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1. WhatsApp Business is growing fast, with now 50M+ active merchant users
  • WhatsApp Business helps merchants communicate with current and potential customers. Businesses can provide customer service through direct messaging, facilitated by features such as automated greetings, quick replies to frequently asked questions, away messages, and business profiles.
  • The app is currently free to use; however, larger businesses pay a fee per message to use WhatsApp Business API (though responses to customers within 24 hours are free). There are 60+ official API partners that can help businesses implement the API, with targeted solutions by use case and industry vertical.
  • WhatsApp Business is available in the US, UK, Germany, India, Indonesia, Brazil, and Mexico, with plans to roll out worldwide. India (15M+ merchants) and Brazil (5M+ merchants) are its two largest markets. WhatsApp’s payment ambitions in those markets have, however, run into some roadblocks. In 2018, it piloted payments in India – which was supposed to be its first payments market – but has been waiting on government approval for two years. In Brazil, it rolled out payments last month only to have regulators suspend it after just 9 days of operation.
  • India, Brazil and Indonesia – WhatsApp’s top 3 markets (in users) outside the US – continue to be squarely in Facebook/WhatsApp’s sights, as it targets these rapidly digitizing countries for growth. Facebook, as part of its $5.7B investment in Reliance’s Jio Platforms in India, plans to integrate JioMart ordering into WhatsApp. It also has a deal with Indonesia-based Gojek to help digitize small businesses.
  • WhatsApp Business also represents Facebook’s larger push to draw smaller businesses – who are increasingly moving to digital/social channels to operate – to its platforms. In May 2020, it rolled out a Shops storefront on Facebook, with Instagram to follow. The new offering will help businesses set up free customizable storefronts powered by 3rd-party services. It is, however, facing heated competition from other global players, especially in India, where Amazon and Walmart/Flipkart are also targeting the digitization of neighborhood kiranas.
  • Related Briefs:
    • Jul 15 2020: Who will be the next set of “big tech” firms?
    • May 22 2020 (3 Shifts): Facebook pushes into social commerce with the Shops storefront
2. SiriusXM invests in podcast advertising and analytics, in a race against Spotify
  • Podcast advertising and analytics are top-of-mind for SiriusXM. The Midroll ad network, which connects advertisers with 300+ podcasts based on target audience, is expected to help SiriusXM deepen its position in digital audio ads with “precision targeting, ad efficiency and improved measurement.” The Stitcher deal comes less than a month after SiriusXM’s acquisition of podcast management platform Simplecast, which lets podcasters distribute podcasts and analyze their consumption (e.g. by episode and geography).
  • Stitcher/Midroll and Simplecast join a stable of recent SiriusXM acquisitions that include ad-supported internet-radio company Pandora ($3B in Sep 2018; 70M users) and audio adtech arm AdsWizz (acquired by Pandora for $145M in May 2018; inventory reach of 100M+ people per month), as well as a recent $75M investment in audio platform SoundCloud (Feb 2020).
  • These acquisitions support SiriusXM’s ambitions to be the leading audio ad network for music and podcasts, as it diversifies from its satellite-radio business (36M paid subscribers). Podcasting, in particular, is the fastest-growing segment in audio entertainment. These ambitions are centered on Pandora, which began incorporating podcasts in Dec 2018 with an emphasis on AI-powered discoverability and personalization at the episode level through its Podcast Genome Project (similar to its Music Genome Project).
  • In 2019, it launched the Pandora for Podcasters self-service hub enabling creators to submit their show’s RSS feed (similar to Apple and Spotify’s podcast platforms). Last month, Pandora introduced a Podcasts Analytics tool designed to offer podcasters data about their audience and performance on Pandora (e.g. listener locations, unique listeners, listening time, stream counts, and thumbs up and thumbs down).
  • Pandora is building on its existing audio advertising business that has targeting data, audio programmatic platform, and direct sales capabilities. Its successful partnership with SoundCloud to let advertisers buy SoundCloud inventory directly through Pandora has an aggregate reach of 100M+ unique listeners. It also plans to integrate AdsWizz’s programmatic technology and dynamic ad insertion with Simplecast’s podcast management to power ads.
  • Related Briefs:
    • Dec 3 2019: Spotify’s podcast-driven growth & the trajectory of podcasting
    • Oct 24 2019: Disney+ and the age of streaming-video wars
3. Palantir files to go public amid strong growth & mixed environment for surveillance
  • Palantir’s growth has been driven in part by a need for health surveillance and government tracking to curtail the spread of COVID-19. For instance, it was recently reported to be working to organize information for HHS Protect, the new system that will replace the CDC’s data-gathering network. It also has contracts with the Department of Veterans Affairs, the NIH, and the UK's NHS, and has reportedly been pitching its solutions across Europe.
  • Palantir’s planned public listing right now is interesting given its controversial history and the current sentiment around surveillance. Protests against police use of facial recognition have put pressure on tech firms, causing Amazon, Microsoft and IBM to pull back on their facial-recognition efforts. As we have seen in the past, however, a major expansion of government powers – even in response to an emergency situation – tends to be sticky. In the near term, we are likely to see more surveillance, generating tailwinds for companies like Palantir and autonomous drone/border surveillance firm Anduril (also backed by Peter Thiel). As we emerge from this pandemic, however, the pendulum will swing back towards privacy regulation in democratic countries.
  • Related Briefs:
    • Jun 12 2020 (3 Shifts): Tech firms pull back on facial recognition
    • Apr 15 2020: Geolocation tracking & the expansion of government surveillance
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