After a few quiet weeks, last week was once again very strong from a Canadian capital markets perspective. Nearly a billion dollars of Canadian VC funding was announced, with a lot of attention on Wealthsimple’s $750 million financing. Canadian innovation public markets have also been very robust, with recent IPOs by Thinkific, Magnet Forensics and listings by Taiga Motors, and InterCure. In the USA, the Apple – Epic lawsuit continues to reveal very interesting data points, while the global chip shortage continues to persist. Lastly, Bitcoin is expected to become available to customers of hundreds of banks in the US this year, as crypto custody firm NYDIG has teamed up with fintech company Fidelity National Information Services, in a move which could be very interesting for the cryptocurrency.

Canadian Technology Capital Markets & Company News

Magnet Forensics closes $115 million Initial Public Offering.

Magnet Forensics Inc., a developer of digital investigation software that acquires, analyzes, reports on, and manages evidence from digital sources, announced the closing of its initial public offering (the “Offering”) of 6,773,500 subordinate voting shares of the Company (“Subordinate Voting Shares”) at a price of C$17.00 per share, which includes the exercise in full by the Underwriters (as defined below) of their option to purchase up to 883,500 additional Subordinate Voting Shares, for total gross proceeds of C$115,149,500. The Company expects to use the net proceeds from the Offering to strengthen its balance sheet, providing it with flexibility to fund its future growth strategies. https://bit.ly/33p6cc3

Thinkific (THNC-TSX) announces closing of over-allotment option.

Thinkific Labs Inc. announces that, further to its successfully completed initial public offering (the “Offering”) of 12,310,000 subordinate voting shares at a price of $13.00 per share, the underwriters have exercised their over-allotment option (the “Over-Allotment Option”) in full and have purchased an additional 1,846,500 subordinate voting shares at a price of $13.00 per share. The additional gross proceeds of $24,004,500 from the exercise of the Over-Allotment Option bring the total gross proceeds raised from the Offering to $184,034,500. Following the closing of the Over-Allotment Option, the Company’s issued and outstanding share capital will consist of 76,684,064 shares, which includes 19,690,312 subordinate voting shares and 56,993,752 multiple voting shares. https://bit.ly/2Q24iuN

Enthusiast Gaming (EGLX-NASDAQ, EGLX-TSX) files preliminary base shelf prospectus and registration statement.

When made final or effective, the Preliminary Shelf Prospectus and corresponding Registration Statement will allow the Company to undertake offerings of common shares, preferred shares, debt securities, warrants, units and subscription receipts (collectively, the “Securities”), or any combination thereof, up to an aggregate total of $250 million from time to time during the 25-month period that the final short form base shelf prospectus remains effective. The Securities may be offered in amounts, at prices and on terms to be determined at the time of sale. The specific terms of any offering of Securities, including the use of proceeds from any offering, will be set forth in one or more shelf prospectus supplement(s) to be filed with applicable securities regulators. https://bit.ly/3nVjdnd

Spectra7 (SEV-TSXV) announces pricing of brokered private placement.

The Company, in consultation with its agent Cormark Securities Inc. (the “Agent”), has determined that units of the Company (the “Units”) will be offered at a price of $0.03 per Unit. The gross proceeds of the Private Placement is expected to be a minimum of $5.0 million, or approximately 167 million Units, and up to $6.6 million or 220 million Units. https://bit.ly/3nYWSVV

Galaxy Digital (GLXY-TSX) to acquire BitGo to form pre-eminent global provider of digital asset financial services for institutions.

The company has agreed to acquire BitGo, the leading independent digital assets infrastructure provider. The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale. BitGo was the first independent regulated custodian, purpose-built for digital assets. Since its founding in 2013, BitGo has been a pioneer in developing leading custody and wallet infrastructure products, financial products including prime lending, trading, and portfolio management, as well as tax solutions that mitigate risk and optimize capital efficiency. https://bit.ly/33mSlD0

Wealthsimple secures $750 million, claims $5 billion valuation.

Wealthsimple has raised a $750 million financing round as the FinTech company looks to expand its market position and continue to build out its product suite. The Toronto-based startup announced the deal Monday morning, claiming it brings Wealthsimple’s post-money valuation to $5 billion. Wealthsimple plans to use the new capital to expand its market position, build out its product suite, and grow its team. The round was co-led by venture capital firms Meritech and Greylock. The deal also included participation from DST Global, Sagard, Iconiq, Dragoneer, TCV, Inovia, Allianz X, Base 10, Redpoint, STEADFAST, Alkeon, TSV, Plus Capital and others. A number of Canadian celebrities also invested, including Drake, Michael J. Fox, Ryan Reynolds, Kelly Olynyk, Dwight Powell, and Patrick Marleau. The fundraising consists of a $250 million in primary capital and a $500 million secondary offering to the PCC Group, which consists of Power Corp, IGM Financial, and Great-West Lifeco. While the round decreases Power’s interest in Wealthsimple, the PCC Group will continue to be the largest shareholder in Wealthsimple with a combined 43 percent equity interest and 60 percent of the voting rights. Prior to this latest round, Power held a 61 percent equity interest in Wealthsimple. According to Wealthsimple, over two million Canadians currently use the company’s products. https://bit.ly/3hbCwXN

Ada secures US$130 million, claims $1.2 billion valuation.

Toronto artificial intelligence (AI)-powered customer support software startup Ada has raised US$130 million in Series C financing at a reported valuation of $1.2 billion. The round was led by Spark Capital, with participation from Tiger Global. Previous Ada investors Accel, Bessemer, FirstMark, Version One, and Burst also provided financing. The round brings the startup’s total funding to date to $200 million. The funding comes just over a year after Ada raised $63.7 million. https://bit.ly/3o1htsI

Precision AI raises $20 million to reduce the chemical footprint of agriculture.

Precision AI, a computer vision and robotics company empowering sustainable farming practices, announced the closing of $20 million in equity and grant funding. The Seed round was co-led by At One Ventures, founded by GoogleX co-founder Tom Chi, and the Industrial Innovation Venture Fund of BDC Capital, with participation from Fulcrum Global Capital and Golden Opportunities Fund, with supporting non-dilutive co-investments from Sustainable Development Technology Canada and Protein Industries Canada. https://bit.ly/3vNxrZY

Fluence Technologies raises $12.5 million, swaps CEOs to fuel next phase of growth.

Toronto FinTech software startup Fluence Technologies has closed a $12.5 million CAD Series A round from Banneker Partners, as it looks to bring its financial close and consolidation software to more mid-sized companies, and expand its presence in Europe. https://bit.ly/3uw1UeX

Thentia secures $10 million in Series B financing to ramp up US operations.

Toronto-based government software startup Thentia has closed a $10 million Series B round led by New York growth equity firm Spring Mountain Capital. The round, which consisted entirely of primary equity financing, also saw participation from existing investor BDC Capital. Thentia intends to use the new funding to accelerate its go-to-market strategy and bring its cloud-based licensing software to more United States (US) government agencies. https://bit.ly/2QUlcfx

BDC Capital launches $200 million fund to bolster Canada’s deep tech ecosystem.

BDC Capital has announced the creation of a new $200 million fund designed to invest in and support early-stage Canadian deep tech companies. The Deep Tech Venture Fund marks Canada’s largest dedicated deep tech fund. The move follows BDC Capital’s recent investment in Montréal’s Boreal Ventures, a $26 million Québec-focused deep tech fund founded by BDC Capital alumni David Charbonneau. The fund will aim to accelerate the development of “transformational technologies” in a variety of deep tech sectors, including quantum computing, electronics, photonics, semiconductors, robotics, foundational artificial intelligence (AI), and cybersecurity. The new fund will have a 12-year lifespan, with the possibility of a four-year extension. It aims to support 15 to 20 seed to Series A-stage Canadian-headquartered companies with an average deal size of $5 million, and a target of 2x reserves. https://bit.ly/3f36f2B

Information Venture Partners closes third fund, raising $124 million.

Toronto-based venture capital firm Information Venture Partners (Information VP) has closed its third venture fund, securing around $124 million. Information VP’s Fund III has been backed by a group of limited partners that have invested in its firm since its inception. Information VP did not disclose the names of its LPs. The firm noted the fund’s financiers also include “the five largest institutional fund of fund investors that support the Canadian venture capital ecosystem,” four of Canada’s six largest banks, other large financial institutions and insurers, and “executives from leading fintech companies.” https://bit.ly/33oqXER

Newly launched Carrot Ventures closes $15 million fund to help seed Canadian AgTech startups.

Carrot Ventures, a Calgary-based company creation firm launched by venture capital company AVAC, has closed $15 million for a new fund intended to help seed Canadian AgTech ventures. The fund’s limited partners include AVAC and Farm Credit Canada (FCC), an agricultural lender. Each organization has invested $7.5 million into the new fund. Unlike most venture funds, which invest in existing businesses, Carrot Ventures plans to create its own companies from scratch. Carrot will source the technology, recruit a CEO, form the company, and lead the first round of investment in that company. Canada is home to a number of AgTech startups that have raised significant rounds of funding in recent years. Vancouver-based Semios, which has developed a platform for crop data and pest control management, raised $100 million in private equity. All the major investors in that round were based outside of Canada. Terramera, another Canadian AgTech company, raised $59.5 million in its last round of funding. The investors that led that round are both based in the United States. https://bit.ly/2RzYE3F

A Canadian bitcoin ETF has attracted US$823 million in just 3 weeks since launching as crypto demand remains strong.

A Canadian bitcoin exchange-traded fund that has only been trading publicly for three weeks has amassed US$832 million ($1 billion Canadian dollars) in assets under management. The 3iQ CoinShares bitcoin ETF launched on April 19 and is the fastest bitcoin ETF in Canada to reach 1 billion Canadian dollars in AUM, according to a press release. The fund trades on the Toronto Stock Exchange under the ticket “BTCQ.” The rapidly growing ETF demonstrates that investor demand for bitcoin isn’t slowing down, despite other cryptocurrencies like ether and Dogecoin gaining recent attention. Despite pulling back from it’s all-time-high above $64,000, Bitcoin is still up 97% year-to-date, hovering at $58,000 as of Friday afternoon. “Reaching $1 billion[CAD] in only three weeks speaks to the enormous market demand for bitcoin,” said Fred Pye, Chairman & CEO of 3iQ. “The pace of its growth is yet another milestone in 3iQ’s goal to provide investors with more ways to gain exposure to the largest digital asset in the world.” https://bit.ly/3vOKSJa

Shopify (SHOP-NYSE, SHOP-TSX) joins patent non-aggression network as competition with Amazon heats up.

Shopify has joined the Open Invention Network (OIN), a patent non-aggression community that aims to defend the intellectual property (IP) rights of developers that use Linux, an open source operating system. The OIN acquires patents based on the Linux system and licences them royalty-free to its members, who agree not to assert their own patents against Linux and Linux-related systems and applications. Over the last few years, Shopify has been trying to play a game of catch-up with Amazon, one of its top competitors, which has thousands of patents to its name. IP experts such as lawyer Natalie Raffoul have publicly stressed that to stay competitive, Shopify needs to increase its patenting activity, noting that IP should be a priority if Shopify truly wants to play in the global marketplace. “Hopefully, [Shopify] can catch up, but they will probably need to increase their patenting rate 10-fold,” she told BetaKit in January. Speaking with BetaKit recently, Raffoul said joining a network like OIN could add value to Shopify’s ongoing IP strategy. Shopify is one of a number of large companies that have joined the OIN in recent months. Current members include Google, IBM, and Sony, among others. https://bit.ly/3tqvPnv

Amazon delays Prime Day in India and Canada as Covid ravages both countries.

Amazon is postponing its annual Prime Day event in India and Canada because of the countries’ worsening wave of Covid-19 cases. The company confirmed to CNBC that it’s pausing the two-day discount event in both countries, but didn’t offer a rescheduled date in either country. Amazon launched Prime Day in 2015. The discount celebration is partially designed to secure new Prime members, promote Amazon’s own products and services, and provide a sales boost in the middle of the year. In April, Canada’s rate of new Covid-19 infections overtook that of the U.S. for the first time since the pandemic began. Canada has faced lagging vaccination rates compared to the U.S. Outside of Canada and India, Amazon said Prime Day will continue to move forward in other countries including the U.S., U.K., Germany, France, Spain and China. Amazon announced in its first-quarter earnings results that this year’s Prime Day will take place in June. Typically, Prime Day takes place in July, but pulling forward the event to June will likely “be better for customers, sellers and vendors” as July is a popular “vacation month” in many areas, Amazon CFO Brian Olsavsky said during Amazon’s first-quarter earnings call. https://cnb.cx/2R3iTqo

Global Markets: IPOs, Venture Capital, M&A

Fidelity halves valuation of Ant Group amid Beijing’s crackdown.

U.S. asset manager Fidelity Investments has sharply lowered the estimated value of its shareholdings in Ant Group, as the Chinese financial technology giant grapples with Beijing’s regulatory crackdown, the Wall Street Journal reported. Fidelity’s new estimate values Ant at $144 billion, less than half of the $295 billion valuation based on Fidelity’s previous estimate last August, according to the Journal. Ant, the fintech affiliate of e-commerce giant Alibaba, faces a major restructuring as Beijing tightens its control over online financial services. Last month, China’s central bank said Ant had applied to become a financial holding company that will be subject to more stringent rules and requirements. The Chinese government forced Ant to scrap its US$37 billion initial public offering in November, after Alibaba founder Jack Ma, who controls Ant, criticized financial regulators in his speech at an October conference. The IPO would have valued Ant at more than US$300 billion. https://bit.ly/2RDuiNG

China’s Tencent in talks with U.S. to keep gaming investments.

Tencent Holdings Ltd is negotiating agreements with a U.S. national security panel that would allow it to keep its ownership stakes in U.S. video game developers Riot Games and Epic Games, according to people familiar with the matter. Tencent has been in talks with the Committee on Foreign Investment in the United States (CFIUS), which has the authority to order the Chinese technology giant to divest U.S. holdings, since the second half of last year, the sources said. CFIUS has been looking in to whether Epic Games’ and Riot Games’ handling of the personal data of their users constitutes a national security risk because of their Chinese ownership, the sources added. Tencent owns a 40% stake in Epic Games, the maker of popular video game Fortnite. Tencent also bought a majority stake in Riot Games in 2011 and acquired the rest of the company in 2015. Riot Games is the developer of “League of Legends,” one of the world’s most popular desktop-based games. https://reut.rs/33oG4y7

Peloton plunges 15% after recalling treadmills amid reports of injuries and the death of a child.

Peloton Interactive plunged as much as 15% on Wednesday after announcing it will voluntarily recall two versions of its treadmills. The decision comes in cooperation with the US Consumer Product Safety Commission following reports of injuries and one death. Customers who have purchased either the Tread+ or the Tread treadmill are urged to stop using them and contact Peloton for a full refund, according to a joint statement issued by the company and the CPSC. The decision comes after Peloton initially pushed back on regulatory warnings regarding the safety of its treadmills. https://bit.ly/3basgLC

Emerging Technologies

Apple is reportedly working on a foldable iPhone for 2023.

Rumors about a foldable iPhone have bubbled up before, but a new one has more credibility. Reliable analyst Ming-Chi Kuo told investors that Apple plans to launch an 8-inch foldable iPhone by 2023 according to documents seen by Engadget and an article from MacRumors. The report, based on an “industry survey,” predicts that Apple plans to sell 15-20 million units in 2023. Kuo said already revealed the possibility of a folding iPhone in March, but his latest report has more detail on suppliers. It predicts that the QHD+ flexible OLED will be supplied by Samsung Display, while the DDI display controller will come from Samsung Foundry. It also notes that Apple will use silver nanowire touch tech supplied by TPK, “because of its several advantages over [Samsung’s] Y-Octa technology.” The report is highly speculative, so don’t start saving up for an iPhone Fold or whatever just yet. However, other details give it some extra credibility. Kuo expects Oppo, Vivo, Xiaomi and Honor to launch new foldable models in late 2021 or early 2022, and shipments to ramp up to 17 million by 2022 if component shortages improve. https://engt.co/3f7J4nV

Apple watch could gain breakthrough health upgrade, report claims.

A new report says that a future Apple Watch could have a new raft of health sensors, including blood pressure and—something many people seem to be craving—blood glucose and alcohol levels. https://bit.ly/33scec4

The Army’s new night-vision goggles look like technology stolen from aliens.

Known as the Enhanced Night Vision Goggle-Binocular—or ENVG-B, for short—the new goggles were designed to vastly improve a soldier’s ability to not only see what is going on all around them under any lighting conditions but to also be able to accurately discern what they’re seeing. That was the biggest problem with traditional night vision goggles. The old ones worked by converting the photons gathered in low-light light settings into electrons that were amplified as they passed through a vacuum tube and eventually lit up a phosphor-coated screen that provided a brighter image of what the goggles were seeing. The traditional green color of night vision technology was chosen because it was considered to be the easiest color to look at for prolonged periods in the dark. But the brightened images lacked contrast and were often very noisy, which made it difficult for a user to understand what they were really seeing. For soldiers in combat, that can be especially problematic. https://bit.ly/3xVsXlL

SpaceX successfully launches and lands its Starship prototype rocket.

SpaceX flew the 15th prototype of its Starship fully reusable next-generation rocket, with a test flight that included a successful climb to around 30,000 feet, as well as a controlled flip, descent and soft landing upright as planned. A very small fire appeared to break out at the base of the rocket shortly after landing but it was contained. The craft was powered by three Raptor rocket engines, which shut down in sequence prior to the vehicle reaching apogee (it’s highest point, around 10km). This is a big milestone for SpaceX, which has flown prototypes before, but which hasn’t yet seen a test conclude with the test vehicle intact. Prototypes SN8 and SN9 were destroyed while trying to land, while SN10 exploded shortly after landing. It’s last test launch, SN11, ended in an explosion and total loss of the rocket just before touchdown. https://tcrn.ch/3nZKOUe

Media, Streaming, Gaming & Sports Betting

Amazon says its ad-supported video reaches more than 120 million viewers a month.

Amazon said Monday its ad-supported streaming video content now reaches more than 120 monthly users every month. The company said this is up from 20 million monthly viewers of that content in January 2020. Twitch is one main driver of the growth — although Amazon acquired the company in 2014, it only recently added ad inventory on Twitch to its programmatic advertising platform, whereas inventory previously had to be bought more manually. Twitch is best known as a platform where video gamers stream their gameplay live to large audiences. Other ad-supported video content from Amazon includes live sports like “Thursday Night Football,” IMDb TV, third-party apps and Amazon’s News apps. The figure of monthly users refer to U.S. viewers that watched Amazon’s ad-supported over-the-top content on any device. https://cnb.cx/2R5lgZR

Sony is teaming up with Discord to bring the chat service to Playstation next year.

Sony is launching a partnership with Discord to bring the video-game chat service to PlayStation next year, the company announced on Monday. “Our goal is to bring the Discord and PlayStation experiences closer together on console and mobile starting early next year, allowing friends, groups, and communities to hang out, have fun, and communicate more easily while playing games together,” Sony Interactive Entertainment CEO and President Jim Ryan said in a press release. As part of the partnership, Sony is also investing an undisclosed amount of money into Discord. https://bit.ly/33n5ID5

Netflix considers N-Plus service for behind-the-scenes content and more.

Netflix is considering launching a companion service to offer things like behind-the-scenes content, tentatively named N-Plus. Surprisingly, the company doesn’t seem to be planning to charge an additional subscription for it, rather to make it a free add-on, with some content available even to those without a Netflix subscription. TNW reports. The company began sending out a survey to customers, including TNW’s Abhimanyu Ghoshal, asking them if they’d use the service, which would include a variety of services that allow you to go more in-depth with the streaming service’s content. According to the survey, N-Plus would include “text, image, and video feeds you can sign up for news, interviews, analysis, deep dives, games, how-tos, audience conversations, music, podcasts and more”. https://bit.ly/3vXibKh

Walmart’s unannounced cloud gaming service detailed in confidential Epic emails.

Walmart’s unannounced cloud gaming service, codenamed Project Storm, has been detailed in new confidential emails. An exhibit in the Epic Games v. Apple trial reveals Walmart’s efforts to pitch its cloud gaming service to Epic Games and get Fortnite on board. “I played Walmart’s demo on an Android phone (with an Xbox controller) and the experience felt like playing on PS4 and superior to playing on Android or iOS,” said Epic Games co-founder Mark Rein in an email thread from April 2019. Rein also excitedly shares a photo of a game clip with the rest of the Epic Games executive team, showing how Walmart was planning to sell this in stores to let a phone attach to a controller. “They’re going to sell the clip for a crazy low amount, they were saying something like US$2,” said Rein. https://bit.ly/3eXIxEY

Japan to open its first-ever esports gym in Tokyo, with options to pay for professional training.

Years ago, when competitive gaming started to become more and more popular, many dismissed it as “nerds being nerds”, and hotly debated whether it was worthy of being called “esports”. But as competitions became hot and “gamers” built a billion-dollar industry with millions of fans around the world, people began to acknowledge that esports are, in fact, a serious intellectual and physical competition, where winners can earn huge paychecks in the form of prize money and sponsorships. https://bit.ly/3xHdxlc

Adtech, Privacy & Regulatory

Analytics suggest 96% of users leave app tracking disabled in iOS 14.5.

An early look at an ongoing analysis of Apple’s App Tracking Transparency suggests that the vast majority of iPhone users are leaving app tracking disabled since the feature went live on April 26 with the release of iOS 14.5. According to the latest data from analytics firm Flurry, just 4% of iPhone users in the U.S. have actively chosen to opt into app tracking after updating their device to iOS 14.5. The data is based on a sampling of 2.5 million daily mobile active users. When looking at users worldwide who allow app tracking, the figure rises to 12% of users in a 5.3 million user sample size. Facebook, a vociferous opponent of ATT, has already started attempting to convince users that they must enable tracking in iOS 14.5 if they want to help keep Facebook and Instagram “free of charge.” That sentiment would seem to go against the social network’s earlier claim that ATT will have a “manageable” impact on its business and could even benefit Facebook in the long term. Flurry Analytics, owned by Verizon Media, is used in over 1 million mobile applications, providing aggregated insights across 2 billion mobile devices per month. Flurry intends to update its figures every weekday for the daily opt-in rate as well as the share of users that apps cannot ask to track, both in the U.S. and globally. https://bit.ly/2SCKv6c

Trial documents show Epic financial details. Epic Games’ revenue has fallen for the past two years, documents submitted to the court as part of Epic’s lawsuit against Apple revealed on Monday.

The documents revealed that Epic was projecting to generate 36% less revenue in 2020 than in 2018, with profit falling 80% over the same period to US$531 million. Nearly all of  Epic’s revenue comes from its Fortnite game, which generated US$5.5 billion in revenue in 2018 and US$3.7 billion in 2019. Sweeney also testified that Chinese internet giant Tencent owns a 37% stake in Epic. According to the pool reporters in the courtroom, Sweeney said Epic’s 2020 gross revenue was US$5.1 billion. That’s a marked increase from the US$3.6 billion projection in the financial documents filed with the court. No explanation was given in the pool report. The disclosures came on the opening day of the trial, over Epic’s lawsuit accusing Apple of using its monopoly power to force developers into exclusively using its app distribution and payment services. Less than nine months ago Apple booted Epic’s game Fortnite out of its App Store after Epic intentionally violated Apple’s payment rules. In the lawsuit, Epic is challenging Apple’s move as an antitrust violation. Epic CEO Tim Sweeney was the first witness. During his testimony he gave a detailed explanation of Epic’s business. Sweeney said that he was previously a big fan of Apple, and court filings detail an especially close relationship between the companies. That soured in recent years as Apple’s policies grew more restricted, Sweeney said. https://bit.ly/3us3ePQ

Epic CEO says he would have taken a special App Store deal if Apple had offered.

The Apple vs. Epic trial continued, with Epic CEO Tim Sweeney testifying and facing cross-examination from Apple’s lawyers. Sweeney was pressed on Epic’s business model, the company’s relationship with the likes of Microsoft and Sony, and more. An interesting tidbit came when Sweeney admitted that he uses an iPhone because of Apple’s focus on privacy and security in response to questioning from Apple lawyers. The Epic CEO also acknowledged during his testimony that “30% is most the prevalent rate charged” by various app stores, including Sony, Microsoft, and Nintendo. Sweeney was asked by Epic’s lawyers whether or not he would accept a special deal from Apple for a lower App Store commission. Sweeney, despite the fact that Epic claims to be fighting Apple on behalf of all developers, said that he would have accepted such a deal. https://bit.ly/2RAbSNE

Facebook takes on Nextdoor with Neighborhoods tool.

The world’s largest social media website said Wednesday it’s rolling out a feature with its mobile app called Neighborhoods in four US cities and Canada. Facebook users have to be at least 18 years old to use the new tool, which will allow people find neighbors who have common interests, discover local groups and businesses, participate in polls along with receiving and offering help to those in their communities. The US cities include Charlotte, North Carolina; San Diego, California; Baton Rouge, Louisiana; and Newark, New Jersey. Facebook users already use the social network for these purposes through groups, but Neighborhoods combines all this information in one place. Using Neighborhoods is optional and users will need to share their location to get matched to a neighborhood. Outside of sharing their Facebook profile information, users can also provide their interests such as skiing and there’s also a section to get to know the pets in your neighborhood. People who use the feature could also take on different roles such as a “socializer,” “helper” or “welcomer,” she said. https://cnet.co/3tyc0KO

eCommerce

Facebook chats power a new US$48 billion market in social commerce.

Throughout Southeast Asia, consumers’ affection for haggling and interacting with businesses is fueling a boom in social commerce. Unlike the U.S. or China, where most consumers do their internet shopping with established platforms run by companies like Amazon.com Inc. and Alibaba Group Holding Ltd., in Thailand almost half of all e-commerce takes place through social media or chat rooms on Facebook, WhatsApp or Line’s app. Social commerce accounted for about 44% of Southeast Asia’s US$109 billion e-commerce market last year, according to Bain & Co. Customers can talk directly with store employees or the owners themselves about prices and sales, and the relationships built through personal conversations have helped drive social commerce’s popularity. The pandemic has led global brands such as Chanel and Louis Vuitton as well as Thai brick-and-mortar retailers to register for accounts on Line, spurring a 25% annual growth in official accounts in 2020, said Norasit Sitivechvichit, chief commercial officer of Thailand’s most-used messaging platform, which charges retailers based on their messaging activity and number of followers. https://bloom.bg/3uytubj

Fintech, Blockchain & Cryptocurrency

SEC Chair Gary Gensler raises concerns about Robinhood, trading gamification and social media hype.

New Securities and Exchange Commission Chairman Gary Gensler will testify before the House Financial Services Committee on Thursday. It’s the third House hearing focused on GameStop, but Gensler’s first appearance as chairman before the committee. Gensler will begin his testimony on the increasing gamification of trading, which he defined as trading that has “game-like features” — such as points, rewards, leaderboards, bonuses and competitions — to increase engagement. “Many of these features encourage investors to trade more,” Gensler said. “Some academic studies suggest more active trading or even day trading results in lower returns for the average trader.” Gensler said he has asked his staff to prepare a request for public input: “We need to ensure investors using apps with these types of features continue to be appropriately protected.” https://cnb.cx/3hb3LBZ

Robinhood’s biggest business tripled in the 1st quarter as Reddit-fueled day-trading ran wild.

The Reddit-fueled trading frenzy of early 2021 propelled Robinhood’s biggest business to new heights, according to The Wall Street Journal. The brokerage app’s payment for order flow generated US$331 million in revenue in the first quarter, said the Journal, citing a securities filing from last week. That’s more than triple the US$91 million Robinhood reeled in from the business during the first quarter of 2020. Payment for order flow is the compensation brokerages earn by having third-party firms execute client orders. When Robinhood’s clients buy and sell stocks and options, Robinhood routes the trade orders to outside firms who actuate carry out the trade. The outside firms pay Robinhood for routing the order to them. The practice is Robinhood’s largest source of revenue, and has drawn criticism from investor advocates who say it encourages brokerages to maximize their revenue at the expense of customers. In December, Robinhood agreed to pay $65 million to settle charges from the SEC that accused the app of making misleading statements about how it made money with market makers. https://bit.ly/3f0aFY0

40% of consumers plan to use cryptocurrencies in the next year and millennials are leading the way, according to a Mastercard survey.

40% people are planning to use cryptocurrencies in the next year, according to Mastercard’s New Payments Index. Millennials are especially interested in cryptocurrencies and are keen to learn more about it. 67% of millennials said they were more likely to use cryptocurrency now compared to a year ago, and 75% said they would use crypto coins if they had a better understanding of them. 77% were keen to learn more about cryptocurrencies, Mastercard’s survey showed on Tuesday. https://bit.ly/3epH6jE

Bitcoin trading volume was 7 times that of Apple in April as the cryptocurrency saw wild volatility and a 24% sell-off.

Bitcoin’s trading volume in US dollars outstripped that of tech behemoth Apple’s last month, indicating that the cryptocurrency is “no longer being sidelined” as an asset as more institutional investors pile in, according to research firm Finbold. Trading volume in bitcoin was US$1.84 trillion in April, at least seven times higher than Apple’s at US$249.22 billion, the firm said in a report published Monday. Bitcoin’s 30-day average trading volume of US$61.48 billion was also more than five times higher than US$11.87 billion for the iPhone maker. https://bit.ly/3hb3NKi

Ether hits US$3,000 as Bitcoin’s crypto dominance declines.

Bitcoin’s domination of total cryptocurrency market value is declining as its next-biggest rival Ether reaches the US$3,000 milestone. The rise of Ether suggests there’s room for more than one winner among digital tokens as the sector evolves. Bitcoin now accounts for about 46% of total crypto market value, down from roughly 70% at the start of the year, and Ether makes up 15%, according to tracker CoinGecko. https://bloom.bg/3vOkRcN

A bill in New York aims to halt bitcoin mining for 3 years until its environmental impact can be assessed.

A bill introduced in the New York State Senate is seeking to halt bitcoin mining for three years until the state has assessed its impact on the environment. New York Senate Bill 6486 was presented by Senator Kevin Parker to the State Senate’s Environmental Conservation Committee on Monday, The Block first reported. The bill will specifically look into the greenhouse gas emissions caused by bitcoin mining, including its effects on water, air, and wildlife. The assessment will produce a report, which will then be issued to the public and will be subject to a 120-day public comment period. “Cryptocurrency mining centers are an expanding industry in the State of New York, often, but not exclusively, located in retired or converted fossil fuel power stations, including dormant peaker plants,” the bill said. If the bill passes, it will affect a growing industry, especially in upstate New York where the power for bitcoin mining is more affordable and aided by cooler weather that keeps equipment from overheating as much. https://bit.ly/3f4yT3u

Bitcoin will soon be available through hundreds of US banks in a partnership with crypto firm NYDIG, report says.

Bitcoin will become available to customers of hundreds of banks in the US this year, according to a CNBC report Wednesday. Crypto custody firm NYDIG has teamed up with fintech company Fidelity National Information Services to enable banks to offer the cryptocurrency in the coming months, CNBC reported, citing the two firms. Banks are requesting bitcoin because they are seeing customers sending money to cryptocurrency exchanges such as Coinbase, according to Yan Zhao, president of NYDIG. “This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,'” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.” https://bit.ly/3etX8ZK

Semiconductors

Chip shortage forces carmakers to leave out some high-end features.

When automakers were first hit with chip shortages at the end of last year, they tried idling factories until the troubles blew over. But with the crisis stretching into its fifth month and getting worse, they’re getting creative to keep at least some production moving forward. Nissan is leaving navigation systems out of thousands of vehicles that typically would have them because of the shortages. Ram no longer offers its 1500 pickups with a standard “intelligent” rearview mirror that monitors for blind spots. Renault has stopped offering an oversized digital screen behind the steering wheel on its Arkana SUV — also to save on chips. The crisis is an historic test for the century-old auto industry just as it is trying to accelerate a shift toward smarter, electric vehicles. For decades, carmakers moved steadily to include more and better advanced features; now, they’re stripping some of them out — at least temporarily — to salvage their sales. That rollback underscores the depth of the issues facing the industry. Just last week, BMW AG, Honda Motor Co. and Ford Motor Co. all flagged worsening problems from chip shortages. A failure to secure critical supplies is a massive short-term setback — millions of vehicle sales will be lost this year — and bodes ill for the future as competition from tech-savvy internet and consumer-electronics companies intensifies. https://bloom.bg/3w55VYf

Chipmaker TSMC eyeing expansion of planned Arizona plant.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), is planning to build several more chipmaking factories in the U.S. state of Arizona beyond the one currently planned, three people familiar with the matter told Reuters. TSMC, the world’s largest contract chipmaker, announced in May 2020 it would build a US$12 billion factory in Arizona, an apparent win by the Trump administration in its push to wrestle global tech supply chains back from China. TSMC is setting up a 12-inch wafer fabrication plant in Phoenix, and the facility is expected to start volume production in 2024, Taiwan’s investment commission of the ministry of economic affairs, which approved the investment, said in December. TSMC manufactures the bulk of its chips in Taiwan and has older chip facilities in China and the U.S. state of Washington. https://reut.rs/2RAizPZ

ESG

London-based EV maker Arrival soars 10% after announcing a vehicle-development partnership with Uber.

Shares of London-based electric automaker Arrival surged as much as 10% on Tuesday after the company said it will partner with Uber to develop a vehicle for ride-hailing drivers. No financial terms of the agreement were disclosed. Uber in 2020 said it’s aiming for its London-based service to feature all electric vehicles by 2025. Despite Tuesday’s surge, Arrival’s stock is still down roughly 32% in 2021, although it is now up 97% over the past 12 months. Uber slid 2%. https://bit.ly/3h92nQa

Sophic Capital Client Insights

Renoworks Software Inc. (RW-TSXV, ROWKF-OTC) – Building a big business with the industry’s biggest enterprises.

Following the initial business disruptions and lockdowns in 2020 due to the COVID-19 pandemic, home construction and renovations thrived. Sophic Capital client Renoworks Software followed along, with 2020 revenues growing 20+% year-over-year. Renoworks counts some of North America’s largest construction material manufacturers, distributors, and retailers as customers and should benefit from the continuing home renovation boom. https://bit.ly/3f32quq

GameSquare Esports Inc. (GSQ-CSE) – A cash generative esports business.

The number of hours of streamed esports content watched soared during 2020, with Twitch, YouTube Gaming, and Facebook Gaming collectively increasing 81% in 2020. Esports audience growth hasn’t escaped the major brands. However, marketing to esports fans is very different than marketing to older generations. Old marketing methods don’t work. GameSquare Esports has proven that it can help major brands engage esports audiences. https://bit.ly/2QYjQQW

Body and Mind Inc. (BAMM-CSE, BMMJ-OTC) – Ohio presents a large and growing Cannabis opportunity.

Sophic Capital client Body and Mind has a strong presence in the Buckeye state, a market that could soon rival the cannabis industry in neighboring Michigan. How big could Ohio’s cannabis market become? Read on. https://bit.ly/3xZKWre

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