Hub Ventures, Excelerat...

The startup accelerator scene is booming, and that means there will be days like today, when a bunch of news from the various incubators around the country hits all at the same time. Today, we’ve got the details from several of the newer programs, some of which are announcing their new spring classes, others which are wrapping up with demo days. The result, in either case, is that there are now dozens upon dozens of new companies making their grand debut today, across a number of verticals that include everything social networking to health care. Below, we’ve rounded up the new launches and announcements from Hub Ventures ,  Excelerate Labs , and  MuckerLab . In addition,  DreamIt Ventures is preparing to start its summer program in NYC next month, and is hosting a kick off party tomorrow night. Hub Ventures Hub Ventures , the San Francisco-based startup accelerator focused on funding entrepreneurs “building a better world ,” (and new member to the  Global Accelerator Network championed by TechStars) is announcing its Spring 2012 cohort of startups. Something notable about this group is the gender diversity – there are six female co-founders and key team members, representing five of the startups in the group. This spring, the focus is on transportation and personal safety, infant and maternal health, collaborative consumption (fractional car ownership), information technology for development, financial tools for small businesses in the developing world, and clothing up-cycling to enable insourcing and job creation in the U.S. Startups received $17,500-$20,000 and are eligible for an extra $75,000 if chosen by key investor   Lakeland VenturesDevelopment . One spot is being held for a innovation hackathon prize, also sponsored by Lakeland Ventures. Hub Ventures says it received 209 applications for 10 spots this year – up 200% from 75 applicants last year. Refuel by StreetOwl  – Ofer Raz, Neel Ganjoo, and Cyndy Sandor:  a rewards platform to encourage safer driving, save lives, and disrupt the $200B insurance industry CheckInOn.Me  – Deb Levitt:  an automated, mobile phone based personal safety system DIIME  – Theresa Fisher and Gillian Henker:  innovative medical devices to improve infant and maternal health in low-resource settings of Africa Givkwik  – Jason Rosado:  one-click mobile app and online giving to enable impulsive philanthropy Africa’s Talking  – Eston Kimani:  an SMS-based web and communication platform to solve information poverty in Africa Acopio  – Paul Goodman, Iris Shim, and Ariel Chait:  management information systems for agricultural cooperatives that improves transparency and traceability Repat  – Ross Lohr and Nathan Rothstein:  up-cycling old unwanted t-shirts into value-added products and creating sustainable insourcing jobs in the US Inventure  – Shivani Siroya and Jon Blackwell:  an SMS-based financial tool for small businesses in the cash economy of India Mesh Motors – Ezra Goldman:  an innovative approach to car sharing via the fractional ownership model Excelerate Labs Chicago-based Excelerate Labs , led by entrepreneurs Troy Henikoff (SurePayroll) and Sam Yagan (OkCupid, eDonkey, SparkNotes) is announcing its Class of 2012. The selective summer program will wrap up with a demo day in August. This year’s class, the third for the organization, features companies from India and France, which are moving to Chicago, as well as others from California, Massachusetts, Florida and Texas. Excelerate Labs has also partnered with digital startup center 1871, which offers working space for 400, plus office space for V.C.’s, classrooms and partnerships with universities. This year, the incubator said it received 50% more applications than last year. Then ten companies chosen are below. 71lbs – Helps small and medium-sized businesses (SMBs) save money on shipping through data analytics,understand their parcel shipping spend and make better shipping decisions for the first time. Cureeo – Offers original and limited edition artwork to collectors and novice art enthusiasts without the hassle of personally hunting through physical and online galleries to find that perfect piece. The company provides background about the artist and their work as well as education on how and why to shop for fine art. Customers can share their taste preferences and design needs then receive a selection of artwork options handpicked for them by one of Cureeo’s art specialists. Fibroblast – Aims to help solve three big, interrelated problems in U.S. health care: shrinking margins, convenient access and need for preventive care. The company addresses these problems by providing patients with the ability to self-schedule appointments anytime and anywhere by using a cloud-based calendar, and automates appointment notifications. Providers get analytics tools to optimize their practices. Also creates a network of interconnected providers to refer patients. frintit – Acts as the “AdSense” of the physical direct mail world by allowing direct mail advertisers to intelligently target a consumer based on their interests. Using a combination of web and mobile data, frintit offers a direct mail platform to reach the right customer. Good Karma Clothing for Kids – A new subscription service that delivers right-sized baby clothes that customers exchange as their baby grows so busy parents don’t have to spend a ton of time and money keeping up with fast-growing little bodies. Good Karma delivers bundles of ready-to-wear clothing on request, washed in environmentally and baby friendly detergent. Lasso – Direct quote: “A new service hailing from an uncharted land where friends freely gather with the whip of a hand, where plans manifest in a couple of clicks so friends can greet faces and not profile pictures.” (We have no idea). Orbeus – A computer visual recognition engine that enables computers to perform face detection and recognition, logo and product recognition, optical character recognition, and scene understanding. Pictarine – Centralizes photos from all online services including Facebook, Flickr, Instagram and Twitter. Pictarine automatically organizes photos as timelines, backups the best photos, lets you share favorites with friends and helps you discover new photos. SpotHero – Similar to ParkingPanda and others, the company works with some of the largest parking operators in the country to make discounted parking available to customers by helping drivers get the parking spot that they want. Whimseybox – A subscription service for the DIY and craft community. Every month, the company ships customers craft product samples, helping them o rediscover crafts and express their creativity. Users can also visit the company’s Project Gallery for inspiration and ideas, upload and share their projects with the startup’s community. MuckerLab MuckerLab ,  a new L.A.-based startup accelerator , also a member of the Global Accelerator network, is having its Demo Day today. The program, founded by Erik Rannala , formerly of Harrison Metal, and  William Hsu , who most recently served as Chief Product Officer at AT&T Interactive, doesn’t always focus on media and entertainment startups, despite its location. Rannala previously told us that ad tech and e-commerce have also thrived in L.A., but they’re not limiting their focus at this time to any particular vertical. Selected startups received $21,000 in seed funding, and the usual benefits like shared office space, various discounts on hosting and software, and legal assistance. This year’s group of eight fits with accelerator’s goal of having five to ten startups to kick off its launch. Instacanvas , a marketplace for social media art and artifacts. Laffster , a distribution and discovery platform for premium comedic content through YouTube, Laffster.com and beyond. Lifecrowd , a marketplace for social activities connecting people, interests and culture. Penango , browser-based encryption and security solutions for cloud applications. Surf Air , a membership-based, private airline thatbrings the ease and comfort of flying private to a new audience. Retention Science , a big data retention-marketing platform for e-commerce. OttoLikes Labs , an interest curation engine that’s pioneering an entirely new category of algorithms to provide consumers with ideas for online and offline products and services. Wallaby Financial , a network-branded (Visa) payment card that dynamically routes transactions across a consumer’s existing credit cards to maximize rewards, cash back or savings. Ecinity  - an automated marketing solution for small to mid-sized businesses to attract new customers without paying for advertising and with no or minimal effort from the merchant. DreamIt Ventures DreamIt Ventures , which operates programs in Philadelphia, N.Y., and now, Israel , is kicking off its 2012 Summer program tomorrow night with a party at Google’s NYC office. DreamIt has selected 15 companies, 5 of which are participating in the newly launched DreamIt Israel. This program brings Israeli startups to NY, giving them access to U.S.-based mentors, investors, and up to $25,000 in seed funding. DreamIt Israel is already underway now in Tel Aviv, and the companies will join DreamIt NY in NYC on May 14th. Another 5 are in DreamIt Access, a dedicated effort to launch 15 minority-led startups over the next 12 months. Comcast Ventures, the venture capital affiliate of Comcast Corporation, is an investor in DreamIt Access. DreamIt’s Demo Day will be August 8th. Stay tuned.

A Closer Look: Facebook...

One thing that has been remarkable about Facebook is its willingness to expand in developing markets that many other consumer Internet companies would otherwise write off because they’re hard to monetize. But that growth abroad plus the company’s increasing headcount and share-based compensation expenses are eating into its operating margins, according to yesterday’s earnings numbers from a revised IPO filing. Facebook made $381 million in operating income (or 36 percent of its $1.06 billion in revenue) in the first quarter of this year. That’s down from $388 million in operating income (or 53 percent of its $731 million in revenue) from a year ago. Net income is actually down 12 percent year-over-year to $205 million from $233 million a year ago. What gives? A couple of things: 1) Share-based compensation is a huge part of it. These expenses came in at $103 million for the first quarter, up from $7 million a year earlier. If you take it out, operating margins are still down year-over-year, but not by as much. Net income would actually increase overall from $240 million a year ago to $308 million. This isn’t necessarily a one-off though. Below is what Facebook expects to pay in share-based compensation expenses for the next several years in the hypothetical case that the IPO happened on March 31. After that, Facebook will have to find ways of continuing to attract and incentivize the best technical talent if there is no longer as much as upside to its equity. That will be expensive, considering the options that the best engineers have at growing companies across Silicon Valley. If Facebook can’t lure them away from other startups with stock, it will have to bump up the cash component of compensation. 2) Growth is happening in emerging markets, where revenue per user is lower than it is in mature markets like the U.S. Overall, Facebook’s average revenue per user (or ARPU) climbed 6 percent year-over-year to $1.21 in the first quarter, but that pace was weighed by growth in developing countries. Facebook says, “The sequential decline in ARPU in the first quarter of 2012 was affected by the fact that our user growth was higher in geographies with relatively lower ARPU.” Is this a bad thing? It depends on how you’re thinking about it. In online advertising, the spoils will go to those who have scale. As a platform reaching 900 million users with very targeted data about pretty much all of them, Facebook is becoming a must-have for any online display advertising campaign (if it isn’t already). Furthermore, the key markets Facebook is growing in happen to be some of the largest, fastest-growing economies in the world. Facebook had 45 million monthly actives in Brazil last month, up 180 percent from a year earlier. That gives them a penetration rate of about 30 to 40 percent in the country, according to the filing. Facebook is also growing in India, where it had 51 million monthly actives last month or more than double what it was a year earlier. That may not sound like that much in a country of 1.2 billion people, but keep in mind that India has low Internet penetration. Plus, many of these users experience Facebook solely through their mobile phones, which the company hasn’t completely figured out how to monetize yet. Facebook estimated that about 83 million of its monthly actives globally use the service only through their phones last month. Facebook also thinks of itself as a mission-driven company, which exists to connect everyone in the world. You can debate the sincerity of those intentions, but getting every person on the planet connected to the network is what the company intends to do. 3) Overall growth in headcount.  Even if you take out share-based compensation, Facebook’s costs for building and maintaining data centers and then hiring extra sales employees and engineers are rising at a faster pace than revenue is growing. Cost of revenues is up 66 percent year-over-year, mostly because of data center costs. If you look at marketing and sales costs, those are double what they were a year ago excluding share-based compensation. Frankly, this is the less scalable part of the business. Facebook needs to hire more sales and customer service employees as it adds offices around the world. Research and development, or engineering, is also growing at a faster pace than revenues. But not by as much as other departments are if you take out share-based compensation expenses. Engineering is the jewel of the company. The company prides itself on having about 1 million users per engineer if not more, so like I said above, it will have to spend to attract the best especially after upside is fully priced into Facebook shares after the IPO. 4) Lastly, declining margins are natural as a company matures: Facebook actually says this in the filing. Now let’s also look at revenue. Advertising revenue is scaling pretty much proportionally to user growth:  They’re up 37 percent year-over-year to $872 million. Guess what’s also up by about that much? Monthly active usage, which also grew 32 percent year-over-year to 901 million. To grow advertising revenues, Facebook needs to do one of two things. It either needs to get more users. Or it needs to get its current users more addicted (I mean, “engaged”) and exposed to more ads that are better-targeted. Right now, sheer growth in the user base is compensating for slow growth in revenue per user. Facebook said the average price per ad for the first quarter of 2012 was unchanged compared to a year earlier, although it increased in key markets like the U.S. and Canada. It actually declined in Europe because of a weak local economy there. It’s not a great sign that ad prices are actually declining in mature markets like Europe. But Facebook also has some remarkable cards up its sleeves. With ”like” buttons and more scattered about the web, Facebook could launch a web-wide display advertising network. The company has never confirmed this, but it’s a painfully obvious opportunity. Payments revenue is maturing for gaming apps, so the question is where will it grow next?  While payments and other fees revenue is almost double what it was a year ago at $186 million in the first quarter, it’s not really clear that how much this can climb unless Facebook pushes Credits for other types of apps. Payments and fees revenue is flat on the quarter. Because I hear about the exact same seasonal trends in revenue for apps on the iOS and Android platforms, that by itself isn’t that worrying. What is concerning is that revenues for casual games on the Facebook canvas are maturing. You can see a very visible quarter-over-quarter slowdown in Zynga bookings, but I also hear about it anecdotally from many second and third-tier developers who frankly don’t find the Facebook canvas as attractive a place to be anymore. There are only a handful of sizable gaming companies that are making noticeable investments Facebook canvas games like Germany’s Wooga, King.com and midcore developers like Kixeye. Many others are simply moving off toward iOS or Android. The easy days of high virality and fat profit margins are over for Facebook game developers. It’s becoming more about making real, high-quality games. Growth will either come from non-casual games like the ones made by Kixeye, or it will have to come from other kinds of non-gaming apps. Facebook acknowledges this, saying, “We may seek to extend the use of Payments to other types of apps in the future.” Since Facebook made Credits mandatory for canvas games last July, It would be ideal if Facebook could start a big push for payments in other types of apps around the same time this year. That way the company can show favorable year-over-year growth.

Vodafone Buys Cable &am...

Big news from the UK this morning: Vodafone , one of Europe’s biggest mobile operators, has made a formal offer to buy up the assets of Cable & Wireless Worldwide   for £1 billion ($1.7 billion), a deal that catapults Vodafone into running its own fixed line network in the UK and specifically will give it a much bigger view to winning enterprise business — a big challenge to BT and a mark of further consolidation in the space. Cable & Wireless, first founded in the nineteeth century and one of the biggest operators in Europe, has fallen on hard times more recently and has run through three chief executives since a restructuring in 2010. The deal will make Vodafone the UK’s second-largest operator, with £7 billion ($10.5 billion) in annual revenue. According to Vodafone’s statement to the market, Vodafone will offer C&W shareholders 38 pence in cash for each C&W share, a premium of 92 percent to C&W’s closing price on February 10 (when Vodafone had first made its offer). It says that both sides have reached agreement on that deal and that C&W directors will recommend the buy to shareholders. The deal opens a new opportunity for Vodafone to offer networking services for enterprises, which form the core of C&W’s customer base at the moment, but as Vodafone CEO Vittorio Colao noted in the statement Vodafone could also use C&W’s extensive international network to offload its mobile network traffic in other markets and serve enterprises outside the UK, too: “The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations. We look forward to working with the management and employees of Cable & Wireless Worldwide to combine our expertise for the benefit of our customers and shareholders.” It will also give Vodafone its first crack at owning a broadband network: that could mean more consumer services from the carrier, too, to compete against incumbent operator BT. It raises another question, though: currently Vodafone supplies BT with wireless network that it sells on to customers; and BT provides Vodafone with backhaul for its wireless network. For now it looks like business as usual: “I see no reason why our relationship with BT should not continue to be good,” Colao noted in the analyst call earlier today. The deal is also a setback for another carrier, Tata in India, which had also been angling to buy C&W as part of its international expansion strategy; it withdrew its bid last week . Cable & Wireless is one of the UK’s oldest carriers. The company was first established from a number of international telegraph assets and in the 1980s became the first carrier to offer a competitive service to BT in the UK. It’s not clear yet what will happen to C&W’s current chief executive, Gavin Darby, although this deal could mark a return of sorts: he had joined C&W in November 2011 having previously worked for Vodafone. At the moment around one-third of C&W’s revenues come from its international operations, which extend across the UK, Asia Pacific, India, Middle East & Africa, Europe and North America. In the UK, although C&W had offered retail services (eg broadband and other products like cable) to consumers in the past, more recently the company has been operating as a wholesale carrier, with other operators using its network to deliver broadband to businesses and consumers. It will be interesting to see whether Vodafone plans to continue this business model, or use the network to launch its own broadband operation.

Meet The XOLO X900, Int...

With Lava’s XOLO X900 Intel is entering uncharted territory. It’s the chip maker’s first major push into mobile phones. Intel revealed its new mobile strategy and upcoming hardware a few months back at Barcelona’s Mobile World Congress. Since then Lava’s XOLO X900 has not changed. It’s still destined for just India. It’s still a mid-tier Android 2.3 phone (ICS is coming) with a 4.03-inch, HSPA+ 3G phone. But Intel’s inside and that’s a big deal. Inside the average looking X900 is Intel’s Atom Z2460 processor. This is the first of several upcoming phones that forgo the tradition ARM-based CPU for Intel’s Atom X2460. Intel designed this Atom SoC with Android specifically in mind. The chip runs at a competitive 1.6GHz and features Intel’s hyper-threading, 400MHz graphics core with support for OpenGL, ES2.0 and OpenVG. The silcon also had a dedicated imaging core that supports throughput of up to 240 megapixels per second and a 10-picture burst mode — a key selling point of the XOLO X900. This is just a test for Intel, though. The company is launching this device in only India. A similar but slightly more powerful handset will hit China later this year. Intel is using these fast-moving markets as a test bed of sorts. If found to be successful, Intel will no doubt look to other OEMs for the slower moving, but more lucrative markets of Europe and the US. Until then, Indian buyers will have Intel smartphones all to themselves. Lava’s XOLO X900 will hit Indian retailers on April 23 for approximately 22,000 rupees, or about $420. Seeing how the iPhone 4S goes for twice as much in India, the XOLO X900′s price should be enticing enough to convince at least some buyers to test Intel’s first generation device.

IBM’s Mixed Q1 2012: Re...

IBM just reported mixed first quarter earnings for 2012. GAAP earnings came in at $2.61, up 13 percent with non-GAAP earnings at $2.78, up 15 percent. Revenue was flat for the quarter coming in at $24.7 billion, up 1 percent adjusting for currency. Analysts expected $2.66 a share and $24.82 billion in revenue. Net income for the quarter came in at $3.1 billion, up 7 percent from last year. “In the first quarter, we drove strong profit and earnings per share growth. We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives,” said IBM CEO Ginni Rometty. “Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the company’s ongoing margin expansion. In terms of geographic area, the Americas’ first-quarter revenues were $10.5 billion, an increase of 1 percent. Revenues from Europe/Middle East/Africa were $7.6 billion, down 2 percent. Asia-Pacific revenues increased 4 percent. OEM revenues were $509 million, down 17 percent compared with the 2011 first quarter. Revenues in the BRIC countries — Brazil, Russia, India and China — increased 10 percent The company said that cloud revenue doubled first-quarter 2011 revenue. Revenues from the Software segment were $5.6 billion, an increase of 5 percent compared with the first quarter of 2011. Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.5 billion, an increase of 7 percent. Global Technology Services segment revenues increased 2 percent. Global Business Services segment revenues were down 2 percent to $4.6 billion. The company ended the quarter with $12.3 billion of cash on hand. The quarter has been mixed for IBM. While the company revealed layoffs in February, IBM has spent some cash in the first quarter on acquisitions, buying Worklight for $70 million and Green Hat . Big Blue also sold 750 patents related to networking, software and other technologies to Facebook. IBM actually raised expectations for full-year 2012 GAAP diluted earnings per share to at least $14.27 from at least $14.16; and operating (non-GAAP) diluted earnings per share to at least $15.00 from at least $14.85. During the earnings call today, IBM said that it spent $1.5 billion on acquiring five companies in the quarter.