March 24, 2024: Dovish Fed, AI prospects, And IPO Pops!

The market had another strong week, buoyed by a dovish Fed, bullish AI prospects and a couple positive IPO debuts. Major indexes performed well, hitting record highs, and then backing off Thursday’s intraday highs. For the week, Dow Jones was up 2%, S&P 500 gained 2.3%, Nasdaq composite rose 2.85%. The IPO pop is back — Reddit ended its first day on the public markets up 48% from its offering price. Astera Labs, ended its Thursday above US$64, about a three-quarters rise from its IPO price two days ago. Walmart-backed Ibotta filed for an IPO. CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, is in talks to raise equity capital in a transaction that would more than double its valuation to US$16 billion. Telegram raised US$330 million through a corporate bond issued last week. The government of Saudi Arabia plans to raise US$40 billion for a fund focused on artificial intelligence investments, partnering with Andreessen Horowitz. Nvidia on Monday unveiled its next artificial intelligence chips, Blackwell, during its annual conference for app developers. The Justice Department and several states filed an antitrust lawsuit against Apple on Thursday. In Canada, Sophic Client, Kraken Robotics, announced $2.4 million of sonar and subsea power contracts. Abaxx announced the upsizing of its Bought Deal financing to $16.25 million. Nuvei, is nearing a buyout deal. Private-equity firm Advent International is in advanced talks with Nuvei for a transaction that could be announced soon, according to the WSJ. Hamilton-based oncology firm Fusion Pharmaceuticals will be acquired by AstraZeneca for up to US$2.4 billion. Toronto based Cohere, is in advanced talks to raise US$500 million at a valuation of about US$5 billion. Cohere was valued at US$2.2 billion last June when it raised US$270 million.

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) announces $2.4 million of sonar and subsea power contracts.

Kraken received contracts totalling $2.4 million for subsea batteries and synthetic aperture sonar systems (SAS). The SAS sensor contracts are for a Research Institute and a Hydrographic Office of an unnamed Navy. No details can be provided on the subsea power customer due to confidentiality. Deliveries will occur in 2024. https://bit.ly/4ajz45P

Abaxx (ABXX-NEO) announces upsize of Bought Deal financing to $16.25 million.

Abaxx Technologies, a financial software and market infrastructure company, majority shareholder of Abaxx Singapore Pte Ltd., the owner of Abaxx Commodity Exchange and Clearinghouse (individually, “Abaxx Exchange” and “Abaxx Clearing”), and producer of the SmarterMarkets™ Podcast, is pleased to announce that it has agreed to increase the size of its previously announced bought deal financing with Canaccord Genuity Corp. and BMO Capital Markets, (the “Co-Lead Underwriters”). The Co-Lead Underwriters have agreed on behalf of a syndicate of underwriters (collectively, the “Underwriters”), to purchase, on a bought deal basis, an aggregate 1,250,000 common shares of the Company (the “Common Shares”) at a price of C$13.00 per Common Share (the “Issue Price”) for aggregate gross proceeds to the Company of C$16,250,000 (the “Offering”). The Company has also granted the Underwriters an option to purchase up to an additional 187,500 Common Shares at the Issue Price, to cover over-allotments, if any, and for market-stabilization purposes, exercisable in whole or in part at any time, for a period of 30 days after the closing of the Offering (the “Over-Allotment Option”), which if exercised in full, would increase the aggregate gross proceeds of the Offering to C$18,687,500. The Offering is expected to close on or about March 28, 2024 and is subject to customary closing conditions, including receiving all necessary regulatory approvals. https://tinyurl.com/bd795bja

Martello (MTLO-TSXV) announces $1.5 million private placement.

Martello Technologies, announced a non-brokered private placement of common shares in the capital of the Company (“Common Shares”) for aggregate gross proceeds of approximately $1,500,000. The sole subscriber in the Private Placement is Wesley Clover International Corporation, a corporation controlled by Terence Matthews, Chairman of Martello. The subscription by Wesley Clover is irrevocable and committed. Pursuant to the Private Placement, Martello will issue 30,000,000 Common Shares at $0.05 per Common Share. The Private Placement is expected to be completed on or before March 27, 2024. The Company intends to use the proceeds of the Private Placement for general corporate and operational purposes. HO Industries SAS, previously the majority shareholder of GSX, has a pre-emptive right to maintain its pro rata ownership in the Company in connection with the Private Placement. https://tinyurl.com/3psasuxm

Ryan Reynolds-backed payments processor nears buyout deal.

Canadian payments processor Nuvei, backed by celebrity entrepreneur Ryan Reynolds, is nearing a buyout deal. Private-equity firm Advent International is in advanced talks with Nuvei for a transaction that could be announced soon, according to people familiar with the matter. The talks could still fall apart before a deal is reached. Given Nuvei’s current market capitalization of about 4.1 billion Canadian dollars (US$3 billion), it would qualify as one of the larger recent private-equity deals at a time when activity is muted as a result of higher interest rates and other factors. The company, whose platform helps customers with everything from fraud protection to shopping-cart integration, said about a year ago that Reynolds made an undisclosed investment. The actor’s other investments have included American Aviation Gin and Wrexham Football Club. Earlier in 2023, Nuvei completed the US$1.3 billion acquisition of Atlanta-based payment platform Paya Holdings. On the heels of Reynolds’ investment, short seller Spruce Point Capital Management questioned the rationale behind the Paya transaction among other concerns it said it had about the company. The shares are down from a high of over C$170 in 2021. https://archive.is/yt6fq

Fusion Pharmaceuticals (FUSN-NASDAQ) to be acquired by AstraZeneca for more than US$2 billion.

Hamilton-based biopharmaceutical precision oncology firm Fusion Pharmaceuticals has entered an agreement that will see it acquired by pharmaceutical giant AstraZeneca for up to US$2.4 billion. Fusion Pharmaceuticals was founded out of McMaster University in 2014 with the goal to cure cancer by developing targeted alpha therapeutics, a method that employs radioactive substances that undergo radioactive decay to treat diseased tissue at close proximity. The transaction’s upfront value is approximately US$2 billion and will see Fusion’s shareholders receive US$21.00 per share, a 97 percent premium on its March 18 closing price of US$10.64. However, it has the potential to be valued as high as US$2.4 billion upon filing a new drug application with the US Food and Drug Administration by 2029. The bonus will be paid out as US$3.00 per share in a cash payable, non-transferable contingent value right. Following Fusion’s spinout from McMaster, the company raised a US$25 million Series A round in 2017 led by its founding venture investor, Johnson & Johnson Innovation. The company later picked up investors like OrbiMed in its US$105 million Series B round in 2019 and the Canada Pension Plan Investment Board in a $26 million raise ten months later. Fusion debuted on the NASDAQ in June 2020 at a share price of US$17.00, but has fallen as low as US$2.31 per share in the past year. Following the announcement of the deal, its stock price sits at US$21.15 as of 2:00 pm EST Wednesday. https://tinyurl.com/yfjzsmxz

AI startup Cohere seeks US$5 billion valuation in latest fundraising.

Cohere, an artificial intelligence startup that develops foundation models to compete with ChatGPT creator OpenAI, is in advanced talks to raise US$500 million at a valuation of about US$5 billion, according to a person familiar with the matter. The Toronto-based company has seen its annualized revenue run rate grow to US$22 million this month from US$13 million in December as it launched new model Command-R, said the source, who requested anonymity to discuss confidential matters. The startup founded by former Google researchers has pitched its growth potential to investors by building enterprise-focused AI models. Cohere, which currently has a partnership with Oracle also plans to make its models available on other major cloud providers. Cohere was valued at US$2.2 billion last June when it raised US$270 million from investors including Inovia Capital, Nvidia and Oracle. The new valuation it is seeking had not been reported previously. https://archive.is/QIGPv

With $45 million Series B, PocketHealth gears up to continue North American expansion, AI push.

PocketHealth’s all-equity Series B round, which closed in early March, was led by Round13 Capital with support from fellow new investors Deloitte Ventures and Samsung Next and existing backers, healthcare investor Questa Capital and AI-focused Radical Ventures. It brings PocketHealth’s total equity funding to $75 million. The startup’s app allows patients to securely access, store, and analyze their own medical image records, including X-rays, ultrasounds, CT scans, and MRIs, and share them with healthcare providers. https://tinyurl.com/35andbjy

Borderless AI Raises US$27 million in seed funding.

Borderless AI, a Toronto, Canada-based AI-powered startup for Employer of Record (EOR) space, raised US$27 million in Seed funding. The round was led by Susquehanna and Aglaé Ventures, with participation from additional undisclosed investors. The company intends to use the funds to expand operations and its development efforts. Led by CEO Willson Cross, Borderless AI works to bring an AI agent to the HR industry. Its novel AI agent, Alberni, can solve complex problems and automate processes in any country around the world leveraging generative AI to automate and accelerate the process of onboarding, managing, and paying international team members, solving international employment law challenges while accelerating geographic expansion and ensuring compliance in hiring processes. https://tinyurl.com/muba2evp

Flosonics Medical raises $27 million Series C to scale uptake of wearable ultrasound device.

Sudbury, Ontario-based healthtech startup Flosonics Medical has closed $27 million (US$20 million) in Series C financing as it looks to drive the adoption of its blood flow measurement wearable. The round was led by New York-based New Leaf Venture Partners, with participation from returning investors Arboretum Ventures, Genesys Capital, and iGan Partners. Prior to closing its Series C round of funding, Flosonics closed a $18 million (US$14 million) Series B round in 2021, and in 2018, raised $5 million in a round led by iGan Partners. The startup has also received investment through the Ontario Together Fund, which invests in businesses that work to improve the healthcare sector’s resilience. https://tinyurl.com/3j95t4zk

Google Canada provides $2.7 million in research grants to major Canadian AI institutes CIFAR, Amii, CEIMIA.

Google Canada is doling out $2.7 million in research grants to three major Canadian artificial intelligence (AI) institutes. The Canadian Institute for Advanced Research (CIFAR), the Alberta Machine Intelligence Institute (Amii) and the International Center of Expertise of Montreal on AI (CEIMIA) will each receive a portion of the grant funding aimed at supporting research into the sustainability and responsible development of AI. https://tinyurl.com/3wnr4pf7

Ocean tech startup Poseidon raises $28 million Series B to make fish farming more eco-friendly.

Campbell River, British Columbia-based Poseidon Ocean Systems has closed a $28 million (US$20.75 million) Series B round of funding. The round was led by Ecosystem Integrity Fund, a sustainability-focused venture capital fund, with participation from InBC and returning investor Export Development Canada. https://tinyurl.com/28jfyz9t

IPO Mania for Reddit, Astera.

The IPO pop is back. Reddit ended its first day on the public markets up 48% from its offering price, notching a first-day return that is above historical averages and could signal a broader rejuvenation of the IPO market. The popular discussion forum priced its shares at US$34 in its IPO, the high end of the range, and ended Thursday’s trading at US$50.44. The IPO “pop” was bigger than Snap’s in 2017 and Pinterest’s in 2019. The share price values Reddit at about US$9.6 billion, getting the company close to its last-round private fundraising from 2021. The company appears to have been lifted in part by retail investors, which were allocated about 12% of the deal and appeared to buy more Thursday. Meanwhile, Astera Labs, which sells crucial data center components, continued a hot streak. The company, bolstered by a generative AI pitch, ended its Thursday above US$64, about a three-quarters rise from its IPO price two days ago. https://tinyurl.com/2j7f422n

Walmart-backed Ibotta files for IPO disclosing profitable turn.

Digital marketing software firm Ibotta Inc. filed for an initial public offering on the heels of this week’s successful debuts by Reddit Inc. and Astera Labs Inc. The Denver-based company, which helps brands to deliver mobile promotions through rewards and rebates, said in a filing Friday that it turned a profit last year, reversing earlier losses. Ibotta, whose investors include Walmart Inc., will disclose proposed terms for its IPO in a later filing. Bloomberg News reported in November that Ibotta was working with advisers and could seek to be valued in a listing at $2 billion or more. In 2019, Ibotta was valued at US$1 billion in a Series D funding round led by Koch Disruptive Industries, an investment arm of Koch Industries Inc. The company handles promotions for more than 2,400 brands, such as Coca-Cola, Whirlpool and Hallmark, according to its filing with the US Securities and Exchange Commission. Walmart is listed among Ibotta’s stockholders with a 5% or greater stake in the company, Ibotta said in the filing. Ibotta had net income of US$38 million on revenue of US$320 million for last year, compared with a net loss of US$55 million on revenue of US$211 million the previous year, according to the filing. The offering is being led by Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. The company plans for its shares to trade on the the New York Stock Exchange under the symbol IBTA. https://archive.is/3e1jl

CoreWeave is in talks for funding at US$16 billion valuation.

CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, is in talks to raise equity capital in a transaction that would more than double its valuation to US$16 billion, according to people with knowledge of the matter. A US$16 billion post-money valuation would eclipse CoreWeave’s US$7 billion mark in a transaction last year. The company said in December that it had closed a US$642 million minority stake sale to an investor group comprising Fidelity Management & Research Co., Investment Management Corporation of Ontario, Jane Street and JPMorgan Asset Management, among others. https://archive.is/NNsqC

Messaging app Telegram raises US$330 million in debt.

Telegram raised US$330 million through a corporate bond issued last week, its CEO Pavel Durov said on his channel on the messaging app. The bond, which he claims received more demand than issuers could meet, will help the company continue expansion at “an accelerated speed.” The new cash means Telegram has now raised a total of US$2.3 billion in debt financing over the last three years. Durov told the Financial Times last week that he wants the app to turn a profit next year as it increases revenue and looks toward an eventual initial public offering. The Dubai-based company, which has positioned itself as an alternative to Meta Platforms’ owned WhatsApp, first introduced advertising and subscription offerings in 2022, after increased use resulted in a rise in server costs. Telegram said it crossed 5 million paying subscribers in January. Starting this month, the company also launched a revenue-sharing program that pays moderators of Telegram pages up to 50% of advertising revenue from their channels. It has 900 million active monthly users. https://tinyurl.com/5evnywu6

Saudi Arabia’s Public Investment Fund, Andreessen Horowitz discuss partnership.

The government of Saudi Arabia plans to raise US$40 billion for a fund focused on artificial intelligence investments, according to a report from The New York Times. Representatives from Saudi Arabia’s Public Investment Fund have recently discussed partnering with Andreessen Horowitz on the fund, though its unclear in exactly what capacity. Andreessen Horowitz is itself in the process of raising several billion to invest in AI companies, as well as startups in other categories such as aerospace and defense, The Information earlier reported. The firm is backed by the venture arm of the Public Investment Fund, known as Sanabil. Andreessen Horowitz co-founder Ben Horowitz has spent time in the Saudi capital, Riyadh, and has had discussions with the governor of the Public Investment Fund, Yasir al-Rumayyan, about opening an office there, according to The New York Times report. Spokespeople for PIF and Andreessen Horowitz didn’t immediately comment. https://tinyurl.com/mr4339se

Nvidia unveils new AI chip, reportedly in talks to buy Israeli startup.

Nvidia on Monday unveiled its next artificial intelligence chips, Blackwell, during its annual conference for app developers in San Jose, Calif. During his keynote address, CEO Jensen Huang said all of the major cloud providers in the U.S. are gearing up to offer the server chips, which the company has said will ship later this year. The company said Blackwell chips can process a state-of-the-art large language model 25 times more cheaply and efficiently than the H100, its most advanced AI chip available today. Separately, Nvidia is in advanced talks to acquire a startup whose technology helps app developers use Nvidia’s AI server chips more efficiently, according to a report from Israeli news outlet Calcalist. The Israeli startup, Run.ai, helps developers limit the number of AI chips they need to complete a task. Developers say they have struggled with Nvidia’s chips in that regard. Acquiring Run.ai could boost Nvidia’s own cloud service for developers who use its chips, which the company hopes will diversify its revenue streams. Calcalist reported that the deal price could range from many hundreds of millions of dollars to US$1 billion. The five-year-old startup has raised close to $120 million, the report said. A spokesperson for Nvidia declined to comment. https://tinyurl.com/mpk43pyw

Apple held talks with Google, OpenAI to license generative AI models.

Apple is in active talks with Google and recently held discussions with OpenAI over licensing their generative AI models for use on the iPhone, Bloomberg reported. If Apple signs a deal with Google for its Gemini AI model, the partnership could draw more scrutiny from regulators as the U.S. Department of Justice is already suing Google for monopolizing search and search advertising. Any deal with Google would come on top of Apple’s partnership with Google for search, where Google pays Apple a percentage of revenue it gets from search advertising to be the default search provider on the iPhone, Bloomberg said. Bloomberg reported that while Apple is developing generative AI features of its own, those will operate on-device and that Apple wants to partner with someone else to offer functions via the cloud such as creating images and writing essays based on prompts. https://tinyurl.com/cb9tjcft

Apple and Baidu discussed AI deal for iPhones in China.

Apple has held talks with Baidu about using the Chinese tech giant’s AI software in iPhones within the country, The Wall Street Journal reported on Friday. The Chinese government has only cleared a select number of AI models to be sold within the country, including Baidu’s, while models from US companies like Google and OpenAI are prohibited. The reported talks are the latest sign that Apple is looking for outside partnerships to bring new AI capabilities to its devices. The company has separately held talks with Google about potentially licensing its AI models in iPhones, Bloomberg and The New York Times reported this week. Apple develops its own in-house AI, but primarily uses it for rudimentary functions within Siri that run on people’s devices and is looking for outside partnerships to offer more complex AI functions in the cloud such as generating images or text, the reports said. https://tinyurl.com/3evsv8ap

HashiCorp stock rises 12% following report that it’s looking for buyers.

HashiCorp, which sells tools for running applications on cloud providers and private data centers, is considering selling itself, Bloomberg reported. The stock rose 12% in after-hours trading on Friday following the report but is still down 67% from its initial public offering in late 2021, at the peak of the pandemic-fueled software boom. Its current valuation is about US$5 billion. Its slowing growth could have contributed to its decision to look for buyers. The company said earlier this month that revenue growth would slow to 11% to US$647 million in the fiscal year that ends next January, down from 23% revenue growth in the just-ended fiscal year. HashiCorp’s products, which facilitate collaboration between developers and IT operations teams, are based on open-source software and also extend into cybersecurity and networking. https://tinyurl.com/4du2h9yj

Super Micro Computer rides AI server boom to join S&P 500.

Super Micro Computer, which joins the S&P 500 on Monday, enjoys a rare advantage among server makers that are trying to tap the generative AI boom – close ties with Nvidia that help it launch products faster than rivals Dell and Hewlett Packard Enterprise. The company has historically been among the first to receive artificial intelligence chips from Nvidia and Advanced Micro Devicesas it helps them check server prototypes, giving it a head start over rivals, analysts and industry experts said. https://tinyurl.com/57vcahvu

China’s Tencent plans to double share buybacks this year.

Tencent said it plans to double the size of its share buybacks to nearly $13 billion this year, as the Chinese internet giant tries to shore up investor confidence amid lingering uncertainties over China’s economy and the company’s videogame business. Tencent, whose share price has declined 16% over the past 12 months, said it intends to at least double its share repurchases to more than 100 billion Hong Kong dollars (US$12.8 billion) this year, from 49 billion Hong Kong dollars last year. The company announced the plan as it reported its earnings for the fourth quarter of 2023. While revenue rose 7% thanks to robust growth in advertising sales, the results also highlighted the weakness of the company’s videogame business. Tencent’s revenue from its domestic gaming business fell 3% in the fourth quarter, due in part to a decline in contributions from long-standing titles such as “Honor of Kings.” The company’s international videogame revenue rose 1%, but excluding currency fluctuations, the revenue declined 1%. Tencent’s net profit for the quarter fell 75%, largely because its year-earlier profit was boosted by one-time gains from the sale of its stake in Chinese food delivery giant Meituan. One bright spot was ad revenue, which rose 21% in the quarter as advertisers spent more money on the platform for short videos within Tencent’s WeChat messaging app. https://tinyurl.com/59v8hfvk

Alibaba sells down stake in Chinese video firm Bilibili.

Alibaba has sold almost US$360 million of its stake in Chinese online video firm Bilibili, Bloomberg reported. The move comes as the Chinese tech giant sells some of its assets and prioritize investments in its core businesses as well as key new areas such as artificial intelligence. Over the past several months, Alibaba also has sold down its stake in Chinese electric car maker Xpeng. Alibaba, meanwhile, has been ramping up its AI-related investments. Over the past year, the company has acquired minority stakes in several Chinese generative AI startups that develop large language models. Alibaba, China’s largest e-commerce and cloud computing company, is trying to refocus its strategy as it grapples with sluggish growth amid intense competition from domestic e-commerce rivals such as PDD and ByteDance. https://tinyurl.com/u2webbvn

Justice Department sues Apple.

The Justice Department and several states filed an antitrust lawsuit against Apple on Thursday, claiming the iPhone maker responded to competitive threats by “imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements” allowing it to charge higher fees and offer a “less secure or degraded user experience.” In the complaint, filed in New Jersey federal court, the government said Apple’s anticompetitive conduct had not only limited competition in the smartphone market but had reverberated through other industries “including financial services, fitness, gaming, social media, news media, entertainment and more.” In a statement, Apple said the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely competitive markets.” The long-expected lawsuit means that four major tech firms are now being sued by the federal government on antitrust grounds, including earlier cases filed against Alphabet, Meta Platforms and Amazon. https://tinyurl.com/25nvx44s

Apple, Google expected to face EU probes under new digital law.

Apple and Google are expected to face European Union investigations regarding their compliance with the new Digital Markets Act, Bloomberg reported. The European Commission is preparing to announce the probes into the tech giants in the coming days, according to the report. Meta Platforms is also expected to face scrutiny from the commission, Bloomberg said. The EU has been stepping up its efforts to regulate tech giants. Earlier this month, for example, the European Commission fined Apple nearly US$2 billion for alleged “abusive App store rules” affecting rival music streaming services. https://tinyurl.com/2ccju27a

Disney gets backing of Glass Lewis in proxy fight with Nelson Peltz.

Disney got a stamp of approval from Glass Lewis, an influential independent shareholder advisory firm, in its proxy battle with Nelson Peltz and other activists. Disney and Glass Lewis announced the firm recommends shareholders vote for all 12 of Disney’s board of director nominees at the company’s annual meeting on April 3. In a report dated March 18, Glass Lewis said it believes Disney is taking a “credible” effort to transform its business that has been weighed down by declining cable TV revenues and lack of profits in streaming. The firm also praised Disney’s board for willing to update its membership and endorsed its current efforts to find a successor for Disney CEO Bob Iger. “While it remains too early to say with certainty that each of those programs will prove successful, we believe it is similarly too early to suggest there exists adequate cause for investors to support alternate solicitations, which may prove significantly less accretive to Disney’s trajectory, by comparison,” the firm wrote. Glass Lewis’s endorsement is yet another blow to Peltz’s effort to win two board seats. Last month, Disney and Iger also won the backing of Walt Disney’s heirs, a symbolic move that suggests Peltz’s campaign does not have much of a chance. https://tinyurl.com/yc7az9rm

Hindenburg shorts data center firm Equinix alleging inflated profit metric.

Hindenburg Research on Wednesday disclosed a short position in data center firm Equinix, which operates as a real estate investment trust (REIT), alleging it exaggerated a profitability metric amid a race with big cloud firms including Amazon.com. Equinix shares fell nearly 5% in afternoon trading as the short-seller said the REIT with more than 260 facilities globally was using an accounting trick to boost its adjusted funds from operations (AFFO). https://tinyurl.com/3f59zmt3

DoorDash begins Baconator deliveries by drone.

DoorDash announced today that it’s rolling out a new fast food delivery pilot in the US, in partnership with Alphabet’s Wing drone delivery company. That’s right, friends. If you’re lucky enough to live near the Wendy’s at 2355 N. Franklin Street in Christianburg, Virginia, you can have your square beef sandwiches delivered by drone. DoorDash and Wing have had a similar partnership in Australia since 2022, which DoorDash says has expanded to “over 60 participating merchants” in three Queensland locations. While this is Wing’s first pilot with DoorDash in the US, the company has bigger partnerships with others, including Walgreens and Walmart. https://tinyurl.com/52k52zw5

Temu owner PDD Holdings’ quarterly revenue more than doubled.

Chinese e-commerce giant PDD Holdings said Tuesday its revenue more than doubled in the December quarter to US$12.5 billion as the company continues to market aggressively to shoppers in the U.S. and other overseas markets. The company, which owns e-commerce sites Pinduoduo and Temu, said that sales and marketing expenses rose 50% from a year earlier to roughly US$3.75 billion. Temu in particular has grown rapidly after launching in the U.S. in September 2022, in part due to a marketing blitz that has included billions of dollars worth of digital ads, as well as TV commercials that aired during this year and last year’s Super Bowl broadcasts. PDD reported net income of US$3.27 million, a 146% increase from the year before. PDD doesn’t break out financial results for its different e-commerce businesses, but analysts have estimated that Temu remains unprofitable due to the amount it spends on marketing. Sales to U.S. shoppers represented 60% of Temu’s gross merchandise value last year, The Information reported this week, but Temu is hoping to reduce that share to as low as 30% this year as it prioritizes expansion in other markets like Europe and the Middle East. https://tinyurl.com/46ktpxxm

Amazon’s new focus: fending off rivals Temu and Shein.

Amazon.com is training its attention on emerging e-commerce players Temu and Shein, viewing the newer platforms as significant threats to its online shopping dominance. Temu and Shein have, for now, supplanted Walmart and Target as focal points in internal Amazon meetings related to retail, people familiar with the matter said. The companies with Chinese roots are expanding in the U.S. and targeting Amazon customers. Temu has gone on an advertising blitz, spending billions of dollars and becoming the top advertiser by revenue on Meta Platforms in 2023, The Wall Street Journal reported this month. Amazon executives are concentrating in part on two aspects of their business they believe will continue to give them a competitive advantage: customer trust and fast delivery. Employees are working to increase the selection of items available for same-day delivery in categories such as electronics, and the company is exploring promotional campaigns that would emphasize reliability and delivery speeds, the people said. Temu and Shein have seen their popularity rapidly grow in America. U.S. monthly active users on Temu grew to 51.4 million in January from its September 2022 launch, according to estimates from Sensor Tower. Shein’s users increased from 20.9 million to 26 million during the same period. Customer trust, reliable shipping and easy returns have long been a staple of Amazon’s strategy. Amazon spent much of last year revamping its delivery services to get even closer to customers and deliver products more efficiently. The company said more than four billion items arrived on the same or next day in the U.S. in 2023. Temu and Shein, meanwhile, offer bargain prices in part because they deliver items more slowly. The two companies ship products directly from China, and they don’t store much inventory in the U.S. Shein especially is recognized for its on-demand manufacturing model, which helps control the amount of waste in packaging and other materials it uses. https://archive.is/hFOhK

Amazon and FedEx discussed returns deal.

Amazon and FedEx discussed a deal last spring that would’ve seen the delivery giant accept Amazon returns at its retail stores, the Wall Street Journal reported on Monday. The discussions, which didn’t lead to an agreement, highlight how Amazon has been grappling with the high cost of returns after customers started sending back items more frequently during the pandemic. Amazon already lets customers make returns through FedEx rival UPS but started adding fees for some UPS home pickups and store drop-offs over the past couple of years, The Information has reported. A deal between Amazon and FedEx would have been notable because the two companies largely stopped working together in 2019 as Amazon put a greater emphasis on its own logistics operations. https://tinyurl.com/bdhdhb95

MicroStrategy now owns 1% of all bitcoin in the world.

In August 2020, MicroStrategy made its first bitcoin purchase, buying 21,454 bitcoin for US$250 million. Fast forward three and a half years and the company now owns over 1% of all the bitcoin that’s been mined. MicroStrategy has steadily bought more of the digital token ever since its first purchase. The company bought another 9,245 tokens for US$623 million between March 11 and March 18, according to an SEC filing. That takes its total stash to 214,246 tokens, which is just over 1% of the roughly 19.7 million tokens issued so far. MicroStrategy’s crypto craze has been driven by co-founder Michael Saylor, a long-time bitcoin bull who has recently said the crypto will “eat gold,” the asset that it’s most often compared to. His bets seem to have paid off as bitcoin has taken off on a blockbuster rally in the last 12 months. MicroStrategy’s stock is up around 380% in the past year, while bitcoin has jumped more than 150% in that time. Almost a quarter of MicroStrategy’s bitcoin purchases have been made in 2024 alone, Bloomberg noted. The average price of bitcoin in MicroStrategy’s latest acquisition was US$67,382, the SEC filing showed. The average purchase price of its total holdings, which are worth US$13.46 billion, is US$35,160. https://tinyurl.com/52vwrauj

TSMC, Intel suppliers delay U.S. plants on surging costs, labor crunch.

At least five suppliers to Taiwan Semiconductor Manufacturing Co. and Intel have delayed construction of facilities in Arizona, a sign that rebuilding America’s chip supply chain is a bigger challenge than expected. Chemical and material makers LCY Chemical, Solvay, Chang Chun Group, KPPC Advanced Chemicals (Kanto-PPC) and Topco Scientific all announced plans and bought land to build facilities in Arizona after the world’s two top chipmakers, TSMC and Intel, rolled out their own multi-billion-dollar investments in the state. But construction of these facilities — which are vital for building a complete chip supply chain — has been put on hold or significantly scaled back, multiple chip industry executives briefed on the matter told Nikkei Asia. Most of those affected attribute the postponements to surging costs for building materials and labor, as well as a shortage of construction workers. “The key factor is that local demand does not yet require so many local supplies,” the executive with Topco told Nikkei Asia. “Thus it’s not that rush for us to spend resources so quickly. … It’s not only about the facility itself. We have to make some additional investments to build roads and connect water and electricity around our campus ourselves.” https://tinyurl.com/ye29ph99

SolarBank to acquire Solar Flow-Through Funds Ltd. in all stock transaction valued at $45 million.

SolarBank Corporation has entered into a definitive agreement with Solar Flow-Through Funds Ltd. to acquire all of the issued and outstanding common shares of SFF through a plan of arrangement for an aggregate consideration of up to $41.8 million in an all stock deal. The Transaction values SFF at up to $45 million but the consideration payable excludes the common shares of SFF currently held by SolarBank. Under the terms of the Transaction, SolarBank has agreed to issue up to 5,859,567 common shares of SolarBank for an aggregate purchase price of up to $41.8 million, representing $4.50 per SFF common share acquired. Upfront consideration of $25.53 million and contingent consideration of $16.31 million – SolarBank’s existing share ownership of SFF excluded. The Transaction represents a 7% premium to a valuation report prepared by Evans & Evans, Inc. on SFF and its assets. Solar Flow-Through (“SFF”) owns a total of 70 operating solar sites located in Ontario with a combined capacity of 28.8 megawatts (“MW”) operating under long term contracts with the Ontario IESO. SFF also owns and is constructing three battery energy storage system projects in Ontario with an aggregate discharge capacity of 14.97 MW and are expected to operate under long term guaranteed capacity contracts from the Ontario IESO. SFF and SolarBank will have a combined capacity of approximately 47 MW, including SolarBank’s independent power producer (“IPP”) assets. Addition of recurring revenue from existing IPP assets: $9.2 million for SFF calendar year 2023; $9.4 million for SFF calendar year 2022. https://tinyurl.com/fvyn9fhe

RIC Energy sells seven New York State community solar projects to Radial Power.

RIC Energy, a global independent renewable energy developer and producer, announced the sale of seven photovoltaic plants in upstate New York to Radial Power, a leading distributed energy platform focused on the decarbonization of large real estate portfolios. The plants, with a combined capacity of 34 MW, are located throughout the upstate New York region. The facilities are expected to provide 100 percent clean energy to more than 8,000 homes participating in their respective utilities’ community solar programs. The total investment in these projects is expected to be more than $85 million dollars. In recent months, RIC Energy has sold 13 photovoltaic plants in the state of New York with a total capacity of 70 MW to various companies. RIC Energy has become the second largest developer in the upstate area with more than 600 MW of photovoltaic and storage capacity and a total portfolio of more than 2,000 MW in the US, where it began operations fourteen years ago. https://tinyurl.com/3psmrbfr

ECA to sell Delaware community solar projects to Luminace.

Brookfield-owned Luminace will acquire two PV plants from ECA Solar with a combined capacity of 10 MW, located in Delmarva Power & Light’s service territory in Delaware. The facilities are expected to completely provide energy to the 2,500 homes participating in the utilities’ community solar program. Total investment in these projects is expected to top US$25 million. https://tinyurl.com/mwvs2bkx