Last week was exceptionally busy in Canadian capital markets with regards to both public and private markets funding. We witnessed very robust activity with M&A and associated funding, IPO activity, a couple US listing and a few more iconic VC funding rounds – the Canadian tech funding ecosystem seems to evolving very nicely. In the small cap space, we saw a successful marketed offering by Sophic Client AnalytixInsight (ALY-TSXV, ATIXF-OTC). In addition, privately held crypto custodian Brane Capital, saw a strategic investment by DMG Blockchain Solutions — we’ve been tracking the company for a year, and they appear to be making good progress. In the US, Goldman Sachs’ global head of internet banking, recently remarked that a “listings supercycle” for tech companies was only just beginning. We’re excited! Even though, Grab pushed back its US$40 billion SPAC target date, we’re keeping an eye out for this one. Robinhood could be public next month, and Didi Chuxing’s IPO filing warrants deeper attention.

Canadian Technology Capital Markets & Company News

Lightspeed (LSPD-TSX, LSPD-NYSE) to acquire two e-commerce companies for US$925 million.

Montréal retail tech company Lightspeed has signed definitive agreements to acquire two California-based e-commerce firms for a combined total of US$925 million. Lightspeed plans to buy Ecwid, which offers an e-commerce platform for small businesses, for a total of approximately US$500 million. Lightspeed is also set to acquire wholesale software provider NuORDER for about US$425 million. Both acquisitions are expected to close during the third quarter of 2021 and remain subject to customary closing conditions, post-closing working capital adjustments, and regulatory approval. The announcement follows Lightspeed pointing to plans to potentially raise up to US$4 billion over the next 25 months through a type of offering that can indicate a company’s aim to make acquisitions. Lightspeed has been a highly acquisitive company for a number of years. The two deals are the latest in a series of major acquisitions Lightspeed has made since going public. Lightspeed intends to fund the US$500 million Ecwid acquisition cost through a combination of US$175 million in cash and the issuance of US$325 million worth of subordinate voting shares. Lightspeed plans to finance the US$425 million NuORDER acquisition cost through a combination of US$212.5 million in cash and the issuance of US$212.5 million million worth of subordinate voting shares. https://bit.ly/3xgfbZZ

WELL Health (WELL-TSX) arranges $200 million senior secured credit facilities with the Royal Bank of Canada and a syndicate of lenders for its proposed acquisition of MyHealth.

The company obtained a debt financing commitment of $140 million and an additional $60 million uncommitted accordion for further expansion potential, provided by RBC, the Bank of Montreal, HSBC Bank Canada, The Toronto-Dominion Bank, ICICI Bank Canada and Laurentian Bank of Canada (collectively the “Lenders”) in support of its proposed acquisition of MyHealth Partners Inc. (“MyHealth”). RBC acted as the Lead Arranger, Sole Bookrunner, and Administrative Agent on the financing. The committed credit facilities (the “Credit Facilities”) will comprise a revolving facility in the amount of $90 million and a term facility in the amount of $50 million. The Lenders have also provided WELL with an uncommitted accordion facility in the amount of $60 million to help finance future acquisitions by WELL and other opportunities. The Credit Faciilties will mature in four years and carry a floating interest rate based on market terms that is set to reduce as MyHealth’s leverage decreases. https://bit.ly/3pMOPfC

Q4 looks to raise $150 million through IPO.

Toronto-based investor relations (IR) software company Q4 has priced its planned initial public offering and is looking to raise $150 million. In its amended prospectus filed Thursday, Q4 said it plans to price its shares between $10.50 and $13.00 per common share. With an approximate 59 million in common shares issued if Q4 reaches its funding target, the company could reach a market capitalization of almost $700 million. The offering’s joint bookrunners include CIBC Capital Markets, National Bank Financial, and Credit Suisse Securities, and underwriters include Canaccord Genuity, Raymond James, RBC Dominion Securities, Stifel Nicolaus Canada, TD Securities, and INFOR Financial. https://bit.ly/3cCL2vQ

Hut 8 Mining (HUT-TSX) announces anticipated Nasdaq listing date and $100 million bought deal Unit offering.

The company entered into an agreement with Canaccord Genuity Corp. (“Canaccord”) as lead underwriter, on behalf of itself and a syndicate of underwriters (collectively with Canaccord, the “Underwriters”) under which the Underwriters have agreed to purchase an aggregate of 20.0 million units (the “Offered Units”) at a price of CAD$5.00 per Offered Unit (the “Issue Price”) for aggregate gross proceeds of approximately CAD$100.0 million (the “Offering”). It is expected that trading of the Company’s common shares on The Nasdaq Global Select Market (“Nasdaq”) will begin on or about June 15, 2021, the expected closing date of the Offering, under the symbol “HUT”. Each Offered Unit will consist of one common share in the capital of the Company (each a “Common Share”) and one-half of one Common Share purchase warrant (each a “Warrant”). Each Warrant is exercisable to acquire one Common Share (a “Warrant Share”) at an exercise price of CAD$6.25 per Warrant Share for 24 months after issuance. https://bit.ly/3viruUm

AcuityAds (AT-TSX) announces pricing of US$50 million Initial Public Offering in the United States and public offering in Canada.

The underwriters have agreed to purchase, at a price of US$10.15 per share, an aggregate of 4,926,109 common shares (the “Common Shares”) from the Company for aggregate gross proceeds of US$50,000,006. The Common Shares of the Company are expected to begin trading on The Nasdaq Capital Market (“Nasdaq”) under the symbol “ATY” on June 10, 2021, and will continue to trade on the Toronto Stock Exchange under the symbol “AT”. The offering is expected to close on June 14, 2021, subject to customary closing conditions. The offering is being conducted through a syndicate of underwriters led by Canaccord Genuity and Needham & Company, who are acting as joint lead book-running managers and representatives of the underwriters for the offering. RBC Capital Markets and TD Securities Inc. are also acting as book-running managers for the proposed offering, and with Lake Street Capital Markets, LLC, Roth Canada, ULC, Eight Capital, Desjardins Securities Inc., Echelon Wealth Partners Inc. and Paradigm Capital Inc. as co-managers (collectively, the “Underwriters”). https://bit.ly/3xj7UbW

Enthusiast Gaming (EGLX-NASDAQ, EGLX-TSX) announces pricing of its previously announced equity offering.

The company has priced the offering (the “Offering”) at US$5.75 per common share (the “Common Shares”) for aggregate gross proceeds to the Company of USD$46 million. In connection with the offering the Company has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets and Canaccord Genuity (the “Lead Underwriters”) as joint lead bookrunning managers, with B. Riley Securities acting as joint bookrunner, and including Paradigm Capital Inc., Scotia Capital Inc., Alliance Global Partners, Colliers Securities LLC and Haywood Securities Inc., as co-managers (together with the Lead Underwriters, the “Underwriters”). https://bit.ly/3gvWA5u

AnalytixInsight Inc. (ALY-TSXV, ATIXF-OTC, Sophic Client) announces pricing of overnight marketed equity offering.

The company entered into an underwriting agreement (the “Underwriting Agreement”) with a syndicate of underwriters led by Canaccord Genuity Corp. and Cantor Fitzgerald Canada Corporation, acting as the co-lead underwriters and joint bookrunners, and including Roth Canada, ULC (collectively, the “Underwriters”), to sell 11,500,000 units of AnalytixInsight (the “Units”) at a price of $0.70 per Unit (“Issue Price”) for aggregate gross proceeds of $8,050,000. https://bit.ly/2RMDm30

VSBLTY (VSBY-CSE) announces pricing of overnight marketed financing.

The Offering will be conducted on a commercially reasonable “best efforts” agency basis for the issuance of 16,000,000 million Units at a price of $0.50 per Unit for aggregate gross proceeds of $8,000,000 million. Echelon Wealth Partners Inc. (the “Agent”) is acting as agent for the Offering. Each Unit will consist of one common share (a “Common Share”) and one-half of one share purchase warrant (each whole share purchase warrant, a “Warrant”). Each Warrant will entitle the holder to purchase one Common Share at an exercise price of $0.65 for 36 months from the date of issuance. The Company intends to apply to list the Warrants on the Canadian Securities Exchange. https://bit.ly/3gi8XTJ

Adcore (ADCO-TSX) announces marketed public offering.

The company is commencing a marketed offering (the “Offering”) of units (the “Units”) of the Company. Each Unit will consist of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole purchase warrant, a “Warrant”). In connection with the Offering, the Company has filed a preliminary supplement (the “Preliminary Supplement”) to its short form base shelf prospectus dated May 10, 2021 (the “Base Shelf Prospectus”) with the securities commissions or similar regulatory authorities in each of the provinces and territories of Canada, other than Québec. The total size of the Offering as well as certain other terms of the Units and the Warrants (including the term and the exercise price of each Warrant) will be determined in the context of the market at the time of pricing. https://bit.ly/3xeVNfW

Kovo HealthTech lists on TSX Venture Exchange. Vancouver-based Kovo HealthTech, a company that creates, acquires, and grows healthtech businesses, is now trading on the TSX Venture Exchange (TSXV). Kovo filed a non-offering prospectus on May 26, offering no securities as part of its go-public plans. The firm’s common shares began trading June 4 under the symbol ‘KOVO.’ As of June 4, the company has approximately 31 million common shares outstanding, as well as options and warrants to purchase approximately 4 million common shares. Kovo HealthTech aims to acquire profitable RCM businesses and works to organically grow these businesses. Kovo specializes in revenue cycle management (RCM), a financial process that uses medical billing software to digitally track patient care episodes from registration and appointment scheduling to the final payment of a balance. The firm, which was founded in 2020, aims to acquire profitable RCM businesses and works to organically grow these businesses. According to the company’s prospectus, Kovo has completed seven successful acquisitions to date, and, in the last fiscal year, tracked approximately 366 percent revenue growth on its RCM business. The firm also processes US$71 million annually in RCM claims and its clients service 2.6 million patients. https://bit.ly/3vfZUqB

SSENSE claims $5 billion valuation following minority investment from Sequoia Capital.

Montréal-based global fashion tech startup SSENSE is set to announce it has reached a valuation of $5 billion following a minority investment from Sequoia Capital. This represents the first round of external funding for SSENSE since it was founded in 2003. The size of the investment was not disclosed. https://bit.ly/3wnhMkE

Trulioo hits $2 billion valuation following $476 million Series D led by TCV.

Global identity verification startup Trulioo has secured $476 million in a TCV-led Series D funding round that makes the Vancouver-based startup the latest Canadian unicorn. With its sizable Series D round, Trulioo claims a valuation of $2 billion. TCV is a new addition to Trulioo’s investor base. The Silicon Valley-based investor has backed the likes of Airbnb, Facebook, Netflix, Spotify, and Peloton, as well as major Canadian players like Wealthsimple and Clio. Trulioo’s round also included existing investor Citi Ventures, Blumberg Capital, Mouro Capital and American Express Ventures. https://bit.ly/3ggHVfj

Faire secures $260 million Series F round, claims $7 billion valuation.

Kitchener-Waterloo and San Francisco-based retail startup Faire has secured $260 million in Series F financing, as it looks to build on a year of significant growth. Faire said the fresh capital gives it a valuation of $7 billion, nearly triple the firm’s valuation last October. The round was led by Sequoia Capital. All of Faire’s existing investors also participated, plus two new investors in Baillie Gifford and Wellington Management. Faire’s list of previous investors includes Forerunner Ventures, Founders Fund, Khosla Ventures, Lightspeed Venture Partners, Y Combinator, DST Global, Dragoneer, D1 Capital Partners, and Norwest Venture Partners. The raise brings Faire’s total funding to date to nearly $700 million. https://bit.ly/3cC1AUZ

Raquel Urtasun launches new self-driving startup Waabi with $100 million from top investors.

Canadian artificial intelligence (AI) luminary Raquel Urtasun has moved on from Uber’s self-driving unit and launched her own company with the goal of disrupting the autonomous driving landscape. With the backing of top venture investors and experts in the AI space, Urtasun isn’t the only one who thinks her new company has hit on a winning approach. Urtasun’s new company, Waabi, comes out of stealth with over $100 million CAD in initial capital. The Series A round marks one of the largest rounds of initial financing ever raised by a Canadian startup. https://bit.ly/3cCxssA

Nesto secures $76 million to scale digital mortgage solution.

Montréal-based FinTech startup Nesto has raised $76 million in Series B financing as it looks to simplify the mortgage buying process for more Canadians. The round was led by Michael Rowell and Michael Paulus of insurtech company Assurance IQ, which was sold to Prudential Financial in 2019. Two Power Corp-backed firms also participated in the round, Toronto’s Portage Ventures and Montréal’s Diagram Ventures. As did Breyer Capital, Marc Alloul and other undisclosed strategic investors. Nesto’s Series B financing comes just over a year after it secured a $11.5 million Series A round, which was led by Diagram and Investissement Québec. https://bit.ly/2Tnpug7

Kepler raises $72.6 million as the firm looks to grow network, expand to US.

Three months after becoming the largest satellite operator in Canada, Toronto-based space tech startup Kepler Communications has secured $72.6 million in Series B financing. This latest round brings Kepler’s total funding to date to $108.9 million and was led by Tribe Capital, with participation from new investor Canaan Partners, and existing investors including IA Ventures and Costanoa Ventures. Kepler is one of many space tech companies looking to bring their innovations out of orbit this year. Starlink, which is part of Elon Musk-led SpaceX, is currently testing a new satellite dish, and earlier this year began accepting preorders for its service in Canada. Canadian companies have also been big contributors to this sector, and have seen their own notable developments in the last few months. MDA, a Brampton, Ontario-based space tech firm, closed a $400 million initial public offering in April, and now trades on the Toronto Stock Exchange. NorthStar, a Montréal-based startup that has developed an earth and space monitoring platform, began construction of its one satellite fleet in the fall of 2020. NorthStar plans to use these satellites to monitor Earth through a network of optical sensors. https://bit.ly/3zqP7xk

Poka secures $30 million to scale factory worker training solution.

Quebec City-based software startup Poka, which offers an edtech platform for factory workers, has secured around $30 million in Series B financing. The all-equity round was led by 40 North Ventures with participation from McRock Capital and existing Poka investors SE Ventures, CDPQ, Robert Bosch Venture Capital, and Leclerc. The financing brings Poka’s total funding to date to more than $54 million. https://bit.ly/3pK9eC4

DMG Blockchain Solutions announces strategic investment in crypto custodian Brane Capital.

The company announced a $3-million strategic investment in Ottawa-based Brane Capital. DMG has agreed to purchase 8.0 million units of Brane at a unit price of $0.375 per unit. Each unit is composed of one common share in the capital of the Brane and one half of a common share purchase warrant. Each whole warrant will entitle DMG to purchase one additional common share of Brane at an exercise price of $0.50 per common share for a period of 24 months. https://bit.ly/3iE9NMi

BDC Capital announces $300 million growth venture co-investment fund.

This fund is designed to play a key role in supporting venture backed companies as they scale to their full potential and help to attract additional investors to support their expansion. “During the life of the initial Co-Investments Fund we were pleased to find both a strong appetite for collaboration among investors and significant market demand,” said Jérôme Nycz, Executive Vice President, BDC Capital. “Consequently, we believe that by doubling down on our commitment, this successor fund will play an important role in maintaining the long-term growth of VC backed companies and supporting them on their path to becoming global tech leaders.” The new fund will continue making industry-agnostic investments through participation in late stage financing, co-investing alongside other partner funds. This provides an additional source of Canadian funding for late stage companies in a globally competitive marketplace. https://bit.ly/3xbsPxo

Version One Ventures raises US$100 million for two new funds.

Vancouver-based Version One Ventures has secured US$100 million across two newly announced venture funds. The firm raised $70 million for its fourth fund and $30 million for its second opportunities fund (all numbers USD). The raises follow a notable year for Version One that has included newly minted unicorn companies and Coinbase going public. The fourth fund comes three years after Version One’s third fund, which pulled in $57 million CAD. The firm launched its first opportunities fund in 2020 with $25 million. With the two new funds, much of Version One’s thesis remains the same, focusing on pre-seed and seed-stage companies. Over the last year, the venture firm did expand geographically, committing to a global thesis amid the shift to remote work. https://bit.ly/3cyUQHm

Diagram doubles size of Opportunity Fund with final $60 million close.

Montréal-based venture builder and investor Diagram Ventures has secured an additional $60 million CAD in the final close for its Opportunity Fund, as it looks to reinvest in its stars. Through the new $120 million fund, Diagram is looking to place additional bets on its winners by providing growth funding to its most promising portfolio firms, after seeing some success with its venture builder model. Diagram’s new fund is anchored by Power Corp’s Sagard Holdings and supported by a group of Canadian, American, and European entrepreneurs and corporate leaders. https://bit.ly/2RMCjjC

Amazon to hire 1,800 new corporate and tech employees in Canada in 2021.

The 1,800 new hires will support teams across Amazon, including AWS, Alexa, Amazon Advertising, and Retail and Operations Technology. More than 1,500 positions are currently open on amazon.jobs for software development managers, senior software development managers, software development engineers, senior software development engineers, data engineers, program managers, cloud computing solutions architects, sales and marketing executives, and more. https://bit.ly/3pL9bpw

Global Markets: IPOs, Venture Capital, M&A

Singapore’s Grab pushes back target date for US$40 billion SPAC merger.

Grab, a major ride-hailing and food delivery app in Southeast Asia, is pushing back the target date for its US$40 billion merger with a special purpose acquisition company sponsored by Altimeter Capital Management. Singapore-based Grab, which is backed by SoftBank, said it now expects to complete the merger with the SPAC, called Altimeter Growth, in the fourth quarter. When Grab first announced in April its plans to go public in the U.S. through the SPAC, the company said it would aim to close the merger deal by July. Grab said it was finalizing its financial audit and working with U.S. Securities and Exchange Commission to obtain pre-clearance of certain accounting policies and financial disclosures, without elaborating. As a result, some of its financial information remains subject to further review and revision, it said. https://bit.ly/3zptOMg

Robinhood is now eyeing an IPO in July at a US$40 billion valuation, report says.

Robinhood is targeting a stock market debut in July, after its plan to go public this month fell through, Bloomberg reported. The popular investing-app provider, expected to trade on the Nasdaq index, wants to time its initial public offering for when people return from the US Independence Day holiday break next month, Bloomberg said on Tuesday, citing sources. The company confidentially filed for an IPO in March, aiming to make its debut in late June. But its prospectus with the securities’ regulator has not yet been made public. Popular among retail investors, Robinhood counted more than 13 million users at the end of 2020. It has been credited with helping enable the trading frenzy that sent GameStop stock skyrocketing this year. https://bit.ly/2SvJBIP

The CEO of Kraken says the crypto exchange is considering a traditional IPO following rival Coinbase’s volatile direct listing.

Kraken founder and CEO Jesse Powell said he is considering a traditional initial public offering to take the cryptocurrency exchange public instead of a direct listing following Coinbase’s volatile performance. “An IPO is looking a little more attractive in light of the direct listing’s performance,” Powell told Fortune. “I would say we’re looking at it more seriously now having the benefit of seeing how the direct public offering played out for Coinbase.” Coinbase, the largest cryptocurrency exchange in the US, went public on April 14 in what many viewed as a milestone from the digital asset ecosystem. The company was valued at US$68 billion ahead of its direct listing but now hovers around a market cap of US$58 billion. Powell pinned the volatility of Coinbase’s performance to the method it used to go public, especially since existing shareholders are not prohibited from selling their shares at the debut in direct listings. https://bit.ly/2U6bhVr

Mark Cuban-backed banking app Dave to go public via SPAC merger at a US$4 billion valuation.

Dave, a banking app supported by billionaire Mark Cuban, on Monday announced it will go public through a merger with a blank-check company at a valuation of US$4 billion. Dave will merge with VPC Impact Acquisition Holdings III, a SPAC launched by Chicago-based Victory Park Capital, and includes a US$210 million concurrent private placement led by Tiger Global Management. VPC completed its initial public offering for the SPAC in March. Founded in 2017, Dave said it has helped Americans avoid billions of dollars in overdraft fees charged by banks, and has assisted over 10 million customers over the years. https://bit.ly/2Sttb3P

Zoom and Salesforce make quick US$23 million profit after IPO of Israeli software vendor Monday.com.

In Zoom’s IPO two years ago, Salesforce made a bundle by investing US$100 million at the offer price and watching the stock soar out of the gate. Zoom learned a little something from that experience. Zoom and Salesforce each purchased US$75 million worth of stock in Israeli software company Monday.com, which debuted on the Nasdaq on Thursday. Monday.com, which provides cloud-based collaboration tools, didn’t have a Zoom-level pop, but the stock did jump 15% — rising from US$155 to US$178.87 — giving both investors a quick paper profit. https://cnb.cx/2SvJJbh

Payments processor Marqeta pops 19% in trading debut after raising US$1.23 billion in an upsized IPO.

The payments processor Marqeta saw its stock jump as much as 19% on its Wednesday trading debut after raising US$1.23 billion in an upsized IPO. The company sold 45.5 million shares for US$27 apiece on Tuesday after marketing shares for between US$20 and US$24 each. Marqeta was founded in 2009 by its current CEO Jason Gardener and now has operations in 36 countries employing over 500 people. The company trades on the Nasdaq Global Select Market under the symbol “MQ.” Oakland, California-based Marqeta provides physical and virtual debit, credit, and prepaid cards to clients like Uber, DoorDash, Instacart, and even financial institutions like Goldman Sachs. Marqeta’s largest customer is the payments processor Square, which accounted for some 70% of its net revenues in 2020. https://bit.ly/3wpOuCg

Didi Chuxing’s IPO filing shows fast rides growth, puzzling financial reporting.

Didi Chuxing, the biggest ride-hailing firm in China, on Thursday unveiled its long-awaited public offering document, showing that its rides business shrunk just 8% in 2020, a stark contrast to the major contraction of its U.S.-based counterparts Uber and Lyft. And Didi’s rides business doubled in the first quarter of 2021 compared to the same period last year while Uber and Lyft reported first quarter 2021 revenue of around 40% less than a year earlier. That shows how much slower the taxi recovery has been outside of China. While Didi is growing fast, its business doesn’t appear to justify anywhere near the US$100 billion valuation some bankers told Didi it could be worth in an offering this year. And not just because Didi made it difficult for investors to draw comparisons between its business and those of Uber and Lyft, the only other publicly traded firms in the sector. Didi refers to its gross bookings—the total fares from its rides—as revenue whereas its counterparts subtract out payouts to drivers. However, based on disclosures buried in Didi’s filing, its first quarter rides revenue appeared to be half as big as Uber’s and just 20% bigger than that of Lyft, which is a closer comparison to Didi because it doesn’t have a food delivery business. Lyft’s market capitalization is US$18 billion. Didi is investing in food and parcel delivery—which represent a tiny portion of its revenue—and driverless taxi development, dragging down its bottom line. Didi burned US$712 million in cash in 2020 after burning only around US$127 million in 2019. In the first three months of this year, Didi burned US$203 million. Still, the company said its rides business was profitable in the first quarter, to the tune of at least US$200 million, after taking into account stock compensation, amortization and other costs. https://bit.ly/3cFox9U

SoftBank-backed construction firm Katerra files for bankruptcy protection in U.S.

Katerra said it had secured commitments for US$35 million in debtor-in-possession (DIP) financing from SB Investment Advisers (UK) Limited to fund operations during the Chapter 11 process, adding that the company’s international operations are not affected by this filing. The company had estimated liabilities of US$1 billion to US$10 billion and assets of US$500 million to US$1 billion, according to the court filing made in the United States Bankruptcy Court for the Southern District of Texas. The Information news website reported earlier this month that Katerra had told employees it planned to shut down, marking the collapse of the SoftBank-backed company that had raised more than US$2 billion to slash the cost of building apartments. https://reut.rs/3cyX0GY

Chinese operators of grocery apps Missfresh, Dingdong target US$500 million each via US IPOs, say sources.

Two Chinese online grocery platforms – Missfresh and Dingdong Maicai – are seeking to raise about US$500 million each through initial public offerings on US stock exchanges to fund their growth plans, according to people familiar with these transactions. Missfresh, in which social media giant Tencent Holdings owns an 8.1 per cent stake, is seeking to sell American depositary receipts on Nasdaq. Dingdong Maicai, backed by Sequoia Capital and Tiger Global Management, is targeting a similar amount through a share sale on the New York Stock Exchange. Both companies are keen to launch their stock offerings and list by the end of June at the earliest, these people said, declining to be named because they were not authorised to discuss the matter publicly. The on-demand grocery e-commerce market is extremely competitive in China, with many players finding it hard to turn a profit. The grocery app operators are pinning their hopes that consumers will continue to order fresh produce online after getting used to the convenience and safety during the Covid-19 pandemic. https://bit.ly/3gxDpYQ

Michael Saylor’s MicroStrategy is raising US$400 million of debt to acquire more bitcoin.

Michael Saylor’s business intelligence firm, MicroStrategy, announced on Monday that it will offer US$400 million of senior secured notes to qualified institutional buyers. The notes will be due in 2028 and MicroStrategy plans to use proceeds from the transaction to buy more bitcoin, according to a press release. The announcement comes after MicroStrategy disclosed it will be forced to take an impairment charge of nearly US$285 million in the second quarter due to fluctuations in bitcoin’s price. Microstrategy currently holds some 92,079 bitcoins bought for a total of US$2.251 billion at an average price of about US$24,450 per bitcoin. The company’s bitcoin holdings are currently worth roughly US$3.3 billion. https://bit.ly/3zqeyPh

Facebook just bought the Fortnite of VR.

Facebook has acquired yet another developer of a popular virtual reality game, announcing on Friday that BigBox VR, makers of the battle royale VR title Population: One, will be joining Oculus Studios. Population: One has been a hit, earning more than US$10 million on the Oculus Store “after just a few months,” Verdu said in a February blog post. The game, which is available on both the Oculus Store and on Steam, will “continue to be supported on all its current platforms,” according to Verdu. And the game will continue to receive regular updates, BigBox VR says on its website. BigBox VR joins a slew of other VR studios that Facebook has snapped up over the past couple years. The company acquired Onward developer Downpour Interactive in April, Lone Echo creator Ready at Dawn last June, Asgard’s Wrath maker Sanzaru Games in February 2020, and Beat Saber developer Beat Games in November 2019. https://bit.ly/35jpKPO

 

Emerging Technologies

One Fastly customer triggered internet meltdown.

A major internet blackout that hit many high-profile websites on Tuesday has been blamed on a software bug. Fastly, the cloud-computing company responsible for the issues, said the bug had been triggered when one of its customers had changed their settings. The outage has raised questions about relying on a handful of companies to run the vast infrastructure that underpins the internet. Fastly apologised and said the problem should have been anticipated. The outage, which lasted about an hour, hit some popular websites such as Amazon, Reddit, the Guardian and the New York Times. https://bbc.in/3cC265n

Cruise gets permit from California to provide passenger test rides in driverless vehicles.

The California Public Utility Commission (CPUC) said last Friday it has authorized General Motors-owned self-driving vehicle company Cruise to provide driverless passenger service to the public in its robotaxis. The CPUC said Cruise is the first entrant in its driverless pilot program, which lets companies give test rides in vehicles without drivers. Under the terms of the program, Cruise may not charge passengers for the rides, and the company must submit quarterly reports to the CPUC about the vehicles’ operations. Cruise has been testing its driverless vehicles in San Francisco, and last month applied for a permit that will allow the company to charge for autonomous rides and deliveries in the area. The company unveiled its Cruise Origin, a prototype vehicle without a steering wheel, pedals, or any controls typically associated with human driving last year. It’s slated to begin production at GM’s Detroit-Hamtramck plant starting in early 2023. Currently, most of Cruise’s driverless test vehicles are Chevrolet Bolt EVs. https://bit.ly/3zl0Jll

Alibaba says will develop an autonomous truck.

Chinese e-commerce giant Alibaba will develop a self-driving truck with its logistics subsidiary Cainiao and next year will roll out 1,000 autonomous delivery robots, the company’s Chief Technology Officer Cheng Li said. Investors are bullish on self-driving trucks even though developers have repeatedly missed milestones and are still far from fully driverless vehicles or making money. In addition, trucks pose some bigger challenges than passenger cars because of their greater weight. Still, in China, autonomous driving is a national priority and Alibaba’s is one of the country’s biggest movers of goods across the country. https://bit.ly/3giUYgt

Jeff Bezos says he will fly into space next month.

Amazon founder Jeff Bezos has revealed on Instagram that he plans to fly on Blue Origin’s first human spaceflight next month. “I want to go on this flight because it’s a thing I’ve wanted to do all my life,” Bezos, the richest person in the world, said in a post published Monday morning. “It’s an adventure. It’s a big deal for me.” Bezos said he invited his younger brother, Mark, whom he described as his best friend, to go along. The two will join the winner of an auction for a third seat on the flight, which is set to take place on July 20 of this year. Bidding for this seat is already at US$2.8 million but is likely to go higher during a live auction on June 12. Proceeds from this auction will be donated to Blue Origin’s foundation, Club for the Future. This means that Bezos will beat his competitor in the suborbital space race, Virgin Galactic founder Richard Branson, into space. Branson is hoping to fly on his VSS Unity vehicle later in 2021. https://bit.ly/3vjmHlB

Apple’s Augmented Reality headset launching in 2nd quarter of next year – Kuo.

Noted Apple analyst Ming-Chi Kuo is predicting that Apple’s Augmented Reality headset will launch in the second quarter of 2022. This is expected to be a development tool and stepping stone toward Apple Glasses. The note is about a key Apple supplier, Genius, which makes iPhone lenses – and is expected to supply lenses for Apple’s AR headset, too. Kuo refers to the VR/AR device as an HMD, or head mounted display. https://bit.ly/2TtOrqs

Facebook plans first smartwatch for next summer with two cameras, heart rate monitor.

Facebook is taking a novel approach to its first smartwatch, which the company hasn’t confirmed publicly but currently plans to debut next summer. The device will feature a display with two cameras that can be detached from the wrist for taking pictures and videos that can be shared across Facebook’s suite of apps, including Instagram, The Verge has learned. A camera on the front of the watch display exists primarily for video calling, while a 1080p, auto-focus camera on the back can be used for capturing footage when detached from the stainless steel frame on the wrist. Facebook is tapping other companies to create accessories for attaching the camera hub to things like backpacks, according to two people familiar with the project, both of whom requested anonymity to speak without Facebook’s permission. Facebook aims to release the first version of the watch in the summer of 2022 and is already working on second and third generations for subsequent years. Employees have recently discussed pricing the device at roughly US$400, but the price point could change. While it’s unlikely, Facebook could also scrap the watch altogether, as the device has yet to enter mass production or even be given an official name. https://bit.ly/3cCLKt0

Media, Streaming, Gaming & Sports Betting

Subscription-based streamers outstrip ad-supported services’ share of watch time.

With the exception of Hulu, the preeminent streaming services have been subscription-based and sans ads. Netflix and Amazon Prime Video have historically dominated the market, and more recently Disney’s Disney+ and WarnerMedia’s HBO Max have risen the ranks without relying on advertisers for revenue. However, the past year — and this year in particular — has seen an increasing influx of major ad-supported streamers. Last July, NBCUniversal’s Peacock rolled out nationally in the U.S. Then in January, Discovery debuted Discovery+. And in June alone, both HBO Max and ViacomCBS’s Paramount+ will have added ad-supported tiers to their respective services. The ad-supported streaming landscape “is significantly different than it was 18 months ago. It’s been like a hockey stick,” said one agency executive. The introduction of more ad-supported streamers has coincided with an increase in the overall number of streaming services that people use. In 2020, the typical person used, on average, nearly eight streaming services — including free services — compared to six in 2019, according to PwC. https://bit.ly/3vljAJL

Microsoft building Xbox app for TVs, streaming device.

Microsoft is discussing a plan with television set makers to bring Xbox games to their devices without requiring players to have consoles. The company said it is also making a streaming device so people can do the same on TVs that don’t have Xbox apps built into them. Those were the most high-profile bits of news Microsoft made on Thursday as part of a broader set of Xbox announcements from the company. The announcements collectively showed how the company is doubling down on plans for its gaming service, known as Xbox Game Pass, which gives people access to a growing library of games for US$10 to US$15 a month. Right now, many subscribers to the service—which is akin to a Netflix for gaming—play those games on conventional Xbox consoles. But Microsoft is also rolling out a feature as part of Game Pass that lets people stream Xbox games from the cloud without needing a console in their homes. While it’s still not clear how well that cloud gaming feature will work once it’s in wider use, Microsoft sees it as a way to expand the audience for its games business. https://bit.ly/3gi9uoN

The CEO of DraftKings says he’s looked into adding crypto as a form of payment, but regulations are preventing it.

DraftKings CEO Jason Robins said he has looked into adding cryptocurrencies as a form of payment for his online sports betting company but admitted that the current regulations prevented him from pursuing the matter further. “The payment methods we can accept are determined by the individual state regulators and, as of now, crypto is not an approved payment type in any of the states where we’re live,” Robins said during a live town hall hosted by stock trading app Public Wednesday. DraftKings in the past year has been benefitting from a wave of enthusiasm over the country’s emerging sports-betting industry. Research firm Eilers & Krejcik Gaming in February projected that sports betting would generate US$5.8 billion in revenue by 2023, up from an estimated US$920 million in 2019. https://bit.ly/2U3ZeI3

Adtech, Privacy & Regulatory

JBS paid US$11 million to resolve ransomware attack.

The ransom payment, in bitcoin, was made to shield JBS meat plants from further disruption and to limit the potential impact on restaurants, grocery stores and farmers that rely on JBS, said Andre Nogueira, chief executive of Brazilian meat company JBS SA’s U.S. division. “It was very painful to pay the criminals, but we did the right thing for our customers,” Mr. Nogueira said Wednesday in an interview with The Wall Street Journal. He added that the payment was made after the majority of JBS plants were up and running again. https://on.wsj.com/3ve4ntP

Hackers steal wealth of data from game giant EA.

Hackers have broken into gaming giant Electronic Arts, the publisher of Battlefield, FIFA, and The Sims, and stole a wealth of game source code and related internal tools, Motherboard has learned. “You have full capability of exploiting on all EA services,” the hackers claimed in various posts on underground hacking forums viewed by Motherboard. A source with access to the forums, some of which are locked from public view, provided Motherboard with screenshots of the messages. https://bit.ly/3zjMInU

Google agrees to US$270 million fine in French antitrust settlement.

Google has agreed to pay a US$270 million fine to settle an antitrust case brought by France’s competition authority that alleged the company used its dominant position in the digital ad market to favor its own business, harming smaller rivals and news publishers. The case is one of several Google faces globally, alleging that it has abused its heft from search to advertising and apps to favor its own properties and suppress competition. In May, Italy’s competition regulator fined the company more than US$120 million for blocking an electric vehicle charging app from the Android Auto in-car app system. As part of the settlement in France, the regulator said Google has agreed to provide “fair access to information on the auction process” for other companies that help publishers sell ads and no longer allow its ad exchange, AdX, to use competitors’ pricing to optimise its own bids in a way that third parties can’t. Google also said it will appoint an independent trustee to monitor whether it follows through on its commitments. Maria Gomri, legal director at Google France, wrote in a blog Monday that the company will test and develop changes to its ad technology in the coming months before rolling them out more broadly and in some cases globally. Google is committed to working with regulators and investing in new products and technologies that give publishers better results and more choice, she wrote. https://bit.ly/3vjmXB5

Ohio AG sues to regulate Google as a public utility.

Google is under yet another regulatory attack that could dramatically reshape its business, this time from Ohio Attorney General Dave Yost. In a lawsuit Tuesday in Delaware County, Ohio, Yost’s office is suing to have the internet search giant declared a public utility and prevent it from favoring its own products and services in its search results. In the lawsuit, Yost says Google’s roughly 90% share of the general online search market means that it must offer the same non-discriminatory access to its search engine that is required of electric utilities and phone companies. “When you own the railroad or the electric company or the cellphone tower, you have to treat everyone the same and give everybody access.“ Echoing an earlier lawsuit filed in December by Ohio and 37 other state attorneys general, if successful the current lawsuit would use Google’s common carrier status to bar it from discriminating against rivals in its search results. Yost’s lawsuit is the first of its kind in the US. For support, he is citing US Supreme Court Justice Clarence Thomas, who in February advocated for regulating certain large internet companies as public utilities. If successful however, Google would only be subject to heightened regulations in Ohio. https://bit.ly/3vkv1l1

Apple’s new ‘private relay’ feature will not be available in China.

The feature was one of a number of privacy protections Apple announced at its annual software developer conference on Monday, the latest in a years-long effort by the company to cut down on the tracking of its users by advertisers and other third parties. Apple’s decision to withhold the feature in China is the latest in a string of compromises the company has made on privacy in a country that accounts for nearly 15% of its revenue. In 2018, Apple moved the digital keys used to lock Chinese users’ iCloud data, allowing authorities to work through domestic courts to gain access to the information. https://reut.rs/3zpumBO

Apple is encroaching on Facebook’s territory like never before with new social feature.

Starting this fall, the decade-long spat between Apple and Facebook will start a new chapter. And this part of the story has Apple encroaching on Facebook’s territory in ways it never has before. On Monday, Apple revealed several new social features that will come to iPhones and iPads with the launch of iOS 15 this fall. Soon, iPhone users will be able to hold FaceTime video calls with Android and Windows users for the first time. They will also be able to use a new feature called SharePlay, which lets you hold a FaceTime call and watch a streaming movie, listen to music, or share your screen with your contacts. IMessage is getting a boost as well, with new features that make it easier to share web links, photos, Apple Music tracks and Apple News articles with your contacts. https://cnb.cx/3zm2lLr

Senate passes US$250 billion bipartisan bill to counter China tech threat.

The Senate has passed a bipartisan bill that provides US$250 billion in government funding for technology research and development, in an effort to make sure that the U.S. can stay competitive against China in key areas of advanced technology, the Wall Street Journal reported. The bill, known as the U.S. Innovation and Competition Act, expands the government’s role in tech research. Some of the funding will be used for semiconductor research and manufacturing, as part of Washington’s push to encourage more chip production in the U.S. The bill also includes a provision that prohibits downloads of the popular video app TikTok, owned by Chinese internet giant ByteDance, on government devices. To become law, the bill still needs to be approved by the House of Representatives. https://bit.ly/3wkaePP

New tax regime won’t push big tech companies out of Ireland.

Big tech companies and other industries that have bunkered down in Europe’s tax havens are unlikely to shift their bases under the proposed global minimum tax regime as markets like Ireland still offer more corporate perks than wealthier neighbors. While the 15% tax rate proposed by the Group of Seven rich nations is higher than Ireland’s current 12.5% levy for businesses, it’s still below the 20% or more companies would face in countries like the U.S. or France. The country also has tax treaties with other nations that allow multinational businesses to pay a lower rate and incentives to compensate companies for research and development spending. If new legislation doesn’t address the other perks tax havens offer big tech companies, they could maintain a lot of their advantages. https://bloom.bg/3woOH8A

eCommerce

Netflix is launching an e-commerce site to sell show-related merchandise like anime hoodies and US$60 ‘Lupin’ throw pillows.

Netflix is launching an e-commerce site selling merchandise inspired by its shows, The New York Times reported on Thursday. Future additions to Netflix.shop will include products tied to shows like “The Witcher” and “Stranger Things,” according to the press release. The store is currently accessible in the US but will expand to other countries in the coming months. It is run through Shopify, according to the Times. Netflix has previously struck deals with companies like Amazon and Walmart to sell products tied to its content, the Times reported. The new online shop allows Netflix to further capitalize on viewer interest in merchandise to help make up for lack of advertising revenue since the streaming site, unlike many of its competitors, doesn’t run ads. The launch comes shortly after a disappointing quarter for the company; Netflix reported adding just under 4 million subscribers in the first quarter of 2021, falling short of its forecast of 6 million new subscribers. This quarter, Netflix is expecting just 1 million new members. https://bit.ly/2RSsot0

Shopify brings on team from augmented reality home design app Primer.

In Friday acquisition news, Shopify shared that they’ve acquired the team from augmented reality startup Primer, which makes an app that lets users visualize what tile, wallpaper or paint will look like on surfaces inside their home. In a blog post, co-founders Adam Debreczeni and Russ Maschmeyer write that Primer’s app and services will be shutting down next month as part of the deal. Primer’s team of eight employees will all be joining Shopify following the acquisition. Primer had partnered with dozens of tile and textile design brands to allow users to directly visualize what their designs would look like using their iPhone and iPad and Apple’s augmented reality platform ARKit. https://tcrn.ch/3zkOcy9

Fintech, Blockchain & Cryptocurrency

The number of active bitcoin addresses has rebounded to near-record highs, new data shows.

The number of active bitcoin addresses rebounded to near-record highs, driven partially by El Salvador’s passage of a law that makes it the first country to accept the digital currency as legal tender. According to Glassnode data, on May 8 there were roughly 1.229 million active bitcoin addresses. That’s just under 15,000 addresses away from the January 8 all-time record of 1.243 million. According to Glassnode, the rise in bitcoin addresses is a common “characteristic of bull markets” as the number of addresses rises when there is “strengthening demand for on-chain transactions, value settlement, and urgency for inclusion in an upcoming block.” https://bit.ly/2RSsu3Q

Semiconductors

US chip production on track for US$52 billion government investment after Apple lobbying.

The US Senate has approved US$52 billion in funding to boost US chip production, as part of an effort to address the global chip shortage, and to reduce dependence on China. Apple was one of the companies lobbying for the move. In total, the US Innovation and Competition Act provides almost US$250 billion in funding for US manufacturing, with US$52 billion of it specifically allocated to chip fabrication. However, it is as yet unclear whether it will also pass in the House. The act aims to correct a dramatic slide in government investment in tech R&D over the decades, from 2.2% of GDP in 1964 to just 0.7% last year. The global chip shortage has seen US automotive plants standing idle, and Apple has warned that both Mac and iPad production are likely to be hit. https://bit.ly/3cE1pID

ESG

Apple in talks with Chinese battery makers for Apple Car.

News about Apple Car is back, with a new report suggesting Apple is in early-stage talks with two major Chinese battery makers. According to a report by Reuters, the Cupertino company is looking for a supply of batteries for its planned electric vehicle. Apple is allegedly talking to China’s CATL, which supplies major carmakers including Tesla, and BYD. According to the report, Apple is including a condition for potential battery suppliers: build manufacturing facilities in the US, said two of the sources. CATL appears to be reluctant to build a US factory due to political tensions between China and the United States. This news comes after Bloomberg reported last week that Apple lost several top managers in this project, although it still is “actively recruiting” new hires. https://bit.ly/3gkIqFw

Square will invest US$5 million to build solar-powered bitcoin mining facility.

Financial services firm Square Inc. will partner with blockchain technology provider Blockstream Mining to build an open-source, solar-powered bitcoin mining facility, Blockstream announced in a press release Saturday. Square confirmed the news in a tweet, saying it was “committed to driving further adoption and efficiency of renewables within the bitcoin ecosystem.” According to the release, Square will invest US$5 million in the facility, which will be a “proof-of-concept for a 100% renewable energy Bitcoin mine at scale,” and will be built at one of Blockstream’s sites in the US. “We hope to show that a renewable mining facility in the real world is not only possible but also prove empirically that Bitcoin accelerates the world toward a sustainable future,” the release states. https://bit.ly/3weuJgJ

The president of El Salvador says the country is exploring using geothermal energy from volcanoes to mine bitcoin following its decision to make the cryptocurrency legal tender.

El Salvador’s president Nayim Bukele took to Twitter on Wednesday for yet another big bitcoin announcement. This time, Bukele said that he has instructed the president of the country’s state-owned geothermal electric company, LaGeo SA de CV, to “put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos.” The move comes after the country passed a law to make bitcoin legal tender on Wednesday via a supermajority (62 votes out of 84 possible). According to data from Cambridge, the bitcoin network’s total energy consumption represents about 0.53% of total global energy consumption, and more than 85% of the energy consumed is used in the mining process. https://bit.ly/2TqqRdQ

Sophic Capital Client Insights

Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC): Luckbox – Meet the New CEO.

Since his days at gaming company Electronic Arts (NASDAQ:EA), Thomas Rosander has thought about the massive opportunity from combining the large, growing esports audience with betting. Now, as Real Luck Group’s new CEO, he has the opportunity and the tools to execute upon his vision, implementing a proven strategy he used at prior companies to grow players and revenues via a nuanced and data-driven marketing approach. https://bit.ly/3wlyG38

Sophic Client HIRE Technologies (HIRE-TSXV): HIRE Technologies – A Stock Ready to Go “HIRE”.

COVID-19 economic recovery plans will likely include government stimulus programs targeted towards re-employing millions of affected workers across the United States and Canada. To handle this impending surge in demand, the staffing industry will have to rely more heavily on technology driven solutions. Sophic Capital client HIRE Technologies is well positioned to capitalize on these staffing trends. https://bit.ly/35cDWu4

Sophic Client Body and Mind Inc. (BAMM-CSE, BMMJ-OTC): Arkansas – Hog Wild for Cannabis.

Arkansas is a limited-license medicinal cannabis market with patient spending growing rapidly – from $600K per day in Dec/20 to over $900K per day in Apr/21. The current daily spending rate puts the state on track for a $330 million revenue pace, with per capita spending higher than both Florida and Colorado. Sophic Capital client Body and Mind has seized upon the Arkansas growth opportunity with its award-winning dispensary and its recently launched cultivation operations. The company currently operates 1 of only 33 retail dispensaries in the state and is expected to start selling it’s award winning flower into the market by the end of the year. With limited retail competition, constrained supply and its upcoming ramp in cultivation the company is well positioned to build a long-term sustainable moat in this limited license state. https://bit.ly/2ROXr8V

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