Google’s $7 Billion Real Estate Plan for the Coming Year
Recovering From Pandemic Downturns
) plans to spend $7 billion on real estate in 2021, mostly in the form of office space and data centers. Last year, Google paused its real estate spending as the pandemic weighed on the company’s balance sheet. Google saw its first-ever year-over-year revenue drop during the second quarter of 2020.
Now, business is picking back up. Google wants to take advantage of the current real estate market to set itself up for success as the world begins to recover from the pandemic.
Planning a Return to the Office
Google plans to bring workers back to offices starting this fall. Google does not plan to offer permanent remote work, and most employees will be expected to come into the office at least three days per week. “Coming together in person to collaborate and build community is core to Google’s culture, and it will continue to be an important part of our future,” said Google CEO Sundar Pichai in an announcement about the company’s real estate investments.
$1 billion of Google’s budget will be invested in California. A number of other large tech companies have divested from California during the pandemic, but Google wants to maintain its presence in its home state. Google is also investing in offices and hiring people in cities like Atlanta and Washington DC in order to ensure that its workforce is geographically and racially diverse.
Google’s Goals for its Cloud Business
Google has big goals for its cloud business in the coming years, so it is making significant investments in data centers. In its most recent earnings report, Google shared that its cloud arm lost $5.61 billion on $13.06 billion in revenue last year.
Though Google’s real estate investments will raise expenses for its cloud business, Google says it is more focused on growth at the moment and will work to make its cloud operations profitable over time.
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Peloton and Adidas Team Up
Peloton’s New Apparel Line
) and Adidas (ADDYY
) are joining forces to launch a new apparel line which will feature unisex styles and inclusive sizing. The line was created with input from several of Peloton’s top instructors, including Robin Arzon, Ally Love and Cody Rigsby.
The clothes will be available for purchase starting March 25 on both companies’ websites and in some Adidas and Peloton stores. Adidas and Peloton did not share financial terms of the deal.
Peloton’s Other Clothing Partnerships
Adidas is not the first clothing company to partner with Peloton. The connected fitness company makes its own branded clothing and sells apparel and accessories from large names like Lululemon (LULU
) and Nike (NKE
), as well as smaller brands like Beyond Yoga and Spiritual Gangster.
Peloton’s clothing arm has not been a strong source of revenue, but it has fueled growth for its app. When users sign up for the app they receive referral codes for clothing discounts. Peloton’s clothing partnerships also help it stay competitive with other at-home fitness companies, which offer their own clothing deals.
Peloton’s Next Challenge
Peloton’s share price climbed over 440% in 2020 and the company has a market capitalization of over $31 billion. But the stock is currently down about 30% year to date.
Demand for Peloton bikes surged during the pandemic as gyms shuttered. As more people receive COVID-19 vaccines, some analysts wonder if Peloton will be able to hold on to customers’ attention or if the brand will become less relevant. By diversifying through clothing partnerships and other strategies, Peloton hopes to be ready for whatever the coming months bring.
Friday Fundings: Squarespace, Yotpo, and SecurityScorecard
Squarespace Hits $10 Billion Valuation
Website building service Squarespace is now valued at $10 billion after a recent $300 million funding round. Participating investors included Dragoneer, Tiger Global, D1 Capital Partners, and Fidelity Management & Research Company. Squarespace has seen surging demand for its services as businesses have shifted their operations online during the pandemic. Since its founding in 2003, it has expanded beyond simple website templates to offer ecommerce support and other features for its clients.
This funding was announced less than two months after Squarespace confidentially filed to go public through either a direct listing or an IPO. The company is expected to make its public debut sometime this year.
Yotpo Raises Fresh Funds for Ecommerce Marketing
Ecommerce marketing company Yotpo has raised $230 million in a Series F round led by Bessemer Venture Partners and Tiger Global. Yotpo is now valued at $1.4 billion.
Yotpo gives brands a one-stop-shop for all their ecommerce marketing needs. It serves small clients as well as large brands like Patagonia and Steve Madden (SHOO
). As ecommerce has boomed, so has demand for Yotpo’s services. Revenue from its SMS marketing product climbed by 170% last year, and revenue from its loyalty and referrals program nearly doubled during the same time frame.
SecurityScorecard Raises $180 Million in Series E Round
SecurityScorecard has raised $180 million in a Series E round with participation from new investors including Silver Lake Waterman and T. Rowe Price, and existing investors including Evolution Equity Partners and Accomplice. This could be the company’s last fundraising round before it goes public, though it has not shared specific information about its plans to make a public debut.
SecurityScorecard helps companies evaluate the security risks of their vendors. It gives vendors a security letter grade based on a variety of factors. So far, SecurityScorecard has rated over 2 million companies around the world.