Week in a Nutshell #17

Welcome to the seventeenth episode of the 'Week in a Nutshell’ series,

We had relatively a slow week compared to the previous one. Fitbit's IPO application and Delivery Hero's acquisition of Turkey's online food order giant Yemeksepeti were the highlights of the last week.

Headlines:

  1. Fitbit files for $100 million IPO, shows big profits
  2. Delivery Hero Eats Up Turkey’s Yemeksepeti For A Record $589M

Fitbit files for $100 million IPO, shows big profits

Fitbit, maker of fitness tracking bands and devices, filed for $100 million IPO. Not so long ago, in 2012, Fitbit generated $76 million revenue and $4 million loss and then in following year, 2013, Fitbit's financial performance was below the expectations due to a $52 million loss even though the increased revenue of $271 million. However, Fitbit signalled a great recovery in 2014 with $745 million revenue and $132 million net income.

I believe Fitbit's revenue growth can be attributed to two things. First, fitness tracking devices market has been growing fast for the last couple of years and Fitbit managed to get the lion's share in this market by over powering its competitors such as Jawbone UP and Nike Fuelband. Fitbit also shared that it owns more than 50% of the fitness tracking bands market and sold 10.9 million fitness tracking bands in 2014.

I think Apple Watch and Android Wear supported smart watches will be the biggest competitor of Fitbit in 2015 and going forward since they can also track fitness activity. Fitbit currently has a mobile app that can work on iPhones without the requirement of a Fitbit band. I believe Fitbit should focus making the Fitbit application work on any smartphone and any watch without the requirement of a Fitbit band and generate an alternative revenue stream through the app.


Delivery Hero Eats Up Turkey’s Yemeksepeti For A Record $589M

Berlin-based online food ordering service Delivery Hero has been investing and acquiring other food ordering services across Europe after receiving an investment in February from Rocket Internet. Delivery Hero reached to a significant scale in Europe after these acquisitions.

Delivery Hero announced the acquisition of the food ordering service giant of Turkey, Yemeksepeti last week for $589 million worth of cash and stocks. Delivery Hero also stated this sum is the highest amount paid for an acquisition in the online food ordering service market.

Yemeksepeti operates in Turkey as well as Greece, Jordan, Lebanon, Oman, Qatar, Saudi Arabia, United Arab Emirates and Qatar. Thus, Deliver Hero makes a very strong entrance to the MENA region with Yemeksepeti acquisition. I think this is a great strategic decision for Rocket Internet as they aim to create a global scale and presence in the online food ordering service market with the Global Online Takeaway Group organization. Yemeksepeti's dominance in the Turkish market and its strong presence across the MENA region would definitely contribute to the vision of the Global Online Takeaway Group.

This acquisition is also a big milestone for the entrepreneurship in Turkey as it is the first time for a Turkey-born startup to be valued for more than 1 billion TRY. Huge congrats and respect to the founders Nevzat Aydın and Melih Odemis.


We came to the end of the seventeenth episode of ‘Week in a Nutshell’ series. If you enjoyed this post, I'd be happy if you could comment, share, like and/or recommend it. 

Thanks,
Birkan