| If you tax away capital formation (or vote for people who do
| it) it's useless to wonder why European entrepreneurs take
| foreign capital. Most of them outright emigrate anyway so you
| don't even get to notice it.
| ABS wrote:
| Tencent co-lead and invested in the Series B round, it didn't
| "acquire" Scalapay
| lmeyerov wrote:
| One down round later and investor preference shares+rights
| means Tencent, and effectively China, owns. It sounds like
| revenue (profit) is nowhere near these levels, so long time
| for that to change.
|
| For all consequential purposes, their huge preference means
| they already do. You can bet there is strong language where
| Tencent (China) can veto big decisions, and hold that over
| the teams head for smaller ones.
| Lascaille wrote:
| Semantics aside that differs how?
| ABS wrote:
| from "a lot" to "massively" depending on the terms
| s_dev wrote:
| I'm not sure what distinction you think you're making. They
| bought a lump of the company at whatever valuation and that's
| termed an "investment". However my point is that I don't
| suspect they're strictly after a return on investment here.
| ABS wrote:
| no, they very explicitly co-lead the round with Willoughby
| Capital and the participation from Tiger Global, Gangwal,
| Moore Capital, Deimos, and Fasanara Capital.
|
| Buying something to own/control it and investing in
| something for an expected future return are very, very,
| extremely different things and even more so in this
| context.
|
| Both formally (terms and conditions signed by all the
| parties involved, and there are many here and it's Series
| B, the clauses regarding equity, control, debt, exits and
| so forth) and practically.
| oefrha wrote:
| If you can't see a distinction here, then Tencent was
| "acquired" by Naspers of South Africa in 2001 by your
| logic.
| OJFord wrote:
| And also by me, at various times, through various
| different funds.
| oefrha wrote:
| You didn't own a 46.5% stake in 2001 or a 30.86% stake in
| 2021, but in principle, yes.
| jasode wrote:
| _> I'm not sure what distinction you think you're making.
| They bought a lump of the company at whatever valuation and
| that's termed an "investment". However my point is that I
| don't suspect they're strictly after a return on investment
| here._
|
| The distinction is that _" acquire"_ means _controlling
| interest_. Investing $497 million when the valuation is
| over $1 billion means... (doing the math) ... Tencent has
| less than 50% ownership. At this point, Tencent only has an
| _investment_ and not a controlling interest. _Therefore,
| Tencent did not acquire Scalapay (yet)._
|
| This isn't being pedantic about semantics. Instead, it's
| being very clear about who _controls_ Scalapay based on how
| much ownership percentage was purchased.
|
| Another example of the difference... in 1997 when Microsoft
| invested $150 million in Apple, it did not purchase enough
| ownership % to consider it an acquisition. The $150m is a
| lot of money but MS didn't acquire Apple with that
| transaction. (https://www.google.com/search?q=microsoft+inv
| ests+%24150+mil...)
|
| EDIT reply to: _> Valuation has nothing to do with
| controlling interest. They are unrelated. _
|
| Setting aside a multi-class stock arrangement with 10x
| voting rights which would be unusual for non-public company
| at this early stage because it requires approval by the
| previous investors & founders, _the post-money valuation is
| mathematically related to the ownership percentage
| purchased_ -- and therefore determines if there 's a
| controlling interest.
| IncRnd wrote:
| > Investing $497 million when the valuation is over $1
| billion means... (doing the math) ... Tencent has less
| than 50% ownership.
|
| > This isn't being pedantic about semantics.
|
| You are quite simply wrong. Valuation has nothing to do
| with controlling interest. They are unrelated. A company
| can have 100 shares, each worth $1, and be valued at
| $2,000,000,000.
| aetherson wrote:
| You're wrong.
| IncRnd wrote:
| In what way am I wrong?
| JumpCrisscross wrote:
| > _company can have 100 shares, each worth $1, and be
| valued at $2,000,000,000_
|
| Not OP. But that company is worth $100.
|
| "Worth" is an ambiguous term, however, as it encompasses
| value in both par and market. One case makes you right.
| The other, the other.
| IncRnd wrote:
| A company is worth what people are willing to pay for
| it's shares. The share price is not the same as
| valuation, which can be seen in the example above. It can
| also be seen with what is commonly called value
| investing, which is used by possibly millions of people,
| purchasing shares where the book value is greater than
| the trading value.
| JumpCrisscross wrote:
| > _company is worth what people are willing to pay for it
| 's shares_
|
| If you say a company's shares are "worth" $1 per share,
| you imply that's what people are willing to pay for it.
| If you're playing with the word "worth," it's your
| incumbency to explain that deviance from the common use.
|
| Par value is a legal term. Book value is an (increasingly
| anachronistic) accounting term; actually, several terms,
| since GAAP book is separate from IASB or Chinese book,
| but I digress. Each of which are separate from market
| value, which is also various; consider a public stock:
| does one take the bid or the offer or the mid market
| tick? At Noon or the closing or a VWAP?
|
| Companies play with their headline valuation. In this you
| are correct. But they're playing with the ambiguity that
| stumbles you.
| [deleted]
| IncRnd wrote:
| You agreed with my comment elsewhere. Please stop with
| strawman restatements and arguing for the sake of
| arguing.
|
| > Technically, no. You can acquire control of a $100bn
| company for $1 if the shareholder agreement says so.
| Votes and dollars don't have to correlate, particularly
| in Italy. [1]
|
| [1] https://news.ycombinator.com/item?id=30455219
| [deleted]
| HWR_14 wrote:
| It's technically possible. You can imagine a company with
| exactly 100 shares, and a contract that allows the
| company a right to buy any share put up for sale pre-IPO
| for $1. Then all 100 shares are "worth" a dollar, even if
| the price in the market without that clause would be
| $20MM. That would correspond to a $2 billion valuation.
| JumpCrisscross wrote:
| > _Investing $497 million when the valuation is over $1
| billion means... (doing the math) ... Tencent has less
| than 50% ownership_
|
| Technically, no. You can acquire control of a $100bn
| company for $1 if the shareholder agreement says so.
| Votes and dollars don't have to correlate, particularly
| in Italy.
|
| Practically speaking, you're probably right.
| jollybean wrote:
| Profit is definitely their primary motivation.
|
| Chinese companies are a bit nationalist, and they definitely
| have some internal actors from the CCP there for purposes of
| oversight, and in a pinch can very easily have their arms
| twisted - but - they are just companies wanting to make money
| really.
|
| Tencent is just Tencent. They will follow internal censorship
| laws, but it's likely just a matter of moderation much the way
| FB does it, but with different parameters, and taking some
| direction from the state. My guess is that for the most part
| Chinese companies are fine with it. For products they control
| outside the country my estimation is that it's censored in a
| completely different way, much more liberally, but some things
| might get scrubbed.
|
| Of course investing in a company is different than owning it
| (i.e. >50%) and it's very different if it's based in China vs.
| a European company.
|
| China has huge trade surplus. What this means, is that we send
| them USD/EUR for 'stuff'.
|
| Eventually, they have to use those USD/EUR for 'something'.
| What are they going to buy? Well - stocks, real estate,
| companies etc..
|
| It's actually rational for EU/USD to sell them things at hugely
| inflated price tags, it's a nice way to bring the cash back in
| on good terms.
|
| If they are cash-flush, then they might just be looking to
| protect their money as much as anything.
|
| In most cases, it's unlikely that having a Chinese investor
| will make a huge difference in terms of anything happening out
| of China. It's unlikely the could or would make censorship
| demands on anything happening outside of China, that said, if
| they gain control, it's a bit of a different story.
| HWR_14 wrote:
| > I feel like in a decade us Europeans will be sitting around
| wondering why we sold off promising startups to China like we
| did US tech companies the previous decade.
|
| While what you're saying is true, might it be a brilliant time
| to sell a chunk to Tencent? If you believe that China is likely
| to invade Taiwan soon, and western countries will respond by
| freezing any Chinese assets overseas (see: Russia/Ukraine),
| might this be a great way to pocket cash and then have the
| equity revert back to you in a few months?
|
| That said, Tencent seems to own a chunk of most important
| private tech companies and most mid-level game companies.
| amelius wrote:
| Or why we kept shouting that IP law needs a reform, without
| taking serious action.
| arbuge wrote:
| I think the lack of unicorns in Europe has a lot more to do
| with the regulation culture and lack of ecosystem around
| starting new companies than with the US or China acquiring them
| away before they have the chance to fully bloom. You can see
| this even within Europe. Lots more unicorns in the UK than in
| Italy for exmaple.
| osullip wrote:
| According to Smart Company it's an Aussie unicorn.
| https://www.smartcompany.com.au/startupsmart/news/scalapay-b...
| mfontani wrote:
| Scalapay divides a purchase into N smaller installments, with no
| fees.
|
| How are they going to make money?
| theodorton wrote:
| patio11 wrote a really insightful blog post earlier this year
| on Buy Now Pay Later business models.
|
| https://bam.kalzumeus.com/archive/buy-now-pay-later/
| gpderetta wrote:
| That was a great article, thanks.
| eunos wrote:
| I'm concerned if BNPL practice flourishing because it's quite
| easy to trigger systemic crisis later on. Also quite ironic
| Tencent funded them, Ant group was whammed by Chinese Govt
| because they were promoting BNPL on scale.
| AussieWog93 wrote:
| >I'm concerned if BNPL practice flourishing because it's
| quite easy to trigger systemic crisis later on.
|
| Genuine question - how would that work?
|
| BNPL companies tend to have pretty low limits and demand
| repayment fairly quickly, so I don't think it could lead to
| a GFC-scale bad debt situation at the very least.
| eunos wrote:
| Well when I watched the big short, they said that house
| mortgage is the safest investment ever.
| ChemSpider wrote:
| Accepting money from Tencent is a shame. No reasons at all to be
| proud of this.
|
| https://www.hrw.org/news/2020/09/28/chinese-tech-firms-fueli...
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