Farfetch valuation and the weekly roundup in tech and retail

News and commentaries

I first heard of Farfetch, the mid- to premium luxury e-commerce site back in 2012. I remember sharing it with a friend because the styles of certain brands were very different from US websites. She warned me to watch out for possible fakes especially from a new and relatively unknown website. It gave me pause because she could very well be right. But I kept myself updated with the website because I found the concept very interesting – sourcing from small boutiques internationally (mostly Europe and North America) and bringing them into a single shoppable platform. But it’s also interesting that there was this old mindset, completely overturned by now, especially by Net-a-Porter Group, that it’s hard to trust the authenticity of luxury items sold exclusively online. Fast forward to this week, and Farfetch just joined the billion-dollar valuation club, raising $86M in funding with a $1B valuation.

With massive valuations of tech companies, Farfetch is a small blip in the horizon but it still remarkable for an e-commerce startup serving in a niche – luxury items from small boutiques worldwide. Personally, I have not bought anything from Farfetch though I have considered it several times but then again, I’m probably not their target customer – I am quite price-sensitve to shipping, which is not free on Farfetch (although they do have promotional complimentary shipping at times). Still, a fashion startup with a $1B is exciting news.

In a follow-up to my post about self-driving cars, consulting firm McKinsey & Co. just released a study on self driving cars, claiming that self-driving cars could save thousands of lives and could boost Internet revenue by billions.

Here are this week’s weekly roundup in tech and retail:

In tech:

  1.  SpaceX wins preliminary ruling on patent dispute with Jeff Bezo’s Blue Origin
  2. As Apple readies for its Apple Watch event on Monday, the company joins Dow Jones industrial average; meanwhile reports of fraud associated with Apple Pay surfaces
  3. Google to become a wireless carrier, but subscribers must have Google’s flagship phone, the Nexus 6
  4. Uber buys mapping tech startup deCarta for an unspecified amount
  5. Facebook will change the way it counts “likes” for Facebook Pages, feature will roll out in the coming weeks

In retail:

  1. Etsy, the online marketplace for handmade crafts, files for IPO, will list on the Nasdaq under the ticker ETSY
  2. Amazon opens store inside local competitor, Alibaba’s Tmall in China
  3. Adidas reports Q4 loss, net loss for 3 months ended December reach $140M
  4. Abercrombie & Fitch reports another slide in sales for quarter ending January 31 while competitor American Eagle Outfitters reports stronger-than-expected earnings
  5. Coach turnaround efforts continue with opening of Paris flagship

Snapchat’s $10B valuation and the weekly roundup in tech and retail

News and commentaries

I did not balk at Instagram’s $1B acquisition by Facebook nor at Dropbox’ estimated $10B valuation. I believe that both address certain needs. Instagram was widely used in fashion, an industry that most people continue to underestimate. Dropbox, based on experience, is the easiest way to manage files in the cloud and addresses students, teachers, professionals, as well as enterprises. But it seems that recent billion-dollar valuations in the tech space have been based not so much on their business models but rather on how much of an acquisition target they can be.

Looking at Snapchat‘s recent valuation of $10B, I do balk a little. Admittedly, I have not taken advantage of the app’s ephemeral messaging features, which I imagine, are used for drunken messaging and sexting. I don’t necessarily think these features are solving a need so great that people will eventually pay for it. Furthermore, the app’s demographic of teenagers are quite a fickle bunch. However, as an acquisition target, the $10B valuation makes some kind of crazy sense. Kleiner Perkins Caufield & Bryers, the venture capital firm leading Snapchat’s round, must have some really good inside information of how they can profitably exit this one. Google, Apple, Facebook and even Amazon have to fight to stay relevant especially among the elusive millennials. If these companies want to have a pipeline of young users to whom they can eventually sell anything to, then Snapchat and others like it are an expensive but necessary buys.

Read on for this week’s most relevant news in tech and retail:

In tech:

  1.  After failed talks with Google, Amazon acquires game streaming site, Twitch for $1B
  2. Apple sends invites for September 9 keynote event, may launch iPhone 6 and iWatch
  3. Dropbox announces lower pricing, new features and offers 1TB cloud storage for $9.99/month
  4. Instagram releases new app, Hyperlapse, turning shaky videos into time-lapses
  5. Fashion wearables: Ralph Lauren with OMsignal launch high-tech biometric shirts at the US Open; Rebecca Minkoff will debut 2 bracelets for charging and notifications at next week’s runway show

In retail:

  1. Quarterly reports: Salvatore Ferragamo second quarter reports show higher than expected profit of €90M, up 8% from last year; Tiffany & Co. second quarter earnings are up 7% compared to last year, raises full-year forecast
  2. Alibaba reports April-June results of 46% increase in year-on-year revenue of $2.54B, fuels the fire of impending IPO; IPO roadshow rumored to start after Labor day
  3. Dalian Wanda Group enters into a ¥5B e-commerce joint venture with Tencent and Baidu
  4. Abercrombie & Fitch  to remove logos after disappointing second quarter revenues of $891M, a 6% drop from last year
  5. E-commerce startup JustFab raises $85M at a valuation of $1B