July 17, 2022: Sideways Chop Continues

Major indices fell during the week, only to recover most losses towards the end. The Dow Jones Industrial fell 0.2% last week, S&P 500 fell 0.9%, and the Nasdaq dropped 1.7%. Toronto’s, and Vancouver’s tech talent pools saw the highest growth in North America, according to 2022 CBRE report. Payments giant Stripe last valued by private investors at US$95 billion, cut the internal value of its shares by 28%. Digital mortgage lender Better filed paperwork Thursday to go public via SPAC, or special-purpose acquisition company. Chinese fast-fashion giant Shein hopes to do an initial public offering in the United States as soon as 2024, according to Bloomberg. Tech-focused private equity firm Francisco Partners raises fresh US$17 billion for deals. Pinterest stock pops 19% on activist investor increasing stake. ServiceNow shares dropped 12% after CEO warns of fierce macro headwinds in interview. Shares of Mullen Automotive Inc. shot up 16.2% in premarket trading Monday, after the electric vehicle maker said Amazon delivery service placed an order for up to 600 cargo vans over the next 18 months. Canoo surges 107% after the EV maker inks deal to sell up to 10,000 delivery vehicles to Walmart. Twitter sues Elon Musk for giving up on multi-billion dollar acquisition deal. Netflix is partnering with Microsoft for its new ad-supported tier. U.S. online sales during Amazon’s Prime Day shopping event jumped 8.5% from last year to nearly US$12 billion – its biggest ever globally, with members of its Prime loyalty program purchasing more than 300 million items. Intel plans price hikes on broad range of products. GM is building a ‘coast-to-coast’ EV fast-charging network — on Thursday, GM announced that it is partnering with Pilot Company and EVGo to construct a coast-to-coast national DC fast charging network.

Toronto, Vancouver tech talent pools saw highest growth in latest CBRE report.

Toronto’s tech talent pool experienced the most growth across the Canadian and United States markets between 2016 and 2021, according to CBRE’s Scoring Tech Talent report for 2022. This year, CBRE ranked Toronto the third best city across Canada and the US for tech talent, pulling in over 88,900 jobs within five years. That moved Toronto up one spot from its ranking in the previous report, replacing Washington, DC. The top five markets were the same as last year, consisting of one Canadian city (Toronto), as well as US regions San Francisco; Seattle; Washington, D.C.; and New York. In line with the San Francisco Bay Area, Ottawa had the highest concentration of tech talent in North America, more than double the average among all 50 ranked cities of 5.6 percent. Toronto and the Waterloo region, along with Seattle, were among the top five most concentrated tech markets, ranging from 9.6 percent to 10.3 percent of their total employment. https://bit.ly/3o6kOHx

Milk Moovement bags $26 million to bolster dairy supply chain software.

Halifax-based SaaS startup Milk Moovement has announced that it closed a $26 million (US$20 million) Series A round led by VMG Catalyst. Other investors that contributed to the round include Richard Cargill, founder of Turas Mara, which invests in companies that develop sustainable solutions to food, agriculture, and water. Concurrent to the Series A funding, American food safety company Ecolab also made a minority equity investment in Milk Moovement. https://bit.ly/3uO3vif

Fieldless Farms secures $17.5 million to expand indoor farm, leafy greens product line.

Ottawa-based agtech startup Fieldless Farms has raised a $17.5 million Series A round with a combination of equity and debt. The financing was led by agriculture and food fund Forage Capital Partners, with participation from Farm Credit Canada (FCC) and the Business Development Bank of Canada (BDC). Fieldless noted that BDC and FCC provided equal amounts in the debt portion of the fundraise, but did not disclose the exact size of BDC and FCC’s investments. https://bit.ly/3o5xpL7

Tissue engineering startup Spiderwort raises $17.1 million to move to clinical trials.

Ottawa-based biotech company Spiderwort has secured $17.1 million (US$13.2 million) in its Series A round led by Horizons Ventures. The financing also saw participation from K5 Global, BoxOne Ventures, Break Off Capital, Capital Angel Network, Anges Québec and other undisclosed investors. https://bit.ly/3nYa65M

Northumberland CFDC secures $7.7 million from federal government to launch new funding program.

The Government of Canada is investing over $7.7 million into the Northumberland Community Futures Development Corporation (CFDC) to deliver thriveFORWARD—a new funding program meant to help southern Ontario tech companies scale-up and transition to greener business processes. Participants will be eligible to receive up to $25,000 to help bring their products to market and accelerate their growth. Businesses in the industrial sector can also receive up to $100,000 to support the cost of adopting new digital and clean technologies. https://bit.ly/3IxjKpH

Multilingual chatbot startup Proto secures $5.6 million for global expansion.

Waterloo-headquartered customer experience tech startup Proto (formerly Sinitic) has raised $5.6 million in Series A funding. The financing was led by Mucker Capital with participation from current shareholder Yolo Investments.  https://bit.ly/3Ryoj7c 

Welbi raises $3 million to take its senior engagement software south of the border.

Welbi Technologies Inc. announced a $3 million seed round that will enable the startup to expand across Canada and into the United States with its patient engagement software for seniors in long-term care facilities. Graphite Ventures, MaRS IAF, SoGal Ventures, and Roach Capital invested in the seed round.  https://bit.ly/3P7yAW9

Truffle raises $2.3 million to compete with restaurant POS incumbents Lightspeed, Square.

Edmonton-based restaurant management software provider Truffle has secured an all-equity $2.3 million seed funding round as it attempts to compete with incumbents and bigger players in the space. The round, which closed in June, was led by Accelerate Fund III, with participation from Sprout.vc and Birchcliff Partners. https://bit.ly/3z6c7TQ

Stripe cuts internal valuation by 28%.

Payments giant Stripe last valued by private investors at US$95 billion, cut the internal value of its shares by 28%, people familiar with the matter said. Stripe told employees in an email Friday that the internal share price was about US$29, compared with US$40 in the most previous internal valuation, known as a 409A valuation, the people said. The move lowered the implied valuation of those shares to US$74 billion, according to one of the people, which is calculated separately from the stock owned by major shareholders. https://on.wsj.com/3AUBTMc

Mortgage lender Better files to go public in SPAC deal.

Digital mortgage lender Better filed paperwork Thursday to go public via SPAC, or special-purpose acquisition company, in a move that comes during a particularly challenging period for homebuyers. The grueling macroeconomic circumstances have affected both Better and its customers, contributing to the company’s decision to go public, a source familiar with the matter told Yahoo Finance. As interest rates have risen, Better needs access to capital particularly as it looks to build out its product capabilities and serve its customers in an increasingly difficult home-buying environment, the source said. The Wall Street Journal reported on Better’s plans to go public in a SPAC deal in May, noting that the deal would value the lender at roughly US$7 billion in pre-new money. Better — which was founded in 2016 and has since originated about US$100 billion in mortgages — offers consumers an online homeownership platform that includes a mortgage originator, a real estate brokerage, and two insurance companies. The company reportedly has been exploring a listing for some time, as it has faced internal turmoil after hundreds of employees were fired via Zoom last year. The deal, which the company expects to raise US$750 million, seeks to give Better the resources to serve its customers amid rising interest rates and record inflation, a source familiar with the matter told Yahoo Finance. The transaction will be conducted with Aurora Acquisition Corp. (AURC), and the New York-based company plans to trade under the ticker BETR. https://yhoo.it/3AS7XAv

Chinese fast-fashion company Shein seeks U.S. IPO as soon as 2024, report says.

Chinese fast-fashion giant Shein hopes to do an initial public offering in the United States as soon as 2024, according to a report from Bloomberg, which cited people familiar with the matter. Yet it faces environmental, social and governance, or ESG, concerns that could be an obstacle to an IPO, according to the report. Previously, Shein had sought a 2022 IPO in the U.S., according to Reuters. Shein, which has a US$100 billion valuation, has drawn scrutiny for its cheap product line that has been built on a fast and prolific production chain. https://cnb.cx/3IGNRLn

JustWorks withdraws plan for IPO, six months after setting terms to be valued at up to US$2 billion.

JustWorks Inc. filed Wednesday to withdraw its plans for an initial public offering, about seven months after the profitable human resources software company filed to go public and six months after setting IPO terms. The company filed an S-1 to go public in mid-December, with heavyweights Goldman Sachs, J.P. Morgan and BofA Securities as the lead underwriters. Then on Jan. 4, JustWorks said it expected to raise up to US$224.0 million as the 7 million-share IPO was expected to be priced between US$29 and US$32 a share to value the company at up to US$2.0 billion. But in the latest amended-S-1 filing on June 27, JustWorks had removed the expected number of shares it would offer and the expected pricing of the IPO. JustWorks was profitable, as it had net income of US$10.9 million on revenue of US$982.7 million in 2021, after a loss of US$20.3 million on revenue of $742.4 million in 2020. https://bit.ly/3z5ksav

Tech-focused private equity firm Francisco Partners raises fresh US$17 billion for deals.

Francisco Partners Management LP said Tuesday it has US$23 billion to invest in the technology sector including US$17 billion for two new private equity funds and US$6 billion in dry powder remaining in previous funds. The San Francisco firm raised US$13.5 billion for its flagship fund Francisco Partners VII LP and US$3.3 billion for Francisco Partners Agility III LP. https://bit.ly/3aAVaaQ

Pinterest stock pops 19% on activist investor increasing stake.

Pinterest Inc.’s stock popped 19% in extended trading Thursday following a report that activist investor Elliott Management Corp. has built a stake of more than 9% in the social-media company. The investment could make Elliott the biggest stakeholder in Pinterest, according to the Wall Street Journal report. https://bit.ly/3cfO8Zn

Unity is merging with ironSource in an all-stock deal valuing Ironsource at US$4.4 billion in a big consolidation play for gaming.

The companies have confirmed the news here. ironSource is being valued at US$4.4 billion in the all-stock deal. Part of the transaction will also involve Silver Lake and Sequoia, the two largest Unity shareholders, investing US$1 billion in Unity in the form of convertible notes after the transaction closes. The companies expect the detail to close in Q4, and “is expected to generate a run rate of US$1 billion in Adjusted EBITDA by the end of 2024,” Unity said.  https://tcrn.ch/3aGR4hs

Twitter sues Elon Musk for giving up on multi-billion dollar acquisition deal.

Elon Musk confirmed last week that he was officially giving up on the deal he made with Twitter back in April in which he promised to buy the social media platform for US$44 billion. Now Twitter is suing Musk for not honoring the deal. In a lawsuit filed in the Delaware Court of Chancery against Musk on Tuesday (via The Verge), Twitter claims that the billionaire refuses to fulfill his “obligations” when it comes to the agreement made earlier this year. https://bit.ly/3O2IO95

ServiceNow shares drop 12% after CEO warns of fierce macro headwinds in interview.

ServiceNow Inc.’s stock tumbled 12% on Tuesday following an interview in which its chief executive, Bill McDermott, warned of some serious macro headwinds. “You’re at 41-year high inflation. The dollar right now is the highest it’s been in over two decades. We have interest rates rising. People worried about security. You’ve got a war in Europe. So, the mood is not great,” McDermott said in a “Mad Money” segment on CNBC that aired after markets closed Monday. McDermott’s comments were made on the state of the tech sector, and not specifically about ServiceNow, which reports second-quarter earnings on July 27. Shares of ServiceNow have declined 34% so far in 2022, while the broader S&P 500 index is down 19%.  https://bit.ly/3P6T8OF

Google plans to scale back hiring this year.

Joining a long list of tech firms, Alphabet Inc.’s Google intends to reduce hiring for the rest of 2022 with the threat of recession, company Chief Executive Sundar Pichai said in an email to staff Tuesday. The Silicon Valley company, which employed almost 164,000 as of March 31, is scheduled to report second-quarter earnings on July 26. In recent days, Netflix Inc., Tesla Inc. , Twitter Inc. and Microsoft Corp. have announced cutbacks amid inflation, the war in Ukraine, supply-chain constraints, and a looming recession. https://bit.ly/3yFhiIX 

NFT Marketplace OpenSea to lay off 20% of employees.

OpenSea, one of the largest marketplaces for nonfungible tokens, said Thursday it would cut a fifth of its staff as the crash in cryptocurrency prices continued to wreak havoc on digital-asset firms. Chief Executive Devin Finzer said in an internal memo to employees that he shared on Twitter that the company would provide severance and healthcare coverage into 2023, as well as accelerated equity vesting, for those laid off. https://on.wsj.com/3z8My4C

Troubled crypto lender Celsius Network files for bankruptcy.

Celsius Network, the embattled crypto lending firm that has frozen customers withdrawals and transfers for over a month due to liquidity issues, has filed for Chapter 11 bankruptcy protection, the company announced on Wednesday. The company said it has US$167 million in cash on hand to help support operations through the process. Among the creditors listed in Celsius bankruptcy filings are Pharos USD Fund, ICB Solutions, and Alameda Research, the trading platform and market maker founded by FTX CEO Sam Bankman-Fried. Celsius said it had between US$1 billion and US$10 billion in estimated liabilities and more than 100,000 creditors. “This is the right decision for our community and company,” said Alex Mashinsky, Celsius CEO and co-founder, in a press release. “I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.” Celsius had drawn users to its platform with the promise of delivering high interest rates—some marketed as high as 18%—for customers who lent crypto to Celisus. The company would then lend out that borrowed crypto to other investors like hedge funds at higher rates. One such fund, Three Arrows Capital, has also filed for bankruptcy protection in New York after it was ordered to liquidate by a court in the British Virgin Islands. https://bit.ly/3RR9sVN

Rivian reportedly considers laying off 700 employees.

Electric automaker Rivian is considering laying off around 5 percent of its 14,000 employees, or around 700 people, according to a report from Bloomberg. The report notes that, while nothing has been officially decided or announced yet, the company is mainly looking to remove jobs that were added as it scaled up and that aren’t involved in manufacturing. https://bit.ly/3O3LVxA

Mullen Automotive stock soars after Amazon delivery partner orders up to 600 EVs.

Shares of Mullen Automotive Inc. shot up 16.2% in premarket trading Monday, after the electric vehicle maker said and Amazon.com Inc. delivery service partner placed an order for up to 600 cargo vans over the next 18 months. As part of the binding agreement signed by DelPack Logistics LLC, the first 300 of the EV cargo vans can be delivered by Nov. 30. “This agreement is a milestone for Mullen Automotive,” said Mullen Chief Executive David Michery. “DelPack is a leader in last mile package delivery and this agreement puts our Class 1 cargo van program front and center for last mile delivery opportunities.” Mullen shares have plummeted 77.6% year to date through Friday, while the S&P 500 has lost 18.2%. https://bit.ly/3Rq0ezq

Canoo surges 107% after the EV maker inks deal to sell up to 10,000 delivery vehicles to Walmart.

Canoo stock surged on Thursday after the electric vehicle maker announced a deal to sell 4,500 delivery vans to Walmart, with the option for the retail giant to purchase up to 10,000. The stock had surged by as much as 107% shortly after the opening bell, before paring some gains to trade at around US$4.55 per share. Last year, Canoo reported a net loss of US$346.8 million in 2021, up from US$86.7 million in 2020. https://bit.ly/3cea0Vj

More affordable model of Apple’s mixed reality headset coming in 2025.

The announcement of Apple’s rumored mixed reality headset seems to be getting closer as multiple sources are pointing to an official launch in 2023. However, while the first model is expected to be priced as high as US$3,000, analyst Ming-Chi Kuo has now said in a new report that Apple is already working on a more affordable version of its headset for 2025. The analyst expects Apple will ship 10 million units of its AR/VR headset by 2026. https://bit.ly/3PfHkKh

Netflix is partnering with Microsoft for its new ad-supported tier.

Netflix is partnering with Microsoft for its upcoming ad-supported streaming tier, the company announced Wednesday. The streaming service says Microsoft will become its “global advertising technology and sales partner” upon rolling out the cheaper option. In a post on Microsoft’s blog, the company says marketers will work with Microsoft to bring ads to the Netflix ecosystem. The company is also exploring livestreaming and ways to clamp down on password-sharing to help mitigate a decline in subscribers and revenue.  https://bit.ly/3cfWsZ9

YouTube TV now has more than 5 million users, topping Hulu’s live TV service.

Google says YouTube TV has surpassed 5 million accounts — making it the U.S.’s biggest internet-based pay TV service. The 5 million-plus users for YouTube TV, regularly priced at US$64.99/month, is as of June 2022, according to the company. The tally includes users on limited-time free promotional trials, according to Google. As of April 2, Hulu had 4.1 million Hulu + Live TV subscribers — a decline of 200,000 over the first three months of 2022. https://bit.ly/3z0Y5CX

Alibaba executives called in by China authorities as it investigates historic data heist.

Executives from Alibaba Group Holding Ltd.’s cloud division have been called in for talks by Shanghai authorities in connection with the theft of a vast police database, according to people familiar with the matter, adding urgency to an internal investigation by the Chinese tech giant into how one of history’s largest data heists was allowed to happen. The investigation revolves around a cache of sensitive Shanghai police data on an estimated nearly one billion Chinese citizens, which was offered for sale online for the equivalent of roughly US$200,000 in late June. Cybersecurity researchers said a dashboard for managing the database had been left open on the public internet without a password for more than a year, making it easy to pilfer and erase its contents. Based on scans of the database, the researchers concluded that it was hosted on Alibaba’s cloud platform. Company employees also confirmed the relationship. https://on.wsj.com/3oaa4b6

China’s regulator slaps Alibaba, Tencent with fines related to past deals.

China’s antitrust regulator has fined Alibaba and Tencent for not properly reporting their past deals. The move caused the share prices of Alibaba and Tencent to drop in Hong Kong Monday. The State Administration for Market Regulation announced the penalties for Alibaba and Tencent in a statement on Sunday. While the fines are tiny, the antitrust watchdog’s continued scrutiny of tech giants shows how Beijing’s regulatory pressure on the internet sector hasn’t disappeared. Shares of Chinese internet companies have bounced back from their lows in March, as some investors and analysts are hoping that the Chinese government’s crackdown is easing and the worst is over for the sector. The market regulator last year hit Alibaba with a record $2.8 billion anti-monopoly fine, saying that China’s biggest e-commerce company had abused its dominance. https://bit.ly/3OhFyGR

U.S. online sales during Amazon’s Prime Day jump to US$12 billion.

U.S. online sales during Amazon.com Inc’s Prime Day shopping event jumped 8.5% from last year to nearly US$12 billion, as inflation-hit Americans pounced on discounted essentials and electronics, showed data from Adobe’s Digital Economy Index. Amazon said on Thursday the two-day shopping event, on July 12 and 13, was its biggest ever globally, with members of its Prime loyalty program purchasing more than 300 million items, or 100,000 products a minute. https://reut.rs/3aEgJXZ

Snap explores plans to let users showcase NFTs as filters.

Snap is exploring plans to allow users to showcase non-fungible tokens on its app, as social media platforms increasingly turn to digital collectibles as a means of attracting influencers and their fans despite the crypto crash. The Los Angeles-based social media platform is preparing to test a feature that would allow NFT artists to showcase their designs on the Snapchat platform as augmented reality filters, according to two people familiar with the situation. The test, which is being run with a handful of “creators”, is scheduled to start at the end of August, one of the people said. Developers will be able to mint, or create, NFTs via a third-party service off the platform, before transferring them to Snap as Lenses. The technology would ensure those filters are attributable to that creator. While the NFT effort is at an early stage, it marks the first foray in the freewheeling world of digital assets for Snap, which offers private messaging and cute photo features to its largely millennial and younger Generation Z audience. https://on.ft.com/3PtLGwQ

GameStop launches NFT marketplace as it hunts for growth in digital-fueled turnaround.

GameStop on Monday announced the long-awaited debut of its online marketplace for nonfungible tokens, or NFTs, in a bid to reinvent its business and cash in on consumer adoption of cryptocurrencies and blockchain technology. Over time, the marketplace will expand to offer other features such as Web3 gaming, GameStop said. About half a million NFTs are expected to be purchased from retailers between November and December, translating to a total market value of US$54 million, according to Salesforce. https://cnb.cx/3yzUGtr

Intel plans price hikes on broad range of products.

Intel has informed customers it will raise prices on a majority of its microprocessors and peripheral chip products later this year, citing rising costs, Nikkei Asia learned. The biggest U.S. chipmaker plans to raise prices this autumn on flagship products such as central processing units for servers and computers, where it dominates the market, as well as on a wide range of other items, including chips for Wi-Fi and other connectivity, according to three industry executives with direct knowledge. Intel says the price hikes are required because of the surging costs for production and materials, the executives said. The percentage increases have not been finalized, and could be different for different types of chips, but are likely to range from a minimal single-digit increase to more than 10% and 20% in some cases, one of the people said. https://s.nikkei.com/3PvrVox

Senate votes on US$52 billion in semiconductor funding could come next week.

Senate Majority Leader Chuck Schumer has told senators to expect a preliminary vote next week on a slimmed-down China competition bill that would include US$52 billion in incentives and an investment-tax credit for U.S. semiconductor manufacturing, Bloomberg News and other outlets reported Thursday. Earlier this week the Biden administration encouraged Congress to focus on passing the money for the semiconductor industry before leaving for August recess. Lawmakers have been debating a broader China competitiveness bill, which is stalled. https://bit.ly/3ckfFct

STMicro, GlobalFoundries plan new US$5.7 billion French chip factory.

Chipmakers STMicroelectronics and GlobalFoundries (GFS.O) announced plans on Monday to build a semiconductor factory in France, drawing on funding from the government, in the latest move to boost output in the region. The project represents the lion’s share of 6.7 billion euros (US$6.8 billion) of investment from major global companies that President Emmanuel Macron is due to announce at this year’s Choose France summit in Versailles. This facility, which will be next to STM’s existing plant in Crolles, is targeted to reach full capacity by 2026, with up to 620,000 wafers per year of production at a size of 18-nanometers, the statement said https://reut.rs/3z8ScE9

Polestar on track to sell 50,000 EVs in 2022.

Polestar, the electric vehicle maker that made its Nasdaq debut in June, said Wednesday it is on track to meet its annual sales target. For the first half of 2022, Polestar delivered approximately 21,200 cars, more than twice as many as the 9,510 cars it posted for the same period in 2021. The company said it expects to deliver 50,000 cars this year. That’s a positive sign for the EV company, which spun out from Volvo and Geely by merging with Gorges Guggenheim, a special purpose acquisition company (SPAc), at a US$20 billion valuation. Overall, the company plans to grow its presence to 30 countries by the end of 2023 and sell 290,000 cars annually by 2025 — about 10 times Polestar’s 2021 sales. https://tcrn.ch/3yJR6gF

GM is building a ‘coast-to-coast’ EV fast-charging network.

Electric vehicle adoption has reached its tipping point in the US. With more and more EVs appearing on American roadways, automakers and charging networks alike are working to build out increasingly critical power infrastructure to keep those EVs moving. On Thursday, GM announced that it is partnering with Pilot Company and EVGo to construct a coast-to-coast national DC fast charging network. “The missing piece in the larger picture of public charging is along highway corridors, which connect the east to the west, the north to the south, one metro area to another” Travis Hester, GM’s chief EV officer, said during a press call Wednesday. “They form a vital network, which moves vehicles and people throughout the country. Rural areas can also be especially affected by the lack DC fast charging in those areas.” The network will offer 2,000 charging stalls at 500 stations located every 50 or so miles along America’s highways,”connecting urban and rural communities, the East and West Coasts and different metropolitan areas,” per a Thursday news release. They’ll be co-branded as “Pilot Flying J” and “Ultium Charge 360” stations, based on Pilots existing Flying J travel centers and governed by EVGo’s eXtend service. https://engt.co/3Pvsa2V