Plus, U.S. December jobs surge

Inside Business

For January 05, 2024

Here's your daily business briefing.

🖥️ Adobe: Online holiday spending up 5%
🤝 Aussie dealmaking: Record resource deals
🏀 NCAA, ESPN sign $920M, 8-year media deal

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In the 2022 holiday season, online spending hit a record $222.1B, rising 4.9% YoY from Nov. 1 to Dec. 31. Adobe Analytics, analyzing 1 trillion visits to U.S. retail websites, highlights that the spending surge resulted from increased purchases rather than higher prices, as many online product categories experienced price declines.

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According to Adobe's Digital Price Index, which analyses online pricing across 18 categories, e-commerce prices fell by 5.3% in December YoY.
Over the holiday season, discounts hit all-time highs, peaking at 31% off gadgets and 24% off clothing.
Nearly one-fifth of all November and December spending was spent online during Cyber Week, which ran from Thanksgiving to Cyber Monday, bringing in $38B.
Buy now, pay later (BNPL) financing choices brought in $16.6B in holiday season e-commerce revenue, up 14% from the year prior.

What the numbers say: Australia has seen a surge in energy and mining deals, totaling $73B until Dec. 15, 2023, making up almost half of the country's overall transactions, the highest since 1998. This highlights the dominant role of energy and mining in Australia's current dealmaking landscape.

Relevance: Australia faces its slowest dealmaking year since 2020, highlighting the impact of energy and mining transactions. Woodside Energy Group Ltd. and Santos Ltd. are in initial talks for a potential $53.69B merger, strengthening the prominence of energy deals with assets from Alaska to Australia.

Where to see the impact: Energy and mining deals rise with demand for essential metals in the energy transition, including Newmont Corp.'s $19.33B acquisition of Newcrest Mining Ltd. Some deals, like Albemarle Corp.'s $4.2B bid for Liontown Resources Ltd. and Brookfield Asset Management Ltd.'s $12B pursuit of Origin Energy Ltd., faced challenges and were rejected by shareholders.

The NCAA and ESPN have signed an eight-year media rights deal valued at over $115M annually from Sept. 1, 2024, to 2032 — roughly three times the current 14-year agreement. ESPN gains exclusive championship coverage rights for various NCAA events, with an additional 25% of $28.75M annually allocated for production and marketing costs.

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The deal secures rights to 40 NCAA championships, comprising 21 women's and 19 men's events, including international rights for these championships and the Division I men's basketball championship.
The agreement seeks to offer a comprehensive, multi-platform showcase for NCAA championships, enhancing the viewer experience and benefiting student-athletes.
About 57% of the deal's value is dedicated to women's college basketball, showcasing the growing popularity of women's sports in the evolving media landscape.
Linda Livingstone, chair of the NCAA Board of Governors, said, "The boosted media rights value enables the NCAA to address inequality and support student-athlete benefits, especially in women's basketball."

In December, U.S. employers added 216,000 jobs, surpassing the expected 170,000, with the unemployment rate remaining steady at 3.7% due to 676,000 individuals leaving the labor force. Concerns include challenges in adjusting for seasonal fluctuations and the disclosure of 71,000 fewer jobs added in October and November than initially reported, contributing to a slowdown with 2.7 million jobs added in 2023 compared to 4.8 million in 2022.

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The increase in employment was aided by government hiring, which added 52,000 jobs in December, especially in education.
A total of 38,000 new jobs were added in the healthcare sector, and 17,000 new jobs were added in the construction sector due to exceptionally warm weather.
In line with the previous month's increase, average hourly earnings increased by 0.4%, translating into 4.1% YoY wage growth.
U.S. Treasury prices declined and the dollar strengthened, while financial markets downgraded their projections for a March interest rate cut to roughly 53%.

Founded three and a half years ago, Blank Street Coffee, now with 74 locations, aims to attract more consumers through its subscription program, Blank Street Regulars, with about 5,000 paying members and 4,000 on the waiting list. The program offers two plans at $8.99 or $17.99 weekly for 14 drinks, including beverages like teas, hot brewed coffee, Americanos, double espressos, and cold brew.

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Blank Street Coffee secured $100M from investors like General Catalyst, Tiger Global, and a Warby Parker co-founder, with a valuation of $177M as of March 2023.
- According to Vinay Menda, co-founder of Blank Street, between 30% and 40% of its clientele may potentially sign up for subscription services.
The brand has become increasingly popular due to its quick expansion, affordable prices, and minimal overhead costs, which have put it up against rivals like Dunkin' Donuts and Starbucks.
A widespread approach startups use is the subscription model, which ensures revenue and attracts repeat business from clients looking for reasonable offers.
The business is considering introducing family and group plans and working on increasing capacity to meet the rising demand for its subscription program.

Search startup Perplexity AI secured $73.6M in funding, valuing the company at around $520M with support from investors like Jeff Bezos and Nvidia. The funding, led by IVP and featuring NEA, Nvidia, Databricks, and Bessemer Venture Partners, empowers Perplexity AI's tools using large language models like Meta's open-source Llama for instant answers with sources and citations.

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In March 2022, the San Francisco-based startup raised $25.6M in a prior round and, with minimal marketing spend, handled over 500 million searches in 2023.
With ambitions to grow the team from 38 to roughly 60 by the end of the year, the funds will be utilized for hiring and product development.
In December 2022, 2.2 million people visited AI's website and mobile app; by December 2023, that number had increased to 45 million visits.
- The startup, which is not yet profitable, is multiplying but wants to challenge the online search sector, which Google dominates with about 90% of the market.
The perplexity AI sets itself apart from established firms like Google by fine-tuning multiple top-performing models instead of depending on just one, establishing itself as a next-generation solution.

Quick Hits:

Need to close more deals faster? See 6 tips on how Calendly helps sales & marketing teams automate the meeting lifecycle and grow revenue. Read the blog.*
BAE Systems will resume M777 lightweight howitzer structure production following a deal with the U.S. Army, worth up to $50M, for the weapon's donation to Ukraine.
Rocket Cos. names former Airbnb CMO Jonathan Mildenhall as its CMO, assigning him the role of shaping a unified brand voice for the company's businesses.
Manhattan condo and co-op prices rose in late 2023 despite record-high mortgage rates, as a significant number of buyers opted for all-cash deals.
China's top sportswear maker, Li Ning, starts 2024 on a downward trend, having been the worst performer on the Hang Seng Index last year, with industry peers also facing declines amid consumer belt-tightening.

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Shriram Jeevakumar

Freelance Writer

Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School.

This newsletter was edited by Aaron Crutchfield

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