This past week was perhaps one of the most tech capital markets news intensive weeks we have witnessed in a while. In Canada, there was plenty of activity in public and private markets, as well as M&A with MindBeacon, Dye&Durham, theScore, BlackBerry, Lightspeed, Benevity, Element AI & PayBright. In the USA, a lot of attention was focused on Salesforce-Slack acquisition, at a 50% premium, however, there were at least three more high profile acquisitions, as well as a few more high profile IPOs including Airbnb & DoorDash.

Canadian Technology Capital Markets & Company News

Toronto telemedicine company MindBeacon looks to go public on TSX as demand surges during pandemic. Veteran Bay Street financier and entrepreneur Sam Duboc is set to take his telemedicine startup MindBeacon Software Inc. public on the Toronto Stock Exchange amid a surge in demand for digitally delivered health services during the pandemic. The five-year-old Toronto company, which provides mental health therapy over the internet through its Beacon service, has tapped TD Securities and Credit Suisse Securities to lead the offering, which is expected to be filed publicly within days and is targeting a $50-million raise, said an anonymous source familiar with the situation. Bloom Burton & Co. and Canaccord Genuity Group Inc. are also part of the underwriting syndicate. MindBeacon set out this year to raise $30-million from private investors but shifted course to raise a larger amount from public investors given the strong performance of technology stocks, including the successful TSX initial public offering of Nuvei Corp. and Dye & Durham Corp., the source said. MindBeacon had previously raised $38-million from backers including Green Shield Canada, Manulife Financial Corp., and Telus Ventures. https://tgam.ca/3loVmcB

Dye & Durham (DND-TSX) to enter Australian market with $87 million acquisition of SAI Global property division. The company announced that it has entered into a definitive agreement to acquire SAI Global’s Property Division for A$91 million, or approximately C$87 million, in cash. The transaction is expected to close in early 2021, subject to required regulatory approvals. SAI Global’s Property Division provides its large B2B customer base, which includes conveyancers, solicitors and the financial services sector, with all the necessary workflow software, systems and information products to facilitate and complete the transfer of property. https://bit.ly/37LbNLI

theScore (SCR-TSX) announces $40 million bought deal financing. The company announced it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and Eight Capital, pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 28,572,000 Class A Subordinate Voting Shares of the Company at a price of $1.40 per Offered Share for gross proceeds to the Company of $40 million. https://bit.ly/2LcGW2V

Drone Delivery Canada (FLT-TSXV) announces upsized bought deal public offering to $12.0 million. Drone Delivery Canada Corp. announced that in connection with its previously announced bought deal public offering, the company and a syndicate of investment dealers co-led by Cormark Securities Inc. and Echelon Wealth Partners Inc. have agreed to increase the size of the offering. The Company will now issue 13,640,000 Units from the treasury of the Company, at a price of $0.88 per Unit for total gross proceeds of approximately $12,003,200. Each Unit will consist of one common share of the Company and one-half of one common share purchase warrant of the Company. Each Warrant will entitle the holder thereof to purchase one Common Share at a price equal to $1.20 for a period of 24 months. https://bit.ly/3mLOmbe & https://bit.ly/3lqQ804

ESE (ESE-TSXV) signs letter of intent to acquire global esports infrastructure company. The company has signed a Letter of Intent (“LOI”) to acquire (the “Acquisition”) the assets of World Phoning Group Inc. and Encore Telecom Inc. (together,”WPG”), which are Canadian companies with combined revenue of over $12.5 million in the last twelve months. WPG operates in Europe and provides infrastructure and support with bespoke solutions for fan engagement of sporting organizations, esports companies and telecom providers across the globe. Under the terms of the LOI, the Business will be reorganized into a newly incorporated company (“SubCo”), in which ESE will hold a 51% interest, and WPG will hold a 49% interest. https://bloom.bg/37CxY6u

BlackBerry’s (BB-TSX, BB-NYSE) stock soars after development agreement with Amazon’s AWS. Shares of BlackBerry Ltd. soared 34.6% in active premarket trading Tuesday, after the security software services company and Amazon.com Inc.’s Amazon Web Services Inc. cloud business announced a “multi-year, global agreement” to develop BlackBerry’s Intelligent Vehicle Data Platform, IVY. Trading volume reached 2.4 million shares before the open, already more than half the full-day average of about 3.8 million shares. BlackBerry’s IVY will allow automakers to provide a secure way to read vehicle sensor data and create insights from that data. Automakers can then use that data to create in-vehicle services. The companies did not provide any financial terms of the agreement. “Data and connectivity are opening new avenues for innovation in the automotive industry, and BlackBerry and AWS share a common vision to provide automakers and developers with better insights so that they can deliver new services to consumers,” said BlackBerry Chief Executive John Chen. BlackBerry’s stock has gained 5.2% over the past three months through Monday, while the S&P 500 has tacked on 2.7%. https://on.mktw.net/3ly4YSf

GoSecure raises US$14 million, bringing Series E to US$35 million. Montreal-based GoSecure, which has developed a cybersecurity managed detection and response (MDR) software platform, has raised an additional US$14 million for its Series E round, bringing the total round to US$35 million. With this latest investment, GoSecure’s Series E financing round is now fully closed. https://bit.ly/3lGP08K

Drone startup Skygauge closes $3.3 million seed as demand increases amid pandemic. Skygauge Robotics has closed a $3.3 million seed round and the Toronto and Hamilton-based drone startup is immediately scaling up its hiring in response to increased demand during the COVID-19 pandemic. The seed round closed in October and was led by BDC Capital’s Industrial Innovation Venture Fund, with participation from RiSC Capital and follow-on from existing investors SOSV (through the HAX accelerator) and Hello Ventures. Skygauge has developed drones for industrial applications, designed to reduce the time involved during inspections, while improving operator safety by keeping them from working at excessive heights. The startup’s drone design enables it to make direct contact with pipes, pressure vessels, and storage containers at varying angles to detect cracks beneath the surface with sensors during inspections that are typically performed by workers on ropes and scaffolding. The startup claims its drones can reduce time on site by 80 percent. https://bit.ly/36JzLaF

Lightspeed stock hits record high after Montreal software company announces second major U.S. acquisition in a month. Lightspeed POS Inc. stock hit a new high Wednesday after the company announced its second $400-million-plus U.S. acquisition in less than a month. The Montreal software company said after the close of markets Tuesday it would pay US$430-million in cash and stock for Upserve Inc., a Rhode Island-based company that provides internet-based restaurant management software to 7,000 restaurants in the United States, generating US$40-million in revenue annually. The deal comes just four weeks after Lightspeed said it would pay US$440-million for New York-based ShopKeep Inc., which generates US$50-million in annual revenues from 20,000 U.S. restaurants with a similar product. The deal is the 11th for the Lightspeed as it continues efforts to consolidate the fragmented market for internet-based point-of-sale and payments products for retail and hospitality companies. The company also said the dilutive impact of the cash-and-share transaction would trigger the automatic conversion of its multiple-voting shares into subordinate voting shares on a one-for-one basis in accordance with terms of its capital structure. With the two deals, Lightspeed will have 107,000 customer locations globally serving the restaurant, retail, hospitality and golf markets and processing more than US$39-billion in transaction revenue. The combined pro-forma revenues of the company postacquisition would be U$243-million in the past 12 months. https://tgam.ca/2L8CK4c

Unicorn in the patch: Calgary software firm Benevity achieves rare US$1.1-billion valuation in deal with U.K. private equity firm. Lightspeed (LSPD-TSX) strikes twice, announcing second major U.S. acquisition in a month. Lightspeed POS Inc. stock hit a new high Wednesday after the company announced its second $400-million-plus U.S. acquisition in less than a month. The Montreal software company said after the close of markets Tuesday it would pay US$430-million in cash and stock for Upserve Inc., a Rhode Island-based company that provides internet-based restaurant management software to 7,000 restaurants in the United States, generating US$40-million in revenue annually. The deal comes just four weeks after Lightspeed said it would pay US$440-million for New York-based ShopKeep Inc., which generates US$50-million in annual revenues from 20,000 U.S. restaurants with a similar product. In early Wednesday trading the stock increased by more than nine percent and topped $74 for the first time – it went public on the Toronto Stock Exchange in March 2019 at $16 a share – after several analysts increased their targets on the stock. The deal is the 11th for the Lightspeed as it continues efforts to consolidate the fragmented market for internet-based point-of-sale and payments products for retail and hospitality companies. The company also said the dilutive impact of the cash-and-share transaction would trigger the automatic conversion of its multiple-voting shares into subordinate voting shares on a one-for-one basis in accordance with terms of its capital structure. https://tgam.ca/33HU4Ds

Element AI to be acquired by ServiceNow. ServiceNow announced the deal Monday, noting it has signed an agreement to acquire Element AI and expects it to be completed in early 2021. Despite being seen as a leader in the Canadian AI sector, Element AI faced difficulties getting products to market. Terms of the acquisition have not been disclosed. However, The Globe and Mail reports that Element AI sold for less than US$500 million. This would place the purchase price well below the estimated valuation that the Montréal startup was said to have after its $200 million Series B round in September 2019. Element AI was founded in 2016 by CEO Jean-Francois Gagné, Anne Martel, Nicolas Chapados, Jean-Sebastien Cournoyer, Philippe Beaudoin, and godfather of AI Yoshua Bengio. It has raised a total of $340 million to date, drawing the attention of investors like the Government of Quebec, pension fund Caisse de dépôt et placement du Québec (CDPQ), McKinsey & Company, DCVC (Data Collective), and Hanwha Asset Management. Despite being seen as a leader and a rising star in the Canadian AI sector, Element AI faced difficulties getting products to market. The Globe reported in 2019 that the startup faced high operational costs, minimal revenue, and setbacks on the development of two of its flagship products, causing it to lay off staff. https://bit.ly/3lJ28tK

Affirm to acquire PayBright for $340 million. PayBright, one of Canada’s leading buy-now-pay-later providers, is set to be acquired by San Francisco-based Affirm. Affirm is set to purchase PayBright for $340 million, including cash and equity consideration. Additional terms of the transaction were not disclosed. The deal is expected to close in the first quarter of 2021.Toronto-based PayBright is lending and payments startup that offers instant point-of-sale financing and installment payment plans for consumers and merchants. Its platform is focused on providing consumers with pay-later solutions at online and brick-and-mortar retailers. Founded in 2009, PayBright has partnerships with more than 7,000 domestic and international retailers, and has approved over $1 billion in consumer credit. Some of its major retail partners include Hudson’s Bay, eBay, Dynamite, SHEIN, Wayfair, Samsung, and Endy. https://bit.ly/2VG257D

Global Markets: IPOs, Venture Capital, M&A

SPAC merger class of 2020 is trading better than 2019. Special purpose acquisition companies are the hottest investment phenomenon of the year. But they’re not a surefire way to make money, as many lose value after they merge with operating businesses. The good news is that the SPACs that have completed mergers this year are trading better than last year’s crop, according to new data. Forty three percent of the stocks of companies formed from the merger of a SPAC with an operating business this year were trading at or above their initial SPAC offering price of US$10 as of Nov. 10,  according to data from SPAC Research. While that means 57% are trading below their initial offer price, it’s an improvement on those that merged last year. Of that group, 71% were trading below their initial price earlier this month. The improvement is likely a reflection of the higher quality of businesses merging with SPACs, increased investor interest in SPACs generally, and the growing number of experienced and high-profile businesspeople backing SPACs, also known as sponsors, says Benjamin Kwasnick, founder of SPAC Research. That suggests the rate of post-merger SPAC stocks trading above the SPAC IPO price should continue to rise, particularly as investors with a long-term time horizon get to know the businesses. SPACs are companies without any operating business that go public in order to raise cash and acquire a business. So far this year, 200 SPAC IPOs have raised US$69 billion, up from 59 that raised US$14 billion last year. They generally have two years to find a merger partner. More than 40 SPACs have merged with a business this year, up from 28 in 2019. https://bit.ly/3ofLVhg

SoftBank will unwind the ‘Nasdaq whale’ options trades that cost the firm nearly US$3 billion, report says. SoftBank’s tech-focused trading arm will let go of its risky options bets after widespread backlash and losses totaling US$2.7 billion, the Financial Times reported on Wednesday. SB Northstar, the unit led by SoftBank CEO Masayoshi Son that bet on tech stocks’ daily moves, will let its options contracts expire, sources told the FT. SoftBank will continue to invest in tech mega-caps, but through long-term equity stakes over highly volatile derivatives trades. The reversal comes just months after SB Northstar was first revealed by the FT to be the “Nasdaq whale” trading billions of dollars’ worth of tech options. The trading arm posted US$3.7 billion in losses in mid-November, with the bulk of the shortfall linked to options positions. SoftBank faced pressure from several parties to abandon the derivatives stakes. Activist hedge fund Elliott Management, which is likely the second-largest owner of SoftBank shares, expressed concern around SB Northstar’s trades, The Wall Street Journal reported in November. Some Elliott executives even hedged against SoftBank’s bullish positions with their own put options on tech stocks. https://bit.ly/33N1HZw

Chinese automaker Kandi plunges nearly 30% after short-seller Hindenburg accused it of fabricating sales to raise $160 million from US investors. Shares in Kandi Technologies tanked nearly 30% on Monday after a scathing report accused the Chinese automaker of faking sales and hyping its electric vehicle growth story. The drop in the shares continued in pre-market trading on Tuesday. Kandi fell 9% to around $9.08 a share, as traders digested short-seller Hindenburg Research’s claim that the company was “using fake sales to undisclosed affiliates.” The Chinese manufacturer, which went public on the NASDAQ in 2008, raised US$160 million from US investors in November alone. Hindenburg said it had spoken to a dozen former employees and business partners to investigate Kandi’s business, when it became apparent that the company’s top customers were undisclosed entities. It found that almost 64% of Kandi’s sales in the last twelve months were made to its own subsidiaries. https://bit.ly/2JL58J4

House approves auditing requirement for Chinese firms listed in U.S. The House has approved a bill that would ban Chinese companies from U.S. stock exchanges unless they allow U.S. regulators to inspect their books, the Wall Street Journal reported. The legislation has already passed the Senate and could soon be signed into law by President Trump. The legislation is another sign of the growing distrust of Chinese firms by U.S. lawmakers and regulators.  Under the legislation, Chinese companies would have three years to comply with the new requirement. There are currently about 200 Chinese companies, including Alibaba Group Holdings, that are traded on U.S. exchanges. If the bill is signed into law, it could lead some Chinese companies to go private or move to exchanges in countries with less restrictive rules. https://bit.ly/33DoTcx

Airbnb to offer 51.9 million shares in planned IPO priced at US$44 to US$50 each. Airbnb set terms for its initial public offering on Tuesday with plans to offer 51.9 million shares priced at US$44 to US$50 each. The global online-rentalplatform would raise US$2.595 billion at the top of that range. Airbnb has applied to list on Nasdaq under the ticker ‘ABNB.’ There are 37 banks underwriting the deal, led by Morgan Stanley and Goldman Sachs. The company’s business was severely impacted and continues to be affected by the coronavirus pandemic. Although it is starting to mount a comeback as it adjusts to the new realities of limited travel for business and pleasure, Airbnb has lost more money in the first nine months of this year than it lost all of last year. Its gross booking value was down nearly 40% and its revenue declined more than 30% year over year. https://on.mktw.net/2JqjRcu

DoorDash raises expected IPO pricing range, could now raise up to US$3.14 billion. DoorDash Inc. disclosed Friday that the expected pricing range for its initial public offering of shares has increased to between US$90 and US$95 a share from the expected range of between US$75 and US$85 a share provided earlier this week. The app-based food-delivery company is still offering 33 million shares in the IPO, which is now expected to raise up to US$3.14 billion. The company is now expected to be valued at up to US$30.2 billion after the IPO, which compares with the market capitalization of fellow app-based food-delivery company Grubhub Inc. , which went public in April 2014, of about US$6.5 billion. DoorDash is looking to go public at a time of strong investor interest in IPOs, as the Renaissance IPO ETF has rallied 36.1% over the past three months, while the S&P 500 has gained 7.0%. https://on.mktw.net/3gfaR66

C3.ai sets terms for IPO, which could value the AI software company at over US$3 billion. C3.ai set terms of its initial public offering, in which the California-based enterprise artificial intelligence (AI) software company looks to raise up to US$527 million. The company is offering 15.5 million Class A shares in the IPO, which is expected to price between US$31 and US$34 a share. With 93.39 million Class A and 3.50 million Class B shares expected to be outstanding after the IPO, the company could be valued at up to US$3.29 billion. Morgan Stanley, J.P. Morgan and BofA Securities are the lead underwriters of the IPO. For the six months ended Oct. 31, C3.ai reported a net loss of US$14.8 million on revenue of US$81.8 million, after a loss of US$29.1 million on revenue of US$73.8 million in the same period a year ago. The company is looking to go public at a time that the Renaissance IPO ETF has rallied 31.2% over the past three months while the S&P 500 has gained 3.7%. https://on.mktw.net/33AE1Y1

U.S. energy storage firm Stem nears $1.35 billion deal to go public: sources. U.S. artificial intelligence-driven energy storage company Stem Inc is nearing a deal to go public through a merger with blank-check acquisition company Star Peak Energy Transition Corp at a valuation of around $1.35 billion, according to people familiar with the matter. The agreement could be announced as early as Friday, the sources said, requesting anonymity ahead of an official announcement. https://reut.rs/2L9hJX9

Ant IPO has slim chance of getting done next year. Ant is still in the early stages of reviewing changes needed to appease regulators, who demand that its business comply with a slate of new and proposed guidelines in areas including lending to consumers, the officials said. With so much work needed and some rules not yet spelled out, the officials said the initial public offering may not get done before 2022. An additional delay of a year or more would be another setback for billionaire Ma, as well as the early-stage investors including Warburg Pincus LLC that were counting on a windfall from what was poised to be a record US$35 billion IPO. It would also deal a potential blow to Alibaba Group Holding Ltd., which owns a third of Ant and saw its stock tumble after the deal was abruptly suspended this month. Alibaba fell 3% in Hong Kong Monday, the biggest drop in almost three weeks. Under the draft rules for micro-lenders issued in early November, Ant would be forced to replenish capital. That could mean the company needs about US$12 billion to comply, according to an estimate from Bloomberg Intelligence. https://bloom.bg/2Vp1kQi

Salesforce to acquire Slack in US$27.7 billion deal. Salesforce said it will acquire Slack, the provider of messaging tools for businesses, in a deal worth US$27.7 billion, making it the biggest acquisition in Salesforce’s history. While the deal had been expected for days, the amount Salesforce is paying is an eye-popping sum for Slack, an unprofitable company that has failed to capitalize on the growth of remote work during the pandemic to extent rivals like Zoom and Microsoft have. The price represents a premium of more than 50% on the value of Slack’s shares before news of the deal talks with Salesforce sent its stock soaring last week. The US$27.7 billion represents the enterprise value of the transaction, which reflects the amount Salesforce will pay minus the cash on Slack’s books and plus its debts. Salesforce said it will fund the deal through a combination of cash and stock. It said it has obtained a commitment from a series of banks for a US$10 billion loan. https://bit.ly/2Jtq8E7

S&P Global reportedly in talks to buy IHS Markit, as race for scale among data providers takes off. S&P Global Inc. is in advanced talks to buy IHS Markit Ltd. for about US$44 billion, a deal that would accelerate the wave of consolidation among Wall Street’s biggest data providers. An announcement could come as early as Monday, according to a person familiar with the matter, who declined to be identified because the information isn’t public. IHS Markit was valued at US$36.9 billion at the close of New York trading on Friday, after climbing to a record earlier in the week. S&P has a market capitalization of US$82 billion after climbing 25% in New York this year. https://bit.ly/3qfSxhN

Facebook buys customer-service software maker Kustomer. Facebook Inc. has acquired Kustomer Inc., a New York-based software company that helps businesses manage customer conversations from multiple services on one dashboard. The deal was valued at more than US$1 billion, said a person familiar with the deal who asked not to be identified because the terms were private. https://bloom.bg/33uTzg8

Report: Amazon in exclusive talks to acquire podcasting company Wondery. According to a new report from The Wall Street Journal, Amazon is now in exclusive talks to purchase the independent podcast network Wondery. This comes after a report last month suggested that Apple was among a handful of companies that had expressed interest in acquiring Wondery. The report says that the talks between Amazon and Wondery value the company at over US$300 million. The talks, while exclusive, are still “ongoing and negotiations could still fall apart,” the report cautions. The valuation comes as Wondery will increase its revenue to more than US$40 million this year. Closely held Wondery is the last large independent podcaster on the market—and could present the final opportunity for a major tech or media giant to buy its way into the exploding field. https://bit.ly/3qwakRG

Emerging Technologies

Sweden’s Ericsson sees 220 million 5G subscriptions by year end. Sweden’s Ericsson on Monday raised its global forecast for 5G mobile subscriptions to 220 million by the end of this year, citing faster than expected uptake in China. The telecoms equipment maker, which had previously forecast 190 million subscriptions, said it expects China to account for almost 80% of the newly forecast total. https://reut.rs/36nbjeU

AWS brings the Mac mini to its cloud. AWS today opened its re:Invent conference with a surprise announcement: the company is bringing the Mac mini to its cloud. These new EC2 Mac instances, as AWS calls them, are now available in preview. They won’t come cheap, though. The target audience here — and the only one AWS is targeting for now — is developers who want cloud-based build and testing environments for their Mac and iOS apps. But it’s worth noting that with remote access, you get a fully-featured Mac mini in the cloud, and I’m sure developers will find all kinds of other use cases for this as well. https://tcrn.ch/36nhhMZ

Amazon is laying the groundwork for its own Quantum computer. Amazon.com Inc. is laying the groundwork for a quantum computer, deepening efforts to harness technology that can crunch in seconds vast amounts of data that take even the most powerful supercomputers hours or days to process. Amazon has been hiring for a Quantum Hardware Team within its Amazon Web Services Center for Quantum Computing, according to internal job postings and information on LinkedIn. Marc Runyan, a former engineer with NASA’s Jet Propulsion Laboratory, lists his title on the professional social network as senior quantum research scientist at Amazon and describes his role as “helping to design and build a quantum computer for Amazon Web Services.” https://bloom.bg/3odQF7g

China stakes its claim to quantum supremacy. Last year Google won international acclaim when its prototype quantum computer completed a calculation in minutes that its researchers estimated would have taken a supercomputer 10,000 years. That met the definition for quantum supremacy—the moment a quantum machine does something impractical for a conventional computer. Thursday, China’s leading quantum research group made its own declaration of quantum supremacy, in the journal Science. A system called Jiuzhang produced results in minutes calculated to take more than 2 billion years of effort by the world’s third-most-powerful supercomputer. The two systems work differently. Google builds quantum circuits using supercold, superconducting metal, while the team at University of Science and Technology of China, in Hefei, recorded its result by manipulating photons, particles of light.No quantum computer is yet ready to do useful work. But the indications that two fundamentally different forms of the technology can outperform supercomputers will buoy the hopes—and investments—of the embryonic industry. Chao-Yang Lu, a physics professor at the University of Science and Technology who worked on the project, calls the milestone “a necessary step” toward a “large-scale fault-tolerant quantum computer.” https://bit.ly/2Jwyc7q

‘It will change everything’: DeepMind’s AI makes gigantic leap in solving protein structures. An artificial intelligence (AI) network developed by Google AI offshoot DeepMind has made a gargantuan leap in solving one of biology’s grandest challenges — determining a protein’s 3D shape from its amino-acid sequence. DeepMind’s program, called AlphaFold, outperformed around 100 other teams in a biennial protein-structure prediction challenge called CASP, short for Critical Assessment of Structure Prediction. The results were announced on 30 November, at the start of the conference — held virtually this year — that takes stock of the exercise. “This is a big deal,” says John Moult, a computational biologist at the University of Maryland in College Park, who co-founded CASP in 1994 to improve computational methods for accurately predicting protein structures. “In some sense the problem is solved.” The ability to accurately predict protein structures from their amino-acid sequence would be a huge boon to life sciences and medicine. It would vastly accelerate efforts to understand the building blocks of cells and enable quicker and more advanced drug discovery. https://go.nature.com/39Bo9bE

Eat Just to sell lab-grown meat in Singapore after gaining ‘world first’ regulatory approval. Eat Just will start offering lab-grown chicken meat in Singapore after gaining regulatory approval from the Singapore Food Agency (SFA). The cell-cultured chicken will eventually be produced under Eat Just’s new GOOD Meat brand through partnerships with local manufacturers and go on sale to restaurants before it is available to consumers. While there are plenty of other companies working on lab-grown meats using various techniques, Eat Just describes the Singapore government’s review and regulatory approval as a “world first.” https://tcrn.ch/2VGvzSF

Spotify just invented AI technology that will police songwriter plagiarism. Songwriters of global hits getting sued for alleged plagiarism has become a recurrent story on MBW these past few years – and a recurrent source of misery for writers and their representatives in the industry. But what if a songwriter or composer were able to use AI technology to avoid litigation altogether, by finding out if their song copies elements of other compositions, potentially in real time? https://bit.ly/2JmAupz

Media, Streaming, Gaming & Sports Betting

Flutter Entertainment agrees to US$4.2 billion deal to increase stake in Fanduel. The accelerated buy-out takes Flutter’s stake in FanDuel from 57.8 per cent to 95 per cent, with the remaining 5 per cent interest held by Boyd Gaming. Flutter will acquire Fast Ball’s stake through a combination of US$2.09 billion in cash and the issue of approximately 11.7 million new Flutter ordinary shares. The cash element will be funded through cash on balance sheet and an equity placing to raise approximately £1.1 billion, involving new and existing institutional investors such as FOX Corporation. FanDuel currently has over 9.5 million customers across the US, approximately 40 per cent of which were acquired in the first two years from its daily fantasy sports database. Shares in Flutter Entertainment plc. were trading 11.26 per cent higher on the news at 14,870.00 pence per share in London Thursday afternoon. https://bit.ly/3ojMhDO

Microsoft acquires Smash.gg. Microsoft has acquired esports tournament and event organization platform Smash.gg for an undisclosed amount. “With this acquisition, the http://Smash.gg community and tournament organizers will continue to benefit from the http://Smash.gg platform, while our team will now benefit from additional resources and support as part of the Microsoft Content Services team,” reads a tweet from Smash.gg. https://bit.ly/36AuKRJ

NFL game streaming exclusively on Amazon Prime Video and Twitch in December. Services to share this page. In a potential sign of streams to come, Amazon Prime Video and Twitch will be the only places where viewers will be able to see an NFL game on December 26. The San Francisco 49ers-Arizona Cardinals contest will be part of a Saturday tripleheader on the day after Christmas, with the NFL Network having exclusive broadcast rights to the day’s two other games. The Tampa Bay Buccaneers and Detroit Lions will meet at 1PM ET and the Miami Dolphins will visit the Las Vegas Raiders at 8:15PM ET. The day’s middle game, at 4:30PM, will stream exclusively on Amazon as well as on its gaming-focused platform, Twitch. https://bit.ly/36oxpxS

Americans of all ages are spending more on video games. We know that time and money spent on video games is surging due to the pandemic. Now, industry-tracking firm The NPD Group is providing detail on where that growth is coming from. And it turns out that people across all age demographics are playing more games more often. That’s big for mobile games, but it also includes Nintendo, PlayStation, and Xbox. In its “2020 Evolution of Entertainment” report, NPD found that 4-out-of-5 consumers in the U.S. played a game in the last six months. More important for the industry, those consumers are spending 26% more time and 33% more money on games than the same period in the previous year. But this isn’t just coming from young people. Older demographics are turning to games more often as they find themselves with money they can no longer spend on dining out or attending live events. Spending on video games for Americans 45 years old-to-54 years old increased 76%. People age 55-to-64 increased their spending 29%. https://bit.ly/2VGbmwh

Warner Bros. to release all 2021 films on HBO Max and in theaters. Warner Bros., one of Hollywood’s biggest studios, plans to release all its major movies next year in theaters and on HBO Max at the same time, a dramatic change that shows just how much Covid-19 and streaming have disrupted the industry. The 17 films affected by the shift include the new installment of the “Matrix” franchise, the Lin-Manuel Miranda musical “In the Heights,” and the DC Comics superhero feature “The Suicide Squad.” Each movie will run on the HBO Max streaming platform for one month at no additional charge — an approach that the AT&T division was already planning for the debut of “Wonder Woman 1984” on Christmas Day. https://bit.ly/3g85OnI

Netflix plans to double spending on original content in Asia. Netflix Inc. is planning to double its spending on original content in Asia next year to help stay ahead in a crowded streaming market, where billionaires including China’s Pony Ma and Hong Kong’s Richard Li are seeking to expand their presence. The world’s largest streaming platform is seeking to cement its stronghold in a region that’s seen the fastest growth in subscribers, said Minyoung Kim, Netflix’s vice president of content. Kim declined to elaborate on what the 2021 budget for originals would be beyond saying Netflix is looking to double its investment from this year on securing exclusive content. Research firm Media Partners Asia said the amount is likely to be at least US$1 billion. The U.S. giant said it has spent almost US$2 billion since 2018 on original and licensed local content. Streaming revenue in Asia Pacific, excluding China, will more than double to US$15 billion by 2025, Media Partners estimates. Netflix, with a 35% share of streaming revenue in the region by the end of 2020, already corners the largest slice. Amazon Prime Video is second with a 10% market share, according to the research agency. Netflix’s sub-US$5-a-month, mobile-only plans have won it more users in India, Indonesia, Malaysia, the Philippines and Thailand. That helped push its Asia Pacific subscriber base to 23.5 million, making it the fastest growing among the firm’s four global market clusters. But the region is also the only market for the firm that saw average revenue per user dropping in the past three quarters. https://bloom.bg/3g2TjtB

OnlyFans is a billion-dollar media giant hiding in plain sight. “When Beyoncé rapped about us on the ‘Savage Remix’ and Cardi B joined the platform, that’s when we really started to see the growth accelerate,” said Tim Stokely, 37, the company’s founder and chief executive officer. According to Stokely, OnlyFans is adding as many as 500,000 users a day and paying out more than US$200 million a month to its creators. Along the way, OnlyFans has grown into one of the biggest media businesses hiding in plain sight. The company has 85 million users, upward of 1 million creators, and will generate more than US$2 billion in sales this year, of which it keeps about 20%. That puts the site on track for US$400 million in annual net sales — dwarfing Patreon, a platform devoted to helping creative types monetize their work, which is valued at more than US$1.2 billion. “OnlyFans is revolutionizing creator and fan relations,” Stokely said. https://bloom.bg/3oFHpJx

Adtech, Privacy & Regulatory

U.S. states plan to sue Facebook next week – sources. A group of U.S. states led by New York is investigating Facebook Inc for possible antitrust violations and plans to file a lawsuit against the social media giant next week, four sources familiar with the matter said on Wednesday. The complaint would be the second major lawsuit filed against a Big Tech company this year. The Justice Department sued Alphabet Inc’s Google in October. https://reut.rs/2I62exT

Facebook accused of squeezing rival startups in Virtual Reality. Virtual-reality startups are accusing Facebook Inc. of using a familiar playbook to muscle out rivals in what could be the digital platform of the future — prompting a new line of scrutiny from U.S. competition enforcers. Facebook is the world’s biggest virtual-reality hardware maker thanks to its 2014 acquisition of Oculus for US$2 billion. Its practices are now drawing the attention of the Justice Department’s antitrust division, which is talking to developers about their interactions with the company, according to two people familiar with the matter. Facebook has a 39% share of the virtual-reality hardware market, making it the industry’s largest player, according to data from market intelligence firm International Data Corporation. Smaller players include Lenovo Group Ltd., Sony Corp. and HTC Corp., while Apple is developing its own mixed virtual and augmented reality headset for launch as early as 2022, Bloomberg has reported. Facebook launched its latest headset, the Quest 2, in October, cutting the price to US$299 from US$399. https://bloom.bg/3opEnsB

A coordinated, global network of hackers tried to break into the COVID-19 ‘cold chain,’ which transports vaccines at -94 degrees Fahrenheit. Hackers have been trying to break into the supply chain that will help COVID-19 vaccines get delivered at the required deep-freeze temperature, IBM said in a report Thursday. IBM security researchers found a “global phishing campaign,” which it said systematically targeted companies involved in the so-called COVID-19 “cold chain.” Phishing attacks are when hackers send a message to the target trying to obtain sensitive information, such as passwords, by posing as someone else. In this case, the hackers targeted executives across a range of groups associated with the The Cold Chain Equipment Optimization Platform (CCEOP) program, which was launched by the Vaccine Alliance and UNICEF. https://bit.ly/2VBfOML

Reddit discloses big user uptick. Reddit has finally given the public a glimpse at the size of its community, and it’s…pretty good. In an interview with the Wall Street Journal, Reddit’s COO Jen Wong revealed in October it had 52 million people using the message board community on a daily basis. She said that was up 44% from the month a year earlier. That boost in new users is consistent with what other social media companies experienced during the pandemic as people forced to stay in their homes spent even more time in online communties. The disclosure is notable for Reddit, which hasn’t broken out its daily users. (In an interview with The Information two years ago, Wong said Reddit had 330 million monthly active users). That’s smaller than Snap and Twitter, and certainly Facebook. But if Reddit can continue to grow at its current pace it will become another digital advertising outlet to contend with. And if its revenue—set to grow by 70% this year according to Wong—follows, an IPO might not be far off. https://bit.ly/3mzJgP6

eCommerce

Feeling the holiday surge, UPS imposes shipping limits on some retailers. The pandemic-fueled surge in online shopping is already taking its toll on fragile U.S. delivery networks. On Cyber Monday, the United Parcel Service instructed drivers around the nation to temporarily stop picking up packages from six large retailers citing volume restrictions, the Wall Street Journal reported Wednesday. The retailers affected reportedly include Nike, Gap, LL Bean, Hot Topic, Newegg, and Macy’s, all of which appear to have exceeded their allotted shipping capacity for the period. The move reflects the fragility of U.S. delivery networks during this year’s unusual holiday shopping season which has been plagued by strained supply chains, changes in Americans’ shopping habits, and surging infection rates around the country. https://bit.ly/39DVIK2

Cyber Monday came in at US$10.8 billion spent online in the US, at the low end of the range but still a record one-day total. According to analytics from Adobe, “Cyber Monday” brought in US$10.8 billion in online spending in the US. This was at the lower end of predicted range for online spend, which it set between US$10.8 billion and US$12.7 billion. Smartphones accounted for 37% of all sales, it said. For the last several years the Monday been the biggest online shopping day of the four-day stretch starting with Thanksgiving. While the figures are lower than the more optimistic predictions, they are still 15.1% higher than last year’s US$9.4 billion spent on Cyber Monday. It also helped online retailers collectively blow past the US$100 billion dollar mark so far for the season, at US$106.5 billion spent so far (up 27.7% on the same period in 2019), Adobe said. Black Friday came in at US$9 billion and Thanksgiving at US$5.1 billion this year, according to Adobe’s figures. Salesforce meanwhile was more optimistic: It said that digital revenues on Black Friday were US$12.8 billion, with global figures coming in at US$62 billion, while Thanksgiving was closer to US$6.8 billion in online sales in the U.S., with the global figure around US$30.4 billion. https://tcrn.ch/2JuXSRQ

Walmart+ takes on Prime by dropping US$35 minimum on Walmart.com purchases. Walmart+, the retailer’s lower-cost alternative to Amazon Prime offering same-day delivery of groceries and other items, is making its service more appealing with today’s launch of a new perk. The company says that starting on Friday, December 4, it will remove the US$35 shipping minimum on orders from Walmart.com for its members. However, this doesn’t apply to the same-day orders of groceries or other items fulfilled by Walmart stores, but rather online shopping where orders are placed through Walmart’s traditional e-commerce channels. https://tcrn.ch/3qsuXhR

Fintech, Blockchain & Cryptocurrency

Bitcoin is winning the Covid-19 monetary revolution. We should not be surprised that a pandemic has quickened the pace of monetary evolution. In the wake of the Black Death, as the historian Mark Bailey noted in his masterful 2019 Oxford Ford lectures, there was an increased monetization of the English economy. In a similar way, Covid-19 has been good for Bitcoin and for cryptocurrency generally. First, the pandemic accelerated our advance into a more digital word: What might have taken 10 years has been achieved in 10 months. People who had never before risked an online transaction were forced to try, for the simple reason that banks were closed. Second, and as a result, the pandemic significantly increased our exposure to financial surveillance as well as financial fraud. Both these trends have been good for Bitcoin. What is happening is that Bitcoin is gradually being adopted not so much as means of payment but as a store of value. Not only high-net-worth individuals but also tech companies are investing. In July, Michael Saylor, the billionaire founder of MicroStrategy, directed his company to hold part of its cash reserves in alternative assets. By September, MicroStrategy’s corporate treasury had purchased bitcoins worth US$425 million. Square, the San Francisco-based payments company, bought bitcoins worth US$50 million last month. PayPal just announced that American users can buy, hold and sell bitcoins in their PayPal wallets. https://bloom.bg/2JwvMFt

S&P Dow Jones Indices to launch cryptocurrency indexes in 2021. S&P Dow Jones Indices, a division of financial data provider S&P Global Inc, said on Thursday that it will launch cryptocurrency indices in 2021, making it the latest major finance company to enter the nascent asset class. The S&P DJI-branded products will use data from New York-based virtual currency company Lukka on more than 550 of the top traded coins, the companies said. S&P and Lukka hope more reliable pricing data will make it easier for investors to access the new asset class, and reduce some of the risks of the very volatile and speculative market, they said. https://reut.rs/3opDTmh

Guggenheim says it could invest up to US$530 million in a bitcoin trust as the cryptocurrency leaps to record highs. Guggenheim Partners is the latest Wall Street firm to show interest in Bitcoin, and a Friday regulatory filing signals the firm could make a massive investment in the soaring cryptocurrency. Guggenheim disclosed in a Securities and Exchange Commission filing published last Friday that its Macro Opportunities Fund held the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust. The trust invests solely in Bitcoin, allowing its shares to serve as a proxy for the popular cryptocurrency. The fund manages roughly US$5.3 billion in assets, making a 10% investment worth about US$530 million. Guggenheim described cryptocurrencies as “digital assets designed as a medium of exchange.” The firm added that, though it could gain exposure to Bitcoin through the Grayscale trust, it had no other plans to invest directly or indirectly in cryptocurrencies. https://bit.ly/37ACjXV

Visa partners with Ethereum digital-dollar startup that raised US$271 million. Credit card giant Visa announced it is connecting its global payments network of 60 million merchants to the U.S. Dollar Coin (USDC) developed by Circle Internet Financial on the ethereum blockchain. The digital currency is now valued at US$2.9 billion. While Visa itself won’t custody the digital currency, effective immediately, the partnership will see Circle working with Visa to help select Visa credit card issuers start integrating the USDC software into their platforms and send and receive USDC payments. Circle itself is also going through the same Fast Track program. In turn, businesses will eventually be able to send international USDC payments to any business supported by Visa, and after those funds are converted to the national currency, spend them anywhere that accepts Visa. After Circle itself graduates from Visa’s Fast Track program, likely sometime next year, Visa will issue a credit card that lets businesses send and receive USDC payments directly from any business using the card. “This will be the first corporate card that will allow businesses to be able to spend a balance of USDC,” says Visa head of crypto Cuy Sheffield. “And so we think that this will significantly increase the utility that USDC can have for Circle’s business clients.” https://bit.ly/39VTzd9

JD.com becomes China’s first online mall to test digital Yuan. JD.com Inc., China’s second-biggest online retailer, will become the country’s first virtual mall to use digital yuan, the cryptocurrency backed by the central bank. JD Digits, the e-commerce giant’s fintech affiliate, will launch a pilot program this month, and customers will pay for certain items with digital yuan, it said on its official WeChat account. About 100,000 digital cash vouchers, worth 20 million yuan in total, will be issued to residents of Suzhou city in the eastern province of Jiangsu on Dec. 11. The digital yuan has been used in more than four million transactions, worth a total of about 2 billion yuan (US$306 million), as of early last month, according to People’s Bank of China Governor Yi Gang. The central bank kicked off tests for the online renminbi in some cities in April to bolster its status as a global currency and to help control the domestic economy as it rapidly goes digital. https://bloom.bg/3gnBO7x

Semiconductors

AWS launches Trainium, its new custom ML training chip. At its annual re:Invent developer conference, AWS today announced the launch of AWS Trainium, the company’s next-gen custom chip dedicated to training machine learning models. The company promises that it can offer higher performance than any of its competitors in the cloud, with support for TensorFlow, PyTorch and MXNet. It will be available as EC2 instances and inside Amazon SageMaker, the company’s machine learning platform. New instances based on these custom chips will launch next year. The main arguments for these custom chips are speed and cost. AWS promises 30% higher throughput and 45% lower cost-per-inference compared to the standard AWS GPU instances.  https://tcrn.ch/3mUZYbO 

ESG

Australians install rooftop solar panels at a record pace. Australians are installing rooftop solar panels at a record pace — taking lockdowns to quash the spread of coronavirus earlier this year as an opportunity for some home improvement. The sun-kissed nation is already among the world’s strongest adopters of rooftop panels, with about 29% of households drawing power from the sun and challenging traditional electricity models. The country is on track to add a record 2.9 gigawatts of small-scale solar capacity in 2020, according to the government’s clean energy regulator, with modeling suggesting that installations may double over the next four years. https://bloom.bg/2JlIhnp

Disclaimer

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.