While last week saw relatively fewer innovation sector public markets transactions in Canada, we saw employee wellness software firm LifeSpeak file for a TSX IPO, VerticalScope upsized its IPO to $125 million, and Shopify reportedly invested in Stripe, bringing its total stake to over $350 million. In the USA, and Europe there appears to be increasing focus on regulations and consumer privacy, including the appointment of tech critic Lina Khan as FTC Chair, a Senate proposal for a new US agency to protect Americans’ data, Google’s adtech business reportedly set to face a formal EU probe by year-end, and U.K. regulators looking to examine if Google and Apple run a smartphone duopoly. Sophic client, Killi (MYID-TSXV, MYIDF-OTC) could be a way for investors to gain exposure to this theme. We’re awaiting public markets debuts by PUBG maker, Krafton in South Korea, Grocery courier Boxed via a SPAC deal, and fintech provider Wise via a London direct listing.
Canadian Technology Capital Markets & Company News
Employee wellness software firm LifeSpeak files for TSX IPO.
Toronto-based employee wellness and software-as-a-service company LifeSpeak has officially filed to go public on the Toronto Stock Exchange (TSX). LifeSpeak plans to trade under the symbol ‘LSPK.’ In May, LifeSpeak was among a throng of Canadian tech companies reported to IPO. On Wednesday, LifeSpeak plans to price its shares between $9 and $12 each. The firm is looking to raise $125 million in gross proceeds, and its market capitalization could reach approximately $465 million following the deal. The offering’s underwriters include RBC Capital Markets, Canaccord Genuity, and Scotiabank, as joint bookrunners. In September, LifeSpeak raised a $42 million equity investment in its first institutional round of financing, led by Round13 Capital. In its preliminary prospectus, filed Monday, the firm claimed to have 228 total clients and $21 million in annual recurring revenue for the 12 months ended March 31, 2021. https://bit.ly/3gEJkMY
VerticalScope upsizes IPO to $125 million, begins trading on TSX.
After increasing the size of its initial public offering (IPO) by $25 millio, Toronto-based VerticalScope began trading on the Toronto Stock Exchange (TSX) on Tuesday under the symbol ‘FORA.’ Through the IPO, which is expected to close on June 21, VerticalScope planned to issue nearly 5.7 million subordinate voting shares at a price of $22 per share. The company’s shares opened at a price of $25.25, but have since dipped to around $23 per share at time of publication. Founded in 1999, VerticalScope is a software company that operates a platform for online enthusiast communities in high-consumer spending categories like automotive, powersports, outdoor, home, health, and technology. Through organic growth and acquisitions like VarageSale, VerticalScope has built a portfolio of over 1,200 online communities and more than 100 million active monthly users. Torstar Corporation, the media company behind the Toronto Star, has been a majority shareholder in VerticalScope since 2015, when it purchased 56 percent interest in the company. VerticalScope’s principal shareholders include Laidlaw’s RDL Ventures, Hedgewood, and NordStar Capital LP, which bought Torstar last year. The IPO’s underwriters include RBC Dominion Securities, Canaccord Genuity Corp, National Bank Financial, TD Securities, Raymond James, Desjardins Securities, Cormark Securities and HSBC Securities. https://bit.ly/3zCVayI
Shopify (SHOP-NYSE, SHOP-TSX) reportedly invests in Stripe, bringing total stake to over $350 million.
Shopify has reportedly invested in San Francisco-based FinTech startup Stripe, which processes payments for e-commerce businesses. According to The Wall Street Journal, Shopify, Capital Group, Sequoia Capital, Silver Lake, and others invested about $1 billion USD in Stripe, after the FinTech firm recently gave investors the opportunity to acquire significant stakes in the company from existing shareholders, including current and former Stripe employees. The Journal reports these bids exceeded $4 billion, but only $1 billion were filled through the tender offer, which closed last month. For Shopify, which has previously partnered with Stripe, the reported investment comes as the Canadian retail tech firm has ramped up its strategic investment efforts. Earlier this year, Shopify put capital into Vancouver-based FinTech startup Bench and Toronto same-day delivery firm Swyft. https://bit.ly/3zDTx3I
ApplyBoard raises $375 million Series D at $4 billion valuation.
Following a busy year, Kitchener-Waterloo’s ApplyBoard has secured $375 million in Series D funding to bolster its international expansion efforts. The all-equity round was led by Ontario Teachers’ Pension Plan Board (OTPPB) through its Teachers’ Innovation Platform (TIP), which focuses on providing late-stage venture capital and growth equity investments to tech firms. Existing ApplyBoard investors Fidelity Management & Research, BDC, Harmonic, Index Ventures, Garage Capital, and Blue Cloud Ventures also participated. The financing follows a year of significant growth for ApplyBoard, fuelled by digital transformation in the international student recruitment industry. Just over a year after raising its Series C round, ApplyBoard’s CEO and co-founder Martin Basiri told BetaKit the startup decided to raise Series D capital earlier than initially planned to build on this momentum. The round, which was first reported by The Globe and Mail as a $230 million USD round, brings ApplyBoard’s total funding to date to $600 million. The Kitchener-Waterloo-based startup claims the new financing gives it a post-money valuation of $4 billion, double that of the company’s $100 million Series C round in May 2020, which was followed by a $70 million extension in September. https://bit.ly/35DeGNQ
Dfuse rebrands, secures $73.5 million grant to develop blockchain infrastructure project.
Montréal-based blockchain startup Dfuse has rebranded to StreamingFast and pivoted its business to supporting a blockchain infrastructure project called The Graph, after securing a $73.5 million grant from The Graph Foundation. The Graph is a network that serves as a searchable index of blockchain data. The Graph Foundation is the non-profit organization that supports its growth. The grant StreamingFast has received consists of a combination of cash and Graph (or ‘GRT’) tokens, Ethereum tokens native to The Graph that are worth approximately $0.70 in USD apiece. StreamingFast refused to disclose the financial terms of the deal, including the portion of tokens involved in the transaction. https://bit.ly/35D0HaJ
SkyWatch raises $21 million Series B as private sector satellite interest skyrockets.
Waterloo-based space tech startup SkyWatch Space Applications has raised a $21 million Series B round after interest in the company’s commercial satellite imagery services soared to the moon. The all-equity, primary capital round was led by Drive Capital, with participation from existing investors BDC ICE Venture Fund, Golden Ventures, Space Capital, and Bullpen Capital. SkyWatch has raised over $30 million to date, with its last round a $10 million Series A coming in January of 2020. Past investors include Sinai Ventures and Globalive Capital. Since its Series A round, SkyWatch has seen an explosion in private sector interest in Earth observation data. The company claims a 450 percent jump in revenue year-over-year for the first half of 2021. https://bit.ly/3vHFFT4
Browze announces $15.2 million Series A round for factory-to-consumer e-commerce platform.
Toronto-based retail startup Browze has announced $15.2 million in Series A financing as it looks to build on its growth in the online, cross-border retail space. The all-equity round was led by Valor Siren Ventures and supported by a group of existing Browze investors that includes Samuel Yen, former VP at Alibaba Group. Browze’s other investors include Eli Spiro, CEO of Axxcess Capital, who invested in the company’s seed round and helped Browze close its Series A. https://bit.ly/2Ujibql
Amplitude Ventures’ precision health fund exceeds $200 million target following final close.
Montréal-headquartered healthtech investment firm Amplitude Ventures has completed the final close of its precision health-focused fund. The firm declined to disclose its final close total but told BetaKit the oversubscribed close surpassed Amplitude’s original target of $200 million. Several VCs that spoke with BetaKit noted that it is highly irregular for a fund to not announce its final close number unless it has failed to reach its fund target. However, sources familiar with the deal did confirm to BetaKit that Amplitude exceeded its $200 million fund target. The new limited partners (LPs) that participated in Amplitude’s final close include RBC (led by RBCx), Alberta Enterprise Corporation, Cathay Capital, and Alexandria Venture Investments, the venture arm of Alexandria Real Estate Equities. A number of undisclosed high-net-worth individuals also participated in this latest close, which brought the total number of LPs in the fund to 37. Other LPs include Investissement Québec, Teralys Capital, and Vancouver City Savings Credit Union. https://bit.ly/3gKMiP0
Since 2019, ecommerce sales in Canada have nearly doubled their share of overall retail sales.
The pandemic boosted Canada’s ecommerce market robustly last year by 75.0%, making it the second-fastest-growing ecommerce market worldwide behind Argentina, at 100.6% growth. Ecommerce’s share of total retail will expand to 13.4% this year and reach 17.2% by the end of our forecast period in 2025. Despite last year’s decline, overall retail sales in Canada will increase 6.4% year over year to $481.40 billion, surpassing pre-pandemic levels. And it’s on track to surpass $500 billion next year. https://bit.ly/3gIZbZX
Global Markets: IPOs, Venture Capital, M&A
23andMe goes public via Richard Branson’s SPAC.
Genetic testing firm 23andMe began trading on the Nasdaq under the ticker symbol ‘ME’ on Thursday after merging with Richard Branson’s special purpose acquisition company VG Acquisition Corp. The deal valued the consumer DNA testing company, co-founded in 2006 by Anne Wojcicki, at US$3.5 billion and cemented Wojcicki’s billionaire status, according to Forbes. In a February filing, 23andMe revealed widening losses on shrinking revenues. It posted revenue of US$305 million for the fiscal year ending March 2020 on losses of US$250 million, down from US$440 million in revenue the prior year on losses of US$183.5 million. Sunnyvale, Calif.-based 23andMe raised approximately US$800 million in VC funding from investors including NEA, Sequoia Capital and GV. In 2020, it was valued at US$2.83 billion as part of a US$82.5 million financing, according to financial data firm PitchBook. https://bit.ly/3vI73A4
PUBG maker plans to raise US$5 billion in landmark Korea IPO.
Krafton Inc., the company behind hit mobile game PlayerUnknown’s Battlegrounds, filed to raise as much as 5.6 trillion won (US$5 billion) in a South Korean initial public offering that’s likely to be the country’s largest ever. The gaming company will sell more than 10 million shares at 458,000 won to 557,000 won apiece, Pangyo-based Krafton said in a filing Wednesday. The top of the range exceeded general market expectations and would grant Krafton a market capitalization of 28 trillion won, based on the number of common shares. Krafton plans to finalize the price July 9 and list on July 22. Krafton is seeking to smash the record for the biggest debut among South Korean companies, previously held by Coupang Inc., which raised US$4.6 billion in an IPO on the New York Stock Exchange in March. The largest listing on domestic exchanges had been Samsung Life Insurance Co.’s $4.3 billion share sale in 2010. Riding a boom in retail trading, Asia’s fourth largest economy is on track for a record year of floats, with more deals from the likes of LG Energy Solution and Kakao’s affiliates likely to come in the second half. The key question Krafton will have to answer is whether it can grow to become more than a one-hit wonder. The company is almost wholly dependent on its blockbuster, genre-defining PUBG, which produced most of its 1.67 trillion won revenue last year, according to a regulatory filing. Analysts also worry about how much Covid-19 lockdowns helped Krafton’s numbers over the past year — the company’s filing showed sales dropped 11.6% and operating profit was down 33% in the first quarter of this year. https://bloom.bg/3vFhLaH
Grocery courier Boxed to go public in SPAC deal.
Grocery courier Boxed Inc. said it would go public through a merger with a special-purpose acquisition company, or SPAC, capitalizing on delivery demand that swelled during the Covid-19 pandemic. Boxed and Seven Oaks Acquisition Corp. said the deal would value the combined company at nearly US$900 million and provide money to serve more households and businesses that started ordering groceries online during the pandemic. Boxed faces mounting competition for its business. While higher than before the pandemic, grocery delivery sales have slowed recently. Instacart Inc., which has said it expects to go public, is pitching its service to businesses and recently introduced 30-minute delivery. Instacart, DoorDash Inc. and Uber Technologies Inc.’s Uber Eats division are also delivering a wider assortment of goods such as baby products, prescriptions and electronics in addition to restaurant meals and groceries. Despite recent growth, they are struggling to turn a profit, squeezed by labor and shipping costs. Boxed isn’t profitable, Mr. Huang said, but Boxed and Seven Oaks projected that its software, advertising and delivery businesses would help it turn a profit within several years. Boxed’s sales growth has also slowed from high levels at the start of the pandemic last spring, but the company said it expects to continue adding customers. When complete, the transaction will assign Boxed an equity valuation of about US$887 million and give it about US$334 million of cash. The boards of both companies have approved the deal, which is expected to close in the fourth quarter. Boxed’s existing backers are rolling over their investments into the public company, which will carry the Boxed name. https://on.wsj.com/3qj9aJS
Wise announces plans to go public via direct listing.
Wise, the fintech company formerly known as TransferWise, has announced that it wants to become a public company on the London Stock Exchange. Instead of following the traditional IPO route, Wise plans to go public via a direct listing. This is going to be the biggest direct listing on the London Stock Exchange. If you’re not familiar with Wise, the company specializes in cross-border money transfers. If you want to send money to someone living in another country, traditional retail banks charge a lot in foreign exchange fees, foreign transaction fees, etc. Of course, there are some well-known alternative options, such as Western Union and MoneyGram. While those companies provide some convenient on-ramp and off-ramp methods, they’re still more expensive than Wise. With Wise, users first upload money to their Wise account using a bank transfer or a debit card. They can then send money in another currency to a recipient’s bank account. The company tries to be as transparent and upfront as possible when it comes to fixed and variable fees. Originally founded in 2011, Wise has grown quite a lot as its revenue grew from US$422 million to US$586 million in its most recent financial year (from £303 million to £421 million, respectively). It represents US$57 million (£41 million) in profit before tax — the company says it has been profitable since 2017. Overall, Wise has 10 million customers who process around $7 billion (£5 billion) in cross-border transactions every month. More recently, the company diversified its revenue by adding new products. https://tcrn.ch/3xz8zpL
Ford-backed EV battery producer to go public via SPAC merger at a US$1.2 billion valuation.
Electric-vehicle battery producer Solid Power on Tuesday announced it’s going public by merging with blank-check firm Decarbonization Plus Acquisition Corporation III in a deal valued at US$1.2 billion. The company is expected to have approximately US$600 million in cash, including US$165 million from investors such as Koch Strategic Platforms, Riverstone Energy Limited, Neuberger Berman funds, and Van Eck Associates Corporation. Ford Motors and BMW recently participated in the US$135 million Series B funding of Solid Power in May. The two companies also expanded partnerships with Solid Power to secure all solid-state batteries for future electric vehicles. Solid Power produces rechargeable batteries for electric vehicles and mobile power markets. The company claims its production mirrors lithium-ion manufacturing processes while eliminating certain expensive and timely steps. https://bit.ly/35F1pUR
China launches Antitrust probe into Didi Chuxing ahead of IPO.
China’s market regulator has begun an antitrust investigation into ride-hailing giant Didi Chuxing, which recently filed for a U.S. initial public offering, Reuters reported, citing three people with knowledge of the matter. China’s State Administration for Market Regulation is looking into whether Didi has resorted to any unfair practices to reduce competition from smaller rivals in the market, according to Reuters. It’s unclear whether such a probe could result in any changes to Didi’s planned IPO, which bankers say could value the company at US$70 billion. Another question is whether an investigation could lead to any changes to Didi’s business operations. In November, China’s regulators forced financial technology giant Ant Group to scrap its US$37 billion IPO, and the company is now restructuring its business. The investigation into Didi would be part of Beijing’s broader effort to tighten its control over the country’s biggest tech companies. In April, the market regulator slapped a US$2.8 billion anti-monopoly fine on e-commerce giant Alibaba. Also in April, the regulator launched an antitrust probe into food delivery and on-demand services giant Meituan. https://bit.ly/2TLqGdp
OnlyFans seeks Billion-dollar valuation.
OnlyFans, a subscription-based social media platform used by adult entertainers, has hired an advisor to help identify investment interest at over a US$1 billion valuation, Bloomberg reports. The company earned over US$400 million in revenue last year and has roughly 130 million users, per Bloomberg. The London-based business may struggle to raise from traditional venture capital firms, many of which have “vice clauses” in their limited partner agreements. Still, OnlyFans is hoping a new slate of investors will help it become a mainstream media platform and attract more advertisers, according to Bloomberg. CEO Tim Stokely spoke to The Information last year about how he planned to bring more creators and celebrities onto the platform. The new financing would represent its first infusion of private capital after Leonid Radvinsky bought a 75% stake in the company in 2018, according to financial data firm PitchBook. https://bit.ly/3xBgLpE
Ford acquires Electriphi as it prepares to woo EV fleet customers.
Ford has two electric vehicles in the pipeline — the E-Transit cargo van and F-150 Lighting Pro —aimed at commercial customers. Now, the automaker is rounding out its future EV commercial business with the acquisition of battery management and fleet monitoring software startup Electriphi. Terms of the acquisition weren’t disclosed. Ford is betting that the software developed by the three-year-old San Francisco startup will help it capture more than US$1 billion in revenue just from charging by 2030. https://tcrn.ch/2SCWKQF
Hindenburg Research reveals DraftKings short position, says company is hiding black market operations.
Short seller Hindenburg Research revealed its latest short position against DraftKings in a report on Tuesday. Hindenburg said that one of DraftKings’ SPAC merger partners, Bulgaria-based gaming technology company SBTech, “brings exposure to extensive dealings in black-market gaming, money laundering, and organized crime.” The short seller claimed that, according to their estimates based on SEC filings, “supporting documents,” and conversations with former employees, roughly 50% of SBTech’s revenue comes from markets where gambling is banned. Hindenburg said the company’s illicit customer relationships were shuffled into a newly formed “distributor” entity called BTi/CoreTech when DraftKings went public via a SPAC merger with Diamond Eagle Acquisition Corp. in April 2020. https://bit.ly/2SECle4
MicroStrategy files to sell US$1 billion in shares to add to its vast bitcoin treasure chest.
Bitcoin bull Michael Saylor’s MicroStrategy plans to sell as much as US$1 billion in common shares with an eye to adding to its huge holding in the cryptocurrency, it said in a filing with the Securities and Exchange Commission. The S-3 filing for a “shelf offering” on Monday came as the business-intelligence software maker completed the sale of US$500 million in high-yield senior secured notes, offered so it could buy more bitcoin. MicroStrategy said it may decide to sell US$1 billion in shares in the shelf offering, which allow a company to issue securities to the public multiple times over a period, based on market conditions. It intends to use the proceeds for general corporate purposes, including additional investment in bitcoin, but has not decided how much to put toward any particular purpose, it said. https://bit.ly/2TQ70oB
Apple is reportedly closer to adding a glucose monitor and body temperature sensor to future Apple Watches.
Apple is getting closer to adding a glucose monitor to future Watch models, Bloomberg reported Monday. The company has been working on such a blood sugar sensor for years, with reports stretching as far back as 2017 detailing how Apple has wanted to use the watchband to monitor glucose. Bloomberg similarly reported that the company is working on a non-invasive feature that wouldn’t involve finger pricking. Instead, Apple would enable the watch to somehow analyze a wearer’s blood through their skin. The feature, however, won’t be available for commercial use for several more years, according to the report. Apple did not immediately respond to a request for comment. Bloomberg also reported that Apple was planning on including a body temperature sensor in this year’s Watch model, which is expected to be called the Series 7, but the feature will most likely be pushed back to 2022. So will an extreme sport Apple Watch that will put the company head-to-head with the likes of Garmin and Casio. https://bit.ly/3zB49Au
Apple reportedly explored setting up primary care clinics, with Apple Watch relaying health data to Apple doctors.
According to a report from the Wall Street Journal, Apple had considered setting up an in-house medical service that would offer primary care clinics with doctors employed by Apple. The Journal says the company was exploring how the Apple Watch could be used to improve healthcare. This project was envisioned in 2016 but has seemingly been put on pause, partly because Apple’s dogfooding of a similar project for its own employees saw limited use. Apple COO Jeff Williams had apparently tasked his team with coming up of ways to disrupt the traditional health industry, where patients only see doctors when something goes wrong. The tabled plan was to offer a subscription health service that would combine virtual and in-person care provided by Apple doctors, enhanced with continuous health monitoring by the customer’s Apple Watch and iPhone. According to the report, Apple used employee health clinics near Apple Park as a test bed for the scheme. However, the project has not advanced much in the intervening years. The Journal says some employees have criticized the accuracy of the data being collected at the employee clinics. https://bit.ly/3zIcN0i
The Jeff Bezos-backed company General Fusion is building a nuclear fusion plant, which is due to switch on in 2025.
General Fusion, a Canadian company backed by Amazon CEO Jeff Bezos, announced Thursday it’s building a nuclear fusion facility in the UK. General Fusion and the UK Atomic Energy Authority (UKAEA) announced the project together, which will see General Fusion build a fusion demonstration plant in the village of Culham, near Oxford. The facility will be a proof-of-concept, allowing General Fusion to demonstrate its Magnetized Target Fusion (MTF) technology before going on to build its first commercial facility. According to General Fusion, construction will begin in 2022, and it is expected to be about three years before the plant is able to open. https://bit.ly/3cRE8mU
Media, Streaming, Gaming & Sports Betting
ByteDance tells employees 2020 revenue more than doubled.
TikTok owner ByteDance has told its employees in a memo that its 2020 revenue more than doubled from the previous year and its gross profit nearly doubled. But the Chinese tech giant swung to an operating loss due to its share compensation for employees. ByteDance, which was valued at US$180 billion in its most recent funding round in December, said in the memo that it recorded an operating loss of US$2.1 billion in 2020 based on International Financial Reporting Standards, an accounting method that requires it to book one-time expenses from share-based compensation, according to a person with direct knowledge of the memo, which was first reported by the Wall Street Journal. On a non-IFRS basis, which reflects its core earnings by excluding the one-time compensation, ByteDance recorded an operating profit of more than US$7 billion in 2020, the person said, in line with a profit figure that The Information reported in January. On an IFRS basis, ByteDance in 2020 recorded a net loss of US$45 billion, due to an accounting adjustment for an increase in the fair value of its convertible redeemable preferred shares. In Hong Kong, one of the possible venues for ByteDance’s future initial public offering, listed companies use IFRS to report their earnings. ByteDance says it has no immediate IPO plans. This is the first time that ByteDance has shared detailed financial results with its employees. ByteDance’s 2020 revenue jumped to US$34.3 billion from US$16.3 billion in 2019, while gross profit rose 93% to US$19 billion, according to the memo. The Information reported in January that ByteDance’s 2020 revenue more than doubled to about US$37 billion. The person said that there are some discrepancies between ByteDance’s preliminary 2020 financial results that the company compiled internally in January and the IFRS-based figures it recently shared with employees. https://bit.ly/3cTzp44
Can streaming pay? Musicians are pinning fresh hopes on Twitch.
Twitch, which is owned by Amazon, attracts an average of 30 million visitors a day, and its users watched more than one trillion minutes of content last year, according to the company. Livestreaming apps are a dime a dozen these days. But what makes Twitch stand out, particularly for music, is how it fosters connections between performers and their audience, and allows those connections to be efficiently monetized. Fan interactions — which pour across the screen in a river of song requests, inside jokes and “emotes” (Twitch-specific emoticons) — are as much a part of the show as the artist onscreen, conveying the sense of a tightly knit, mutually supportive community. https://nyti.ms/2UjiwcB
Mobile game spending hits record US$1.7 billion per week in Q1 2021, up 40% from pre-pandemic levels. The COVID-19 pandemic drove increased demand for mobile gaming, as consumers under lockdowns looked to online sources of entertainment, including games. But even as COVID-19 restrictions are easing up, the demand for mobile gaming isn’t slowing. According to a new report from mobile data and analytics provider App Annie in collaboration with IDC, users worldwide downloaded 30% more games in the first quarter of 2021 than in the fourth quarter of 2019, and spent a record-breaking US$1.7 billion per week in mobile games in Q1 2021. That figure is up 40% from pre-pandemic levels, the report noted. The U.S. and Germany led other markets in terms of growth in mobile game spending year-over-year as of Q1 2021 in the North American and Western European markets, respectively. Saudi Arabia and Turkey led the growth in the rest of the world, outside the Asia-Pacific region. The latter made up around half of the mobile game spend in the quarter, App Annie said. The growth in mobile gaming, in part accelerated by the pandemic, also sees mobile further outpacing other forms of digital games consumption. This year, mobile gaming will increase its global lead over PC and Mac gaming to 2.9x and will extend its lead over home games consoles to 3.1x. https://tcrn.ch/2SPp4iB
Roblox sinks after revealing the number of monthly active users on its platform declined in May.
Roblox stock sank on Wednesday after the gaming company revealed the number of monthly active users on its platform fell 1% in May, ending a run of strong user growth. Daily active users hit 43 million in May, according to Roblox, which was up 28% from the same period last year, but down roughly 1% from the 43.3 million mark achieved in April. Total platform hours engaged increased 9% year-over-year and 1% from April, however, to hit 3.2 billion. Revenue also more than doubled in the month, rising 123-126% to between US$149 million and US$151 million. In bearish news for the gaming platform, Roblox was sued by the National Music Publishers’ Association for US$200 million in damages earlier this month. The association said Roblox wasn’t authorized to use music from artists including Ariana Grande, Imagine Dragons, Ed Sheeran, the Rolling Stones, and more on its platform. https://bit.ly/2TQXLEH
Adtech, Privacy & Regulatory
Tech critic Lina Khan named FTC Chair.
Lina Khan, a Columbia University law professor, former House staffer and outspoken critic of corporate concentration was named by President Biden to head the Federal Trade Commission. Her appointment to lead the regulatory body signals Biden’s interest in aggressive antitrust enforcement. The development came just hours after Khan was confirmed by the U.S. Senate to a seat on the five-member commission. The 69-28 vote in the bitterly partisan Senate reflects the bipartisan interest in antitrust enforcement, particularly against large technology companies. Khan gained notice in 2017 when she wrote a Yale Law Journal article titled “Amazon’s Antitrust Paradox,” that argued current approaches to antitrust law don’t address the scope of Amazon’s market power. Khan was also a key staffer on the House subcommittee that conducted an antitrust investigation last year of big tech companies including Apple, Amazon, Facebook and Google. That led to a 450-page report about anticompetitive conduct at the companies, and a slate of bill proposals aimed at curbing their power that was introduced last week. Though Khan is just one person on a five-member commission, as chair she will set the enforcement and policy priorities for the agency. At 32 years old, she will be the youngest person ever to lead the agency. Khan replaces acting Chairwoman Rebecca Kelly Slaughter, whose term expires in September 2022. Biden will have another FTC spot to fill once current Commissioner Rohit Chopra—ideologically aligned with Khan—departs the FTC to head the Consumer Financial Protection Bureau. Meanwhile, Biden has yet to nominate anyone to lead the FTC’s sister antitrust enforcer, the antitrust division at the Justice Department. https://bit.ly/3wIhTaR
A Senate proposal for a new US agency to protect Americans’ data is back.
Democratic Senator Kirsten Gillibrand has revived a bill that would establish a new U.S. federal agency to shield Americans from the invasive practices of tech companies operating in their own backyard. Last year, Gillibrand (D-NY) introduced the Data Protection Act, a legislative proposal that would create an independent agency designed to address modern concerns around privacy and tech that existing government regulators have proven ill-equipped to handle. “The U.S. needs a new approach to privacy and data protection and it’s Congress’ duty to step forward and seek answers that will give Americans meaningful protection from private companies that value profits over people,” Sen. Gillibrand said. The revamped bill, which retains its core promise of a new “Data Protection Agency,” is co-sponsored by Ohio Democrat Sherrod Brown and returns to the new Democratic Senate with a few modifications. In the spirit of all of the tech antitrust regulation chatter going on right now, the 2021 version of the bill would also empower the Data Protection Agency to review any major tech merger involving a data aggregator or other deals that would see the user data of 50,000 people change hands. Other additions to the bill would establish an office of civil rights to “advance data justice” and allow the agency to evaluate and penalize high-risk data practices, like the use of algorithms, biometric data and harvesting data from children and other vulnerable groups. https://tcrn.ch/3cU1jNi
Google’s adtech business set to face formal EU probe by year-end.
Google could face its biggest regulatory threat, with EU antitrust regulators set to open a formal investigation into its lucrative digital advertising business before the end of the year, said people familiar with the matter. It would mark a new front by the EU competition enforcer against Google. It has in the last decade fined the company more than 8 billion euros (US$9.8 billion) for blocking rivals in online shopping, Android smartphones and online advertising. An EU probe would focus on Google’s position vis-a-vis advertisers, publishers, intermediaries and rivals, one of the people said, indicating deeper scrutiny than the French antitrust agency’s case concluded last week. Google made US$147 billion in revenue from online ads last year, more than any other company in the world. Ads on its properties, including search, YouTube and Gmail, accounted for the bulk of sales and profits. https://reut.rs/3gGRAfz
U.K. regulators to examine if Google and Apple run smartphone duopoly.
The U.K.’s antitrust authority has announced a new market study into whether Google and Apple are harming competition in mobile operating systems, web browsers and app stores. The Competition and Markets Authority said it will scrutinize whether the two companies are effectively a duopoly in mobile phones with Android and iOS, the two dominant operating systems. It is a preliminary move against Google and Apple but the results of the study could be used against them in later enforcement action. The same agency is already investigating both companies over recent privacy changes on the mobile platforms. https://bit.ly/3gCJmVM
Facebook can’t dodge EU-wide privacy orders, top court rules.
Facebook Inc. and other U.S. tech giants can’t dodge potential privacy orders from European Union data protection authorities beyond their lead watchdog in Ireland, the bloc’s top court said in a ruling that tests the limits of beefed-up EU rules. Under certain conditions, a national regulator may exercise its power “even though that authority is not the lead supervisory authority with regard to that processing,” the EU Court of Justice ruled on Tuesday. At issue is the scope of the so-called one-stop-shop system, set up under the EU’s data protection rules since May 2018, which puts the authority in a company’s chosen EU base in charge of supervising it, in close cooperation with the other regulators. Ireland has become the chosen EU hub for some of the biggest U.S. firms, including Facebook, but its data watchdog has been criticized for taking too long. https://bloom.bg/3gHLcoi
Alibaba falls victim to Chinese web crawler in large data leak.
Alibaba says about 925 million people use Chinese retail platforms belonging to the Hangzhou-based company at least once a month. A Chinese software developer trawled Alibaba Group Holding Ltd. ’s popular Taobao shopping website for eight months, clandestinely collecting more than 1.1 billion pieces of user information before Alibaba noticed the scraping, a Chinese court verdict said. The software developer began using web-crawling software he designed on Taobao’s site starting in November 2019, gathering information including user IDs, mobile-phone numbers and customer comments, according to a verdict released this month by a district court in China’s central Henan province. When Alibaba noticed the data leaks from Taobao, one of China’s most-visited online retail sites, the company informed the police, the court said. A spokeswoman said Alibaba proactively discovered and addressed the incident and was working with law enforcement to protect its users. She wouldn’t elaborate on how many people were affected. No user information was sold to a third party and no economic loss occurred, she said. About 925 million people use Alibaba’s Chinese retail platforms at least once a month, according to the company. https://on.wsj.com/2UjiCAZ
CVS accidentally exposed a database containing 1 billion data points, including searches for medications and COVID-19 vaccines.
A dataset containing 1 billion data points from CVS customers, including searches for medications and COVID-19 vaccines made on CVS.com, was inadvertently posted online. Cybersecurity researcher Jeremiah Fowler discovered a non-password protected database belonging to CVS Health on March 31. Fowler posted his findings on Website Planet. The data consisted of searches for medications, COVID-19 vaccines, and other CVS products, Fowler reported. Some searches contained email addresses and “Visitor IDs” that could have matched searches with personal identifying information. https://bit.ly/3gIGSW2
Facebook will begin beaming advertisements into virtual reality.
Advertising giant Facebook announced Wednesday that they’re going to begin testing advertising inside virtual reality titles on its Oculus platform soon. The first roll-out is limited enough, with Facebook testing ads inside a single gaming shooter title: Blaston from Resolution Games. It’s an unsurprising development for a platform that Facebook has long been bankrolling with little regard for current revenues. Nevertheless, Facebook likely realizes that there are going to be plenty of privacy questions and addressed some of them head-on. The biggest admission is that Facebook says it will not be using any data stored locally on the Oculus headset, including images from the device’s cameras to target ads. It also says, somewhat less emphatically, that there are “no plans to use movement data to target ads.” https://tcrn.ch/35GeIo2
Fintech, Blockchain & Cryptocurrency
Man Group-Oxford quants say their AI can predict stock moves.
Man Group Plc-backed researchers at the University of Oxford say they’ve created a machine-learning program that can project how share prices move — notching an 80% success rate for the equivalent of about 30 seconds of live trading. Artificial-intelligence experts at the Oxford-Man Institute of Quantitative Finance exploited principles from natural-language processing to trawl liquidity data across limit order books, a record of buying and selling at preset prices. In a potential step forward for fast-money traders seeking to time markets, the algorithm figured out the direction of a price move over a period of 100 ticks, the equivalent of about 30 seconds to two minutes of trading depending on market conditions. https://bloom.bg/35AWjJt
Goldman Sachs ramps up bitcoin trading in new partnership with Mike Novogratz’s Galaxy Digital.
Goldman Sachs’ efforts to help hedge funds and other big institutional clients wager on bitcoin have taken a step forward. The bank has begun trading bitcoin futures with Galaxy Digital, the crypto merchant bank founded by Mike Novogratz, CNBC has learned. The trades represent the first time that Goldman has used a digital assets firm as a counterparty since the investment bank set up its cryptocurrency desk last month, according to Galaxy co-president Damien Vanderwilt. The moves by Goldman, the preeminent global investment bank, may reverberate on Wall Street and beyond as banks increasingly face pressure from clients who want exposure to bitcoin. By being the first major U.S. bank to begin trading cryptocurrency, Goldman is essentially giving other banks cover to begin doing so as well, said Vanderwilt, a former Goldman partner who joined Galaxy last year. https://cnb.cx/35ChNp9
Hedge funds expect to hold US$310 billion in cryptocurrencies within 5 years – more than 7% of their assets.
Hedge fund bosses are planning to ramp up their holdings of cryptocurrencies, predicting that an average of 7.2% of their assets under management will be held in digital tokens by 2026, a survey has found. That would equate to around US$313 billion of cryptocurrency holdings, based on an estimate of the future size of the hedge fund industry, according to Intertrust Group, which carried out the research. The finding is a sign that many potential institutional buyers are not being put off by bitcoin’s recent plunge, but see cryptocurrencies as a long-term strategy. https://bit.ly/3iUg9Y0
GM ups spending on EVs and autonomous vehicles by 30% to US$35 billion by 2025 on higher profits.
General Motors said Wednesday it will increase spending on electric and autonomous vehicles to US$35 billion through 2025, a 30% increase from plans announced late last year. It also said it is raising its earnings guidance for the first half of the year. The additional money will be used to expand its rollout of EVs and accelerate production of its battery and fuel cell technologies, including two new U.S. battery plants in addition to two under construction, by 2025. America’s largest automaker is racing to catch up to EV leader Tesla and compete for a leadership position against other well-established automakers such as Volkswagen. GM plans to sell more than 1 million EVs annually by 2025. https://cnb.cx/3wJXH8i
Sophic Capital Client Insights
Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) – Meet the New CEO (Part 2).
Building an audience is difficult. Converting an audience into betting customers is more difficult. Since his days at EA Sports, Luckbox CEO Thomas Rosander has visualized the massive opportunity of converting esports audiences into paying bettors. In this follow up to our initial conversation, we learn how he plans to build Luckbox’s audience, convert them to betting customers, and grow the company. https://bit.ly/3cTzEfu
Sophic Client HIRE Technologies (HIRE-TSXV) – CEO Interview Part II.
Much of the HR staffing/consulting industry has been slow to adopt SaaS solutions. It is an industry ripe for technology disruption and consolidation. HIRE Technologies, a company focused on modernizing and digitizing human resources solutions, has been active on M&A. HIRE has the foundation to build several, HR-relevant, value-added solutions that it can upsell to its existing customer relationships. https://bit.ly/3zEegVf
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