This past week was perhaps the most subdued in the past few months in Canadian tech and clean tech capital markets activity. After a few months of intense activity, we’re not too surprised. Within Sophic clients, AnalytixInsight (ALY-TSXV, ATIXF-OTC), made a very significant announcement of a product launch by its 49% owned unit, MarketWall, with Intesa Sanpaolo, a major European bank. As well, Sophic spoke with Ayre Group Ventures about Sophic Client, Mijem (private) and Bitcoin SV. New listings in the USA, were relatively quiet as well. Coinbase, according to some is being classified as a “broken IPO”, disregarding the reference price. We are intrigued by Discord, and Microsoft no longer being in M&A discussions, likely suggesting Discord go public.
Canadian Technology Capital Markets & Company News
Semiconductor group Alphawave IP to seek US$4.5 billion valuation in London IPO.
Canadian chip developer Alphawave IP has chosen to float its shares in London rather than on rival bourses in New York and Toronto as it seeks to obtain a valuation of about US$4.5 billion in an initial public offering. The company, founded only four years ago, develops chip technology that pushes data through data centres and phone networks. It intends to raise more than US$500 million via a listing in London and set up a research centre in Cambridge, the heart of Britain’s semiconductor industry known as “Silicon Fen”, as part of its expansion. The company will move its headquarters to the UK as part of the float, providing a significant boost to the government’s ambitions to attract more technology businesses to Britain. BlackRock and Janus Henderson have agreed to buy US$510 million of shares at an equity valuation of up to US$4.5 billion. The company will sell at least a quarter of its shares as part of the proposed deal. John Lofton Holt, chair of Alphawave IP, said there had been an internal debate within the company about whether to float the business on New York’s Nasdaq or in Toronto, but opted for London due to the country’s strong heritage in developing chip technology that is then licensed to manufacturers. “Silicon IP (intellectual property) was born in the UK and investors really understand that,” he said. Tony Pialis, chief executive of Alphawave IP, said the company was not deterred by the aftermath of the Deliveroo float. “What we build is part of computer chips. We are critical to communications. We didn’t pause at all given what happened with Deliveroo,” he added. https://on.ft.com/3vi4AwB
Absorb Software to be acquired by US private equity firm at $630 million valuation.
Calgary edtech Absorb Software is set to be acquired by New York’s Welsh, Carson, Anderson & Stowe (WCAS), in a deal that is said to value Absorb at over $630 million. WCAS has entered into a definitive agreement to purchase the e-learning and performance management software company from Boston-based growth equity firm Silversmith Capital Partners. A company spokesperson declined to disclose the purchase price. Founded in 2003, Absorb offers cloud-based learning management system (LMS) software to over 23 million users at more than 1,400 organizations in 34 countries. The Alberta-based company has offices in London, Dublin, Tampa, Boston, Salt Lake City, and Sydney. Absorb’s e-learning and performance management tech helps organizations train, retain, and manage employees and external stakeholders. The firm provides its software to businesses, governments, healthcare providers, educators, and non-profit organizations. https://bit.ly/2QSkTkP
US private equity firm to acquire controlling stake in Axonify for $313 million.
United States-based private equity firm Luminate Capital Partners is set to acquire a controlling stake in Axonify for $313 million.The investment gives Axonify a valuation of $438 million. Axonify, which provides communications and training software to frontline employees, said the new investment will help the Kitchener-Waterloo-based startup accelerate product innovation and pursue “other key growth initiatives.” The transaction, which is designed to fuel Axonify’s “next phase of growth,” is expected to close in the second quarter of 2021, pending customary approvals and closing conditions. According to The Globe and Mail, Luminate has bought out previous Axonify investors JMI Equity, Harmony Partners, and BDC Capital, which together owned about 70 percent of the company. https://bit.ly/3vfkCY7
Vertu Capital secures minority stake in Dejero with $60 million investment.
Waterloo-based company Dejero, which provides communications connectivity tech, announced a $60 million minority recapitalization deal led by Toronto’s Vertu Capital. The investment, which will see Vertu acquire a minority stake in Dejero, was supported by Ubicom Ventures. According to The Globe and Mail, the $60 million investment will buy the minority stake in Dejero held by two American firms: Kayne Anderson Capital Advisors (KACA) and Intelsat, a satellite communications company. KACA and Intelsat invested a combined $32 million in Dejero’s 2017 Series B round. According to Crunchbase, Dejero has raised $59.5 million to date. Founded in 2008, Dejero helps customers access internet connectivity by blending cellular, satellite, and broadband through its software and hardware. The company aims to solve the “mission-critical live video transport and real-time data transfer challenges” of organizations around the world. https://bit.ly/3xk7vGV
NERv Technology raises $3.32 million as it prepares to bring medical sensor tech to market.
NERv Technology, a Kitchener-Waterloo-based startup offering a sensory platform designed for the healthtech sector, has closed a $3.32 million seed round of funding. The seed round was led by returning investor SOSV, with participation from Graphene Ventures, OneValley, Northspring Capital Partners, Boutique Venture Partners, and Threshold Impact. A number of additional undisclosed strategic investors, angels, and physicians also invested in the round. NERv has developed a sensory device that is aimed to help doctors monitor postoperative patients remotely, by detecting potential complications. The startup’s device can attach to catheters and wound drains, and detects leakages that can lead to critical, sometimes fatal, complications. https://bit.ly/3xx4inE
AnalytixInsight (Sophic Client, ALY-TSXV, ATIXF-OTC): MarketWall, AnalytixInsight and Intesa Sanpaolo present InvestoPro Sim.
MarketWall, a fintech company specialising in finance and trading IT solutions (and 49% owned by AnalytixInsight), has set up the new investment firm InvestoPro Sim. We published a detailed piece (https://bit.ly/3xkI7Rt) highlighting the significance of this product launch. https://bit.ly/3vguQr9
Mijem (Sophic Client, Private): Good overview Bitcoin SV, and other cryptocurrencies, including Sophic’s comments on Mijem.
Market Cap — A flawed yardstick. There is another company associated with Bitcoin SV that has announced plans to go public, called Mijem. Mijem is a Gen Z-focused marketplace and social platform that Ayre Group Ventures just invested in and will be adding Bitcoin SV as a cashback loyalty program for buyers and sellers on the app. In addition to our [Ayre Group] investment, Mijem worked with a capital markets advisory firm called Sophic Capital to help raise funds with other investors. I spoke to Sean Peasgood, Sophic’s President & CEO, to ask how the investment community reacted to Mijem’s involvement with Bitcoin SV: “Most people in our investor base did not know that BTC can only process 4 to 5 transactions per second. We framed the conversation around the original Bitcoin whitepaper and how BTC’s block limitations prevent it from achieving the tenets detailed in the whitepaper. Then, we explained how Bitcoin SV does achieve the whitepaper’s objectives.” Sean said investors were fascinated: “After explaining the advantages of Bitcoin SV, particularly micro and small everyday transactions, investors saw the value of Bitcoin SV wallets in Mijem’s app. There are 23 million post-secondary students in the USA and Canada, and almost half of that generation wants to use cryptocurrency for real-time transactions. They want to be able to send and receive money from the comfort of their app, in real-time, when they want, without waiting. Bitcoin SV meets their ‘need now/want now’ demands, and adding Bitcoin SV via a wallet to Mijem will make their buy-and-sell transactions seamless.” https://bit.ly/3xmxDB3
Clearbanc Rebrands to Clearco, Announces US$100 million Series C Funding.
Clearbanc, announced a rebrand and $100 million in new Series C equity funding to fuel the company’s ambitious growth plans, bringing the company’s valuation to almost $2 billion. “The move from Clearbanc to Clearco really signals our move beyond capital,” said Co-Founder and President Michele Romanow. “We’ve invested US$2 billion in 4,500 plus companies, and we’re building a product suite to support founders that goes far beyond funding, based on what they’ve told us they need most. https://bit.ly/2QVjGJq
EMERGE (ECOM-TSXV) achieves record revenue and positive Adjusted EBITDA in fiscal 2020.
Gross Merchandise Sales (“GMS”) of $29.4 million, up 94% compared to $15.2 million in 2019. EMERGE reported record annual revenue of $9.2 million, up 121% compared to $4.2 million in 2019. Positive Adjusted EBITDA of $0.8 million, compared to negative $0.6 million in 2019. On December 31, 2020, EMERGE completed the acquisition of truLOCAL, a leading premium meat subscription business, which achieved $19.8 million in revenue and $1.6 million in normalized EBITDA. While total annual revenue for EMERGE exceeded $9 million, the Company had pro forma annualized revenue of $29 million, inclusive of truLOCAL. https://bit.ly/3nkunBK
Shopify (SHOP-TSX, SHOP-NYSE) and Pinterest expand marketing partnership.
Shopify is expanding a previously-announced North American partnership with Pinterest to 27 additional countries, including the U.K., Brazil and New Zealand. Shopify offers merchants a channel they can install from its app store, making it easy for retailers to promote their products on Pinterest with “product pins” that link back to their website. The idea is that merchants that use Shopify to power their web sites could use the channel to reach more customers. The expansion reflects growing interest among merchants in integrating shopping with social media as a way of drawing in more shoppers. According to a recent Shopify report, more than half of consumers under 35 discover new brands on social media. Retailers in North America are trying to catch up to the growing social shopping market in China, which hit US$150 billion in sales last year, according to estimates from Coresight Research. https://bit.ly/2RSECkO
Canadian crypto miner Bitfarms (BITF-TSXV) is planning a huge new bitcoin mining site in Argentina.
Canadian bitcoin mining company Bitfarms said late on Monday it is planning a new bitcoin mining site in Argentina that will be its largest yet. The eight-year deal supplies Bitfarms with 210 Megawatt of electricity, at a price of $0.02 per kilowatt per hour in the first four years. In a statement, Bitfarms said this will be enough electricity to create revenues of around US$650 million or 11,774 Bitcoin. This is however dependent on what happens with the bitcoin price over that time. Bitfarms currently operates five industrial mining sites in the Canadian province of Quebec, with a total wattage of 69 megawatts. At 210 megawatts and 55,000 state-of-the-art mining machines, the Argentine site will have almost three times as much capacity as all current Bitfarms sites put together. Bitfarms mining operations run on hydropower to make bitcoin mining more environmentally friendly. The company has made a significant expansion effort over the past year by purchasing new mining machines and is working towards being listed on the NASDAQ. https://bit.ly/3dOcBU1
Global Markets: IPOs, Venture Capital, M&A
Coinbase CEO Brian Armstrong sold shares worth nearly US$292 million on his company’s first trading day.
Coinbase CEO and co-founder Brian Armstrong sold shares worth $291.8 million of his company in its first trading day on the Nasdaq. Filings made with the Securities and Exchange Commission showed Armstrong sold three groups of shares, totalling 749,999, at prices ranging from Coinbase’s opening price of US$381 to US$410.40. Following the launch, Armstrong’s stakes in the company were estimated to be worth around US$13 billion based on the company’s first-day closing price of US$328.28. Shareholders sold stakes worth around US$5 billion on the day of Coinbase’s market debut, Coindesk reported over the weekend. https://bit.ly/3sPgL28
DoubleVerify’s stock opens 30% above IPO price, valuing company at more than US$5 billion.
DoubleVerify Holdings Inc.’s public debuted received cheers from investors, as the New York-based digital media measurement software company’s stock opened 29.6% above its initial public offering price. The company said late Tuesday that its IPO priced at US$27.00 a share, at the top of the expected range, as it raised US$232.9 million and selling shareholders raised US$127.1 million. The stock’s first trade was at US$35.00 at 11:02 a.m. Eastern for 1.8 million shares. At that price, the company was valued at about US$5.44 billion. The company went public at a time of recent tempered investor enthusiasm for IPOs, as the Renaissance IPO ETF hsa dropped 10.5% over the past three months while the S&P 500 has gained 7.8%. https://on.mktw.net/3xuZCib
Outbrain is going public.
Outbrain will pursue an initial public offering, with the company seeking a US$2 billion valuation after the abandonment of its earlier attempted merger with rival Taboola. https://bit.ly/3ngZRbE
Meituan to raise US$10 billion.
Chinese food delivery firm Meituan is looking to raise about US$10 billion in stock and convertible bonds to help it compete, Bloomberg reported. Part of the fundraising will come from a US$400 million investment by shareholder Tencent, while US$3 billion will come from the sale of convertible bonds. China’s grocery delivery market is intensely competitive, with each of the players raising money to compete. The biggest competitors include Pinduoduo, Didi Chuxing, Xingsheng Selected and Alibaba-backed Nice Tuan. Xingsheng raised US$2 billion in February. https://bit.ly/3xlEc6J
Chat app Discord ends takeover talks with Microsoft.
Microsoft Corp. and video-game chat company Discord Inc. have ended takeover talks after Discord rejected a US$12 billion bid, according to people familiar with the matter. Discord is now focused on a potential public listing in the long term, the people said, asking not to be identified because the deliberations are private. https://bloom.bg/3tDvO0r
Mastercard announces US$850 million deal for digital-verification company Ekata.
Mastercard Inc. plans to purchase digital-verification company Ekata for US$850 million, the company announced Monday morning. Ekata works with merchants, financial institutions, and other parties to weed out bad actors when people are making purchases or opening accounts. “The shift to a more digital world requires real solutions to secure every transaction and instill trust in every interaction,” said Ajay Bhalla, Mastercard’s president of cyber and intelligence solutions. The company expects that Ekata’s solutions will prove complementary to Mastercard’s existing fraud-assessment offerings. Mastercard anticipates that the deal will close in the next six months. It doesn’t expect that the deal will be dilutive to its business for more than 24 months. Mastercard shares have gained 19% over the past three months as the S&P 500 has risen 10%. https://on.mktw.net/3erd9OQ
Affirm to purchase Returnly in US$300 million deal.
Affirm Holdings Inc. plans to acquire Returnly, the company announced Wednesday. The deal has a total cash and equity consideration of US$300 million. Returnly makes it easier for merchants to process returns by offering instant store credit even before an item is returned to the merchant. Returnly’s offering enables consumers to use their store credit to get replacement items before their return is fully processed. In doing so, Returnly “takes the product return risk and settles orders in real time,” Affirm said in a press release. “Store credit, issued before the item is actually returned, is now a practical requirement in highly competitive segments like fashion and lifestyle,” Affirm Chief Executive Max Levchin said in the release. Affirm plans to introduce Returnly customers to its buy-now-pay-later offering as well. The company expects the deal to close this quarter and doesn’t anticipate that the acquisition will have a material impact on its financial results for the second half of its fiscal year, which ends in June. https://on.mktw.net/3emlIu8
Skillz jumps after Cathie Wood’s ARK Innovation ETF added another 1.2 million shares of the mobile gaming platform on Thursday.
Skillz saw its stock jump as much as 5.84% on Friday before paring gains after Cathie Wood’s ARK Innovation ETF added another 1,222,207 shares of the mobile gaming platform to its holdings on Thursday. Skillz was founded in 2012 by Andrew Paradise and Casey Chafkin as a platform where ordinary gamers can compete to win real prize money. The company boasts 2.4 million monthly active users and 9,000 registered game developers, according to its latest SEC filings. Skillz also dishes out more than US$100 million in prizes to users each month. The San-Francisco-based firm saw its revenue jump 92% year-over-year in 2020 to just over US$230 million, although net losses increased to a record US$122 million for the year as well. Skillz went public via a merger with the special purpose acquisition company (SPAC) Flying Eagle Acquisition Corp. back in December of 2020 at a valuation of US$3.5 billion. The company is now worth over US$6.5 billion. https://bit.ly/3vhDyFH
Congruent Ventures raises US$175 million fund for early-stage climate tech.
On Thursday, the young San Francisco-based firm closed a US$175 million second fund, bringing it to US$300 million under management. Amid a booming market for sustainable businesses, Congruent is among a relatively small group dedicated to funding companies that are just getting started, and may not even have a product or revenue yet. https://bit.ly/3nfrOk3
Amazon’s automated checkout is coming to full-size supermarkets.
Amazon.com Inc. is poised to bring its automated checkout technology to full-size supermarkets, a significant milestone in the race to revolutionize how people buy their groceries. Planning documents for a store under construction in Brookfield, Connecticut, contain all the hallmarks of an Amazon Fresh grocery store: a two-word logo on dark gray panels above the store’s entrance, online order pickup counter and such full-service departments as a butcher. The plans also identify a dozen entry and exit gates as well as ceiling-mounted racks to run wiring to camera arrays, a setup that until now has only appeared in Amazon Go convenience stores. https://bloom.bg/3dJYRtJ
Media, Streaming, Gaming & Sports Betting
Netflix blames ‘lighter content slate’ for slowing subscriber growth.
Netflix added 4 million net new subscribers in the first quarter of 2021, bringing its total subscriber base to 207.6 million, according to its latest earnings report. Any year-over-year comparison was inevitably going to make this latest quarter seem disappointing, since Netflix grew by an unprecedented rate (15.77 million net new subscribers) during the same period last year, when the pandemic first trapped global audiences at home. But these new numbers also fall short of the 210 million subscribers that Netflix had been predicting. While the streaming market has certainly become more competitive (with Disney+ recently passing 100 million subscribers), Netflix suggested that its lackluster growth had less to do with “competitive intensity” and more with the simple fact that it released fewer original shows and movies, thanks to pandemic-related production delays. https://tcrn.ch/3ewYm5a
Clubhouse’s monthly downloads plunged 72% last month.
After pulling in 9.5 million downloads in February, Clubhouse only had 2.7 million downloads in March, according to new data from Sensor Tower. New data provided by Sensor Tower this week — coupled with some user complaints — indicates the audio-driven app may be losing some of its momentum. The key takeaway from Sensor Tower: Clubhouse downloads dropped 72% in March compared to February, when the app was downloaded 9.6 million times. In March, Clubhouse was downloaded 2.7 million times — putting it just ahead of the 2.4 million downloads it had in January. https://bit.ly/3vfoRTx
Apple reportedly wants to add more social features to iMessage, setting up another fight with Facebook.
Apple is working on enhancements to iMessage that will help it compete with the more robust social networking features in Facebook messaging products like WhatsApp, Bloomberg reported on Thursday. Even though Bloomberg’s report didn’t specify what changes are coming to iMessage or when they’re expected to launch, there are serious implications here as tensions between Apple and Facebook continue to heat up. Facebook CEO Mark Zuckerberg has already highlighted Apple’s iMessage as a key example of how the two companies are increasingly becoming bitter rivals. https://cnb.cx/3niaGKA
Microsoft’s ‘Netflix-for-gaming’ service launches on iPhone and PC this week.
Microsoft’s Xbox Cloud Gaming service, previously known as xCloud, will begin rolling out in beta to iPhones, iPads and PCs this week. The service will be invite-only to start, Microsoft said in a blog post Monday. Xbox Cloud Gaming was on track to launch for iPhones and iPads earlier, but Apple updated its App Store rules in September that impacted services like Xbox Gaming and Google Stadia. Apple’s move forced the companies to use web browsers to redesign their services so that they could circumvent the App Store rules. Under the rules, Microsoft, Google and other companies with similar services would have had to offer each game as an individual download instead of offering a complete library the way Netflix does for movies. Xbox Cloud Gaming is sort of like Netflix for games. People who subscribe to Microsoft’s $14.99 per month Xbox Game Pass Ultimate plan can access more than 100 titles. The cloud gaming aspect lets you stream the games without having to download them, provided you have a fast enough internet connection. The streaming option is already available for Android phones. https://cnb.cx/3dLBFuS
Sling launches sports betting channels with DraftKings.
Dish’s Sling TV is launching a sports betting information channel with DraftKings, marking the first of its kind. Sling TV is starting with a DraftKings basketball channel, but will follow up with baseball and hockey in coming weeks. Viewers can see real-time game info and betting odds but also can make bets on DraftKings while they are watching. As live sports tends to be one of the few things that draw viewers to television, it makes sense that Sling is striking such a deal. And given the growing popularity of online betting as it becomes legal in more states, more deals like this are likely to take place. It wouldn’t be surprising to see betting companies like DraftKings even expand their entertainment officers to do deals with athletes or popular sports figures to draw more users. And as that happens it will be interesting to see how sports channels like Disney’s ESPN react. https://bit.ly/3nhczr7
Esports betting market continues to garner serious investor interest in Q2 2021.
The growing Esports and competitive-gaming phenomenon is continuing to rage on in 2021 and garner significant investor interest due to the massive opportunities. With the global Esports betting market on track to reach US$13 billion by 2025, it has emerged as one of the fastest-growing industries in the world. https://prn.to/3xeEX1H
Adtech, Privacy & Regulatory
Tile spooked by AirTags competition, calls on Congress to investigate potential antitrust concerns.
Tile and Apple have been duking it out over the last few years over what the former calls unfair competition. Tile is also one of the founding members of the Coalition for App Fairness that’s been litigating against Apple. Now after Apple officially debuted its new AirTag item tracker, Tile’s CEO says he would like to see Congress launch an investigation into Apple bringing AirTags to market. This isn’t the first time Tile has given testimony to Congress over its antitrust concerns about Apple. Back in January, 2020, Tile described Apple as an unfair gatekeeper. https://bit.ly/3tQigib
Geico admits fraudsters stole customers’ driver’s license numbers for months.
Geico, the second-largest auto insurer in the U.S., has fixed a security bug that let fraudsters steal customers’ driver’s license numbers from its website. In a data breach notice filed with the California attorney general’s office, Geico said information gathered from other sources was used to “obtain unauthorized access to your driver’s license number through the online sales system on our website.” The insurance giant did not say how many customers were affected by the breach but said the fraudsters accessed customer driver’s license numbers between January 21 and March 1. Companies are required to alert the state’s attorney general’s office when more than 500 state residents are affected by a security incident. https://tcrn.ch/3veDXIW
Apple targeted in US$50 million ransomware attack resulting in unprecedented schematic leaks.
Apple has been targeted in a US$50 million ransomware attack following the theft of a trove of engineering and manufacturing schematics of current and future products from Quanta, a Taiwan-based company that manufactures MacBooks and other products for Apple. The leak, first reported by The Record, was carried out by REvil, a Russian hacking group that’s also known by the name Sodinokibi. The group had already begun posting the stolen images on April 20th, timed specifically to coincide with Apple’s latest “Spring Loaded” event, after Quanta refused to pay the US$50 million ransom for the data. The group is now hoping to get Apple itself to pay up by May 1st, promising to continue to post new images from the leak daily until it does. https://bit.ly/32IE5nZ
Researchers uncover advertising scam targeting streaming-TV apps.
Fraudsters infected nearly one million mobile devices with software that mimicked streaming-TV apps and collected revenue from unsuspecting advertisers, according to cybersecurity company Human Security Inc., exposing vulnerabilities in a fast-growing corner of the digital ad market. The fraudsters spoofed an average of 650 million ad placement opportunities a day in online ad exchanges, stealing ad dollars meant for streaming apps available on popular streaming-TV platforms run by Roku, Amazon.com, Apple, and Alphabet. The researchers described the fraud operation as sophisticated, but said it could be stymied if digital ad players strictly followed industry guidelines for tracking the origins of traffic and implemented certain security features. Fraud has plagued the digital-advertising industry since its inception. Most online ad buying happens through exchanges rather than directly from sellers. Buyers bid for available inventory, generally targeting certain kinds of audiences, and are matched with sellers by middlemen. Ad space in the connected-TV industry is often bought this way. Mr. McNally said that as the streaming ad industry grows, security safeguards aren’t keeping pace. https://on.wsj.com/3aEDvvP
Facebook tests topic targeting for in-stream video ads.
The company is starting a global test of In-Stream Video Topics, which will allow advertisers to target their ads not just by audience, but also based on the topic of a given video. In a blog post, Facebook says the initial targeting will include “over 20 Video Topics, like Sports, and over 700 hundred sub-topics such as Baseball, Basketball, Golf, or Swimming.” Everson said the company will use machine learning technology to classify eligible videos, as well as to ensure that they meet Facebook’s brand safety guidelines.In addition, Facebook is announcing that it will start testing ads in its short-form Instagram Reels format, initially in India, Brazil, Germany and Australia. These ads can be up to 30 seconds long, and users can interact with them in the same ways they interact with organic Reels content (liking, sharing, skipping). https://tcrn.ch/2PoewWa
Square announces new inventory features for its sellers.
Square Inc. announced Thursday that it plans to make new inventory-management features available to its sellers. The company is rolling out tools that help sellers automate their inventory-management processes by using barcode scanners to take stock of inventory and receiving alerts driven by machine learning to see when an item is due to run out. The company will also let sellers build out their catalogs by scanning item barcodes and seeing item information automatically populate. “We’re looking forward to providing sellers with access to the tools they need to prepare for reopenings and the year ahead,” said Roshan Jhunja, Square’s general manager for retail, in a release. They’ve gained 10.0% over the past three months as the S&P 500 has risen 7.7%. https://on.mktw.net/3evgU5Q
Fintech, Blockchain & Cryptocurrency
China softens tone on bitcoin, calling it an ‘investment alternative’ after years of cracking down on crypto.
China pivoted in its stance on bitcoin last Sunday, calling the digital asset an “investment alternative” – a comment that Beijing insiders described as “progressive” – after years of cracking down on cryptocurrencies, CNBC first reported. “We regard bitcoin and stablecoin as crypto assets …These are investment alternatives,” said Li Bo, deputy governor of the People’s Bank of China, during the Boao Forum for Asia, a panel hosted by CNBC on Sunday. “They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.” China in 2017 shuttered its cryptocurrency exchanges and banned initial coin offerings, which had been a new way for startups to raise funds by generating their own virtual currencies. As investment alternatives, “many countries, including China, are still looking into it and thinking about what kind of regulatory requirements, maybe minimal, but we need to have some kind of regulatory requirement to prevent …the speculation of such assets to create any serious financial stability risks,” Li said. https://bit.ly/3eviAfO
The UK will explore a Bank of England-backed cryptocurrency called ‘Britcoin’.
British finance minister Rishi Sunak on Monday revealed that he is exploring the feasibility of a cryptocurrency backed by the Bank of England dubbed “britcoin,” aimed addressing some of the issues posed by other cryptocurrencies. “We’re launching a new task force between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC),” Sunak said during the UK FinTech Week conference, as reported by Reuters. Shortly after the announcement, Sunak published to his nearly 500,000 followers a one-word tweet saying: “Britcoin?”. The new task force will explore opportunities and risks of a CBDC, as well as monitor international CBDC developments to “ensure the UK remains at the forefront of global innovation.” https://bit.ly/3sJeBRX
Facebook-backed Diem aims to launch digital currency pilot later this year.
Facebook wanted to revolutionize finance with a global digital currency — then came the regulators. First proposed in June 2019 with the name libra, the token was initially intended to be a universal currency tied to a basket of sovereign currencies such as the U.S. dollar and the euro. But after facing strong opposition from regulators around the world, the organization overseeing the project lost major backers including Visa and Mastercard. The group eventually watered down its plans, opting for multiple “stablecoins” backed one-to-one by different government-backed currencies, as well as one multi-currency coin. Now known as diem, the Facebook-backed digital coin is expected to launch later this year, albeit in a much more limited form. When it finally arrives, diem won’t come with the same fanfare and controversy of the original idea envisioned by the social media giant nearly two years ago. The Diem Association, the Switzerland-based nonprofit which oversees diem’s development, is aiming to launch a pilot with a single stablecoin pegged to the U.S. dollar in 2021, according to a person familiar with the matter. The person, who preferred to remain anonymous as the details haven’t yet been made public, said this pilot will be small in scale, focusing largely on transactions between individual consumers. There may also be an option for users to buy goods and purchases, the person added. However, there is no confirmed date for the launch and timing could therefore change. https://cnb.cx/3xk7Ol9
WeWork will accept crypto as payment and hold digital currency on its balance sheet.
WeWork announced on Tuesday that it will begin accepting cryptocurrencies as a form of payment and plans to hold the digital assets on its balance sheet. Specifically, WeWork plans to accept bitcoin, ethereum, USD Coin, paxos, and “several other cryptocurrencies” as payment for its services. The shared workspace provider also said it will pay landlords and third-party partners in cryptocurrency whenever possible via Coinbase. https://bit.ly/2QOOwDD
Venmo adds support for buying, holding and selling cryptocurrencies.
The company says it will begin to roll out the ability for Venmo’s more than 70 million users to buy, hold and sell cryptocurrencies directly in the app, similar to the support Venmo parent company PayPal added late last year. Initially, Venmo will support four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash — the same that PayPal offers its U.S. users. The company had already announced its plans to introduce cryptocurrency on Venmo in 2021. Both Venmo and PayPal support for crypto come by way of a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services. Though there isn’t much differentiation between what both PayPal and Venmo offers users today, the company explains that the move is more about getting cryptocurrencies in front of a separate, and arguably younger, audience. https://tcrn.ch/3nk04uP
PayPal to launch local wallet in China focused on cross-border payments.
In January, the U.S. fintech company became the first foreign firm with 100% ownership of a payments platform in China. But until now, PayPal’s been quiet on its plans. Hannah Qiu, the China CEO for PayPal, told CNBC that the company is looking to launch a domestic wallet. But instead of it competing with the dominant players Alipay and WeChat Pay for domestic payments, PayPal will focus on cross-border payments. https://cnb.cx/3tQ3qIu
Playboy is up 143% since going public via SPAC this year as the adult lifestyle brand lures investors with pivot to NFTs.
Earlier this month, Playboy announced its partnering with online NFT marketplace Nifty Gateway to offer investors a chance to buy fractional shares of Playboy’s digital artwork. Playboy told Insider’s Kari McMahon it plans to use the partnership to showcase its art photography archive and release original works from artists on Nifty’s blockchain marketplace. While Playboy is most known for its provocative centerfold images and magazine covers, the company also owns works from artists including Pablo Picasso, Salvador Dali, and Andy Warhol, McMahon reported. https://bit.ly/3aAArkn
Intel CEO sees prolonged chip-supply constraints.
Intel Corp.’s new chief executive said a global chip-supply shortage could stretch two more years as the U.S. semiconductor giant posted weaker quarterly earnings. Pat Gelsinger said the supply constraints that have affected some sectors of the global economy for months will continue until more capacity comes online to meet chip demand for everything from automobiles to electronics. https://on.wsj.com/2S0yjvJ
United Kingdom UK invokes national security to investigate Nvidia’s ARM deal.
The UK government will look into the national security implications of U.S. group Nvidia’s purchase of British chip designer ARM Holdings, it said on Monday, raising a question mark over the US$40 billion deal. Digital minister Oliver Dowden said he had issued a so-called intervention notice over the sale of ARM by Japan’s SoftBank to Nvidia. ARM is a major player in global semiconductors, a sector fundamental to technologies from artificial intelligence and quantum computing to 5G telecoms networks. Its designs power nearly every smartphone and millions of other devices. The CMA has been looking into the deal since January, focusing on whether ARM could raise prices or reduce services to customers that compete with Nvidia. https://reut.rs/3gw49uy
Solar stocks soar after Biden unveils plan to cut carbon emissions in half by 2030.
President Joe Biden’s plan to cut US carbon emissions in half by 2030 sent solar stocks soaring in Thursday trades, with the Invesco Solar ETF up as much as 5%. The goal more than doubles what the US agreed to when Biden re-joined the Paris Climate Accord, and is based off of US’ 2005 carbon emissions. Biden’s carbon emission reduction proposals came as he opened a climate summit among world leaders. Investors believe solar power will likely be a key technology that helps the administration meet its ambitious goals. Shares of Enphase Energy, SunPower Corp., and SolarEdge Technologies jumped as much as 8%, 6%, and 10% respectively. This isn’t the first time an ambitious green-energy agenda helped boost a subset of clean energy stocks. Biden’s US$2.2 trillion infrastructure plan helped spur a rally in electric vehicle stocks last month, as the plan called for investing US$174 billion in the sector to better compete with China. The Biden administration said its new carbon reduction goals would “create millions of good-paying, middle class, union jobs.” https://bit.ly/3vdlOv9
Chinese Tesla rival NIO targets Europe with its smart EVs as it takes a first step towards going global.
Chinese Tesla rival NIO will begin delivering its smart electric vehicles (EVs) to European customers as early as next month, taking a first step towards going global amid an escalation of competition at home. Qin Lihong, co-founder and president of the EV start-up, told reporters at the 2021 Shanghai Auto Show that a sales team focusing on the European market had been established and a detailed plan about its expansion into the market would be announced in early May. Norway looks set to be the first market that NIO will explore outside mainland China, with a showroom in the northern European nation expected to open in September, according to local media outlet Bilbransje24, which cited Marius Hayler, the chief executive of NIO Norway. Shanghai-based NIO is following in the footsteps of its domestic rival Xpeng Motors in tapping the European market as they find themselves largely eclipsed by global leader Tesla at home. https://bit.ly/3vkInhg
Honda will phase out gas-powered cars by 2040.
Honda said it will stop selling gas-powered vehicles by 2040. The automaker expects 40 percent of its sales globally to be comprised of battery-electric and fuel-cell vehicles by 2030, followed by 80 percent in 2035, and 100 percent of sales by 2040. Honda is the latest car company to commit to an all-electric future, with General Motors, Ford, Volkswagen, Volvo, and others making similar promises in recent months. Honda also said it would “strive to realize carbon neutrality for all products and corporate activities” by 2050. https://bit.ly/3vghyef
ESG in gaming: the invisible giant of potential.
Why it matters is because gaming/esports has the perfect demographic for the generation with the most potential to change the world and use their voices, and dollars – and they’re highly engaged. The opportunity for the industry is to utilize that engagement as a vehicle to influence them as a force for good, also making it an ideal place for ESG/impact investors to start looking. https://bit.ly/3dKNH7T
Sophic Capital Client Insights
Intesa Sanpaolo, AnalytixInsight (Sophic Client, ALY-TSXV, ATIXF-OTC) and MarketWall announce launch of European online broker.
Intesa Sanpaolo, an Italian bank with a €45 billion market cap, and AnalytixInsight launched a InvestoPro, a digital, online trading platform. InvestorPro leverages MarketWall, an AI-based Fintech firm 49% owned by AnalytixInsight and 33% by Intesa Sanpaolo. With over 20 million customers in 40 countries, Intesa Sanpaolo has plans for InvestorPro, which could mark a turning point for AnalytixInsight. Since MarketWall plans to generate revenue from users, we believe AnalytixInsight stock may be valued by investors through a lens based on revenue. With this methodology, over four to five years, future value of roughly C$6.00/share could be realized by AnalytixInsight, which would discount back to around C$2.50/share of value today based on certain assumptions. https://bit.ly/3xkI7Rt
Body and Mind Inc. (Sophic Client, BAMM-CSE, BMMJ-OTC): Cultivating an investment idea.
The legalization of recreational cannabis in the U.S. is just getting started, with only 16 states approving. Sophic client, U.S.-based Body and Mind Inc., is a multi-state cannabis operator with retail, distribution, cultivation and/or processing operations in Nevada, California, Arkansas and Ohio. We interviewed CEO Michael Mills to learn more about the U.S. cannabis industry, and how Body and Mind is positioned to win large market share. https://bit.ly/3gwEfH4
The information and recommendations made available here through our emails, newsletters, website, press releases, collectively considered as (“Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. You hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Company’s Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser under the securities legislation of any jurisdiction of Canada and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisory, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor.