In a historic year for valuations, League‘s new funding round has squeezed in one more Canadian tech unicorn before the clock struck midnight on 2021. The Toronto-based healthcare startup raised US$70 million in new financing, which at a pre-money valuation of US$850 million, or $1.1 billion, made it Canada’s newest tech unicorn. New Zealand-based accounting platform Xero has reached a deal to acquire Calgary tax preparation software startup TaxCycle for a total of $75 million. A record 560 startups were valued at over US$1 billion this year, earning their place in the so-called “unicorn” club, according to a report from Business Insider citing data from Crunchbase and PitchBook. The term unicorn was first coined in 2013. At the time, there were just 39 U.S. startups that fit the bill, with an average of four unicorn births per year in the decade prior. Today there are approximately 1,000 private companies around the world valued at US$1 billion or more. Those companies are estimated to be worth a total of roughly US$3 trillion, per Crunchbase data. Shares of Alibaba Group Holding Ltd. rose 0.8% in morning trading Monday, after China’s securities regulator’s draft rules on overseas listings released over the long weekend OK’d the listing structure known as variable-interest entity (VIE) used by the e-commerce giant to list its shares on the NYSE. Facebook’s Oculus VR app marked a key milestone over the Christmas weekend, when it was the most popular download on Apple’s App Store. The Oculus app beat out long-standing leaders like TikTok, YouTube, Snapchat and Instagram for having the most downloads. This marks the first time ever the Oculus app was No. 1 on Christmas.
Canadian Technology Capital Markets & Company News
League enters 2022 as Canada’s newest unicorn with TDM Growth Partners-led round.
In a historic year for valuations, League‘s new funding round has squeezed in one more Canadian tech unicorn before the clock strikes midnight on 2021, BetaKit has learned. Sources confirmed to BetaKit that the Toronto-based healthcare startup has raised US$70 million in new financing, which closed today. Those sources, who wished to remain anonymous because they are not permitted to speak on behalf of the company, indicated that the pre-money valuation of the financing priced League at US$850 million, or $1.1 billion, making it Canada’s newest tech unicorn. Per Crunchbase, the new investment puts League’s total financing at over US$140 million. Notable past investors include Telus Ventures, Wittington Ventures, RBC Ventures, OMERS Ventures, Portag3 Ventures, Real Ventures, Manulife, and BDC, among others. The investment was led by Sydney, Australia, and New York-based TDM Growth Partners. The firm has invested in a variety of notable tech companies, including Square, Twilio, Spotify, and Canadian-bred Slack. It has been a long road to unicorn status for League and its founder – who had once set the ambitious goal of reaching a billion-dollar valuation by 2018. Founded by the serial entrepreneur in 2014 after selling e-reader startup Kobo to Rakuten for US$315 million, the initial vision of League was that of an Uber for healthcare services, allowing users to find, connect, and chat with medical professionals and health practitioners in their local area. https://bit.ly/343ZjjS
CDPQ invests $100 million in AppDirect channel partner program.
AppDirect has announced a new $100 million commitment from Caisse de dépôt et placement du Québec (CDPQ) to support the growth of channel partners using its subscription commerce platform. The San Francisco-based startup, which has deep Canadian roots, plans to use this funding to establish a new overarching funding arm called AppDirect Capital. Through AppDirect Capital, AppDirect will support the growth of its existing AppSmart Invest program, which provides capital to its technology advisor channel partners. CDPQ previously led AppDirect’s US$185 million September 2020 funding round, supporting the San Francisco firm’s Montréal expansion efforts. https://bit.ly/3mNLa0I
Xero to acquire Calgary’s TaxCycle in $75 million deal to expand Canadian presence.
New Zealand-based accounting platform Xero has reached a deal to acquire Calgary tax preparation software startup TaxCycle for a total of $75 million. TaxCycle, formally known as Trilogy Software, is an established Canadian tax solution that serves nearly 4,000 tax firms and over 16,000 individual accountants, bookkeepers, and tax preparers across the country with its desktop-based offering. The announcement is the latest in a series of moves that Xero has made to expand its Canadian presence. Xero also described Calgary as “an important location for its Canadian growth plans,” noting that the acquisition immediately grows its presence in the city by three-fold. https://bit.ly/3Jz37K7
Global Markets: IPOs, Venture Capital, M&A
More than 500 startups gained unicorn status in 2021.
A record 560 startups were valued at over US$1 billion this year, earning their place in the so-called “unicorn” club, according to a report from Business Insider citing data from Crunchbase and PitchBook. The new cohort of unicorns includes Anchorage, which offers crypto custody, trading and financing services for financial institutions, and cloud software provider Benchling, among others. With the pace of VC investment reaching a record fast clip in 2021, more companies than ever saw their valuations skyrocket past US$1 billion, particularly in the U.S. Of the nearly 600 new billion-dollar startups, 344 are headquartered in the U.S. That’s a massive jump from just two years ago, when only 79 U.S. startups earned billion-dollar valuations for the first time. The term unicorn was first coined in 2013. At the time, there were just 39 U.S. startups that fit the bill, with an average of four unicorn births per year in the decade prior. Today there are approximately 1,000 private companies around the world valued at US$1 billion or more. Those companies are estimated to be worth a total of roughly $3 trillion, per Crunchbase data. Other 2021 entrants to the unicorn club include the audio chat app Clubhouse, human resources platform Lattice and the crypto payments startup MoonPay. https://bit.ly/32yQPBb
A deal for Colin Kaepernick’s SPAC unraveled because the former NFL star wouldn’t do TV press for it, report says.
An agreement for Colin Kaepernick’s special purpose acquisition company to acquire a lender focused on underserved borrowers has fallen apart, according to a report by The Wall Street Journal. Kaepernick’s Mission Advancement SPAC was on course to buy financial services firm The Change Company but Kaepernick wouldn’t do public speaking engagements about the pending deal, leading to the deal’s collapse last week, sources told the Journal. The former San Francisco 49ers quarterback balked at requests from executives at The Change Company to appear on ABC’s “Good Morning America” television program and declined to participate in interviews as part of the rollout, the report said, citing an internal document. https://bit.ly/3FN1Qgh
Shares of Virgin Orbit fall 1% after public listing via SPAC.
Virgin Orbit made its public debut Thursday, with shares of the satellite launch company ending down 1% after its completed merger with special purpose acquisition company NextGen Acquisition Corp. II. The stock slipped to US$9.14 at the close of the market Thursday after NextGen’s share price closed at US$9.25 Wednesday. The public listing comes more than two years after the public listing of another Virgin Group company, space launch firm Virgin Galactic, went public via a Chamath Palihapitiya-backed SPAC in October 2019. Virgin Galactic’s stock is down 42% from the start of the year and 78% down from its peak in February. Virgin Orbit differs from Virgin Galactic in that it focuses on launching small satellites—not human passengers—into space. The four-year-old company generated US$7.2 million in revenue for the first nine months of the year and reported a net loss of US$115 million, according to a regulatory filing. It expects to generate US$70 million in revenue for all of next year. https://bit.ly/3mNLigK
China unveils sweeping rules for foreign IPOs in Didi’s wake.
China has unveiled sweeping regulations governing overseas share sales by the country’s firms, taking one of its biggest steps to tighten scrutiny on international debuts in the wake of Didi Global Inc.’s controversial listing. The regulations, issued by the country’s securities watchdog, commerce ministry and top economic planning agency over the past week, cast more uncertainty over the prospects for overseas initial public offerings that had proceeded virtually unchecked for two decades. The Nasdaq Golden Dragon China Index dropped 1.1% overnight despite another all-time high for U.S. shares, while the Hang Seng Tech Index slipped as much as 1.6% in Hong Kong trading Tuesday, dragged down by losses in Tencent Holdings Ltd. and Meituan. https://bloom.bg/3pKORGi
Didi blocks employees from selling shares indefinitely.
Didi Chuxing has barred employees from selling shares in the company indefinitely, dealing a blow to staff of the Chinese ride-hailing group that has come under intense regulatory scrutiny after its listing in New York. Monday was supposed to mark the end of a 180-day period during which current and former staff were not permitted to sell shares, but the prohibition has been extended without a new end date being set, according to people familiar with the matter. The change marked the latest setback at the group, which has lost 60 per cent of its value, or about US$38 billion in stock market capitalisation, since its US$4.4 billion initial public offering in New York in June. Chinese authorities launched an investigation into Didi’s data security practices days after the company went public and the group announced this month that it would delist in the US and pursue a listing in Hong Kong. The company’s shares fell about 5.2 per cent in New York on Monday, wiping almost US$1.5 billion from its market capitalisation. The company remains unable to sign up users and China’s cyber space regulator ordered app stores to remove 25 of its other apps, including those that register drivers. Government data showed Didi’s ride count in China has declined since its apps were pulled from online stores, with passenger rides in November down 11 per cent compared with October. https://on.ft.com/3ERlmXD
Alibaba stock rises in wake of China regulator’s draft rules on overseas listings.
Shares of Alibaba Group Holding Ltd. rose 0.8% in morning trading Monday, after China’s securities regulator’s draft rules on overseas listings released over the long weekend OK’d the listing structure known as variable-interest entity (VIE) used by the e-commerce giant to list its shares on the NYSE. Alibaba’s stock has now rallied 6.8% since closing at a 4 1/2-year low of USUS$111.96 on Dec. 3, but was still down 20.4% over the past three months, and 48.6% year to date, while the S&P 500 has gained 26.9% this year. The China Securities Regulatory Commission (CSRC) said companies can list shares outside of China using the VIE structure as long as they follow domestic laws and register with the CSRC first, according to a report in The Wall Street Journal. Among other China-based companies listed in the U.S. using the VIE structure, which are still facing scrutiny by U.S. regulators, shares of ride-hailing company DiDi Global Inc. slid 2.0%, e-commerce company JD.com Inc. fell 0.8% and internet-search company Baidu Inc. gained 1.2%. DiDi said earlier this month that it plans to delist from the NYSE, and to list in Hong Kong, amid pressure from regulators. https://on.mktw.net/31iQtOn
Facebook parent Meta rallies 3% as the app for its Oculus headset hits No. 1 in Apple’s App Store.
Facebook parent company Meta’s Oculus VR app marked a key milestone over the weekend, when it was the most popular download on Apple’s App Store on Christmas. The Oculus app beat out long-standing leaders like TikTok, YouTube, Snapchat and Instagram for having the most downloads. Meta has not disclosed exactly how many VR headsets it has sold. This marks the first time ever the Oculus app was No. 1 on Christmas and comes after the parent company’s big bet on the metaverse. Meta Platforms has dominated metaverse conversations since it announced its name-change from Facebook. https://bit.ly/3qJVjNh
Apple giving top employees major stock bonuses as some engineers leave for Meta.
The Silicon Valley competition never fades away. While Apple itself just recently hired Meta’s lead of PR for Oculus ahead of its rumored launch of an AR headset next year, the company is trying to not lose its talent by issuing significant stock bonuses to some engineers. As reported by Bloomberg, Apple has issued “unusual and significant stock bonuses.” In the story, Mark Gurman says that these bonuses “have ranged from about US$50,000 to as much as US$180,000 in some cases.” Last week, the company informed some engineers in silicon design, hardware, and select software and operations groups of the out-of-cycle bonuses, which are being issued as restricted stock units, according to people with knowledge of the matter. The shares vest over four years, providing an incentive to stay at the iPhone maker. https://bit.ly/3ELRPPg
GoDaddy’s stock jumps toward a near 5-month high after WSJ report of Starboard taking a sizable stake.
Shares of GoDaddy Inc. shot up 8.1% toward a near five-month high in morning trading Monday, after The Wall Street Journal reported that hedge fund Starboard Value LP has acquired a 6.5% stake in the company. The domain name registration company’s stock has run up 17.6% amid a six-day win streak, putting it on track for the highest close since Aug. 4. With a market capitalization of US$13.68 billion, a 6.5% stake would be valued at nearly US$900 million. The WSJ report, which cited people familiar with the matter, said that Starboard’s exact plans couldn’t be learned, but that the activist investors typically urges companies to boost performance and seeks board representation. GoDaddy’s stock has lost 3.3% over the past 12 months, while the S&P 500 has rallied 28.7%. https://on.mktw.net/3JCYsXF
Apple reportedly hires Meta’s AR communications lead ahead of headset launch in 2022.
As rumors about Apple’s rumored AR headset only grow, the company is said to have hired Meta’s augmented reality communications lead. As reported by Bloomberg’s Mark Gurman in his Power On newsletter, he was told that Apple hired Andrea Schubert, Meta’s communications and public relations head for its augmented reality efforts. So far Bloomberg has reported that Apple’s AR headset can show text, emails, maps, games, and other things through holographic displays built into the lens. Last year, Mark Gurman revealed that the company has two strategies for its augmented reality devices, one being the AR glasses and the other a more robust AR/VR headset. The latest rumors suggest that the device will be targeted at advanced users as it will feature two 8K displays to show ultra-high resolution images. https://bit.ly/3qJnBHw
Media, Streaming, Gaming & Sports Betting
The biggest bet in sports gambling: The ad push to grab customers.
The steady legalization of online sports betting in states across America has sparked a rush by firms, also including casinos such as Caesars and MGM, to grab as much market share as they can while the market is still new. The money they’re spending is proving to be a windfall for sports media businesses such as WarnerMedia’s Turner Sports. But it’s straining the finances of the betting services and raising questions about how long this ad spending boom can last. The frenzied spending raises the possibility that more betting firms will buy media businesses, on the theory that it will make marketing cheaper. Some deals have already happened: Penn National Gaming in the past two years has bought into two sports media firms, including a 36% stake in Barstool Sports. In recent weeks, DraftKings contemplated making a bid for The Athletic, a subscription sports media service, but didn’t proceed, a sign that the cost of acquisitions may be too high for a betting service that’s already dealing with high costs. Still, industry executives expect more deals to come. Sports betting companies will spend US$1.2 billion in the U.S. on marketing designed to sign up new customers in 2021, up from about US$500 million last year, with that figure expected to grow to US$2.1 billion next year, according to a top sports media and marketing investor. Such customer acquisition–focused marketing typically involves performance advertising, which is designed to get users to perform an action, such as downloading an app or clicking affiliate links within editorial content, leading to betting services. Sports betting firms also spend on traditional advertising to promote their brand names—for example, the gambling ads you see during a sports game on ESPN these days. The ad explosion is good news for sports media. Turner Sports, for instance, expects to generate more than US$400 million in new revenue over the next three years from DraftKings and FanDuel, according to people familiar with the matter. While that remains a small percentage of WarnerMedia’s ad revenues—it generated nearly US$4.9 billion through the first nine months of 2021, up 15% from the previous year—sports betting advertising can help offset declines in ad dollars as marketers shift spending away from traditional TV. And ad spending by betting services will continue to grow as online wagering becomes more pervasive in the U.S. The question is whether it’s sustainable for sports betting firms, which operate on thin profit margins, according to these industry executives. On average, betting services keep only about US$6 for every US$100 bet made. Out of that US$6 of gross gaming revenue, the firms have to pay state taxes and cover marketing costs and other items. After all those expenses, a betting firm can earn as little as US$1 per every US$100 bet. And in many cases, sports betting firms are losing money on each bet. https://bit.ly/3eL9NqB
Fintech, Blockchain & Cryptocurrency
Robinhood to beta test crypto wallet next month.
Robinhood will start beta testing its crypto wallet among thousands of users in mid-January, the trading platform said Wednesday in a blog post. The company said that more than 1.6 million have signed up for the wallet so far. Robinhood first announced the crypto wallet in September after mentioning during its second-quarter earnings call in August that there was high demand for the product. Offering a wallet would make Robinhood more competitive with U.S.-based crypto exchanges like Coinbase, Kraken, FTX.US, Binance.US and Gemini, which already have wallet services. The trading platform has run into problems with data security, though, which might be a turn-off to customers looking to place their crypto holdings in a wallet issued by the company. Robinhood said in November that an unauthorized third party had obtained the email addresses of five million customers and the full names of two million users. https://bit.ly/3zlKxki
Former Fort Worth electronics giant RadioShack reboots as cryptocurrency company.
Although the RadioShack electronics retail chain essentially crumbled following bankruptcy filings in 2015 and 2017, the name has survived for 100 years. In a bid to make RadioShack relevant for another 100 years, the brand’s new owner is making a play for one of the hottest, and most controversial, emerging business sectors in the world — cryptocurrency. Seeking to capitalize on RadioShack’s global brand name, Miami-based owner Retail Ecommerce Ventures is propelling RadioShack (once based in Fort Worth) into the promising yet murky territory of cryptocurrency. On its website, RadioShack — whose name still appears on hundreds of stores operated by independent dealers — recently revealed plans for a cryptocurrency platform called RadioShack DeFi (short for decentralized finance). The company touts RadioShack DeFi’s ability to profit from a 100-year-old brand name that’s recognized in more than 190 countries and once encompassed more than 8,000 stores. The concept calls for people to freely swap existing cryptocurrency tokens for newly created RADIO cryptocurrency tokens through the RadioShack DeFi platform. https://bit.ly/3mOODfo
Samsung, Micron warn Xian lockdown may disrupt memory chip manufacturing.
The lockdown in the city puts further pressure on global supply chains and adds to a torturous year for exporters facing sharply higher freight costs even as prices for raw materials including semiconductors skyrocket amid the two-year long pandemic. The curbs could cause delays in the supply of DRAM memory chips, widely used in data centres, Micron said on Wednesday. The stringent restrictions, which went into effect earlier this month, may be increasingly difficult to mitigate and have resulted in thinner staffing levels at the manufacturing site, Micron added. Samsung Electronics also said on Wednesday that it would temporarily adjust operations at its Xian manufacturing facilities for NAND flash memory chips, used for data storage in data centres, smartphones and other tech gadgets. https://reut.rs/3qJVtEn
Rivian’s 400-mile electric vehicles delayed to 2023.
Rivian is telling customers that it won’t be building R1T pickup trucks with the “Max pack” battery option until 2023, as it’ll be prioritizing ones with the standard “large” battery pack for production throughout next year (via Electrek). In an email attributed to CEO RJ Scaringe, the company says it will work on orders for the higher-trim “Adventure Package” trucks with the regular battery first, and that the lower-end “Explorer Package” and bigger battery will come later. When the company debuted its truck in 2018, the 400-mile estimated range afforded by the 180kWh Max pack was a big selling point. The “large” battery pack that comes standard with the trucks gets an EPA estimated range of 314 miles, but for the adventurous, off-road crowd Rivian markets to, every additional mile counts. https://bit.ly/3mL1IXe
NYC orders nearly 200 Mustang Mach-Es for police and first responders.
On Wednesday, New York City announced it has ordered 184 fully electric Ford Mustang Mach-Es for use by law enforcement and emergency response workers. The vehicles are set to be delivered by June 2022, as part of an US$11.5 million contract that will remain in place for five years. The city said the Mach-Es would be used by the New York Police Department, New York City’s Sheriff’s Office, the Department of Correction, the Department of Parks and Recreation, the Department of Environmental Protection, and other emergency management and response departments. New York City plans to buy over 1,250 electric vehicles in 2022, transitioning all law enforcement vehicles to electric ones by 2035. This year was set to be a huge year for EVs, but many automakers have struggled to scale production. The Mach-E had its own shaky rollout in March, and Ford was forced to delay deliveries to some 4,500 customers. New York’s order is part of a broader push to integrate electric vehicles into government fleets. In January, Biden said that his administration would work to phase out the government’s use of gas-powered vehicles in its fleet of more than 600,00 vehicles. Earlier this year, President Biden signed a historic US$1 trillion infrastructure bill that invested billions into building a network of electric vehicle chargers across the country. https://bit.ly/3FMnwt5
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