While this past week, was relatively quiet in terms of Canadian small cap equity funding; sports betting and gaming stocks performed well. Sophic client, Luckbox (LUCK-TSXV) stock performed well as the company announced its entry into sports betting and Sophic client Kontrol Technologies (KNR-CSE) stock also performed well on the back of a $2 million funding from the province of Ontario. In the USA, Robinhood appears to be going ahead with its plans to go public in 2021 as downloads surged despite recent weeks’ public relations fiasco. In other developments, the tech media had some fresh data on Apple’s speculated virtual reality headset, which will reportedly cost US$3,000 and have 12 cameras with eye-tracking technology.
Canadian Technology Capital Markets & Company News
OpSens Inc. (OPS-TSX) announces $25 million bought deal offering.
The company entered into an agreement with a syndicate of underwriters led by Stifel GMP (the “Lead Underwriter” and together with the syndicate of underwriters, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis 13,888,889 common shares of the Company (the “Common Shares”) at a price of $1.80 per Common Share (the “Offering Price”) for gross proceeds of approximately $25,000,000 (the “Offering”).
Engine Media (GAME-TSXV) announces private placement of up to US$15 million.
The company announces that due to continued demand from the Company’s recently completed private placement, it intends to complete a non-brokered private placement of up to 2,000,000 units (the “Units”) at a price of US$7.50 per Unit (the “Offering”) for gross proceeds of up to US$15,000,000. Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (a “Warrant”). Each whole Warrant entitles the holder to acquire one additional share of the Company at a price of US$15.00 per share for a period of 3 years provided that: (i) if the common shares are listed for trading on NASDAQ, (ii) the Company completes an offering of securities under a short form prospectus for an aggregate amount of at least US$30,000,000, and (iii) the closing price of the common shares on NASDAQ is US$30.00 or greater for a period of 15 consecutive trading days, then the Company may accelerate the expiry date of the Warrants to the 30th day after the date written notice is provided to the holders.
Dye & Durham (DND-TSX) significantly expands Australian footprint with $166 million acquisition of GlobalX.
The acquisition is a follow-on to the recently announced SAI Global transaction, and consistent with Dye & Durham’s strategy of building a larger Australian platform through M&A. As an in-market competitor, the acquisition of GlobalX is highly complementary, and will provide significant synergy opportunities due to the crossover of businesses in Australia and the UK.
Georgian doubles down on Top Hat with US$130 million investment as company swaps CEOs.
Longtime Top Hat investor Georgian Partners has committed an additional US$130 million into the EdTech startup following a year of COVID-fueled changes and industry-disrupting acquisitions, culminating in new leadership. The financing comes with news that founding CEO Mike Silagadze will step down from the role in favour of a new ‘top hat’, former Bazaarvoice chief revenue officer, Joe Rohrlich. Rohrlich is set to take over as Top Hat’s CEO March 15. The investment brings Georgian’s share to just below 50 percent majority ownership of the company. The $130 million Series E round, which a company spokesperson told BetaKit now valued Top Hat at “about half a billion,” consists of $50 million in primary capital, with the remaining $80 million going towards a secondary purchase of past investors. Top Hat’s many backers include Inovia Capital, Union Square Ventures, Emergence Capital, Leaders Fund, and Golden Venture Partners. Top Hat would not confirm to BetaKit which investors were cashing out, but noted that all prior investors would still hold some stake in the company following the deal.
MKB closes $100 million for second cleantech-focused fund. Montreal-based private investment firm Mackinnon, Bennett & Company (MKB) has closed $100 million for its second growth equity fund. MKB plans to use the fund to invest in later-stage companies focused on the decarbonization and electrification of energy and transportation. The raise brings MKB close to its $150 million target. The new fund is being called MKB Partners Fund II, LP (Fund II). The round includes new and return investors. It was led by the Business Development Bank of Canada (BDC), which also led MKB’s first fund. Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ) also led as part of the investor syndicate. Other LPs in Fund II include Fonds de solidarité FTQ, Fondaction, and Vancity, as well as a group of undisclosed “prominent” family offices and investors.
Dating app Clover closes $12 million growth capital financing.
Clover, the top-rated dating app, announced a growth capital financing of $12 million consisting of growth debt from Espresso Capital, and a structured equity investment from an existing investor. Based in Toronto, Espresso provides innovative venture debt and growth financing solutions to leading companies in technology, healthcare, internet & digital media, and other high-growth verticals.The company plans to use the new funds to accelerate its rapid growth. In fiscal 2020, Clover generated $19 million in revenue from 900,000 paid subscriptions, a 67 percent CAGR over the past three years. Clover’s simplicity and versatility have attracted 9 million users in the highly desirable Gen Z (50%) and millennial (42%) demographics. Ninety percent of the app’s users are concentrated in major US markets.
COVID-fuelled growth sees EdTech startup Showbie raise $7.5 million Series A extension. Edmonton-based hybrid learning platform Showbie has added $7.5 million to its Series A as the startup aims to take advantage of the accelerated adoption of new classroom technologies due to the pandemic. The fresh capital brings Showbie’s total funding for its Series A round to $12.5 million. The startup initially raised a $5 million Series A round last August that was led by Rhino Ventures. Investors in the extension, which closed in late December, include new funding from ATB Private Equity, along with participation from existing investors and debt financing from RBC. To date, the company has raised $16.5 million total.
Kontrol Technologies Corp (Sophic Client, KNR-CSE, KNRLF-OTCQB): Ontario announces $2M for ‘game changer’ airborne COVID-19 detector.
The province is providing $2 million towards an investment aimed at accelerating production and the commercialization of the made-in-Ontario Kontrol BioCloud real-time airborne COVID-19 detector. The provincial funding will complement funding from CEMSI, a London-based subsidiary of the Vaughan-headquartered Kontrol Technologies Corp., for a $4-million investment total. Economic development minister Vic Fedeli says the device itself is not only made in Ontario, but more than 85 per cent of its components are also made in the province. “So not only will Kontrol BioCloud create 250 direct jobs in London, there will be 750 people throughout the supply chain that are making components for this,” Fedeli told Global News. “They’re going to pump out 20,000 units a month. So this will allow them to really accelerate that scale-up of the production, just really leapfrog and get into manufacturing.”
Real Luck Group Ltd. (Sophic Client, LUCK-TSXV) adds sports betting to Luckbox platform ahead of Super Bowl weekend. The company and its subsidiary companies doing business as “Luckbox” (the “Group”), a provider of legal, real money betting, is pleased to announce the expansion of its partnership with EveryMatrix Ltd. to add sports betting functionality to its proprietary platform. The agreement allows Luckbox, a leading esports betting provider, to expand its reach to over 105 traditional sports. Each month players will be able to enjoy 85,000 pre-match events, 70,000 live events, and 450 types of bets for these traditional sports. Sports fans will also be able to enjoy key features including bet builder and cash out. Quentin Martin, Real Luck Group Ltd. CEO, said: “The timing of this announcement could not have been better as the Super Bowl, the largest sporting event in the United States and a top-five event globally, gets underway this week.”
EMERGE (ECOM-TSXV) provides corporate update including triple digit revenue growth in grocery and golf products in January 2021.
truLOCAL, EMERGE’s largest and most recent acquisition, achieved over 117% revenue growth in January 2021 compared to January 2020, with continued profitability, exceeding management expectations in both revenue and EBITDA. Shopify-powered brand, JustGolfStuff.ca, achieved gross merchandise sales (“GMS”) growth of over 515% in January 2021 compared to January 2020, surpassing 2020 holiday shopping season levels. Management expects the overall business to achieve triple digit revenue growth in Q1 2021 compared to Q1 2020. Management expects the majority of revenues to be subscription-based in 2021. Additional acquisition targets are being advanced in the grocery and golf verticals, among other additional niche e-commerce verticals, with e-commerce pipeline of target opportunities exceeding $35 million in combined EBITDA.
Trademark approvals raise hopes of Apple Card in Canada.
The approval of two trademarks has raised hopes of seeing the launch of Apple Card in Canada. Canadian trademarks were approved for both Apple Card and Apple Cash. The Canadian Trademarks Database reveals that it took quite some time to get approval Apple filed its application back in July of 2019, and approval was finally granted just last week. Apple Card is the iPhone maker’s own “reinvented” credit card, currently only available in the United States. An Apple Card credit card easily is accessed via your iPhone and also a physical titanium card as well. There are no fees, 2% daily cash back and more from various partners. As for Apple Cash, launched in the U.S. back in late 2017, it allows iPhone users to easily send and receive money with your debit card via Apple Pay, right within iMessage or by using Siri. Essentially, if Apple Cash were to launch in Canada, say good bye to sending Interac e-Transfers.
Clearview AI ruled ‘illegal’ by Canadian privacy authorities.
Controversial facial recognition startup Clearview AI violated Canadian privacy laws when it collected photos of Canadians without their knowledge or permission, the country’s top privacy watchdog has ruled. The New York-based company made its splashy newspaper debut a year ago by claiming it had collected over 3 billion photos of people’s faces and touting its connections to law enforcement and police departments. But the startup has faced a slew of criticism for scraping social media sites also without their permission, prompting Facebook, LinkedIn and Twitter to send cease and desist letters to demand it stops. In a statement, Canada’s Office of the Privacy Commissioner said its investigation found Clearview had “collected highly sensitive biometric information without the knowledge or consent of individuals,” and that the startup “collected, used and disclosed Canadians’ personal information for inappropriate purposes, which cannot be rendered appropriate via consent.”
Global Markets: IPOs, Venture Capital, M&A
SoftBank files for a double scoop of SPAC.
The SPAC mania continues unabated, with new SPACs being filed with the SEC on an almost hourly basis at times. SoftBank, the Japanese telecom conglomerate which has also been running the gigantic Vision Fund and its successor, doesn’t want to be left out. It filed back-to-back SPAC registration statements for two new blank-check companies. SVF Investment Corp 2 is US$200 million and SVF Investment Corp 3 is a US$350 million vehicle. Both SPACs have a standard roughly 15% over-allotment option. One interesting component of both SPACs is that they have what is known as a forward purchasing agreement connected to SoftBank’s Vision Fund 2. That agreement allows the second Vision Fund to purchase shares into these SPACs when they begin their business combinations with their target startups, essentially giving it the right to buy into the mergers. The Vision Fund has a US$100 million agreement with SVF 2, and a US$150 million agreement with SVF 3.
Robinhood plans to forge ahead with its planned IPO this year despite GameStop controversy, report says.
Robinhood’s controversial decision to limit trading in a handful of volatile stocks isn’t derailing its plans to go public later this year, according to a report from Bloomberg, citing people close to the company. Robinhood has seen a surge in business over the past year as a new generation of investors flocked to the stock market amid a global pandemic that shut down professional sports leagues for months on end. The company had more than 13 million users at the end of 2020. The firm, founded in 2013, is keeping its options open in terms of how it goes public. According to the report, Robinhood is exploring a traditional road show IPO, a direct listing, or a merger with a SPAC. The company had been planning to hold an IPO around May, Bloomberg said. Robinhood was valued at about US$11 billion in a 2020 fundraising round, but the IPO valuation would likely be higher based on last week’s capital raise. Ribbit Capital led the latest capital raise with a US$2.4 billion convertible note that will convert into equity at a US$30 billion valuation, or a 30% discount to an eventual valuation in a public listing, whichever is lower, Bloomberg reported, citing people with knowledge of the terms.
Oscar Health files for IPO, adds David Plouffe to board.
Oscar Health, the health insurance company co-founded by Jared Kushner’s brother, Joshua, has filed for an IPO and announced that Barack Obama’s former campaign manager, David Plouffe, will join its board of directors. The company brought in US$1.67 billion in 2020, up from US$1.04 billion in 2019. However it’s net losses widened to US$406.83 million in 2020, up from US$261.18 million in 2019. Oscar has a total of 402,044 insurance customers as of the end of 2020, with just under 2,000 being covered under Oscar’s Medicare Advantage plan, while the rest are individuals or small groups. In 2019, it had a total of 229,818 members. Oscar Health’s top shareholders include Alphabet (Google’s parent company), Fidelity, Formation8, Founders Fund, General Catalyst, Khosla Ventures, and Thrive Capital (Joshua Kushner’s VC firm).
Genetic testing company 23andMe to go public via merger with Richard Branson’s SPAC in US$3.5 billion deal.
23andMe, a consumer genetics company, is going public via a merger with Richard Branson’s special purpose acquisition corporation (SPAC) VG Acquisition Corp., in a deal with an enterprise value of about US$3.5 billion, the companies said Thursday. SPACs,or blank-check companies, raise money in an initial public offering and then have two years to acquire a business or businesses. They have become a popular vehicle for IPOs during the pandemic. Once the deal has closed, the company will change its ticker symbol to “ME” and trade on the New York Stock Exchange. 23andMe co-Founder Anne Wojcicki and Branson are investing US$25 million in the company, which will have a pro forma cash balance of more than US$900 million at closing. 23andMe offers individuals the chance to have their genes tested, providing them with information on health risks and ancestry. “Through a genetics-based approach, we fundamentally believe we can transform the continuum of healthcare.,” Wojcicki said in a statement. The deal is expected to close in the second quarter. VG Acquisition shares jumped 12% premarket on the news.
A SpaceX rival backed by former Google CEO Eric Schmidt and Salesforce’s Marc Benioff plans to go public via SPAC.
Astra, a rocket builder start-up, is merging with special-acquisition company Holicity to go public in the second quarter this year, according to CNBC. The 4-year-old Californian company is backed by former Google CEO Eric Schmidt and Salesforce’s Marc Benioff. Astra expects to raise US$500 million through the SPAC deal, including US$300 million from Holicity and US$200 million in a PIPE round from BlackRock, taking its enterprise value to US$2.1 billion. Shares in Holicity’s SPAC, which trades under “HOL,” jumped nearly 40% on the news, to around US$14.26 a share. The deal is expected to close in the second quarter, after which Astra aims to list on the NASDAQ under the ticker symbol “ASTR.”
Huuuge US$445 million float marks Warsaw’s biggest-ever gaming IPO.
Developer of free-to-play mobile casino games Huuuge Inc.’s initial public offering in Warsaw raised 1.67 billion zloty (US$445 million), becoming Poland’s largest gaming industry listing on record. Huuuge and its shareholders sold 33.32 million shares at 50 zloty apiece, the top end of an initial range, according to a statement Friday. Strong investor demand last week prompted existing holders to offload more shares in the offering, boosting the deal size. The IPO comes in the wake of woes for CD Projekt, whose Cyberpunk 2077 video-game has been plagued by bugs. The stock had slumped as much as 42% following the game’s Dec. 10 release date, and has pared some of those declines over the past two weeks after Elon Musk praised the game. The IPO values the company at 4.2 billion zloty, meaning Huuuge will be the second-biggest studio listed in Warsaw after CD Projekt SA. “The success of Huuuge’s offering shows that CD Projekt’s problems with Cyberpunk did not damage sentiment toward Polish gaming stocks,” Pawel Sugalski, a fund manager at Rockbridge TFI SA, said by email.
Kuaishou, TikTok’s Chinese nemesis, surges 194% on IPO debut.
Kuaishou, a Chinese video app that’s largely underappreciated outside China, has just completed a massive initial public offering in Hong Kong. The app is by far the biggest rival for Douyin, TikTok’s Chinese version, and unlike many Western video platforms that make money from ads and subscriptions, Kuaishou’s cash cow is its tipping business. Kuaishou’s shares opened in Hong Kong on Friday at HK$338 (US$43.6) apiece, a 194% jump from its IPO price of HK$115 (US$14.8). That catapults its market cap to nearly HK$1.4 trillion (US$180 billion). Kuaishou’s stock is a huge hit with both institutional financiers and retail investors from China, many of whom are familiar with the app that boasted 481 million monthly users in the 11 months ended November. The app set a record as the most oversubscribed deal in Hong Kong, attracting retail investor demand totaling US$164.8 billion, the South China Morning Post reported. Its share reached HK$322.8 on the gray market platform operated by Phillip Securities Group and HK$421 on online broker Futu Securities.
Agora, the Chinese-founded company powering Clubhouse, sees stocks soar as investors try to cash in on Silicon Valley’s hottest social media platform.
Fervour over audio-focused social media start-up Clubhouse has sent shares of Chinese-founded company Agora soaring after news started circulating online that it was providing critical back-end communication services to the hottest new social app in Silicon Valley since Snapchat. Investors piled into Agora on Monday, pushing the stock up to US$73.60, a 30 per cent jump over the closing price on Friday. The jump came the same day Tesla and SpaceX CEO Elon Musk joined Clubhouse and quickly hit the platform’s limit of 5,000 concurrent listeners in his room, where he hosted a conversation with Vlad Tenev, CEO of online brokerage Robinhood. Clubhouse has been drumming up a lot of excitement in Silicon Valley. The invite-only, social audio app allows users to easily organise virtual talk shows in chat rooms. Since launching on iPhone in April 2020, the app has built a following among venture capitalists and tech company founders. The company recently raised US$100 million in funding led by Andreessen Horowitz, putting the start-up’s valuation at US$1 billion.
Emerging Technologies
Apple’s virtual reality headset will reportedly cost US$3,000 and have 12 cameras with eye-tracking technology.
Apple has had a virtual and augmented reality headset in the works, and it will come with more than a dozen cameras to track your hand movements as well as eye-tracking technology, according to a new report from The Information. The outlet viewed internal images of a late-stage prototype and described it as having a curved visor with mesh material and interchangeable headbands. People familiar with the project told the publication that the headset is equipped with high-quality 8K displays, Lidar technology, and is code-named N301. Apple will use its own chips to power the device, according to The Information. The 12-plus cameras in the headset will be able to reflect real-time video of the outside world onto the screens for the viewer, The Information reported. Those cameras would allow the headset to communicate with the viewer’s eye movement and hand gestures. Apple is also working on a device that the user can wear on their finger to control the headset, per the report. Bloomberg reported in late January that Apple’s first VR headset could ship as early as 2022. A source also told The Information that the device could indeed be available as early as next year, and the company could ship about 250,000 units in the first year of its release.
Bloomberg: Apple and Hyundai hit the brakes on Apple Car production negotiations.
Over the last weeks, a handful of reports have indicated that Apple would be teaming up with Hyundai for the production of Apple Car. Now, a new report from Bloomberg suggests that the two companies have recently paused their discussions. Hyundai made a bold statement last month when it confirmed that it was in talks with Apple about a potential partnership for Apple Car. Almost immediately after issuing the first statement, Hyundai backtracked and published a new statement without a mention of Apple. After Hyundai’s initial statement, a handful of different reports corroborated that Apple and Hyundai were in talks about the electric, self-driving Apple Car. Most recently, reports suggested that Apple would be working with Hyundai subsidiary Kia Motors through a potential US$3.6 billion investment. A new report from Bloomberg, however, says that Hyundai and Apple have hit the brakes on their negotiations. One reason for the paused negotiations is that Apple is “upset” over Hyundai’s pre-announcement of the deal.
Apple rumored to sign US$3.6 billion deal with Kia Motors for Apple Car partnership.
According to local newspaper DongA, Apple is set to announce a major contract with Kia Motors, worth about US$3.6 billion as the company ramps up its efforts to build an electric car. According to the papers, the news could be officially announced as soon as February 17. Apple is apparently looking to produce about 100,000 cars a year, starting in 2024. A previous report had suggested that Apple was looking to sign a deal with Hyundai by March. The local media report was surfaced by Bloomberg today. It remains to be seen how close Apple and Kia’s partnership will be in the making of the Apple Car, or if it is more of a designer-supplier relationship a la Apple and Foxconn’s relationship in the iPhone supply chain.
Amazon reportedly hopes to to double its delivery fleet this year by investing in smaller trucking companies that would exclusively serve the e-commerce giant.
Amazon is planning to launch an “Amazon Freight Partners” program to help train delivery upstarts that would, in turn, join Amazon’s fleet of exclusive delivery partners, per a new report from The Information. The e-commerce giant continues to grapple with high freight volumes, and it has struggled to partner with enough delivery partners to meet that demand. Amazon plans to expand its trucking fleet to more than double its size this year through the incubator — it currently has about 100 delivery partners and is working to push that number up to 285 by the end of 2021, per the report. Amazon said in an internal document, viewed by The Information, that the program would include business training for managing 20 to 50 tractor-trailers or commercial trucks, loans for truck costs, and other guidance.
Elon Musk says Neuralink could start planting computer chips in humans brains within the year.
Tesla CEO Elon Musk said on Monday that Neuralink — his brain-computer-interface company — could be launching human trials by the end of 2021. Musk gave the timeline in response to another user’s request to join human trials for the product, which is designed to implant artificial intelligence into human brains as well as potentially cure neurological diseases like Alzheimer’s and Parkinson’s. Musk has made similar statements in the past about his project, which was launched in 2016. He said in 2019 that it would be testing on humans by the end of 2020. Musk told Clubhouse users Sunday night that Neuralink recently used its nanotechnology to implant a chip into a monkey’s brain. The wireless chip allowed the monkey to play video games using only its mind, according to Musk.
Media, Streaming, Gaming & Sports Betting
Amazon is reportedly spending nearly US$500 million a year on its video game division.
Amazon’s video game division has been struggling to get off the ground, and a report from Bloomberg indicates just how much has been spent trying to make it happen. Two sources familiar with Amazon’s budget told Bloomberg that the tech giant is spending “nearly US$500 million a year” operating the video game division.
Amazon’s next CEO says he’s committed to making video games.
One day before he was named the next chief executive officer of Amazon.com Inc., Andy Jassy reaffirmed his commitment to making video games while acknowledging the stark challenges the team has faced, according to an email to staff reviewed by Bloomberg. Jassy expressed support for Mike Frazzini, the head of Amazon Game Studios and the subject of a Bloomberg profile last week examining the troubles the company has faced in gaming. The story was based on interviews with more than 30 current or former Amazon employees. Both executives sent emails to their staff this week referencing the article, saying the accounts were exaggerated but recognizing that they had made mistakes.
Google Stadia shuts down internal studios, changing business focus.
Google Stadia, the late 2019 streaming platform that promised to revolutionize gaming by letting users stream games without needing to own a powerful PC or console, is altering course, getting out of the game-making business and will now offer its platform directly to game publishers alongside offering Stadia Pro to the public. One games industry source told Kotaku that Google was canceling multiple projects, basically any games slated for release beyond a specific 2021 window, though they believed games close to release would still come out. Google will close its two game studios, located in Montreal and Los Angeles. Neither had released any games yet. Google will continue to operate the Stadia gaming service and its US$10 monthly Stadia Pro service. It’s unclear how many, if any, exclusive games will still come to the service, though the company has indicated that it can still sign new games and will bring more third-party releases to the platform. It nevertheless will look to many like a draw down of the plan to have Stadia run as a bona fide competitor to console platforms.
Sony sold 4.5 million PlayStation 5 consoles last year.
Sony shipped 4.5 million PlayStation 5 units worldwide in 2020, as revealed by information published alongside the company’s latest earnings report. The number highlights Sony’s current ability to mass-produce the console, which has been extremely difficult to buy since its launch in November. Demand for the PlayStation 4 dropped dramatically year-on-year, with 1.4 million units shipped in the October-December quarter — a 77 percent decrease from the previous year. Sony actually managed to sell fewer PS4s in the holiday quarter than it did from July to September.
They’re flocking to America to make a fortune playing video games.
America is accustomed to dominance in global sports, but in League of Legends, the highest-profile video game played by professionals, U.S. teams lag far behind their counterparts in Asia, where e-sports are a way of life. In countries like China and South Korea, gamers start competing as children, and professionals train up to 18 hours a day. To keep up, U.S. teams have dangled increasingly large salaries in front of these superstars, akin to Major League Soccer’s luring famous European footballers stateside. Aided by an influx of cash and big-name sponsors, these teams have recruited at least 40 players from Asia since 2016, according to a New York Times analysis, and a similar number from Europe. Many professional gamers are simply looking for a big paycheck, fueling the perception that the United States serves as a retirement community for players who are past their prime. Others are drawn to a comfortable lifestyle in places like Los Angeles. And some claim to be the player who will finally put America on the map by winning the first world championship for the continent. Interest in e-sports leagues surged among U.S. audiences in recent years. In 2015, 38.2 million people in North America watched at least one e-sports event, according to Newzoo, a gaming analytics firm. By 2020, that number had jumped to 57.2 million. League of Legends, a team-based title released by Riot in 2009, dwarfs its competitors in viewership. Nearly 46 million people watched at least part of the world championship event in October.
Over 50 percent of esports followers likely to bet on esports in the US – Survey.
Esports has continued growing, and with it, opportunities to bet on the outcome of matches has risen as well. A survey from consumer insights group Interpret found that 52% of esports followers, or those who “regularly follow” professional esports, are likely to place bets on major esports tournaments. 21% were neutral on the subject, while 28% were unlikely to place bets. Interpret clarified to GamesIndustry.biz that its survey questionnaire reached a sample size of 9,000 U.S. residents age 13-65, with esports followers representing a sample of 521 people. It also specified using an online betting service, so it did not include in-client non-monetary bets or skin betting. As esports gambling increases, companies have had to address tack-on issues with betting taking place on their matches. Activision Blizzard entered a multi-year partnership with Sportradar last year to institute betting monitoring on both the Overwatch League and Call of Duty League. Last October, several Counter-Strike players were banned for placing bets on themselves following a joint investigation from the Esports Integrity Commission and the Esports Entertainment Association, and in 2019, six men were arrested in connection with suspicious betting activity on Counter-Strike matches.
Adtech, Privacy & Regulatory
Google explores alternative to Apple’s new anti-tracking feature.
Google is exploring an alternative to Apple Inc.’s new anti-tracking feature, the latest sign that the internet industry is slowly embracing user privacy, according to people with knowledge of the matter. Internally, the search giant is discussing how it can limit data collection and cross-app tracking on the Android operating system in a way that is less stringent than Apple’s solution, said the people, who asked not to be identified discussing private plans.
Global tech tax is expected to arrive this summer.
Tech giants including Alphabet Inc., Apple Inc. and Facebook Inc. could soon be hit with higher taxes around the world after global talks moved closer to an agreement. Clashes between the European Union and Trump administration had hobbled progress over who outside of the U.S. gets to tax American tech companies, but President Joe Biden’s Treasury secretary pick, Janet Yellen, last week injected renewed optimism for a global deal. After a call with Yellen, German Finance Minister Olaf Scholz said the Biden administration was showing a readiness to clinch an agreement. “I’m very confident we will be able to do it,” he said last Thursday. The Organization for Economic Cooperation and Development is brokering the discussions among nearly 140 countries and intends to settle them by the summer. For years, Europe and the U.S. have chafed over where tech companies owe their taxes. In one legal case, the EU wants to overturn Apple’s victory in a 13 billion euro (US$15.7 billion) tax dispute, arguing the iPhone maker owes that money to Ireland, not the U.S. A top EU court last July sided with Apple. Europe wants to overhaul the traditional way of taxing internet companies by imposing levies on revenue, not profit. Officials want a slice of the value U.S.-based companies create in Europe through targeted advertising, the sale of data or other services.
SolarWinds, a maker of network-management software, is still trying to understand how hackers got into the company’s network.
The newly appointed chief executive of SolarWinds Corp. is still trying to unravel how his company became a primary vector for hackers in a massive attack revealed last year, but said evidence is emerging that they were lurking in the company’s Office 365 email system for months. The hackers had accessed at least one of the company’s Office 365 accounts by December 2019, and then leapfrogged to other Office 365 accounts used by the company, Sudhakar Ramakrishna said in an interview Tuesday. “Some email accounts were compromised. That led them to compromise other email accounts and as a result our broader [Office] 365 environment was compromised,” he said. It is the latest development in the eight-week investigation into one of the worst breaches in U.S. history. SolarWinds, previously a little-known but critical maker of network-management software, is still trying to understand how the hackers first got into the company’s network and when exactly that happened.
Amazon is deploying AI cameras to surveil delivery drivers ‘100% of the time’.
Amazon is rolling out AI-powered cameras in its delivery vehicles so it can keep closer tabs on drivers. The four-camera system will use machine learning to detect unsafe behaviors like distracted driving and speeding, and then issue verbal warnings to drivers, the company said in an instructional video first reported by The Information. Amazon said in the video that the cameras are meant to improve safety, an issue the company faced scrutiny over after multiple investigations revealed its focus on speed helped lead to at least a dozen fatalities (though Amazon has avoided liability because the drivers aren’t employees). But the cameras, which Amazon said will record drivers “100% of the time” during their routes, also raise privacy and bias concerns given the company’s track record on both.
Robinhood CEO to testify before House committee: report.
Robinhood Markets Inc. CEO Vladimir Tenev is expected to testify before the House Financial Services Committee, according to a Politico report on Monday. The committee’s chairwoman, Democratic Rep. Maxine Waters of California, said last week that she would convene a hearing to “examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”
eCommerce
Amazon begins testing customer deliveries using Rivian electric vans.
Amazon has started making deliveries to customers in Los Angeles using electric vans designed and built by Rivian. The electric vans, which are part of Amazon’s 2040 climate pledge, won’t go into series production until the end of the year, according to an update Wednesday by the company. Amazon declined to reveal how many electric vans were in the test fleet. The customer deliveries are part of continuous testing being conducted by Amazon and Rivian to measure performance as well as safety durability in various climates and geographies. Road tests first started more than four months ago. In the meantime, these electric vehicles will continue to pop up on delivery routes in up to 15 additional cities in 2021. Eventually, Amazon plans to deploy at least 100,000 electric vans — the size of its order with Rivian — over the next several years.
Fintech, Blockchain & Cryptocurrency
People are furious with Robinhood but they keep downloading it.
When Robinhood announced last Thursday morning it was restricting trades on a number of meme stocks, the fallout was swift. Redditors, who accused the commission-free investment app of betraying its name by protecting the rich, said they would leave the platform. Politicians called for congressional hearings. Users filed multiple lawsuits nationwide alleging market manipulation. Many more people kept on downloading the app. In fact, the day Robinhood restricted trading turned out to be the biggest single download day on record for Robinhood, with 440,000 unique first-time installations in the US, according to data from app measurement company Sensor Tower. The following day was its second-biggest download day ever. Subsequent days saw a decrease in daily downloads, but the number is still nearly double what it had been in the beginning of last week. Indeed, 3.7 million people in the US installed Robinhood for the first time in January, nearly four times the number who did so in January 2020. More than 2 million did so last week alone — the same number of downloads it had in its previous best month (March).
Ant reaches agreement with China regulators on overhaul.
Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company, making it subject to capital requirements similar to those for banks. The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas such as blockchain and food delivery, people familiar with the matter said. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure. Alibaba Group Holding Ltd., which owns about a third of Ant, erased losses in Hong Kong trading on Wednesday after Bloomberg reported the agreement. The stock closed with a 0.4% gain. Ant is still exploring possibilities to revive its initial public offering, which was abruptly halted by regulators in November, one person familiar with the matter said. But given the financial holding company framework is so new, it’s unclear how long it might take for authorities to sign off on a listing. Bloomberg Intelligence analyst Francis Chan estimates Ant’s valuation could drop to US$108 billion. Ant fetched a US$280 billion pre-money valuation before its IPO was halted.
Semiconductors
AMD expects PC and next-gen chip shortages through first half of 2021.
AMD had a big year in 2020, but demand for its gaming chips has exceeded supply. As reported by Tom’s Hardware, AMD CEO Lisa Su said on a Q4 2020 earnings call to expect “some tightness” through the first half of 2021, though there will be “added capacity” in the second half of the year.
Disclaimer
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “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. In accessing or consuming the Materials, 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, directors, officers, shareholders, 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 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 or dealer under the securities legislation of any jurisdiction of Canada or elsewhere 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 advisor nor does it maintain any registrations as such, 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 or securities regulatory authority 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. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information. The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.