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FanDuel CEO's Exit Pauses IPO Plans 

FanDuel CEO’s Exit Pauses IPO Plans 

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https://www.pymnts.com/personnel/2021/fanduel-ceo-exit-pauses-ipo-plans/
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Flutter Entertainment’s FanDuel had plans to go public, but the exit of its chief executive officer (CEO) has stalled the initial public offering (IPO), Morningstar reported.

Matt King stepped down from his CEO post at FanDuel, a position he’s had for the past four years. A search for his successor is currently underway.

“As previously announced, the Flutter board has been assessing the potential merits of listing a small stake in FanDuel in the U.S. Whilst Matt’s departure will affect the timing of any potential U.S. listing, the board will continue to keep this option under review,” Flutter said, per Morningstar.

King was instrumental in taking FanDuel from being a digital operator for fantasy sports into a “market leader in online sports betting and gaming,” the company said.

Flutter CEO Peter Jackson told Morningstar that the company “will be sorry to see him leave,” but that King’s exit “leaves the business in great shape.”

“We are starting the process of looking for a new CEO for FanDuel, and we remain focused on maintaining our leadership position in the U.S. market,” Jackson said.

Flutter’s stock prices tumbled some 3 percent in Dublin trading after the news of FanDuel’s delayed IPO and the exit of King. 

“With FanDuel well-positioned for the next chapter of its growth and always an entrepreneur at heart, now is the time for me to take on new opportunities as the next step in my career,” King said in a statement, according to RTE.

FanDuel said in March that it is focusing on fraud prevention as well as introducing faster payouts. The company posted 81 percent revenue growth last year. In a PYMNTS interview, Trent Striplin, FanDuel’s director of customer finance, said that despite the pandemic, customer behavior has been largely unchanged. However, getting paid faster is a continuing desire. Payouts are currently refunded back to the credit cards used or in person via cash. 

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May 12, 2021 at 05:14PM
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Ahold Delhaize Looks To Click-And-Collect Endless Aisle For Digital Growth

Ahold Delhaize Looks To Click-And-Collect, Endless Aisle For Digital Growth

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https://www.pymnts.com/earnings/2021/ahold-delhaize-looks-to-click-and-collect-endless-aisle-for-digital-growth/
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The online grocery space may have exploded in the past 14 months, but the market remains underpenetrated, leaving grocers with plenty to be excited about when it comes to digital growth. For its part, Dutch grocery company Ahold Delhaize reported Wednesday (May 12) that in the first quarter of 2021, net consumer online sales accelerated to 103 percent, with 188 percent growth in the United States and 79 percent growth in Europe. Looking ahead, the company expects online sales to continue to grow, raising its guidance to predict over 70 percent growth in U.S. online sales in 2021 and to predict over 40 percent net consumer online sales growth overall.

A significant share of the U.S. digital sales growth came from the company’s acquisition of New York-based online grocer FreshDirect, which closed in January, and without which Ahold Delhaize’s U.S. online sales would have grown 135 percent for the quarter, rather than 188 percent.

“They have very high fulfillment performance levels — on-time, complete orders, a super high level of freshness in the proposition. 60 percent of the total sales are fresh. I think it’s a great addition to us that we can learn from,” CEO Frans Muller said of FreshDirect on a call with analysts. “And on the other hand, of course we would like to make sure that we also share groupwide learnings with them as well, when we talk about things like marketing and digital, eCommerce, and these types of areas.”

Another driver of the company’s strong U.S. online sales growth came from the expansion of click-and-collect locations, growing to 1,139 collection points at the end of Q1, up from 1,116 the previous quarter, per a presentation shared with analysts. Additionally, the company plans to expand to nearly U.S. 1,400 click and collect points by the end of 2021. Muller emphasized that the company’s click-and-collect services were provided in-house, rather than through third-party picking services such as Instacart.

“We operate our own click-and-collect services, we operate our own fulfillment, it’s our own data, it’s our own front end, it’s our own relationship with customers,” said Muller. “That’s why we invested two years ago, in our PRISM software, which is … proprietary software to support the total fulfillment became but also the front-end process, the total eCommerce suite for the U.S. business.”

Also in the U.S., Muller said that the company would launch its Ship2Me endless aisle in the latter half of the year, which would offer over 100,000 grocery and general merchandise products. Investing in eCommerce growth outside of the U.S., the company plans to open its first home delivery fulfillment center in the Czech Republic in 2022, to expand its Albert Hejin “AH Compact” grocery delivery service to additional markets in the Netherlands.

Overall, net sales were €18.3 billion, up 0.3 percent from Q1 2020, marking growth more modest than it may have otherwise been were it not for the €150 million spent on COVID-19-related costs.

Chief Financial Officer Natalie Knight explained on the call that the previous year’s Q1 sales only included COVID costs for the final two weeks of the quarter, whereas in 2021 these costs “went over the whole period as opposed to just that short time,” she said, adding, “Our expectations for COVID cost going forward this year are that you’re going to see that level off very quickly … We believe we’re going to see significantly lower costs as we go forward.”

Diluted earnings per share totaled €0.54, down from €0.59 the previous year. Relative to pre-pandemic sales, however, the company “expect[s] underlying EPS to grow in the low- to mid-teen range versus 2019.”

Read More On Earnings:

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May 12, 2021 at 04:53PM
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Secondhand Fashion Platform Vinted Nets $303 Million In Funding

Secondhand Fashion Platform Vinted Nets $303 Million In Funding

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https://www.pymnts.com/news/investment-tracker/2021/secondhand-fashion-platform-vinted-303m-funding/
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Secondhand clothing marketplace Vinted has pulled in 250 million euros ($303 million) from investors. Women’s Wear Daily reported that the money will go toward funding international expansion — including hiring more workers, adding more memberships and beefing up infrastructure. In addition, the new funds will go toward expanding Vinted’s new Berlin office.

The funding round, led by EQT Growth, gives the company a valuation of 3.5 billion euros, the publication said. All the previous Vinted investors also participated in the latest round — including Accel, Burda Principal Investments, Insight Partners, Lightspeed Venture Partners and Sprints Capital.

Vinted, which has 45 million members, sells mostly vintage and high-street clothing. The Lithuanian company has gained momentum over the last year. Vinted expanded its team by 75 percent to more than 700 people. In fact, it was one of Lithuania’s first unicorns. The company said its goal is to turn secondhand fashion into consumers’ first choice.

“We are contributing to a seismic shift in the secondhand fashion market, enabling more sustainable, socially responsible shopping habits,” said Vinted CEO Thomas Plantenga, who founded the retail platform in 2008. “Today’s milestone is a vote of confidence in our commitment to the circular economy and our relentless effort to build a business that encourages more people to buy and sell secondhand.”

Carolina Brochado, a partner at EQT Growth, pointed to the growing opportunity for digital-first platforms to address customers’ increased concerns around the environmental impact of clothing. She will be joining the Vinted board.

The market for secondhand goods has been on the rise. The so-called reCommerce market has grown for clothing as well. In addition to Vinted, there’s ThredUP, a secondhand apparel marketplace. “Resale is here to stay,” said ThredUP Co-founder and CEO James Reinhart. “The next question is who wins and who loses.” ThredUP’s annual report said the resale sector grew 25 times faster than the overall retail market in 2019.

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May 12, 2021 at 04:30PM
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Crypto Surge Eclipses ‘Real’ Economy As Coinbase Readies Earnings

Crypto Surge Eclipses ‘Real’ Economy As Coinbase Readies Earnings

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https://www.pymnts.com/cryptocurrency/2021/crypto-surge-eclipses-real-economy-as-coinbase-readies-earnings/
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There’s no surer sign of frenzy than when traders bid up prices of imaginary things to eclipse stalwarts of the real economy — the Fords of the world, the Visas, the JPMorgans.

So is the case with cryptocurrencies such as Ether, which, as Coindesk noted, has surged more than 400 percent year to date, touching $4,000 a coin. We note that round numbers tend to be milestones in that they offer at least some “support” — at least in the minds of the people doing the buying.

At this writing, the market cap of that particular crypto stands at about $497 billion. You might think that market cap, in shorthand, is a measure of popularity for a stock, or a digital coin, and thus its (anticipated) business prospects. Visa’s market cap is about $480 billion, JPMorgan’s is just below $480 billion, Ford’s is $45 billion.

There’s an old adage in investing: Price is what you pay, value is what you get. By pushing up the price of the cryptos, speculators are, in effect, betting that alt coins (alternatives to bitcoin) have at least some shot at mainstream adoption, or … perhaps they are simply headed higher because people think they are headed higher.

But, we contend, companies such as JPMorgan and Visa are, arguably, tied more directly into the financial system, and have been debuting products and services that have historically and in the months and years to come will continue to reshape the financial landscape, with stakeholders such as consumers and businesses already firmly entrenched.

Beyond The Volatility  

We’ll get a sense of how the crypto economy is evolving when Coinbase reports earnings on Thursday (May 13). The exchange, of course, is a publicly traded way to trade the technological underpinning of crypto itself, where, of course, building the conduits to have buyers and sellers interact is important to expanding familiarity with cryptos in general, setting the stage for them to be used in mainstream commerce. Volume is the key here, as the company makes fees off of each transaction.

In terms of projections, Coinbase has said that it expects to see verified users of 56 million, with monthly transacting users of more than 6 million. Assets of $223 billion, as expected, would represent more than 11 percent of crypto asset market share — and revenues of $1.8 billion, as expected (and which is consensus on the Street), will be the proverbial number to beat. Interestingly, the total top line for all of 2020 stood at $1.3 billion, which gives an indication about how quickly trading has ramped.

But beyond trading, it will be important to hear commentary about using various parts of the digital ecosystem. As has been reported, Coinbase has announced that PayPal is a payment option for its U.S. consumers. The transaction limit, as has been noted, is $25,000 daily, which implies that customers can buy a percentage of bitcoin, or a few Ether — hardly enough to pile “all in” on cryptos, but a way, nonetheless, to marry payments choice to the crypto trade.

As to the road ahead, it may certainly be volatile (crypto volumes and pricing may ebb and flow), but expect Coinbase management to give a hint as to how the exchange may be prepared to weather those bumps.

Read More On Cryptocurrency:

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May 12, 2021 at 04:21PM
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Inside Honest: 5 Things You Didn’t Know About The Newly Listed Personal Products Retailer

Inside Honest: 5 Things You Didn’t Know About The Newly Listed Personal Products Retailer

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After just 20 minutes and a nearly 50 percent gain in its trading debut on the Nasdaq last week, the fortunes of the celebrity-backed The Honest Company started to change. Although the nearly 10-year path that led up to Honest’s IPO had been at least partially streamlined by the star power of actress and founder Jessica Alba, the probing eyes of Wall Street investors immediately began to step in and burst that bubble.

Since hitting an initial high-water mark of $23.88 at around noon last Wednesday (May 5), shares of Honest have declined for five consecutive days, giving back all of those momentary gains — and a bit more — as the company eventually slid below its $16 IPO on Tuesday (May 11). 

To be fair, short-term stock market performance and a company’s business prospects are frequently disconnected. For example, it took 16 months for shares of Facebook to get back above their IPO-day pop. But if nothing else, a choppy trading debut offers a chance to take a closer look inside a company that has just opened its books to the public and see what turns up — which is exactly what PYMNTS did.

Here are five things we discovered on our journey inside The Honest Company:

1. Diapers account for 63 percent of sales 

Although Honest sells dozens of different products under three main categories, its diapers and wipes line account for 63 percent of total sales, with skin care and personal care chipping in 26 percent and household and wellness generating the final 11 percent.

In its prospectus, Honest said diapers are a “strategic consumer acquisition tool that acts as an entry point for our portfolio,” noting that nearly 90 percent of its diaper buyers went on to buy something else last year, while nearly half bought two or more non-diaper products.

Honest estimates that “clean and natural” products within the market segments in which it competes will outgrow their conventional rivals by a 6:1 margin over the next five years, with the natural diapers segment alone pegged to deliver 16 percent annual growth versus just 2 percent for conventional.  

“We believe that certain historical leading brands that have produced products in these categories for decades generally focus on single categories and offer products made with conventional ingredients that are less aligned with increasing consumer preference for clean and natural solutions,” Honest said. “We believe that given consumers’ growing focus on their health and wellness, reducing waste and promoting social impact, we are well-positioned to continue to take market share from these legacy brands.”

2. 55 Percent of sales are digital Sales, and 45 percent are retail.

Honest makes no secret about its omnichannel objective to meet consumers wherever they want to shop, with 55 percent of sales coming through its own website or through third-party platforms like Amazon or Walmart, and the rest coming through approximately 32,000 retail locations across the United States, Canada and Europe.

While that is clearly a lot of stores, 70 percent of its retail sales are made through just two accounts — Target and Costco — with Honest acknowledging that “the success of our business is largely dependent on our continuing development of strong relationships with major retail chains.”

The catch, however, is gaining shelf space.

“We may be unable to secure adequate shelf space in new markets, or any shelf space at all,” Honest warned would-be investors in its prospectus, noting that retail growth opportunities may be limited, and that its revenue, business, financial condition, results of operations and prospects could be adversely affected without them.

“We also face severe competition to display our products on store shelves and obtain optimal presence on those shelves,” Honest revealed on page 32, noting that many of its competitors have “significantly greater financial, manufacturing, marketing, management and other resources.”

3. Growth is slowing

Honest said its total sales grew 27 percent to over $300 million last year, while forecasting in the prospectus that its yet-to-be-released Q1 results from 2021 would be far more modest.

“For the three months ended March 31, 2021, we expect to report revenue in the range of $78.0 million to $80.0 million, representing growth in the range of 8 percent to 11 percent over the three months ended March 31, 2020,” the company said.

Although no Q1 operating results are available, Honest’s biggest business — diapers and wipes — grew more slowly last year than its smallest category, household and wellness. Specifically, diaper sales rose 16 percent last year, compared to a growth rate of 116 percent for household and wellness, and 35 percent in skin care and personal care.

4. Honest is still not profitable

Despite all of the fanfare, hype, celebrity testimonials and nearly a decade in business — as well as a market value that is well above $1 billion — Honest is still losing money. In summarizing 16 different significant risks that the company faces, the profitability issue was at the top of the list.

“We have incurred net losses each year since our inception [in 2012], and we may not be able to achieve or maintain profitability in the future,” the prospectus states.

Although Honest said its 40-year-old founder has “an innate and invaluable ability to resonate and engage with consumers” via almost 40 million social media followers, Alba alone has been unable to stop the red ink. While her professional accolades include “globally recognized business leader, entrepreneur, advocate, actress and New York Times bestselling author,” the day-to-day business operations are handled by CEO Nick Vlahos, a former Clorox and Burt’s Bees executive who was brought in for a $6.8 million salary package that is roughly triple Alba’s non-stock compensation.

5. Scrutiny, lawsuits and recalls 

In its own words, Honest describes itself as a “digitally-native, mission-driven brand focused on leading the clean lifestyle movement, creating a community for conscious consumers and seeking to disrupt multiple consumer product categories.” In addition, the company’s commitment to sustainability and creating “clean and natural” products have been a central part of its ethos since its launch.

While those are certainly laudable goals, Honest warned investors that it faces increasing government scrutiny, as well as growing public awareness over product safety issues, and therefore faces ongoing regulatory and litigation risks.

Specifically, Honest said that in 2015 and 2016, it faced multiple class-action lawsuits alleging that its sunscreen was ineffective and not “natural,” and that it misled consumers about ingredients in its laundry detergent, dish soap and multi-surface cleaner. The company also disclosed in the prospectus that it had to recall baby wipes and baby powder products in 2017, as well as a bubble bath recall in January of 2021, due to concerns about potential contamination. 

“These incidents negatively affected our brand image and required significant time and resources to address,” the company said.

Honest — as well as its peers — said it also faces scrutiny from the so-called “word police” over its advertising claims and language, and the use of such imprecise terms as “natural,” “organic,” “clean conscious” and “sustainable.”

“Although the FDA and the USDA each has issued statements regarding the appropriate use of the word ‘natural,’ there is no single, U.S. government-regulated definition of the term ‘natural’ for use in the personal care industry,” the prospectus stated, before advising potential investors that “the resulting uncertainty has led to consumer confusion, distrust and legal challenges.”

Although Alba’s original idea and philosophy are still intact — to “build a mission-based, for-profit business that addresses health equity, sustainability and social justice” — the path leading to that ideal is clearly strewn with competitive challenges and plenty of thorns.

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May 12, 2021 at 04:00PM
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Love Is In The Air As Post-COVID Wedding Industry Makes Up For Lost Time

Love Is In The Air As Post-COVID Wedding Industry Makes Up For Lost Time

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https://www.pymnts.com/news/retail/2021/love-is-in-the-air-as-post-covid-wedding-industry-makes-up-for-lost-time/
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While 2020 may have been a washout for the wedding industry, 2021 is seeing a surge in marriages in the aftermath of the pandemic as increasing numbers of couples are in a hurry to get hitched.

Whether it’s apparel, footwear or jewelry, media services, music, food, venue rentals or travel, pretty much anything having to do with brides, grooms and the taking of vows is on the rise right now.

In fact, the marriage movement has just seen the country’s largest wedding and special event retailer, David’s Bridal, launch a new 24/7 YouTube channel that offers nuptially-inclined consumers an around-the-clock video stream of — you guessed it — other people’s weddings.

“This new streaming channel is the latest addition to the suite of wedding planning tools and resources [we] offer,” the Pennsylvania-based owner of over 300 bridal stores in the U.S., Canada, U.K. and Mexico said in a press release, touting the planning content and inspiration the new service provides.

David’s said the launch of its new video channel marks its latest digital solution within a strategic effort to respond to the evolving needs of the modern couple, adding that the channel meets couples wherever they are in their wedding planning journey.

“We found that women are looking for inspiration all the time — including in the middle of the night — and wedding videos are their faves,” said Kelly Cook, chief marketing and IT officer at David’s Bridal. “The videos are real couples, real photographers, real venues, real vendors, real forever-afters. We were thrilled with the outpouring of videos sent to us for our launch.”

Demise Of The Zoom Wedding

After an unprecedented year of lockdowns and restrictions that shuttered bars and restaurants, battered the hospitality industry and caused wholesale cancellations or indefinite postponement of events, it’s safe to say couples are ditching the video conference version of vows and are ready for the real thing.

“Monday is the new Saturday in Palm Beach,” Palm Beach, Florida wedding and event planner Caroline Scarpinato told the Wall Street Journal. “With such limited availability, couples are willing to host their event on a Monday or Thursday.”

For some businesses, such as jewelers, a challenging year of confinement and crimped spending has left consumers with more money and motivation to spend on big-ticket items like engagement rings and wedding bands.

“The limiting factors on travel have, in many cases, meant that there has been more disposable income,” Matt McCawley of Bloch & Co. told trade publication Professional Jeweller of the coming sales boom. “Also, the fact that the wedding day itself has been delayed may well have assisted with this desire to make the engagement ring extra special,” McCawley added.

In what could be seen as the East Coast’s answer to Las Vegas’ famed Little White Chapel, New York City has seen the creation of a handful of small wedding venues in the past year, including the newly launched Sweet Hearts wedding chapel in Brooklyn, which is currently booking reservations for its $650 and up services into October.

“[Sweet Heart] Founder Julie Guinta wanted to provide an easy, mega-affordable option to her clients. Her hope is that SWEET HEARTS can be your high-touch alternative to getting hitched at the courthouse or flying to Vegas,” the new venue’s website reads.

Of course, all of this activity is dependent upon the continued downtrend of COVID cases and uptrend of inoculation, but cities such as Washington, D.C. are only about a week away from lifting long-standing bans on capacity limits and bans on activities such as dancing.

“On May 21, most restrictions on public and commercial activity, including capacity limits, types of activities, and time restrictions, will be lifted,” D.C. Mayor Muriel Bowser announced this week, noting that large sporting events, concerts and bars and nightclubs would be capped at 50 percent capacity until June 11.

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May 12, 2021 at 04:00PM
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Bright Outlooks For Retail And Mobile Banking 

Bright Outlooks For Retail And Mobile Banking 

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https://www.pymnts.com/today-in-data/2021/bright-outlooks-for-retail-and-mobile-banking/
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Simon Property Group reported that the improving domestic economy is fueling a rise in shopper sentiment, foot traffic and sales throughout its global real estate portfolio. In luxury marketplaces, The RealReal said it would open more neighborhood stores in affluent communities as it forecasted that gross merchandise value (GMV) would grow this quarter. And in digital banking, consumers want more tailored mobile banking app experiences and more customized functionalities. All this, Today in Data.

Data:

$327M: The RealReal’s gross merchandise value for the first quarter.

90.8%: Occupancy rate of Simon Property Group’s U.S. malls and premium outlets as of March 31.

83.6%: Share of The RealReal’s GMV from repeat buyers for the first quarter.

68%: Share of baby boomers and seniors interested in real-time mobile banking app notifications.

$40B: Approximate market cap of Simon Property Group as of May 11.

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Vehicle Sharing Startup Bird Plans Public Offering With SPAC Merger

Vehicle Sharing Startup Bird Plans Public Offering With SPAC Merger

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https://www.pymnts.com/news/ipo/2021/vehicle-sharing-startup-bird-plans-public-offering-with-spac-merger/
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Silicon Valley vehicle-sharing startup Bird is planning to go public with the special purpose acquisition company (SPAC) Switchback II Corporation.

Travis VanderZanden, founder and CEO of Bird, said in a press release that the company was launched in 2017 with an eye on the environment and a mission of providing eco-friendly transportation.

The company has “driven the adoption of micromobility which has resulted in rapid growth,” VanderZanden said. “During this time, we have advanced our operating model, supported by proprietary technology and hardware, to scale our mission and reach more cities.”

He added that the company’s driving force is a foundation steeped in “our strong unit economics” and advanced by its “successful track record to date.” VanderZanden also said that the micromobility market is forecasted to hit some $800 billion.

The startup plans to list via a SPAC merger with Switchback II on the New York Stock Exchange (NYSE) under the ticker Bird.

Jim Mutrie and Scott McNeill, co-CEOs and directors of Switchback, said Bird has leveraged its “first-mover advantage to address the significant market opportunity while also providing an efficient and eco-friendly transportation alternative.”

Crediting Bird for “its market leadership position, experienced and innovative leadership team, compelling current revenues and business model,” the two also noted its “identified levers for growth.”

Bird announced on Monday (May 10) that it was looking to go public at a $2.3 billion valuation. Dallas-based Switchback II Corporation has been eyeing companies that seek a carbon footprint reduction.

Since its launch, Bird has grown to more than 200 cities internationally and has handled over 95 million rides to date.

The startup said in March that it was budgeting $150 million for further expansion across Europe. Currently, its battery-powered two-wheel scooters are making their way in 50 new cities. European riders account for about one out of every two Bird rides globally.

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May 12, 2021 at 03:56PM
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Visa US Spending Momentum Index Points To Rising Consumer Confidence

Visa US Spending Momentum Index Points To Rising Consumer Confidence

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https://www.pymnts.com/news/retail/2021/visa-us-spending-momentum-index-points-to-rising-consumer-confidence/
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The Visa U.S. Spending Momentum Index (SMI) reached a reading of 136 in April 2021, indicating that the U.S. economic recovery remains on steady ground. The Visa SMI implies at its present level that 65 percent of consumers are now spending more than they did a year prior, and just 35 percent are spending the same or less, according to a Wednesday (May 12) announcement.

“The SMI’s latest strong reading provides evidence that consumer confidence is building as the pace of vaccinations increases and restrictions are eased across the country,” Visa Chief Economist Wayne Best said in the announcement. “Signs of economic recovery, additional stimulus payments and optimism that the pandemic is waning are contributing to stronger spending compared to last year and even within recent months.”

However, Visa reported that the gains in spending have remained uneven. The SMI for cities that saw the most substantial job losses in April 2020 has been 1.5 points lower on average during the past year than cities where job losses weren’t as large. For example, the SMI for Chicago, which is among the most impacted cities when it comes to job losses, averaged 100.5 in the past year. By contrast, Atlanta, a city with fewer job losses, had an SMI of 104 during the same time frame. But Visa noted that the gap between Chicago and Atlanta has lessened during the past three months, “helped in part by Chicago’s progress in vaccinating a greater share of its residents.”

“This past year underscores the importance of looking not only at how much is being spent, but also how many consumers are spending,” Best said in the announcement. “What made the most recent downturn and now recovery so different than any previous business cycle was how the pandemic impacted the ability as much as the willingness of consumers to spend. Understanding how many consumers are feeling sufficiently confident and financially secure to spend more is at the heart of what the Visa SMI does.”

The Visa SMI is based on a sample of depersonalized and aggregated VisaNet data, the announcement indicated.

As previously reported, foot traffic at apparel stores is returning to levels that have not been seen since before the pandemic, while U.S. malls are seeing a boom in foot traffic.

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May 12, 2021 at 03:46PM
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