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Uber has already made billions from its exits in China, Russia and Southeast Asia – TechCrunch

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Uber’s exits from China, Russia and Southeast Asia were billed as failures from the company, but the ride-sharing giant has already made billions on paper from those moves, according to its IPO filing.

Uber released its much-anticipated S1 on Thursday U.S. time and reporters and analysts are frantically digging into a treasure trove of previously-unreleased details. A number of sections on Uber’s global divestitures begin to paint a clear picture of the strategy that Uber employed when leaving China, Russia and Southeast Asia in recent years.

In each case, Uber decided to leave the market but, upon doing so, take a stake in its rival business in exchange for the assets it had remaining. Today, those holdings are collectively worth a cool $12.5 billion on paper, with a least $3 billion in gains so far.

China: $7.95 billion

China was Uber’s first tactical exit and it saw the company sell to local giant Didi Chuxing in August 2016. 

The Uber filing shows the U.S. firm took an 18.8 percent take in Didi. That, Uber estimates, has since been reduced to around 15.4 percent due to subsequent fundraising from Didi, which last publicly announced a $5.5 billion raise one year ago — previously, it raised $4 billion at the end of 2017.

Didi’s $56 billion valuation means it is the third highest valued startup in the world behind only ByteDance, parent of TikTok, and Uber, which it counts as an investor

The really interesting part of the filing its Uber’s estimate for the value of its Didi stake: that was $5.97 billion as of the end of 2017, and $7.95 at the end of last year. That’s a $2 billion paper increase in just one year, although the Uber filing doesn’t provide a value for the initial merger deal. Didi is also in the money having invested $1 billion into Uber in exchange for

One notable piece is that an investigation into whether the deal constitutes a monopoly is still ongoing, some two and a half years after the transaction was first announced.

“It is not clear how or when that proceeding will be resolved,” Uber notes in its document.

Finally, the original deal included a clause forbidding Didi from making “certain investments outside of Asia” for a six-year period. The company breached that — it acquired Uber rival 99 in Brazil and expanded its business into Mexico, among other moves — which saw Uber take back some shares, although its net gain was only $152 million.

Didi has struggled over the last 18 months so safety concerns bubbled to the fore following the murder of two female passengers last year. Operationally, too, there have been challenges. Didi reportedly lost $1.6 billion last year — that’s more than Uber — and it reshuffled the organization by laying off 15 percent of its staff recently. Despite buying out Uber, it is up against increased competition after a consortium of automakers inked a $1.45 billion ride-hailing joint-venture while new government rules have made the business of ride-hailing, and in particular recruiting drivers, more challenging in China.

Still, as China’s dominant firm and with an increasingly global presence, you’d imagine that Uber’s stake is likely to become more lucrative in the future.

Southeast Asia: $3.22 billion

Uber’s exit from Southeast Asia in March 2018 never seemed a copy of its China play, where it was burning a reported $1 billion a year. Instead, I argued that the deal was actually a win for the U.S. firm because it took a decent slice of Grab as part of the agreement and Uber’s filings show that is already proving to be the case.

Uber noted that the exit deal saw it take an initial 30 percent stake for $2.28 billion, which has since diluted to around 23 percent following Grab fundraising, which remains ongoing with a goal of $6.5 billion for its Series H. (That may be why the Uber stake was initially announced as 23 percent rather than 30 percent.)

Grab’s most recent valuation was $14 billion, according to sources, which means Uber’s stake is already worth $3.22 billion, a nearly $1 billion jump on paper in just a year.

Uber’s investment in Grab has already made it a $1 billion profit in just over one year

With the company in a dogfight with Go-Jek, its Indonesia rival that’s backed by the likes of Google and Tencent, it seems unlikely that Grab and key shareholder SoftBank will do anything other than keep on raising. That’ll likely dilute Uber — which, as a shareholder rather than an investor, isn’t likely to invest again — but it’ll increase Grab’s valuation and thus the value of Uber’s stake.

That leads us to the next detail of Uber’s Grab investment: its stake is classified as “available-for-sale debt security.” That’s to say that Uber could potentially dispose of its stake in the future.

Indeed, the Uber filing notes a clause in the deal that would allow the U.S. firm to sell “all or a portion of its investment back to Grab for cash” if the company hasn’t gone public by March 25 2023, five years after the deal.

That’s the first real line in the sand that we’ve seen for a Grab IPO and, with a buyback already expensive as Uber’s stake is worth more than $3 billion, the clock is ticking.

Russia: $1.4 billion

Finally, Uber’s third tactical retreat is Russia, where it formed a joint venture with local rival Yandex.taxi in July 2017. The combined business covers ride-hailing and food delivery in over 127 cities in Russia.

That gives it a different kind of relationship to its deals with Didi and Grab, where it one of many minority shareholders, and Uber’s S1 gives fewer details of the Russia JV.

Yandex, like Uber, is testing self-driving vehicles that could used in its taxi service in the future

What we do know is that Uber estimates its share of the business is 38 percent, a slice that it says is worth $1.4 billion. That’s a valuation of around $3.68 billion which is on par with the $3.7 billion that the companies announced at the time of the deal. Like the other deals, the business is the dominant one in a huge market — Russia has a population of more than 140 million people — so it stands to reason that the business will grow and thus Uber’s value within it will increase.

Yandex, the parent of Yandex.taxi, also stands to gain and not just from the joint venture. Uber allocated the company two million shares (then worth $54 million) which, at a proposed $55 per share, would more than double to $110 million at IPO and that’s not counting its potential value in the future.

A change with Careem acquisition

Uber CEO Dara Khosrowshahi said that Southeast Asia would be the company’s last global retreat, and he seems to have been good to his word so far. Indeed, Uber announced its largest acquisition last month with a planned $3 billion purchase of Middle East-based rival Careem, which is present in 15 markets.

The Uber filing explains that the deal, which has not been completed, is $3.1 billion with around $1.4 billion in cash.

“We have structured the acquisition and proposed integration of Careem with the goal of preserving the strengths of both companies, including opportunities to create operating efficiencies across both platforms. We expect to share consumer demand and driver supply across both platforms, thereby increasing network density and reducing wait times for consumers and drivers in the region, while simultaneously achieving synergies from combining back-end support functions and shared technology infrastructure,” Uber wrote in a statement.

That’s certainly a new approach for Uber worldwide and, post IPO, it’ll be interesting to watch it actively play a role in consolidating other businesses into its own rather than going the other way. Still, those three global retreats are likely to pay off handsomely despite being billed as the result of failure.

A graphic from Uber’s filing shows its global presence, and the importance of its investments in China, Russia and Southeast Asia

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M1 MacBook Pro with 8GB, 16GB RAM show surprising benchmark results

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Apple’s M1 Silicon has definitely been hogging the computing news spotlight these past weeks, most of them comparing its performance with Intel’s chips. Not all M1 Macs are the same, of course, and not just counting the difference between an M1 MacBook Air and an M1 MacBook Pro. Even the MacBook Pro (Late 2020) offers two slightly different models with different RAM capacities. Thankfully, someone took the time to benchmark these two variants, and the results might surprise you a bit.

It’s probably logical to assume that an M1 MacBook Pro with 16GB of RAM will outperform one with only 8GB of RAM and that may be true in some cases. It is, however, a simplistic view which could end up literally costing you when you decide which model to pick. Even benchmark tests don’t give the full picture and you have to take them into context.

YouTube channel Max Tech puts these two M1-powered MacBook Pros through a series of tests and, depending on what’s being tested, the performance difference between the two isn’t that stark. For activities that require more memory, like exporting an 8K R3D RAW to 4K, it’s only natural that the 16GB RAM configuration would finish faster. For more CPU-intensive tasks, however, the 8GB RAM model isn’t that far behind.

The real loser in these tests, unsurprisingly, is Intel once again. The benchmarks put an Intel Core i9 MacBook Pro with 32GB of RAM and a 2020 iMac with 16GB of RAM to be almost in the same ballpark as the M1 MacBook Pro with 16GB of RAM. Considering the Intel-powered Macs cost twice or thrice as much, the result is almost embarrassing for Intel.

The benchmarks aren’t exactly a glowing recommendation of the 8GB RAM M1 MacBook Pro, just that, for most use cases, it would be enough. As always, buyers have to keep in mind what they intend to use the MacBook Pros for in the long run but they can rest assured knowing that even the more affordable model is no slouch.

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Intel boasts battery performance superiority over AMD in Intel tests

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Intel has taken quite a beating this year, from AMD’s unwavering onslaught to the damning benchmarks of the Apple Silicon M1. The launch of its 11th-gen Tiger Lake processors for laptops has seemingly been pushed to the sidelines as a consequence and it is looking for ways to get back into the spotlight. What better way to do that than by calling out its eternal rival AMD over the latter’s battery performance and, sure enough, the benchmarks ran by Intel show it having the upper hand in that particular use case.

Intel has traditionally dominated the desktop market where towering computers had less concern about power draw and thermal management. These days, however, laptops dominate the market, and battery life and heat dissipation have become just as or even more important than raw performance. Unfortunately for Intel, these have been areas where its mobile processors have not delivered to users’ satisfaction.

In its latest marketing push, Intel addresses at least one of those concerns, specifically the performance of its new Tiger Lake processors based on its Evo platform when the laptop is running solely on battery power. It pits its 11th-gen processors with laptops running on AMD’s Ryzen 4000 series to see which of the two sets squeezes the most out of battery power. Considering who’s running the tests and presenting the results, the outcome is unsurprising.

Although it concedes that AMD’s chips score better in battery life benchmarks, Intel also points out its own CPUs’ better and more consistent output when it comes to actual data and number crunching. It also takes note of a rather odd behavior from AMD’s processors where the CPUs delay burst and responsiveness for about 10 seconds. It also unsurprisingly calls out the inconsistency of the results from Cinebench, its least favorite suite.

Battery performance is, of course, just a single part of the picture and Intel has reportedly forbidden press from testing and talking about battery life, that other area where its chips have been notoriously weak. Intel has also so far remained silent on benchmark comparisons with Apple’s shiny new ARM-based M1 but it is probably choosing its battles where it has a slight chance of succeeding.

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HomePod mini owners report random Internet connectivity problems

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Apple was terribly late to the smart speaker party and even when the HomePod finally landed, it was initially a disappointment when it came to Siri’s usefulness and control of smart home appliances. It definitely got better over time but its competitors have moved on to bigger and smaller smart speakers. At long last, Apple finally bit back with the HomePod mini but the smart speaker is reportedly giving new owners more headaches than the $99 speaker is worth because of intermittent and inexplicable Internet connection problems.

A smart speaker is smart precisely because of how it connects to the Internet and other Internet-connected devices at home or elsewhere. While it might be possible to do things from a local network only, there are actions that only work if you have an active Internet connection. Without that, a smart speaker is just an overpriced speaker.

Unfortunately, that is exactly the experience that a number of owners are reporting with their new smart balls. They all report getting the same response from Siri when asking it to do something: “I am having trouble connecting to the Internet”. Unfortunately, the large HomePod doesn’t seem to experience the same issue so it’s definitely not the case.

Even worse, no fix seems to be available for the issue. Users have reported trying all possible methods, including those advised by Apple, from resetting the speaker to even resetting their routers. If the HomePod mini started working again, it would only be for a day at most.

The one silver lining is that all HomePod minis are naturally still covered by their warranties but that doesn’t exactly explain why it’s happening in the first place. At this point, it could either be a software problem or, worse, a hardware one, and the latter is definitely harder to fix, especially on your own.

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