Wednesday, January 31, 2024

TikTok’s tune troubles

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By Alex Wilhelm

Wednesday, January 31, 2024

Good morning, friends, and welcome to TechCrunch AM for Wednesday, January 3. It's big tech earnings season, though the news there hasn’t been stellar thus far. But worry not, below we have new venture funds, the latest from fintech, Google's cloud storage momentum, and more. Heck, even TikTok makes an appearance!

Alex

TechCrunch Top 3

  1. Universal Music Group to pull its music from TikTok: After failing to come to an agreement on royalties, Universal intends to remove its massive music catalog from popular social video service TikTok. Universal wants more money, but TikTok doesn't want to pay more. Universal says TikTok is only worth 1% of its revenue so it can afford to walk away for a bit. Can TikTok make it without Billie Eilish and Ariana Grande?
  2. Giant Ventures raises $250M: One part of the post-2021 venture pullback that we don't talk about enough is how much less money VCs are raising than they used to. So it's worth noting when a fund lands a $250 million fund, especially when its prior fund was $100 million. In this case, the firm in question is Giant Ventures, a U.K.-based VC that invests on both sides of the pond.
  3. Layoffs at Wattpad: Popular online writing service Wattpad has laid people off yet again. This time, it's about 30 people, or 15% of its staff — the same proportion of its headcount that it cut last year. Consider this another data point that monetizing online writing remains very, very hard to do.
TechCrunch Top 3 image

Image Credits: Patrick T. Fallon/AFP / Getty Images

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Fintech layoffs: It's bleak to keep writing about them, but there are more layoffs to report. This time, the cuts stem from the world of big-cap fintech. Both PayPal and Block are cutting staff, with the former looking to reduce its headcount by 9% this year in a combination of cuts and closed open roles.

Block is singing a similar tune, with 1,000 people getting laid off, or about 10% of its total team. The layoffs "add to a sense of malaise in the fintech and broader tech sector, which has seen tens of thousands of workers let go in the past few weeks," writes Kyle Wiggers. Yep, it's not just you. Tech layoffs really are getting worse.

India updates: Accel is in advanced talks to lead a $15 million to $20 million funding round into Newme, a company that some are comparing to China's Shein. Given that Shein is considering an IPO in the U.S., it's not a shock that hyper-cheap e-commerce is getting more venture attention. Newme just closed a seed round to boot!

In less exciting news for some Indian startups, the country's central bank issued new, strict curbs on Paytm's Payments Bank. Since that's the bank that fintech giant Paytm uses, this is a big deal. Starting February 29, Paytm Payments Bank will be able to do less than it does currently. This is not the first time Paytm has been in trouble, and it is in the soup this time around due to what the Reserve Bank of India calls non-compliance and supervisory concerns.

People like cloud storage: Alphabet told investors in its quarterly results call that its storage solution, Google One, is nearing 100 million customers. I am one of them, though it's cheap enough that I honestly could not tell you how much space I have or what I pay for it. Why the disclosure? Google wants you to know that it's more than just a search giant and it is, in fact, the No. 3 cloud infra player. Its basket of subscription products, including Google One, YouTube Premium and Music, and other services, has crossed the $15 billion annual run rate mark.

Musk pay deal unfair, judge rules: Elon Musk got an unwelcome ruling in the state of Delaware after a shareholder suit over his compensation package from Tesla. Apparently, the compensation was viewed by some as too much for a part-time CEO. Musk is mad about it, and is airing his gripes on X.

Does the UK think it's the EU? The EU gets away with its regulatory strictures and fines because it is a large, wealthy market. The UK, which left the EU a while back, is also putting pressure on tech giants from TikTok to Bing and Google. The issue is that while the EU has a population of around 450 million, the UK is home to only 67 million folks. Think of it as a bit smaller and poorer market than two Californias stitched together. How much clout the UK can come to wield over how search and social media products work today is not clear, but it's no EU.

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