Lime Scooter
Image: Lime

Protocol Index: The feeding frenzy has begun

Protocol Index

Good morning! This Tuesday, we see the first signs of an impending M&A wave, investors are hot for Apple's bonds, and plastic-free materials aren't worried about the oil price. Want Index in your inbox each morning? Subscribe here.

What Matters Today

  • 7 a.m. PDT: April's ISM non-manufacturing index will give a clearer sense of how the U.S. services industry, software included, has held up.
  • 1 p.m. PDT: Match Group, owner of Tinder, OkCupid and Hinge, reports earnings after markets close. It should give an indication at how dating's changed in the social-distancing era: Match has been slower than competitors to integrate video calling into the app, which may have hurt engagement.
  • 1:30 p.m. PDT: Disney's earnings call will be closely observed for further signs of Disney+ subscriber growth. The company recently said it had more than 50 million subscribers, but with heavy launch discounts and ultra-cheap pricing in India, it's unclear how much of an effect that will have on Disney's profit. With theme parks, cruises, and theatres shut for the foreseeable future, and sports games canceled, the company's more reliant on the streaming service than it could have ever imagined.

Layoff Watch

  • Careem, Uber's Middle East unit, said it will lay off 536 people, almost a third of its staff. Uber also said it would shut down Uber Eats in Egypt, Saudi Arabia and five other countries, while transferring its UAE Eats business to Careem.
  • Nutanix will implement two weeks of unpaid furloughs for 1,465 employees.

Today's News

As of 4:23 a.m. PDT: Nasdaq Futures: 1.17% | Euro 600: 1.55% | Nikkei: -2.84% | Hang Seng: 1.08%





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Everyone's Thinking About

The feeding frenzy has begun

Yesterday, The Information reported that Uber is mulling a $170 million investment in Lime, which would value the scooter startup at $510 million.

  • That's way, way down on its last valuation of $2.4 billion, and even below the $780 million the company's already raised from investors.
  • Most interestingly, the deal would give Uber the right to buy Lime between 2022 and 2024. Uber would offload Jump, its scooter and bike business, onto Lime, and if things work out it can scoop it all back up a couple years from now.

It's our first (big) taste of the M&A spree that seems to lie ahead.

  • This crisis has made shakey companies topple, creating the perfect opportunity for cash-rich firms to swoop in and pick up what's left. (In Lime's case, a big user base.)
  • "This is the first major domino to fall in the COVID-19 shakeout of shared mobility," said PitchBook analyst Asad Hussain. "We expect to see additional downward revaluations" in Q2, he added, but "anticipate exit activity to be muted" thanks to volatile public markets and diminishing corporate acquisition interest.

But evidently some companies are interested in M&A, seeing this as an opportunity to get a leg up on competitors.

  • Nikolay Storonsky, CEO of Revolut, told the Financial Times that he's planning to use the company's warchest to buy distressed companies.
  • "A lot of travel aggregators are in trouble at the moment — we could probably purchase one and sell flight tickets at cost and be 10 to 15% cheaper than everyone else," he said.

Expect much more of this. Some industries — transport, travel, hospitality — have been hit hard by the crisis, but not everyone in those industries has been hit equally. The bigger companies have the cash to withstand the downturn and also have the cash to pick up competitors. SoftBank's "capital advantage" thesis might finally turn out to make sense.


  • "Amazon treats the humans in the warehouses as fungible units of pick-and-pack potential … If we don't like certain things Amazon is doing, we need to put legal guardrails in place to stop those things … a combination of antitrust and living-wage and worker-empowerment legislation, rigorously enforced, offers a clear path forward." — Amazon VP Tim Bray quit over the company's treatment of employees, explaining his decision in a scathing blog post.
  • "This is one of those situations where the rich get richer … It's not just Amazon. The top 10 retailers that can remain open have a tremendous advantage and we're going to see a lot of smaller retailers get washed out." — EMarketer analyst Andrew Lipsman said this crisis will accelerate ecommerce consolidation.
  • "If the cheating behaviors from evil politicians like Pompeo continue, the U.S.'s 'Make America Great Again' could become merely a joke." — Li Zimeng, a newscaster on China's state-owned TV network, ramped up the trade war rhetoric.

Closing Bell

Biomaterial makers aren't worried about the oil price

This morning, biotech startup RWDC Industries announced a $133 million Series B funding round, offering some hope that a sustainable future is still in reach. I spoke to CEO Dr. Daniel Carraway yesterday about the round, curious whether the rock-bottom oil price had dampened demand for PHA, RWDC's biodegradable plastic alternative. "What's driving the interest in materials like PHA is not price," he said, saying that sustainability and safety seemed to still be a focus for his customers. The company has seen one effect though: Construction on its giant new factory in Athens, Georgia, has been delayed by a few months. We'll have to wait just a little longer for a plastic-free future, but it's coming.

Correction: Yesterday's edition misidentified a company that had reportedly laid off approximately 10% of its staff. It is SoftBank Group International.

Thoughts/feedback/tips? Email me — — or anonymously contact Protocol. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

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