Epic Games and Facebook appear to be pushing back against app store policies, which could have far reaching implications. Several high profile companies are expected to go public this fall & Robinhood is garnering lots of attention (including, gracing the cover of this week’s Barrons).

Canadian Technology Capital Markets & Company News

Docebo (DCBO-TSX) launches bought deal offering of common shares. Docebo announced that it and certain of its shareholders, namely Claudio Erba (“Claudio”), Gresilent Holding Srl, an entity which Claudio controls or directs, (“Gresilent” and together with Claudio, “Erba”), Intercap Equity Inc. (“Intercap Equity”), Intercap Financial Inc. (“Intercap Financial” and together with Intercap Equity, “Intercap”) and Alessio Artuffo (“Artuffo” and together with Erba and Intercap, the “Selling Shareholders”) have entered into an agreement with an underwriting syndicate led by Canaccord Genuity Corp., TD Securities Inc., Morgan Stanley and Goldman Sachs Canada Inc. (collectively, the “Underwriters”) to complete a new issue and secondary offering (the “Offering”), on a bought deal basis, of an aggregate of 1,500,000 common shares at a purchase price of $50 per common share for aggregate gross proceeds of $75 million to the Company and the Selling Shareholders. https://bit.ly/3ajUeDd 

Blackline (BLN-TSXV) announces $20.4 million bought deal private placement. Blackline Safety announced that it has entered into an agreement with Canaccord Genuity Corp. and PI Financial Corp., as co-lead underwriters, on their own behalf and on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on an underwritten private placement basis, 3,400,000 common shares of the Company (“Common Shares”) at an issue price of $6.00 per Common Share for aggregate gross proceeds of $20,400,000  (the “Offering”).  https://bit.ly/33R38XE

Atomwise raises $163 million Series B. Atomwise, which operates an artificial intelligence (AI)-based drug discovery platform, has raised $163 million in what it called an oversubscribed Series B financing round. The Series B was led by B Capital Group and Sanabil Investments, and included returning investors DCVC, BV, Tencent, Y Combinator, Dolby Family Ventures, and AME Cloud Ventures. Two undisclosed “top ten global insurance companies” also participated as new investors. Atomwise, founded in 2012, was originally based out of the University of Toronto’s incubator before taking part in Y Combinator and moving to San Francisco. In 2018, the startup raised $57 million for its Series A, backed by the likes of Monsanto Growth Ventures. The company plans to use the new financing to help it further scale what it calls “the largest” AI-driven drug discovery portfolio “in history” and expand what Atomwise claims is a more than US$5 billion deal pipeline for small molecule drug discovery. https://bit.ly/3iKZDpJ 

Cleantech startup Flyscan Systems secures $5.7 million in venture funding. The financing was raised by Enbridge, the Business Development Bank of Canada’s (BDC) Cleantech Practice, and Canada’s National Optics Institute, also based in Québec City. Flyscan’s platform automates the detection of leaks for pipeline operators. The startup classified the raise simply as venture capital financing, and did not disclose the stage of the round. The funding will be used to commercialize Flyscan’s platform, which automates the detection of small leaks of hydrocarbons for oil and gas pipeline operators. Flyscan Systems was founded in 2015 as a spin-off from the National Optics Institute. Its mission is to help companies in the energy sector protect their infrastructure and the environment. The startup previously received financial support from Sustainable Development Technology Canada, Investissement Québec, and the City of Québec. https://bit.ly/2FxIH89 

EnergyX raises $1 million from BDC Capital to fuel US expansion. Toronto-based cleantech startup EnergyX Solutions, which produces software to help businesses and consumers improve energy efficiency, has raised $1 million, bringing the company’s total funding to date to $5 million. The financing was led by BDC Capital’s Growth and Transition Capital division, and was invested in the form of non-dilutive capital. The funding will be used to accelerate EnergyX’s expansion into the United States. Founded in 2016, EnergyX raised $1.3 million in a round led by Globalive Capital in September 2018, which Nishaant Sangaavi, CEO and co-founder of EnergyX Solutions, told BetaKt recently was a seed round. EnergyX also secured a separate $500,000 in January 2019 as well as an additional $500,000 in July 2019. https://bit.ly/2Y3FlQE 

Meeting scheduling software platform Zoom.ai has secured $600,000 in a combination of equity and debt financing. The startup is classifying the round as bridge financing, with its last round being a seed extension in 2018. Zoom.ai told BetaKit the capital will be used to extend the company’s runway, citing the uncertainty of the COVID-19 pandemic. The Toronto-based startup hopes to close an additional $300,000 in the next quarter of 2020. The financing was co-led by the Business Development Bank of Canada, Epstein Enterprises, and Perennial. The raise follows a period of growth for Zoom.ai, which pivoted last year from offering an automated personal assistant, to focus on scheduling meetings. https://bit.ly/3kO5qNh 

Canada opens antitrust investigation into Amazon. Canada’s top competition authority has opened an antitrust investigation into Amazon, asking the company’s all-important third-party sellers to come forward with any evidence that the e-commerce giant has been hurting competition. Canada’s Competition Bureau said Friday the investigation would focus on three main areas. The first was whether Amazon’s policies influenced third-party sellers’ willingness to offer lower prices on other retail websites. The second was about the effects of the sellers using Amazon’s warehouse network called “Fulfillment by Amazon.” The third focused on how businesses were affected by Amazon’s selling its own branded products on the online marketplace. The new investigation comes at a delicate time for Amazon. Earlier this month, Bloomberg reported attorneys general from New York and California had joined the Federal Trade Commission antitrust investigation into the company, with the agencies interviewing witnesses over the coming weeks. The other major antitrust front threatening Amazon is in Europe. The European Commission has been nearing the end of a yearlong investigation into the company. Amazon is expecting a decision from European regulators about whether formal antitrust charges will be laid in the coming months, according to a person familiar with the matter. https://bit.ly/3iOIRX4

Is Apple entering the payment acceptance business? In July, Apple acquired Mobeewave, a relatively unknown payments-technology startup in Montreal, Canada for, reportedly, US$100 million. For nine years, Mobeewave has been developing technology to convert conventional smartphones into payment-accepting devices without requiring additional hardware components. What may seem to be just another acquisition for Apple could have broad implications for the payments industry. https://bit.ly/2XWqs2h

Global Markets: IPOs, Venture Capital, M&A

Airbnb reportedly plans to confidentially file for an IPO later this month. In the course of a few months, Airbnb’s initial public offering plans have gone from completely off the rails to apparently solidly back on track. The online travel giant plans to confidentially file its IPO paperwork later this month, The Wall Street Journal reported Tuesday. The move could set in motion its long-awaited public markets debut with a potential IPO before the end of the year. An Airbnb representative declined to comment on the report. Airbnb had previously been preparing for an IPO this year, but halted the efforts this spring when the onset of the coronavirus pandemic crushed the stock market and shut down travel worldwide, cratering its business. Company CEO Brian Chesky warned that thanks to the epidemic, Airbnb expected its revenue for this year to be less than half what it was last year. To shore up its operations and its cash balance, the company laid off 25% of its staff and hundreds of contract workers, froze its marketing spending, and borrowed US$2 billion. As part of its debt financing, the company agreed to have its valuation slashed from US$31 billion to US$18 billion. But Airbnb — along with the stock market — has rebounded in recent months as people have started to take vacations to traditional holiday spots near their homes. By late May, the number of vacation rental bookings — Airbnb’s core market — had rebounded by 127% from the nadir the market hit in early April. Meanwhile, Airbnb reported its customers booked 1 million nights worth of reservations on July 8, which marked the first time the company had seen that volume of bookings since March 3. With that kind of wind at his back, Chesky told employees last month that the company had resumed its preparations for an IPO. https://bit.ly/31WwD7F

Palantir Plans direct listing for late September. The company, which sells data analysis software used by governments and large companies worldwide, might still change its plans, said the people, who asked not to be identified because the information wasn’t public. Palantir is in the process of raising US$961 million, US$550 million of which it has already secured, according to a July filing with the U.S. Securities and Exchange Commission. That includes a US$500 million investment from Sompo Japan Nipponkoa Holdings Inc. and US$50 million from Fujitsu Ltd. Those sums make listing the stock directly a more accessible path for Palantir, following in the footsteps of Spotify Technology SA and Slack Technologies Inc. In 2015, Palantir reached a valuation of US$20 billion, though in recent years stockholders have sold blocks of shares for much less. The company told investors this year that it expects to break even in 2020 on revenue of about US$1 billion. https://bloom.bg/3kOHU2D

Impossible Foods gobbles up another US$200 million. The new round values the company at a Whopper-sized US$4 billion valuation, according to the data tracker PrimeUnicorn Index. The new round was led by Coatue, a technology-focused hedge fund; another New York-based hedge fund, XN, also participated in the round. Since its launch the company has raised US$1.5 billion from investors, including Mirae Asset Global Investments and Temasek. The presence of these new public/private investment firms on Impossible Foods’ cap table could mean that the company is readying itself for an initial public offering, but that’s just speculation. The most recent price per share is US$16.15, an up round from Series F at US$15.4139, according to PrimeUnicorn. https://tcrn.ch/2Y2QqB9

CuriosityStream to go public. CuriosityStream, the 5-year-old streaming service of documentaries on history, nature and science, announced it is going public through a US$330 million merger with a special purpose acquisition corporation called Software Acquisition Group. CuriosityStream, which was founded by former Discovery CEO John Hendricks, is one of a number of companies going public through SPACS, which are seen as mitigating the risk of a public offering in uncertain markets. CuriosityStream isn’t the only streaming service to go public. FuboTV, a sports streaming service that merged with Facebank Group, a digital media company, announced today it is also filing to go public. https://bit.ly/3h8aObW

CureVac triples in Nasdaq public debut. Shares of German biopharmaceutical company CureVac surged out of the gate on Friday, more than tripling in value in its public debut on the Nasdaq Global Market. Shares of CureVac began trading up 191.56%, or US$30.65 a share, at US$46.65. At 1 pm E.T. the stock was up more than 216% at US$50.66. https://bit.ly/2Y5qkh1

Duck Creek rises in debut after expanded US$405 million IPO. Duck Creek Technologies Inc., a software provider for insurers, climbed 48% in its trading debut after raising US$405 million in an initial public offering priced above the targeted range. After a spring lull in IPOs amid the uncertainty and volatility brought on by the coronavirus pandemic, issuers and bankers aren’t taking much of a summer break. Less than halfway through the month, companies, including so-called blank-check companies, have raised US$9.7 billion in U.S. IPOs. That’s busier then the entire month of August for every year since 2000, when US$10.3 billion was raised, according to data compiled by Bloomberg. Duck Creek’s debut share jump was overshadowed by vaccine maker CureVac NV, which surged 249% for the biggest first-day gain for a U.S. listing this year, the data show. https://bloom.bg/3augavj

Before BigCommerce’s 200% IPO pop, Intuit offered US$1.5 billion for the software company. BigCommerce’s stock more than tripled in its market debut last week, marking the biggest IPO pop of 2020 and valuing the software company at close to US$5 billion. The rally justified the company’s decision to stay independent. Just about a month before the IPO, Intuit offered to buy BigCommerce for US$1.5 billion, according to people familiar with the matter, who asked not to be named because the talks were confidential. Some BigCommerce leaders wanted to take the deal. BigCommerce CEO Brent Bellm gambled that, even in the midst of a global pandemic and economic slump, public investors would continue piling into new cloud software stocks. Several subscription software vendors have doubled or even tripled in value this year, benefiting from surging demand for tools that help companies run digital businesses and manage remote workforces. Were BigCommerce to have taken the deal at US$1.5 billion, the company would have been valued at about 11 times revenue, a good multiple historically for a software company growing at 30% annually. At Monday’s close, the public market is valuing BigCommerce at about 44 times sales. That’s rich, but still less than Shopify, which trades for 62 times sales. https://cnb.cx/2E2lxpv

MGM stock surges after IAC takes 12% stake in a bet on online gaming. IAC/InterActiveCorp, announced Monday morning that it had accumulated a 12% stake in MGM Resorts International that’s worth about US$1 billon. IAC shares are up 2% in premarket trading while MGM’s stock is up 20%. “What initially attracted us to MGM, besides its leadership in leisure, hospitality and gaming, was an area that currently comprises a tiny portion of its revenue – online gaming,” IAC Chairman Barry Diller said in a release. In a letter to shareholders, Diller and IAC Chief Executive Joey Levin likened MGM to Walt Disney Co, writing that “MGM also is an aspirational brand, which could be delivered with daily accessibility and offer gaming consumers (including the 34 million M-life Rewards members) a wider range of services, both physical and digital, than any competitor.” The move comes shortly after the separation of Match Group Inc. from IAC, which Diller said left IAC with “US$3.9 billion of cash, no debt, and its opportunistic zeal intact.” IAC shares have risen 4.4% over the past month as the S&P 500 has increased 5.2%. https://bit.ly/3ak0LOo

AmEx in advanced talks to buy SoftBank-backed Kabbage. American Express Co. is in advanced talks to buy the online small-business lender Kabbage Inc., which is backed by investors including SoftBank Group Corp.’s Vision Fund and Reverence Capital Partners, according to a person familiar with the matter. The all-cash deal could value the closely held lender at as much as US$850 million, including retention payments, according to the person, who asked not to be identified because the matter is private. An agreement could be announced as soon as this month, the person said, though talks could still fall apart. Marina Norville, a spokeswoman for AmEx, and Paul Bernardini of Kabbage declined to comment. AmEx is already the largest provider of small-business credit cards in the country. With Kabbage, it could be a bigger provider of loans to mom and pop shops as well — a strategy it’s already pursuing within its consumer-card business. https://bloom.bg/31U2O7O

ThayerMahan acquires Ocean Acoustical Services and Instrumentation Systems (OASIS). ThayerMahan announced today its acquisition of Ocean Acoustical Services and Instrumentation Systems (OASIS). Founded in 2016, ThayerMahan has rapidly grown into an industry leader in autonomous marine sensor/system solutions. Led by its visionary founder, Michael J. Connor, ThayerMahan has developed patented technology solutions in acoustics, electronic sensing, autonomy, communications and data management while providing unique MDA (Maritime Domain Awareness) solutions to a diverse body of clients in government, industry and academia. https://prn.to/31Jg7bk

Trump orders ByteDance to Sell TikTok’s U.S. business within 90 days. President Trump ordered China’s ByteDance to sell its TikTok video app’s U.S. operations within 90 days. In an executive order issued late Friday, Trump said there is “credible evidence” that leads him to believe that ByteDance “might take action that threatens the national security of the United States.” Just over a week ago, Trump issued an executive order that would effectively ban TikTok in the U.S. in 45 days. The new executive order, which puts additional pressure on ByteDance, makes it clear that the only likely outcome for TikTok in the U.S. is a sale to an American buyer. ByteDance already has been holding discussions with potential buyers. Earlier this month, Microsoft said it is in talks with ByteDance to buy TikTok’s operations in the U.S., Canada, Australia and New Zealand. https://bit.ly/3kRRimf

WeChat ban could significantly hurt iPhone sales. The Trump executive order banning US companies from having a business relationship with WeChat has many ramifications, and analyst Ming-Chi Kuo is concerned that the hit to iPhone sales will be significant. If the order is implemented in full, it would see WeChat being removed from the App Store worldwide. WeChat is a critically important app for the Chinese market and if it’s no longer available on iOS, iPhone sales could decline by as much as 30%. WeChat is more than just a messaging platform for Chinese users. It covers payments, social networking, news, onlinle shopping and much more. WeChat is often described as an ‘OS inside the OS’ because of how many different features it contains. As the order is written, it bans all transactions between US firms and WeChat. This would mean Apple would have to remove the app from the App Store in all territories in 45 days time, as Apple would no longer be allowed to have a contractual relationship with WeChat. However, many expect the administration to weaken the terms by that time. If the executive order is clarified to only require Apple to remove WeChat from the App Store in the United States, then the impact is much less severe. In this eventuality, Kuo predicts a 3-6% iPhone sales decline. https://bit.ly/3h2MtEi

Nio rebounds from the brink with record sales. Chinese EV startup Nio has rebounded from the early months of the COVID-19 pandemic, setting a company record for deliveries and revenue during the second quarter of 2020. Buoyed by a return to strong automotive sales in China, a successful rollout of the updated version of its first electric SUV, and a recent US$1 billion investment from local government entities, the startup now appears to be on its most solid footing since late 2018. Nio, which is backed by Tencent, has found that footing at a pivotal moment. While the pandemic helped put a number of other startups in danger of going out of business around the world — including some seen as potential frontrunners, like Byton — competition has once again heated up in China as the automotive market quickly rebounds there. And with Tesla now the most valuable automaker in the world, there is renewed optimism about the potential of electric vehicle startups to succeed in China before legacy automakers like Volkswagen, General Motors, and Ford start shipping dozens of their own EVs. https://bit.ly/345Yoxd

China’s car sales are surging as it recovers from the pandemic, and that’s great news for Tesla. Car sales are booming in China as the coronavirus pandemic fades in the country, which could be good news for Tesla in an increasingly important market. The China Association of Automobile Manufacturers, an industry group that provides monthly production and sales statistics, said passenger-car sales jumped 8.5% in July compared to last year while overall sales rose 16.4%. The rebound follows a 18.4% slump that began in January as the virus swamped the industry worldwide. It’s good news for the world’s largest auto market, and perhaps even better news for Tesla, which has invested heavily in expanding its presence in the country. The automaker reported another increase in revenues from China in July, even as US sales slumped. For the second quarter, China was responsible for 23% of the company’s total revenue — its highest share ever. Electric vehicles have seen a slight slump in China since Beijing slashed a lucrative subsidy for potential buyers, which had helped Tesla’s initial growth in the country as it completes its Shanghai Gigafactory. Sales of hybrid and pure-electric vehicles rebounded to 98,000 units in July after slumping 32.8% during the first seven months of the year, the Associated Press reports. At the same time, several domestic competitors are slowly beginning to encroach. Nio reported a surge in monthly deliveries in July — now up to over 3,500 — and Xpeng filed for a public offering on the New York Stock Exchange last week. https://bit.ly/2E5lzwP

Airbnb’s revenue reportedly plunged 67% in the second quarter as COVID-19 wreaks havoc on its business. Airbnb’s revenue plummeted 67% in the second quarter compared to the same period last year, according to Bloomberg. The steep drop-off is a reflection of the impact of COVID-19, which has restricted travel across the globe. The company reportedly brought in just US$335 million in revenue during the period ended June 30, down from more than US$1 billion in the same period last year. According to Bloomberg, Airbnb recorded a loss of US$400 million in the second quarter before interest, taxes, depreciation and amortization. That loss likely does not include restructuring charges related to the 1,900 job cuts or other items it could classify as one-time charges, meaning its net loss is almost certainly wider than that. https://bit.ly/3iKZxyn

Emerging Technologies

U.S. will reallocate military 3.5GHz spectrum for consumer 5G in 2021. Over the past three years, engineers and carriers across the world have largely agreed that 3.5GHz-adjacent radio spectrum is ideal for 5G deployments — a “mid band” compromise between the lower frequencies used by older cellular standards and the higher, shorter-distance millimeter wave frequencies. But in the United States, the Department of Defense (DoD) has controlled much of the mid band spectrum, creating a tension between military and potential consumer applications. Today, the White House announced that the DoD has agreed to relinquish 100MHz of 3.5GHz spectrum for commercial use, a process that will augment U.S. 5G networks over the next two years. https://bit.ly/31Nj1LY

Michigan is devoting a 40-mile stretch of highway to testing self-driving cars and improving public transportation. The state of Michigan is planning to work with a Google-funded startup to transform a section of interstate highway into a self-driving car utopia. Cavnue (pronounced like “avenue”), a newly formed subsidiary of the Alphabet’s Sidewalk Infrastructure Partners, won the state’s bid for the project Thursday, and plans to move from lab-based experiments to actual public roadway within two years. Several major automakers and self-driving developers are also advising on the project, but there’s no word on how much money’s being invested into the project. Autonomous vehicles have been testing for years in California and other states. Waymo has even launched a self-driving taxi service on Lyft’s app in Arizona. But this is the first time public infrastructure has been dedicated to the pursuit of driverless vehicles. Eventually, the goal is to enable an express bus lane on the busy corridor between Ann Arbor and Detroit that’s currently occupied by Interstate 94 and historic Michigan Ave, the first road to connect Detroit with Chicago, two industrial powerhouses and population centers in the late 17th century. Like most of the rest of the country, the rise of highways meant the death of public transit. https://bit.ly/2Y6fffK

Virtual Energy: Artificial Intelligence will help run nuclear reactors of the future. Nuclear power plants can produce huge amounts of electricity while keeping their carbon footprints at relatively low levels, compared to power stations that burn fossil fuels. But building, maintaining and operating a nuclear plant is also relatively expensive. To make sure these plants remain competitive, the U.S. Department of Energy’s Advanced Research Projects Agency energy division (ARPA-E) has scientists at GE Research helping to find a way to reduce operations and maintenance costs at such facilities to a mere $2 per megawatt-hour when engineers start designing the next-generation of advanced reactors. That’s a tall order, given that operators can spend more than 10 times that amount to keep their nuclear plants up and running. https://invent.ge/3iBqftr

The pandemic is speeding up automation, putting jobs in question. Forced to tighten their belts financially by the coronavirus pandemic, businesses are increasingly using software that automates back-office tasks. The technology handles repetitive duties like filling in numbers in a spreadsheet or matching invoice data to payment orders. The idea, of course, is for companies to save money by reducing the number of workers they need to handle clerical work. https://bit.ly/3ajSw4y

Media, Streaming, Gaming & Sports Betting

Apple readies subscription bundles to boost digital services. Apple Inc. is readying a series of bundles that will let customers subscribe to several of the company’s digital services at a lower monthly price, according to people with knowledge of the effort. https://bloom.bg/2Y2Gwj7

The Pandemic puts the spotlight on a rising Esports industry. While the coronavirus pandemic caused every major US sports league to suspend its season, esports resumed relatively quickly. Leagues pivoted from competing inside venues to an online-only format where teams and production crews operated remotely. Despite any short-term struggles from large advertising downturns, the outlook for esports remains positive. https://bit.ly/2Cn7c6I

DraftKings expands exclusive MLB fantasy sports partnership. The agreement includes an expanded partnership providing for an increase in DraftKings’ content rights, product integration, prizing and continued use of MLB images and video within DraftKings’ DFS games. “MLB was our first official league partnership dating back to 2012,” said DraftKings chief business officer Ezra Kucharz. “We share a mutual passion and commitment to innovation and fan engagement and are excited to continue our partnership through data and technology to advance our product and broaden engagement opportunities for baseball fans.” DraftKings will also have the right to utilize the iconic official MLB silhouetted batter and all MLB club logos within promotional marketing, as well as in its DFS products. Additionally, DraftKings will work in tandem with MLB for increased integration at All-Star Week activities and the MLB Postseason. This includes VIP experiences for fans, such as on-field viewing of batting practices throughout the MLB season, as well as trips to the World Series. https://bit.ly/2PWrKpB

Adtech, Privacy & Regulatory

Facebook is calling Apple out for refusing to reduce its 30% App Store fee for a new Facebook feature that could help small-business owners during the pandemic. Facebook launched a new feature Friday that allows businesses to charge users to tune into livestreams, such as yoga classes. Facebook said it had asked Apple to reduce its standard 30% App Store commission or allow the company to “absorb all costs for businesses struggling during COVID-19.” But Facebook said, “Unfortunately, they dismissed both our requests and SMBs will only be paid 70% of their hard-earned revenue.” Facebook won’t take a cut from any of the revenue generated from the new feature, according to company executive Fidji Simo, who told Bloomberg that the social-media giant was “calling out” Apple to waive their App Store fees. Simo told the outlet that Google also refused to waive the 30% fee that it charges developers on its Play store, but the company is allowing the social-network giant to use its Facebook Pay product to avoid the in-app tax — Apple is not. https://bit.ly/2PZfvc4

Fortnite: Epic Games sues Google and Apple over app store bans. Fortnite-maker Epic Games is taking legal action against Google after being banned from the Google Play app store, hours after doing the same with Apple. Apple and Google both removed the hit game from their app stores after Epic Games bypassed their payment systems, to avoid giving them a cut of sales. Both platforms take a standard 30% of purchases on their app stores. Google said it runs an “open” system and would work to bring Fortnite back to its official app store. On Android phones, app stores other than Google Play are available, so it it still possible to install Fortnite from Epic Games’ own launcher app and the Samsung Galaxy app store, making it less restrictive than Apple’s system. https://bbc.in/3iDw8pV

A California judge ruled that Uber and Lyft have to classify their drivers as employees, not contractors. Uber and Lyft have to treat their California drivers as employees rather than independent contractors, a California judge ruled Monday. The ruling, first reported by Bloomberg, would force the companies to provide legally mandated benefits, including health insurance and sick leave to drivers. The California state legislature passed a law this year known as AB5 that requires gig-work employers to extend more benefits to workers. Both Uber and Lyft faced a lawsuit from California Attorney General to enforce the law after they denied that drivers classify as employees. Several other California agencies joined that lawsuit against the two companies, arguing that they were “willfully misclassifying” drivers to avoid paying higher wages. Rideshare Drivers United, a driver advocacy group, claims that Uber and Lyft owe more than US$1.3 billion in payments to drivers in California pursuant to AB5. https://bit.ly/3aucdXt

Uber and Lyft threaten to temporarily shut down in California over labor disputes. Uber and Lyft could temporarily shut down in California if a court ruling saying their workers must be classified as employees, not contractors, holds. Uber CEO Dara Khosrowshahi told MSNBC Wednesday morning that “it’s hard to believe we’ll be able to switch our model to full-time employment quickly” after a state judge ruled Monday that Uber, Lyft, and other gig-work companies must reclassify drivers and couriers as employees. Lyft made its threat on a conference call Wednesday afternoon, based on the same ruling. Executives said the shutdown could occur as soon as August 20. The state makes up about 16% of Lyft’s total rides, the company said. Uber’s Khosrowshahi said the shutdown could last until the company’s stay on the court ruling, which it requested in filings Tuesday night, is granted. Otherwise, it could continue until California voters decide on Proposition 22 in November, which would allow the company to classify drivers as contractors. https://bit.ly/3h4bAq9

TikTok collected user data in violation of Google’s Android policies. TikTok collected sensitive data about its users that violated the policies of Google’s Android mobile platform, according to The Wall Street Journal. The Chinese-owned video app, which is currently in talks to sell to Microsoft after being deemed a national security threat by the White House, harvested unique, unchangeable identifiers of users on Android devices until late last year, the report found. The collection of such identifiers, called MAC addresses, is seen as an invasive privacy risk and is banned by Google’s developer policy for Android. (Apple also banned MAC address collection years ago, as the identifier is permanently assigned to a device and can be used to track people without their consent.) The revelation couldn’t come at a worse time for TikTok given the security concerns about the app and its already uncertain future. The Journal’s story describes how TikTok’s parent company ByteDance took great steps to collect and then obfuscate how it transmitted the data back to its servers until the practice stopped in November 2019, when the U.S. opened a national security review of the app. https://bit.ly/2Y4udTB

Think telemarketers are a pest? Wait till China’s AI versions call. Shanghai resident Fan Kaiyi has been on the receiving end of unsolicited calls for as long as she can remember. Whether at home or on her mobile phone, the digital project coordinator, 38, is bombarded by sales representatives trying to sell her everything from property, insurance policies and pharmaceutical products to fitness classes and emigration services. Others try to convince her to take out bank loans requiring no background checks or collaterals. https://bit.ly/3fUl5ag

eCommerce

Amazon reportedly considering mall space for fulfillment centers. Amazon has had talks with Simon Property Group about converting some of its mall spaces into fulfillment centers, The Wall Street Journal reported. The conversations started before the coronavirus pandemic, and before the latest wave of bankruptcy filings by mall stalwarts like Lord & Taylor, JCPenney, and Nieman Marcus. It’s a bit of an on-the-nose example of how e-commerce is overtaking the traditional brick-and-mortar retail establishments that used to be at the center of the shopping mall experience. Simon is the biggest mall owner in the US, and looking to fill empty retail spaces, particularly those left behind by former anchor tenants like Sears and JCPenney. Having its fulfillment center warehouses closer to residential areas would help Amazon make deliveries more quickly, the WSJ notes. https://bit.ly/3iKTYA1

Kroger to build web marketplace to compete with Amazon, Walmart.
Kroger Co. is setting up an e-commerce marketplace open to third-party vendors, part of the grocery-store operator’s bid to wrest web sales away from giants like Amazon.com Inc. and Walmart Inc. The owner of the Fry’s and King Soopers chains is working with online commerce specialist Mirakl to offer tens of thousands of additional goods, including housewares and toys, the companies said Tuesday in a statement. The partnership will let Kroger offer “more-relevant products” by broadening its e-commerce operations to include third-party sellers, according to Jody Kalmbach, the company’s vice president of product experience. https://bloom.bg/2DL9w88

Fintech, Blockchain & Cryptocurrency

Robinhood blows past rivals in record retail trading year. Robinhood Markets Inc. is outrunning its online-brokerage rivals, at least by one widely followed industry metric for customer activity. The company, which runs a no-fee trading app in the U.S. that’s drawing millions of new users as well as a few critics, said that daily average revenue trades — known as DARTs — were 4.31 million in June. That’s about four times the number of fee-generating trades at E*Trade Financial Corp. for the same period, and higher than all of its publicly traded rivals. Robinhood is among brokers that still use the DART term even though they don’t charge fees. Robinhood’s payment for order flow was US$180.1 million for the second quarter, double what it took for the prior three months, according to a regulatory filing. That’s the money it collects from routing orders to market makers such as Citadel Securities and Virtu Financial Inc. The data shows that daily trades at Robinhood more than doubled in the second quarter from the prior period. The top three days in terms of trading volumes occurred in June. The company hasn’t committed to releasing the DART figures every month. Robinhood had said in May that 3 million new funded accounts were added in 2020, with half of the new customers being first-time investors. It announced new funding in July, pushing the company’s valuation to US$8.6 billion. Last month, the firm put its global expansion on hold and postponed its launch in the U.K., following several technical issues and outages to its platform this year. https://bloom.bg/2CvODx4

Square’s Cash App tests new feature allowing users to borrow up to US$200. Cash App, the peer-to-peer payments service from Square, is giving select users a way to get short-term loans. The company said it’s only testing the feature with around 1,000 users for now. But it could become more broadly available — and there are probably plenty of people who could use the money, given the state of the U.S. and global economy, not to mention the current uncertainty about further stimulus plans. Cash App is starting out by offering loans for any amount between US$20 and US$200. You’ll be expected to pay the loan back in four weeks, along with a flat fee of 5%. (Multiplied over a year, that turns into a 60% APR — which sounds high, but at least it’s significantly lower than the average payday loan.) https://tcrn.ch/3kN8HfH

Facebook is reportedly expanding its banking ambitions with a new division that will run all of the tech giant’s payment projects, including Facebook Pay. Facebook is launching a new division to expand its payments and commerce ambitions, per a Bloomberg report. Facebook Financial — or F2 — will oversee all of the tech giant’s payments projects, including Facebook Pay, the service launched in 2019 that allows users to send and receive money on Facebook, WhatsApp, Instagram, and Messenger. According to Bloomberg, one of the division’s priorities will be rounding out WhatsApp’s payments operations in India as well as Brazil, a market it waded into in June, as well as leaping through regulatory hurdles posed in both markets. https://bit.ly/2PXS9U0

Circle K will deploy cashierless checkout in some U.S. stores. Circle K plans to roll out automated checkout at select stores in the U.S. next year, becoming the latest retailer to bet on shoppers’ reluctance to stand in line. The convenience store chain, owned by Canada’s Alimentation Couche-Tard Inc., on Tuesday said it would deploy a cashierless checkout system at a store in the Phoenix area in early 2021. The technology is supplied by Standard Cognition Corp., which has raised $86 million from investors, including EQT Ventures and Y Combinator, by pledging to retrofit existing retail locations quickly. https://bloom.bg/33RekTX

Software firm MicroStrategy makes a massive bet on Bitcoin with a US$250 million purchase. MicroStrategy, a Virginia-based business intelligence software company that trades on the NASDAQ, announced on Tuesday it has acquired 21,454 Bitcoin in what describes as a “capital allocation strategy.” The move is a novel one for a publicly traded firm. While many companies put surplus capital into bonds and other investments as part of their treasury management strategies, a bet of this size on Bitcoin is all but unheard of. MicroStrategy’s decision to plow $250 million into Bitcoin may amount to more than a capital allocation strategy. Barry Silbert, the founder of crypto conglomerate DCG, noted on Twitter that the move could serve to tie MicroStrategy’s valuation to Bitcoin. If investors equate MicroStrategy’s valuation with Bitcoin’s performance, it would not be the only company in this position. The online retailer Overstock is also heavily invested in crypto, a strategy that may have buoyed its share price even as its core business slumps. https://bit.ly/3iMAR8Y

tZero CEO: Blockchain can boost private market liquidity amid the pandemic. Not all that long ago, blockchain and bitcoin were inseparable – shorthand for the Wild West of cryptocurrencies and speculation. And you might recall that digital tokens were emblematic of volatile price swings. A boom and crash just a few years ago showed that, as estimated by Bitcoinist.com, as many as 160 projects were on tap at as of January 2018, and by October of last year, that tally was zero. But more recently, the pandemic has spurred firms to address pain points in various markets through digital shifts. https://bit.ly/3ivI1hr

How did they get the keys? => US seizes millions of dollars from Islamic State and Al-Qaeda’s cryptocurrency accounts. The Justice Department says it has seized millions of dollars from cryptocurrency accounts that militant groups, including al-Qaeda and the Islamic State, relied on to finance their organisations and violent plots. Cryptocurrencies such as Bitcoin are favored for illicit transactions because they are perceived as hard to trace, and one of the groups singled out on Thursday explicitly encouraged donations by telling potential contributors that the money trail would be difficult for law enforcement to untangle, the department said. https://bit.ly/3fXOXCr

Semiconductors

Huawei: Smartphone chips running out under US sanctions. Chinese tech giant Huawei is running out of processor chips to make smartphones due to U.S. sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure. https://bit.ly/33J7Vu1

Semiconductors are a weapon in the U.S.-China trade war. Can this chipmaker serve both sides? What a difference two months can make. In May, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, lost the business of Huawei Technologies—its biggest Chinese customer and the source of 13% of its revenue—as a casualty of geopolitical jockeying between superpowers. But TSMC shareholders took the loss in stride. And by late July, after a stumble by rival Intel, TSMC’s stock had risen almost 50% since May, making it one of the world’s 10 most valuable companies. https://bit.ly/33TQK9o

ESG

US sitting on 145GW of unused commercial solar potential. As the COVID-19 pandemic wears on in the United States, the hardest-hit segment is likely to be commercial solar — projects built on businesses, schools and government buildings.Compared to its pre-pandemic projections, Wood Mackenzie is forecasting a 32 percent drop in commercial solar installations in 2020. Commercial businesses — hugely impacted by current economic conditions — will likely opt out of discretionary investments such as installing solar this year. https://bit.ly/2DxIe5b

Duke shifts toward renewables, storage investments in wake of $1.6B Atlantic Coast Pipeline loss. Duke Energy is shifting its investment strategy toward “low-cost, smaller-scale” projects such as solar and battery storage in the wake of a $1.6 billion loss in the second quarter of this year caused by the cancellation of the Atlantic Coast Pipeline. https://bit.ly/2PRDdGR

Long-Term investors now hold sway over ESG. Long-term investors—those who have perpetually flagged the kind of systemic and workforce issues that now face companies everywhere—are having an outsized influence during this global crisis. Part of that is the surge in interest in ESG investing. UBS this week said it saw flows to ESG funds and pandemic bonds of more than $71 billion in the second quarter, bringing its ESG assets under management to $1 trillion for the first time. Citing Morningstar data, the firm found that 56% of sustainable funds outperformed their peers in the second quarter. https://bloom.bg/3iA4LwR

The energy revolution is (finally) here. As someone who spent the better part of the last decade building startups in the solar and energy efficiency industries, I can attest that there are indeed many challenges to building a scalable cleantech business: it’s inherently more difficult to move atoms than bits, energy markets are heavily regulated and vary greatly from geography to geography, and upfront capital costs are generally expensive and require sophisticated, patient project finance. Given that these challenges are still very much present, the obvious question becomes: why now? What has changed that’s made the field attractive again to VCs hoping to generate >10x returns? In my opinion, this time is indeed different and the opportunities to build venture scale outcomes are numerous. Let’s explore why. https://bit.ly/34045g8

Sophic Capital Client Insights

Kontrol Energy (KNR-CSE) – A second line of defense against COVID-19. Successful development of a COVID-19 vaccine or treatment is only the first step to reversing COVID-19’s devastation. The second step is the logistics of manufacturing and distributing and immunizing the world. Both of these steps will take time, leaving the coronavirus to continue plaguing us unfettered. But what if we had technology that detected COVID-19 as we wait for a COVID-19 treatment or vaccine – technology that can tell us in real-time that the virus is present? https://bit.ly/2DXLu9v

UGE International (UGE-TSXV) – Time to ride the solar coaster. Unlocking Undiscovered Value Not Reflected in the Stock Price. UGE International (TSXV:UGE; OTC:UGEIF), a Sophic Capital client, has been riding the solar coaster for a decade – long before ESG was an investing trend. Founded in 2010, UGE International (“UGE” or the “Company”) is a solar and renewable energy solutions company focused on offering turnkey commercial as well as community solar projects in the North East USA and the Philippines. The Company develops, engineers, deploys, finances, and operates end-to-end solar projects in the 250-kilowatt to 5-megawatt range.We believe that UGE’s growing backlog is not being reflected in the share price. The Company exited its March 31 quarter with approximately US$72 million of backlog, making it the strongest quarter for new bookings in the Company’s history (up from US$30 million in the prior quarter). https://bit.ly/3kvhlzv

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