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The Ebay Veteran Cashing In On The $369 Billion Returns Boom

He raised $1.2 million from friends at VC firms True Ventures and Harrison Metal in 2009 and has collected a total of $73 million from investors. “They’re just scratching the surface of what we think is a massive market,” says Pete Jenson, a partner at Spectrum Equity, which led a $65 million Series C round in 2018. Neither he nor the company would discuss the company’s valuation or their ownership stakes other than to confirm that Rosenberg has a minority stake. Based on the one publicly traded competitor, Liquidity Services, the company is likely worth at least $130 million, but that is likely low, given how fast it is growing.

“That is why Spectrum wrote us a check for $65 million. They like big markets,” agrees Rosenberg.

B-Stock isn’t the only option, of course. Washington, D.C.-based Optoro operates one warehouse but these days mostly sells software that helps chains identify the best way to offload unwanted inventory, whether by restocking merchandise, returning it to a vendor, refurbishing, donating or sending it to a secondary marketplace. It also operates Blinq.com, which sells one-off returns to consumers, and Bulq.com, a smaller B2B competitor to B-Stock. Happy Returns installs pop-up receiving sites for chains that have limited brick-and-mortar presence, and Liquidations.com similarly sells excess inventory via auction.

Rosenberg has taken a different tack, putting all of the burden back on the original sellers, who deal with sorting, packing and shipping items to buyers. No inventory risk, no shipping costs and all the pricing decisions are made by the buyers and sellers. Even the warehouses where all that stuff sits in are the domain of retailers or third-party logistics companies. Sellers pay an estimated 5%-to-10% transaction fee based on the amount of merchandise they move through some 175,000 auctions every year. That keeps overhead low–85% of Rosenberg’s costs consist of doling out paychecks–and that, he claims, has helped him produce net profits since the day he started in 2009.

To help retailers get the best price, B-Stock tinkers with things like whether to sell stuff together or separately, how big a lot should be, how long an auction should run, what pictures to use and what day it should close. It also helps leverage the power of brands–trusted retailers can command a 15% premium–with separate marketplaces for each customer.

“There are times when we get bogged down with returns,” says a manager at a Fortune 500 company that has worked with B-Stock for six years and declined to speak on the record. “We needed someone to help us find homes for product that might beforehand been thrown away.”

Who’s buying all this? People like Clayton Cook, 33, who runs three discount stores in Salt Lake City. He spends an hour every morning browsing B-Stock and typically places about 150 to 200 bids for toys, apparel and other items sold by Walmart, Target and Costco. He doesn’t have time to haggle, so he lowballs his bids and figures he will only win a fraction of them. “The biggest plus is that I get it directly from the source. Because of that I get a better variety and a better product,” says Cook, who expects sales of $8 million in 2019. The site has also attracted a lot of eBay and Poshmark sellers, although the company doesn’t keep track of just how many.

That’s not to say the business is hassle-free. The company’s Better Business Bureau page is littered with complaints from unhappy buyers, most of them upset by the actions of a retailer but blaming the middleman as the face of the transaction.

Rosenberg says the marketplace model has allowed him to build the biggest online liquidation business in town, yet he still only lays claim to less than 2% of a liquidation market that totals $100 billion. To continue cashing in on the returns boom, he wants to bring on outside companies who can offer various logistics services, including sorting and shipping, for an extra fee. He also has plenty of new business to chase: Only 18 of the top 100 retailers in the country are working with B-Stock, plus his current customers could be liquidating even more stuff through his platform.

“It’s a huge opportunity,” says Rosenberg. “And a really, really big market.”

COVER PHOTOGRAPH BY AARON KOTOWSKI FOR FORBES.

Get Forbes’ daily top headlines straight to your inbox for news on the world’s most important entrepreneurs and superstars, expert career advice and success secrets.

I am a staff writer at Forbes covering retail. I’m particularly interested in entrepreneurs who are finding success in a tough and changing landscape. I have been at Forbes since 2013, first on the markets and investing team and most recently on the billionaires team. In the course of my reporting, I have interviewed the father of Indian gambling, the first female billionaire to enter the space race and the immigrant founder of one of the nation’s most secretive financial upstarts. My work has also appeared in Money Magazine and CNNMoney.com. Tips or story ideas? Email me at ldebter@forbes.com.

Source: The Ebay Veteran Cashing In On The $369 Billion Returns Boom

 

 

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This London Tycoon Harbors A Surprisingly Shady Past

Tej Kohli’s name is up in lights in Paris, flashing on the walls in giant, bold type inside the new high-ceilinged headquarters of French e-sports Team Vitality, a 20-minute walk from the city’s Gare du Nord train station. Some of Europe’s top video game players, influencers, journalists and sponsors have arrived on this November day to buoyantly pay tribute to Kohli, a U.K.-based, Indian-born entrepreneur, now heralded as the lead investor in the e-sports team. Team Vitality has raised at least $37 million and scored partnership deals with Adidas, Renault, telecom firm Orange and Red Bull, with a stated goal to become the top team in European competitive gaming.

E-sports, Kohli proudly tells Forbes, “encompasses the entire spectrum of business … [and is] not very different from other things we do in technology.” His wavy mane of dark hair stands out in the room like a beacon, as he beams amid the buzz and recognition.

London is home to 55 billionaires, with more on the outskirts, and they generally fall into two camps: those who completely shun publicity, and those, like Richard Branson and James Dyson, who enthusiastically embrace it. Kohli, who lives in a multimillion-dollar mansion in leafy Henley-on-Thames, aspires aggressively to the latter. In April, Kohli told the FT’s How To Spend It supplement that, “Sometimes in business it’s important to show you can sell yourself by way of your lifestyle.” His website describes him as “Investor, Entrepreneur, Visionary, Philanthropist,” with photos of an apparent property portfolio, with about half a dozen apartment buildings in Berlin, one in India and an office tower in Abu Dhabi. He claims to be a member of two exclusive London private clubs, 5 Hertford Street and Annabels, and publicly gives tips on “foie gras … roast chicken” and places where “the steaks are huge.”

Kohli has employed a large coterie of PR consultants and actively courts the media, pushing grand visions that back up this image. In a 2013 article he wrote for The Guardian, he offers advice on how to get a job in the tech industry (“Learn to code”). In 2016 he told a Forbes contributor: “The one mission that every entrepreneur has, as a person rather than as an entrepreneur, is to extend human life.” And his Tej Kohli Foundation Twitter bio brags that “We are humanitarian technologists developing solutions to major global health challenges whilst also making direct interventions that transform lives worldwide.” A press release issued in mid December boasted of more than 5,700 of the world’s poorest receiving “the gift of sight” in 2019 at Kohli’s cornea institute in Hyderabad, India.


Kohli also aspires to be validated as a billionaire. Over the past two years, his representatives have twice reached out to Forbes to try to get Kohli included on our billionaires list, the first time saying he was worth $6 billion—more than Branson or Dyson—and neither time following up with requested details of his assets. (Kohli’s attorneys now claim that “as a longstanding matter of policy,” Kohli “does not, and has never commented on his net worth,” suggesting that his representatives were pushing for his billionaire status without his authorization.)

There may be good reason for his reticence. It turns out that Kohli—who in a July press release describes himself as “a London-based billionaire who made his fortune during the dotcom boom selling e-commerce payments software”—has a complicated past. Born in New Delhi in 1958, Kohli was convicted of fraud in California in 1994 for his central role convincing homeowners to sell their homes to what turned out to be sham buyers and bilking banks out of millions of dollars in loans. For that he served five years in prison.

Kohli then turned up in Costa Rica, where he found his way into the world of online gambling during its Wild West era in the early 2000s. He ran online casinos, at least one sports betting site, and online bingo offerings, taking payments from U.S. gamblers even after U.S. laws prohibited it, according to seven former employees. He was a demanding, sometimes angry boss, according to several of these employees.

A spokesman for Kohli confirmed that he ran an online payments company, Grafix Softech, which provided services to the online gambling industry, between 1999 and 2006—and that he acquired several distressed or foreclosed online gaming businesses as a limited part of the company’s portfolio. “At no point was any such business operated in breach of the law,” Kohli’s representative said in a statement.                   

Though his representative claims that Kohli has had nothing to do with Grafix since 2006, Forbes found more than a dozen online posts or references (some deleted, some still live and some on Kohli’s own website) between 2010 and 2016 that identify Kohli as the chief executive or leader of Grafix Softech—including the opinion piece that Kohli wrote for The Guardian in 2013.                        

Even in a world of preening tycoons, this juxtaposition—the strutting thought leader who actively gives business advice while he just as actively tries to stifle or downplay any sustained look into his business past—proves eye-opening.

According to Kohli’s back story, he grew up in New Delhi, India, and he has told the British media that he’s the son of middle-class parents. Per his alumni profile for the Indian Institute of Technology, Kanpur (about 300 miles southeast of New Delhi), Kohli completed a bachelor’s degree in electrical engineering in 1980 and developed “a deep passion for technology and ethical and sustainable innovation.”

At some point, he wound up in California, and set up a “domestic stock” business called La Zibel in downtown Los Angeles. Kohli still uses the Zibel name for his real estate operations today. By the end of the 1980s, Kohli was presenting himself as a wealthy real estate investor who purchased residential properties in southern California to resell for profit. The truth, according to U.S. District Court documents, was that from March 1989 through the early 1990s Kohli, then reportedly living in Malibu, had assembled a team of document forgers and “straw buyers” to pull off a sophisticated real estate fraud.

Source: This London Tycoon Harbors A Surprisingly Shady Past

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… a scalable, accessible and affordable technology solution to end corneal blindness worldwide. VIDEO: Wendy & Tej Kohli Discuss The Mission And Purpose Of The Tej Kohli Foundation https://www.businesswire.com/news/hom…

Business Have Been Practicing Social Responsibility For Decades, But Is That Really A Good Thing?

The jury is out on whether corporate social responsibility (CSR) programs will one day make the world a better place. But this much is pretty clear: They’re already benefiting the companies that have implemented them. And in some unexpected ways.

Specifically, CSR has become the weapon of choice for what is known as, in corporate speak, the three R’s: Investor Relations, Human Resources, and Public Relations.

But before we dive into details, a CSR mini-lesson is in order. First off, CSR isn’t an overnight sensation. Over the past couple of decades, companies have been embracing the idea that they need to do more than just make a profit for shareholders. Do-good efforts slowly evolved from passive and limited corporate philanthropy programs—giving to the United Way, for example—to broader and more active CSR programs. Those would take on major social issues like Goldman Sachs’ 10,000 Women program, which in partnership with the International Finance Corporation (World Bank) has delivered $1.45 billion in loans to women-owned businesses in developing countries.

Now, they have evolved even more. Many companies are now incorporating impact-on-society considerations into core business activities. For example, Starbucks only uses “ethically-sourced coffee.” Programs like these are often focused on “sustainability.” In August, 181 CEOs of the country’s largest corporations signed a Business Roundtable statement committing to managing their companies not just for shareholders, but also for customers, employees, suppliers, and communities.

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Photo Illustration by Ryan Olbrysh for Newsweek; Getty 9; Buzz Courtesy of General Mills, Cesars Courtesy of Caesars Entertainment

The idea behind all of these efforts is the well-worn slogan “doing well by doing good,” which means that being a positive force in the community will enhance a company’s reputation, which in theory will pay off in more sales, lower costs and over the long term, more money for shareholders.

Can you even measure something like this? Stephen Hahn-Griffiths, chief reputation officer of the Reputation Institute in Boston, says you can. He reels off a string of statistics, like “40% of the reputation of a company is related to corporate responsibility” and says his organization’s research proves that reputation is a leading indicator of stock market capitalization, or the total value of a company’s shares. In other words, he adds, “CSR has a multiplier effect” when it comes to a company’s value. But CSR can be risky. And take a little guts.

According to analysts, CVS’s 2014 decision to stop selling tobacco products cost it $2 billion a year in sales and caused the stock price to drop. (Investors took a $1.43 billion hit that year according to Martin Anderson of UNC Greensboro.) In 2010, Campbell Soup announced it was reducing the salt levels in many of its soups, a decision they reversed the following year when sales fell by 32%.

Meanwhile, in 2018, Dick’s Sporting Goods stopped selling assault rifles. On a panel at this year’s Aspen Ideas Festival, CEO Ed Stack said that decision cost them customers and employees. He notes that many of the customers who applauded the decision at the time seem to have forgotten, but those who were in opposition have not. “Love is fleeting,” he says. “But hate is forever.”

But many companies feel the do-gooder dividend outweighs the risks, both in relations with consumers and in day-to-day operations.

Brad McLane, who recruits high-level positions at RSR Partners, says, “Companies aren’t doing it just to say they have it. My clients are incorporating it into how they do business—what ingredients they use, where they source, how they design products.” Megan Kashner, clinical professor at the Kellogg School of Management’s Public-Private Interface agrees. She’s says that we’ve moved from “greenwashing programs that mimic CSR” to an era of “authentic CSR.” Greenwashing is the practice of making misleading claims that make a company appear more environmentally or socially conscious than it is, for example, when BP began touting itself as being environmentally conscious through a $200 million public relations campaign, only to have a string of environmental disasters—some of which, according to a government report, were caused by corporate cost-cutting to boost profits.

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BP is the subject of protests by Greenpeace activists over oil drilling in the North Sea. Christian Charisius/picture alliance/Getty

Simon Lowden, Pepsico chief sustainability officer, says, “It’s woven into how we operate as a business. For instance, we need to maintain our license to operate in water-stressed regions, so we’d better focus on being responsible stewards of water. It’s not only the right thing to do, it’s important to our business.”

CSR is particularly useful in human resources. Rebecca M. Henderson, holds the John and Natty McArthur Chair at Harvard and is finishing a book on this topic, Reimagining Capitalism in a World on Fire. She says: “CSR has a tremendous impact on the morale of employees. Authentic purpose, which may mean occasionally sacrificing profits, accesses a whole range of emotions difficult to get at otherwise, like trust and engagement.”

In other words, it gets through. And that is a good thing. It leads to higher levels of productivity and employee retention.

CSR can also be a big factor in recruiting, particularly for younger employees, says Eric Johnson, executive director of graduate career services at the Kelley School of Business at Indiana University. He says, “Social impact is a big piece of the recruiting process. Probably 50 percent of that initial conversation is about what the company is doing to make the world better.”

“Beer companies used to talk about fun and sports. Now they talk about their programs to save water in the world. Social impact can tip the scales. Is a student going to choose an $85,000-a-year job over a $125,000 job because of social impact? I doubt it. But my observation is that jobs heavy in social impact often pay up to 10 percent less than comparable jobs that don’t.”

Professor Kashner adds, “These newly minted MBAs care and they care about the type of work they’re going to be doing. Maybe previous generations drew a line between work and personal life and values, but those boundaries no longer exist.” Korn Ferry, the giant executive recruiting firm, recently surveyed the professionals in its network. “Company mission and values” was the No. 1 reason (33 percent ) they’d choose to work for one company over another.

CSR is increasingly part of the conversation with individual shareholders and investors, like the world’s largest investment firm, BlackRock, which manages $6.5 trillion dollars for its clients. In his last two annual letters, CEO Larry Fink has called on companies to do more and said that BlackRock will evaluate companies on more than just financial numbers. His 2018 letter said, “As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.” Many investment firms now have someone in charge of building portfolios around companies based on their performance on Environmental, Social and Governance or ESG. (Measuring which companies are woke is an industry in and of itself.)

One aggregator of ESG ratings, CSRhub.com, lists 634 data sources. They range from the very broad (for example, Alex’s Guide to Compassionate Shopping) to the very specific (for example, the Alliance for Bangladesh Worker Safety).

For public relations, CSR is both an offensive and a defensive weapon. CSR can be used to pre-empt the conversation in areas where companies have been criticized. Procter & Gamble’s “Ambition 2030 program is heavy on recycling and biodegradability.

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A 50-foot cigarette is “snuffed out” by CVS in New York City. Andrew Burton/Getty

But CSR can also be a useful defense. It not only builds up a stock of goodwill with the media and the public, but it generates good news that crowds out the bad. Large corporations are going to get a certain amount of press and awkward questions each day—better that press and those questions be about CSR than, say, worker safety or GMOs. For example, in 2018 when Johnson & Johnson was accused of knowingly selling baby powder with harmful levels of asbestos, Harvard professor Bill George wrote a stirring defense of the company, focusing not on the merits of the claim, but on J&J’s “Our Credo,” a commitment to integrity and customers written in 1943 (and likely the first CSR document ever produced.)

Still, not everyone is convinced. There are many who adhere to the late economist Milton Friedman’s argument that the sole purpose of the corporation is to make more money for shareholders, who can then choose for themselves whether or not they want to save the world.

Judith Samuelson, vice president of Aspen Institute and founder of their Business and Society Program, who’s worked with many of the companies currently leading the way in CSR, says, “The shareholder primacy viewpoint hasn’t gone away. And even if attitudes have changed, measures haven’t. Many executives, including CEO’s, are still paid in stock, and those who manage portfolios for institutional investors are still bonused on the value of those portfolios.”

Samuelson worries that “Companies may think these (current) programs are enough and not make fundamental change.” Kashner is more optimistic. She cites work that says large public companies are increasingly incorporating CSR metrics into executive compensation contracts.

Those who oppose CSR programs argue that trying to do two things at once, like making a profit and serving society, will destroy the effectiveness of companies.

Samuelson scoffs at this. “Of course companies can do more than one thing. Public companies have to manage multiple objectives all the time. No public company in the world would last a week if the only people they cared about were shareholders. What about customers? Employees?”

She believes that CSR really boils down to responsible decision making, doing what it takes for companies to succeed in the long term. Whatever, CSR is here to stay. It’s become part of the fabric of investing, company operations, and business school curricula.

It’s now being tracked and measured, and in business, what gets measured gets done.

By

Source: Business Have Been Practicing Social Responsibility For Decades, But Is That Really A Good Thing?

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Alex Edmans talks about the long-term impacts of social responsibility and challenges the idea that caring for society is at the expense of profit. Alex is a Professor of Finance at London Business School. Alex graduated top of his class from Oxford University and then worked for Morgan Stanley in investment banking (London) and fixed income sales and trading (NYC). After a PhD in Finance from MIT Sloan as a Fulbright Scholar, he joined Wharton, where he was granted tenure and won 14 teaching awards in six years. Alex’s research interests are in corporate finance, behavioural finance, CSR, and practical investment strategies. He has been awarded the Moskowitz Prize for Socially Responsible Investing and the FIR-PRI prize for Finance and Sustainability, and was named a Rising Star of Corporate Governance by Yale University. Alex co-led a session at the 2014 World Economic Forum in Davos, and runs a blog, “Access to Finance” (www.alexedmans.blogspot.com), that aims to make complex finance topics accessible to a general audience. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

SoftBank Launches New $108 Billion Vision Fund To Invest in AI

SoftBank stunned the venture capital world with its launch of the $100 billion Vision Fund in 2017 and its wide-ranging and aggressive investments. Now billionaire Masayoshi Son has announced an even larger fund with $108 billion to invest in artificial intelligence companies.

Announced on Thursday, the “SoftBank Vision Fund 2” will be the biggest tech fund in the world if it comes to fruition. “The objective of the Fund is to facilitate the continued acceleration of the AI revolution through investment in market-leading, tech-enabled growth companies,” SoftBank Group wrote in a filing with the Tokyo Stock Exchange.

SoftBank has upped its own stake in the new fund to $38 billion from the $25 billion in the original fund and has tapped leading tech companies like Apple, Microsoft and Foxconn, along with Japanese investment investment banks and Kazakhstan’s sovereign wealth fund.

One noticeable omission from the second fund is Saudi Arabia’s sovereign wealth fund, which pumped $45 billion into the first Vision Fund. SoftBank has faced criticism over its ties with Saudi Arabia and Crown Prince Mohammad Bin Salman following the grisly murder of journalist Jamal Khashoggi in the Saudi Consulate in Istanbul.

However, SoftBank said discussions are ongoing with additional participants, so it’s possible Saudi Arabia will still participate in the second fund, while the total money raised may top $108 billion.

SoftBank used the first fund to make aggressive billion dollar investments into an eclectic range of technology companies around the world leading to some questioning the rational of the legendary investor and SoftBank founder Masayoshi Son. Uber, DoorDash, and WeWork have all been backed by the fund, European startups Improbable in the U.K. and travel booking website GetYourGuide in Germany.

The SoftBank Vision Fund, run out of an office in London’s exclusive Mayfair neighbourhood, is led by Son and Rajeev Misra, a banker who previously worked at UBS, Deutsche Bank and Merrill Lynch.

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I’m a Staff Writer covering tech in Europe. Previously, I was a News Editor for Business Insider Australia, and prior to that I was a Senior Technology Reporter for Business Insider UK. My writing has also appeared in The Financial Times, The Telegraph, The Guardian, Wired, The Independent, and elsewhere. I have also appeared on the BBC, Sky News, Al Jazeera, Channel 5, Reuters TV, and spoken on Russia Today and Shares Radio. In 2015, I was shortlisted for Technology Journalist of the Year by the UK Tech Awards and in 2016 I was nominated as one of the 30 young journalists to watch by MHP Communications.

Source: SoftBank Launches New $108 Billion Vision Fund To Invest in AI

DoorDash Is Now Worth Nearly As Much As Grubhub After $400 Million Funding Infusion

Investor appetite in food delivery companies is growing, notwithstanding a rash of customer complaints about how these startups pay contract workers. On Thursday, DoorDash announced it had raised another $400 million in a Series F funding round led by Temasek and Dragoneer Investment Group. The cash infusion brings DoorDash’s total capital raised to $1.4 billion, of which $978 million came from funding rounds in the last year.

Source: https://www.forbes.com/sites/bizcarson/2019/02/21/doordash-funding-400-million-grubhub-7-billion-valuation/#3df12b267e10

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