The holiday shortened last week in Canada, saw very healthy levels of capital markets activity, in public markets, including IPOs, equity financings and some convertible debt as well. VC financing had positive newsflow as well. In addition, many companies, including multiple Sophic clients reported their quarterly financial results. In the USA, we’re paying attention to Acorns’ potential SPAC deal, Vimeo’s public market debut, additional stock awards at WeWork, and Amazon’s MGM acquisition, which we mentioned when the potential acquisition first surfaced a week ago. Outside North America, we’re watching Gojek and Tokopedia’s holding group GoTo’s IPO and fundraising later this year, and Paytm’s potential IPO in India.

Canadian Technology Capital Markets & Company News

Toronto-based Q4 files to go public on TSX. Toronto-based investor relations (IR) software company Q4 has filed a preliminary prospectus as the firm looks to go public on the Toronto Stock Exchange (TSX).

Q4 plans to go public via an initial public offering (IPO). The number of common shares Q4 plans to sell, as well as its common share price, have not yet been determined. The company plans to trade under the symbol ‘QFOR.’ CIBC Capital Markets, National Bank Financial, and Credit Suisse Securities will act as the transaction’s joint bookrunners. Other underwriters on this IPO include Canaccord Genuity, Raymond James, RBC Capital Markets, Stifel Nicolaus Canada, TD Securities, and INFOR Financial. Q4 has raised several rounds of funding, with its last major investment being a $25 million credit facility from CIBC Innovation Banking last year. Prior to that, the company’s last venture round consisted of US$35 million in Series C funding. The firm is headquartered in Toronto and has offices in New York, and London, England. Q4 joins a swarm of Canadian tech startups that have filed to go public this year. Other major companies that have recently sought to list on the TSX include Thinkific, which recently closed a $184 million IPO, and Magnet Forensics, which began trading in late April. https://bit.ly/3fRr3ut

VerticalScope files to list on the Toronto Stock Exchange.

VerticalScope, a Toronto-based digital platform for online enthusiasts, has filed to list on the Toronto Stock Exchange (TSX), making it the latest in a long string of Canadian tech companies turning to public markets. The more than twenty-year-old company filed its preliminary prospectus on Wednesday, revealing plans for an initial public offering (IPO) of subordinate voting shares. The number of shares, as well as price, have yet to be determined. VerticalScope is set to list in the TSX under the symbol ‘FORA.’ According to The Globe and Mail, which was first to report VerticalScope’s plans for going public, the company is looking to raise $100 million as it looks to increase its merger and acquisition activity. The underwriters for the deal include RBC Dominion Securities, Canaccord Genuity, and National Bank Financial. Media company Torstar Corporation is a majority shareholder in VerticalScope, having purchased 56 percent interest in the company in 2015. https://bit.ly/3wKGon9

Converge Technology Solutions Corp. (CTS-TSX) announces upsize to previously announced bought deal financing.

The company entered into an amended agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and Scotiabank (the “Underwriters”), to increase the size of its previously announced offering of common shares. Under the amended terms, the Underwriters have agreed to purchase, on a bought deal basis, 20.0 million common shares of the Company (“Offered Shares”) at a price of $7.50 per Offered Share (the “Issue Price”) for gross proceeds to the Company of $150.0 million (the “Offering”). https://bit.ly/3p9gCqo

BBTV (BBTV-TSX) announces $65 million convertible debenture, refinancing deals as it looks to increase M&A activity.

The deals consist of a private placement and convertible debenture sale totalling $35 million, as well as a $29 million debt deferment for a period of five years. BBTV plans to sell $15 million worth of convertible debentures in a transaction being co-led by Eight Capital and Canaccord Genuity. The company will also hold a private placement of 20,000 convertible debentures. That private placement is being led by an undisclosed Canadian asset manager and gross proceeds from that deal will total $20 million. https://bit.ly/3fYfqSB

CubicFarm Systems Corp. (CUB-TSXV) announces $20 million bought deal public offering of common shares to meet accelerating global demand.

The company announced that it has entered into an agreement with Raymond James Ltd. as sole bookrunner, on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 14,814,815 common shares (the “Common Shares”) of the Company at a price of C$1.35 per Common Share (the “Issue Price”) for aggregate gross proceeds to the Company of approximately C$20 million (the “Offering”). https://bit.ly/3vsunTj

Legend Power Systems Inc. (LPS-TSXV, Sophic Client) announces increase to bought deal offering of up to $10.3 million.

The company entered into an agreement with Stifel GMP, as sole bookrunner and lead underwriter on behalf of a syndicate of underwriters (the “Underwriters”), to increase the size of its previously announced bought deal offering. Pursuant to the upsized deal terms, the Underwriters have agreed to purchase, on a bought deal basis, 12,000,000 units of the Company (“Units”) at a price of $0.75 per Unit, for aggregate gross proceeds of $9,000,000 (the “Offering”). https://bit.ly/3i3x75Q

Kontrol Technologies announces $8.5 million private placement with Institutional Investors.

The company  entered into securities purchase agreements for a private placement of its common shares  (a “Share” and, collectively, the “Shares”) and warrants to purchase Common Shares (“Warrants”) to institutional investors only for aggregate gross proceeds to the Company of approximately $8.5 million (the “Private Placement”). Pursuant to the Private Placement, the Company will issue up to 5,666,332 Shares and Warrants to purchase up to 2,833,166 Shares at a purchase price of $1.50 per Share and associated Warrant. Each Warrant will entitle the holder thereof to purchase one Common Share at an exercise price of $1.75 per Share at any time prior to the three-year anniversary of the closing date of the Private Placement (the “Closing Date”). The Company expects the Closing Date to occur on or about June 1, 2021. https://bit.ly/3wITnpG

ESE (ESE-TSXV) announces $7.5 million bought deal financing.

The company has entered into an agreement with Canaccord Genuity Corp., as sole bookrunner and lead underwriter (the “Lead Underwriter”) pursuant to which the Lead Underwriter has agreed, on behalf of a syndicate of underwriters (together with the Lead Underwriter, the “Underwriters”), to purchase, on a “bought deal” basis pursuant to the filing of a short form prospectus, an aggregate of 5,360,000 units of the Company (each, a “Unit”) at a price of $1.40 per Unit (the “Issue Price”) for aggregate gross proceeds to the Company of $7,504,000 (the “Offering”). https://bit.ly/34srTs7

Vendasta secures $119.5 million in venture funding after pausing IPO plans.

Saskatoon-based software startup Vendasta has secured $119.5 million in funding as part of a change in plans that will see the company put its IPO on hold. The round, which consisted entirely of primary financing, was led by New York’s Lugard Road Capital, and saw participation from Nicola Wealth, the Canadian Business Growth Fund (CBGF), and a group of other undisclosed existing investors. The financing represents the largest ICT VC round in Canadian Prairie history. The financing represents the largest information and communications technology (ICT) venture capital round in Canadian Prairie history, breaking the startup’s previous record raise of $40 million in 2019, from CBGF, Comporium, Saskworks Venture Fund, Vanedge Capital LP, and BDC Capital’s IT Venture Fund. The fresh venture funding also comes just over two months after Vendasta filed to go public on the Toronto Stock Exchange (TSX) on March 16. The startup priced its IPO on March 22, aiming to raise $100 million. However, on April 7, The Globe and Mail reported that Vendasta was struggling to sell its offering amid a recent cooldown in investor demand for Canadian tech IPOs. A company spokesperson confirmed with BetaKit that Vendasta has “no imminent plans” to go public following this round. Vendasta said it plans to use the new capital to accelerate its sales growth. https://bit.ly/3fXLdD5

Xanadu lands US$100 million as investments pour into quantum computing.

Xanadu Quantum Technologies Inc., which aims to commercialize quantum computing using particles of light, has raised US$100 million in new funding as investor interest in the industry heats up. On Tuesday, Xanadu announced a Series B funding led by Bessemer Venture Partners, one of Silicon Valley’s oldest such firms. Funding to date for the five-year-old company now totals US$145 million, said Christian Weedbrook, founder and chief executive of Xanadu. Xanadu, which is headquartered in Toronto, is using particles of light, or photons, to represent qubits, which store data needed to make a calculation. Its chips work at room temperature, unlike those of Alphabet Inc.’s Google, International Business Machines Corp. and Rigetti Computing, which need supercooling to achieve quantum mechanical effects. And more money is being plowed into the sector. In March, IonQ said it plans to go public through a special-purpose acquisition company in a deal that values the combined entity at about US$2 billion. https://on.wsj.com/34wCjqR

eSSENTIAL Accessibility secures $67 million to meet increasing demand for accessible online content.

Toronto-based software company eSSENTIAL Accessibility (eA) has secured a nearly $67 million investment from New York-based investor KKR as it looks to scale its digital accessibility solution. The round, which eA referred to as an “historic investment in the digital accessibility technology sector,” follows a growing reliance on online services during the COVID-19 pandemic. https://bit.ly/3uvI7vd

Crypto startup Ledn secures $36 million from group including Reddit co-founder, hedge fund billionaire.

Toronto-based Ledn, which offers financial services to cryptocurrency holders, has raised $36.1 million in Series A funding. The round was led by London, UK-based hedge fund Kingsway Capital, with participation from new investors such as crypto venture fund Hashed, Susquehanna Private Equity Investments, and ParaFi Capital. The round represents a sizable investment for a Canadian crypto startup and comes amid a flurry of activity in the sector. All investors from Ledn’s prior round also participated in this investment, including Coinbase Ventures, Global Founders Capital, and CMT Digital. White Star Capital’s Digital Asset Fund, which recently closed US$50 million, also re-invested in the round. https://bit.ly/3fwwgbU

PartnerStack aims to capitalize on channel sales demand with $35 million Series B round.

Toronto-based startup PartnerStack has secured approximately $35 million in Series B financing as it looks to help more software-as-a-service (SaaS) companies to accelerate their growth through channel sales. The all-equity round was led by New York’s 3L, with participation from Whitecap Venture Partners, Harbourvest, and existing PartnerStack investor RRE Ventures. According to PartnerStack, the funding caps off the startup’s fourth consecutive year of triple-digit revenue growth. https://bit.ly/3uuWwYr

7shifts secures $21.5 million Series B round to scale restaurant staff management platform.

Saskatoon-based retail software startup 7shifts has raised $21.5 million in Series B financing as the company looks to scale its restaurant labour management platform to meet the needs of restaurants as they gear up for the post-pandemic world. The round was led by New York-based growth equity fund Enlightened Hospitality Investments (EHI). It also involved participation from existing 7shifts investors Ten Coves Capital, Relay Ventures, and Conexus Venture Capital. https://bit.ly/3p5PlVB

Hydra Energy secures $15 million to scale hydrogen fuelling solution for trucking industry.

Delta, British Columbia (BC)-based cleantech startup Hydra Energy has raised $15 million in Series A financing from San Francisco’s Just Business, an ESG-focused private equity firm, to support the company’s first commercial-scale project. Following the success of its pilot project, Hydra aims to use the fresh funding to scale its hydrogen-based fuelling solution as it looks to help decarbonize the trucking sector. https://bit.ly/2RMRdGQ

Novisto raises $9.6 million Series A round to innovate ESG for enterprises.

Montréal-based environmental, social, and governance (ESG) software startup Novisto has closed a $9.6 million Series A round of funding, which brings the company’s total funding to date to $11.4 million. The round was led by White Star Capital with participation from Diagram Ventures, which helped Novisto launch last year. The proceeds from this Series A round will allow Novisto to triple the size of its engineering and product teams, scale its product roadmap, and expand beyond the North American market into Europe. https://bit.ly/3c3c67s

Canadian VC rockets to $2.78 billion in Q1 2021; BC leads all provinces with $1.20 billion – 43% of total disbursements.

BC venture backed companies raised $1.20 billion, equaling to the total VC raised by Ontario and Quebec companies combined ($1.24 billion). Dapper Labs’ US $304 million financing is Canada’s largest VC financing all time. BC cleantech and advanced agri-tech companies raised $277 million, representing 71% of All Canadian cleantech and advanced agri-tech disbursements. US investors invested $1.51 billion, accounting for 54% of the total disbursements. Investors from US, Germany, BVI, Hong Kong, and UK rounded up the top five foreign funding sources, together accounting for 67% of the total disbursements. US Private VC, US Corporate VC, US Hedge Fund, Canadian VC and Foreign Corporate VC ranked as the top five leading investor types. US Private VC invested $626 million; 2.5 times of the total invested by Canadian Private VC. Dentons Canada LLP led all VC law firms with 17 VC deals. https://bit.ly/3c1QfgF

Canada wants YouTube, TikTok to prioritize Canadian content.

Canada wants to force YouTube, TikTok and other video- and audio-sharing sites to prominently feature more of the country’s artists, a move that digital-law experts and former government officials call one of the most aggressive internet regulations yet from a Western country. The aim to promote domestic content on the sites is a step in the Canadian government’s multipronged effort to get the world’s biggest digital companies to contribute more financially to the country’s economy. Canada has vowed to levy a digital-services tax starting in 2022, regardless of whether there is a global deal among Organization for Economic Co-operation and Development members on such a tax this summer. The Liberal government also intends to follow Australia in trying to get digital platforms to compensate media outlets for content, and to create a new regulator to police hate speech and other harmful online activity. The content proposal, unveiled last month, has generated criticism from rival politicians, law professors and net-neutrality advocates, who argue it is akin to an attack on free speech. https://on.wsj.com/3fMJnEM

Global Markets: IPOs, Venture Capital, M&A

Investing app Acorns to go public in US$2.2 billion SPAC deal amid fintech’s massive boom.

Acorns Grow Inc., the Irvine, Calif. firm behind the synonymous investing and savings app, announced Thursday morning it has agreed to go public by merging into a special-purpose acquisition company in a deal that values the seven-year-old startup at US$2.2 billion—marking the latest in a slew of deals catapulting the valuations of buzzy young fintech companies. In a deal that nearly triples its valuation from two years ago, Acorns will merge into Pioneer Merger Corp., a SPAC led by technology veterans including Uber Cofounder Oscar Salazar, Lifelock Cofounder Todd Davis and Mitchell Caplan, a former E-Trade CEO. Acorns, which claims to be the largest subscription-based fintech startup in the nation, joins a growing wave of buzzy fintech firms announcing multi-billion-dollar takeovers and deals to go public this year. Earlier this month, publicly traded Bill.com said it has agreed to acquire corporate card startup Divvy, which launched just one year ago, for US$2.5 billion in cash and stock, and online lending company SoFi announced in January it will merge into one of the blank check companies headed by “SPAC King” Chamath Palihapitiya in a US$9 billion deal. In addition, Investing app e-Toro landed a US$10 billion SPAC deal in March. According to Pitchbook, 2021 is on track to be the second-biggest year ever for fintech IPOs and mergers—with some US$35 billion in deals announced thus far, behind only a record 2019 that saw more than US$150 billion in activity. https://bit.ly/2Sz56s2

Online video platform Vimeo plunges in debut after IAC spin-off.

Shares of online video platform Vimeo Inc, which was spun off from InterActiveCorp, were down 9.5% on their debut on Nasdaq on Tuesday. Demand for Vimeo’s platform, which provides video creation, hosting and marketing tools to professionals and businesses, has spiked during the COVID-19 pandemic as more people shifted to working and learning remotely. https://reut.rs/34A3Qrb

Meet Flywire, the Boston tech scene’s newest public company.

The Boston-based digital payments company Flywire made its public market debut Wednesday on the Nasdaq exchange, after raising US$250 million in an initial public offering. Flywire’s stock ended its first day of trading up more than 46 percent to close at US$35.10, and its valuation is north of US$3 billion. https://bit.ly/2R8heju

Neumann nabs additional stock award from WeWork.

Befallen WeWork CEO Adam Neumann added US$245 million worth of his stock to his hefty exit package, according to a recent securities filing, a reflection of how much leverage the founder’s super-voting shares gave him over the company’s new regime that pushed him out. The stock grants, reported by the Wall Street Journal on Thursday, come on top of the more than US$1 billion in cash, stock and debt refinancing that Neumann already secured as part of his exit package. Before his departure amid WeWork’s scrapped IPO in 2019, Neumann had control over the company because he held stock with 10 times the vote of a regular share. The US$245 million of stock awards were part of a renegotiated 2019 compensation deal that would have handed Neumann additional shares if the company’s stock price went up. WeWork and Neumann amended the agreement in February to allow Neumann to automatically vest those shares. The ultimate value of the stock package hinges on WeWork’s success as a public company. The company is merging with BowX Acquisition Corp. in a deal that should take WeWork public this fall. It is going public at an US$8 billion valuation, a fraction of the US$47 billion valuation Neumann had negotiated with its biggest private investor, SoftBank, in 2018. https://bit.ly/3fXMl9N

Gojek and Tokopedia’s holding group GoTo plans fundraising ahead of blockbuster IPO this year.

Singapore-headquartered rival Grab Holdings said in April that it would go public in the US via a merger with a SPAC backed by Silicon Valley’s Altimeter Capital. That deal valued Grab at about US$39.6 billion. GoTo could reach a similar valuation post-money, according to people familiar with the matter, more than double the combined US$18 billion valuation hit during Gojek and Tokopedia’s most recent fundraising rounds in 2019 and 2020, respectively. A roughly US$40 billion price tag would reflect Gojek and Tokopedia’s most recent financial performance and merger synergies, the people familiar said. Gojek said in November that all of its branded services were generating a profit margin and that its gross transaction value (GTV) had hit US$12 billion, up 10 per cent year on year. Both Tokopedia and Gojek were founded over a decade ago and have worked together delivering packages along Indonesia’s archipelago since 2015. Still, both were protective of their respective data and customers. A merger was first discussed about two years ago but failed to progress, the people familiar said. https://bit.ly/3i20IfH

NetEase’s music app files for US$1 billion Hong Kong IPO.

Chinese gaming giant NetEase Inc.’s music streaming arm has filed for an initial public offering in Hong Kong as the Tencent Holdings Ltd. rival ratchets up competition in online content. The Hangzhou-based firm has submitted a listing application for Cloud Village Inc. to the Hong Kong stock exchange, according to a filing on Wednesday. Cloud Village runs NetEase’s music streaming platform in China and also operates streaming and advertising through the platform. The filing didn’t provide details of the share sale. An IPO of the music unit could raise about US$1 billion, according to a person familiar with the matter, who asked not to be identified as the information is private. NetEase has long been a distant runner-up to Tencent in gaming and music streaming. Started in 2013, the music wing has since expanded its products to offer everything from online karaoke to live-streaming and lyrics sharing. The unit — 62% owned by NetEase — grew its monthly music users to 181 million last year, of which 9% are paying subscribers, according to its preliminary prospectus. Revenue surged 111% to 4.9 billion yuan (US$767 million) in 2020, with social entertainment services making up a bigger share compared with previous years. https://bloom.bg/3p3ooSl

Paytm reportedly aiming for India’s biggest IPO.

Payments platform Paytm wants to raise US$3 billion later this year in what would be India’s biggest ever IPO, Bloomberg reported. Backed by SoftBank, Jack Ma’s Ant Group, and Berkshire Hathaway, the company is looking for a valuation of about US$30 billion, the report said. Despite facing stiff competition in payments from Google, Amazon, Walmart and Facebook, the company’s CEO said it recently had its best quarter ever in the beginning of this year because of online spending surging during the pandemic. https://bit.ly/3fVeDBz

Amazon buying MGM for US$8.45 billion after talks with Apple fizzled out.

It’s been announced today that Amazon is buying MGM Studios for US$8.45 billion, in a move likely to see existing franchises see new life via the company’s film and TV division, Amazon Studios. The deal is the second-largest acquisition in Amazon’s history, behind its US$13.7 billion purchase of Whole Foods in 2017. Amazon said it hopes to leverage MGM’s storied filmmaking history to help bolster Amazon Studios, its film and TV division. Back in January, it was reported that Apple had held preliminary talks about a possible acquisition of MGM. According to this week’s report, MGM has held “preliminary talks” with “a number of companies,” including both Apple and Netflix. MGM’s goal is to “gauge their interest in an acquisition” after building up a content library “worth more than US$10 billion,” the report says. Much of that value comes from MGM’s franchises. https://bit.ly/3oZspHA

Supply chain software provider E2open to acquire BluJay in stock-and-cash deal valued at about US$1.7 billion.

E2open Parent Holdings Inc. , a provider of cloud-based supply chain management technology, said Thursday it is acquiring BluJay Solutions in a stock-and-cash deal valued at about US$1.7 billion. BluJay is a software-as-a-service company for the shipping, logistics and freight forwarding businesses with more than 5,700 global customers. Under the terms of the deal, E2Open will pay with 72.4 million shares and US$760 million in cash. BluJay shareholders will own about 22% of the combined company and its current shareholders, Francisco Partners and Singaporean sovereign wealth fund Temasek will have the right to appoint one director each to the board. E2open has also secured US$300 million in a common equity PIPE, or private investment in public equity, from institutional investors including Berman, The WindAcre Partnership, Eminence Capital and XN, as well as a first lien term loan of US$380 million. The deal is expected to close in the third quarter. It is expected to deliver annualized pro forma revenue of over US$550 million. E2open shares were up 3% premarket and have gained 20% in the year to date, while the S&P 500 has gained 11.7%. https://bit.ly/3yPgznO

Emerging Technologies

Google strikes deal with hospital chain to develop healthcare algorithms.

Google and national hospital chain HCA have struck a deal to develop healthcare algorithms using patient records, the latest foray by a tech giant into the US$3 trillion healthcare sector. HCA, which operates across about 2,000 locations in 21 states, would consolidate and store with Google data from digital health records and internet-connected medical devices under the multiyear agreement. Google and HCA engineers will work to develop algorithms to help improve operating efficiency, monitor patients and guide doctors’ decisions, according to the companies. The deal expands Google’s reach in healthcare, where the recent shift to digital records has created an explosion of data and a new market for technology giants and startups. Data crunching offers the opportunity to develop new treatments and improve patient safety, but algorithm-development deals between hospitals and tech companies have also raised privacy alarms. Other tech giants have struck similar deals with hospitals that grant access to identifying information in technology development, such as an effort by Microsoft Corp. and hospital system Providence to use patient records to develop cancer algorithms. The multiyear HCA-Google agreement will seek to develop algorithms using data from 32 million annual patient visits that could help monitor patients and guide treatment, said Dr. Perlin. During the pandemic, HCA used its own technology to monitor critically ill Covid-19 patients and notify doctors of potentially better treatment options. The company found that survival rates increased by comparing the outcomes for patients before and after rolling out the algorithm. The companies will also seek to develop algorithms that would help improve operations, Dr. Perlin said, such as by automating how hospital units track inventory of critical supplies. https://on.wsj.com/3uwsKTs

Media, Streaming, Gaming & Sports Betting

Nintendo plans upgraded Switch replacement as soon as September.

Nintendo Co. plans to begin assembly of its new Switch as soon as July and release the upgraded replacement for its four-year-old game console in September or October, people familiar with the matter said. The new console, likely to be priced higher than the US$299 original, may be announced ahead of the E3 conference starting June 12 to allow publishers to showcase their full range of Switch games at the global event, the people said, asking not to be named because the plans are not yet public. It will be sold alongside the US$199 Switch Lite, with the standard Switch phased out over time. Nintendo has to compete for gamers’ attention with a new console generation introduced by rivals Sony Group Corp. and Microsoft Corp. in November. Their PlayStation 5 and Xbox Series X machines beef up the visual fidelity, speed and performance of their predecessors, and both have been in extremely limited supply since launch. The Switch maker’s response will be to upgrade its flagship console with a 7-inch Samsung Display Co. OLED display and faster Nvidia Corp. graphics silicon making it capable of 4K output when docked to a TV, Bloomberg News previously reported. https://bloom.bg/3oZO1DE

Adtech, Privacy & Regulatory

Amazon hit with antitrust lawsuit from D.C. Attorney General.

Washington, D.C., Attorney General Karl Racine filed an antitrust lawsuit against Amazon Tuesday, accusing the company of illegally using its monopoly power to raise prices on its platform. Racine’s lawsuit accuses the online retail giant of preventing third-party sellers on Amazon Marketplace from offering lower prices elsewhere, including their own websites. Under pressure from antitrust regulators Amazon ditched its most favored nation clauses in merchant contracts in 2019, but replaced them with a nearly identical term, the lawsuit alleges. If merchants offer lower prices elsewhere, Amazon can push their products lower in its search results or even kick them off the site entirely, according to the lawsuit. “[W]e reserve the right not to highlight offers to customers that are not priced competitively,” an Amazon spokesman said in a statement. “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.” Amazon is the latest large technology company to be sued by U.S. antitrust regulators, after state and federal authorities filed a series of cases against Google and Facebook late last year. The European Commission and U.S. Federal Trade Commission, along with the state attorneys general in California, New York and Washington state also have opened antitrust investigations of Amazon and how it treats sellers on its site. Meanwhile, Lina Khan, the author of a legal paper outlining an antitrust case against Amazon has been nominated to seat on the five-member FTC commission and is currently awaiting Senate confirmation. And Racine has been under consideration in recent months to head up both the FTC and Department of Justice’s antitrust division. Both agencies have been without permanent leadership under President Biden. https://bit.ly/3wKGYBl

More state AGs considering antitrust action against Amazon.

Amazon’s size and cutthroat business practices are attracting increased scrutiny from U.S. regulators, with attorneys general from Massachusetts and Pennsylvania joining the growing list of officials investigating the internet retailer for potential antitrust violations, Bloomberg reported Thursday. Last year, officials from California and New York partnered with the Federal Trade Commission to investigate Amazon’s behavior in crafting and maintaining its online marketplace. Their work is still ongoing. Attorneys general from California and New York have been in contact with officials from Massachusetts and Pennsylvania, and have discussed how best to divide their workloads over the coming months, Bloomberg reported. Amazon’s business practices have also come under fire in its home state of Washington, where the attorney general’s office has been looking into how the internet retailer treats sellers who list their products on other platforms. On Tuesday, Amazon was hit with an antitrust suit by the District of Columbia, which targeted the company’s allegedly punishing pricing policies for sellers. D.C. Attorney General Karl Racine said that Amazon’s contracts prevent third-party sellers from listing their products for less on other websites. https://bit.ly/3i9ltGi

German cartel office opens investigation into Alphabet’s Google.

The Bundeskartellamt, Germany’s cartel office, said it’s opened investigations into Google Germany, Google Ireland and Alphabet . “An ecosystem which extends across various markets may be an indication that a company holds such a market position. It is often very difficult for other companies to challenge this position of power. Due to the large number of digital services offered by Google, such as the Google search engine, YouTube, Google Maps, the Android operating system or the Chrome browser, the company could be considered to be of paramount significance for competition across markets,” said Andreas Mundt, president of the Bundeskartellamt. The regulator also has opened probes into Facebook and Amazon. https://bit.ly/3hYx5Mx

Facebook faces European antitrust probe over marketplace.

So it appears to (finally) be Facebook’s turn to face the music in Brussels. The European Commission is set to announce an official antitrust probe into Facebook over the way the company’s Marketplace platform operates within the wider online classifieds ecosystem, according to the Financial Times. Europe’s top antitrust regulator has reportedly sought feedback from competitors about whether Facebook has an unfair advantage in online classifieds by promoting Marketplace for free. The preliminary investigation has already spilled over into the courts, with Facebook claiming the European probe has encroached on the company employees’ right to privacy. Facebook is the last of the U.S. tech giants to face an official antitrust probe by the Commission. There are a string of investigations and antitrust charges at different stages against the likes of Apple, Amazon and Google. https://bit.ly/34vyG4h

Tesla to store Chinese user data locally after security concerns.

Tesla will store Chinese user data in the country after local authorities voiced concerns that its cars’ cameras and sensors could be used for spying, according to one of Tesla’s official Chinese social media accounts. The move is part of Beijing’s efforts to require foreign companies to store user data onshore as it seeks greater control over information. The Wall Street Journal reported in March that some military and government employees in China were restricted from using Teslas out of concerns that the data gathered by the cars could contain sensitive information about national security. That prompted a response from Tesla founder Elon Musk, who said the company would never spy on Chinese citizens. Tesla said it established a data center in China to localize data storage and that all data generated from sales of cars in mainland China would be stored in the country. https://bit.ly/3fvSLOk

Amazon’s ad revenue is now twice as big as Snap, Twitter, Roku and Pinterest combined.

The major growth in Amazon’s advertising unit means its revenue contribution is now 2.4 times as large as Snap, Twitter, Roku and Pinterest combined, and it’s growing 1.7 times as quickly, according to Loop Capital. Amazon’s “Other” unit, which is primarily made up of advertising but also includes sales related to other service offerings, grew revenue a whopping 77% year over year to more than $6.9 billion in the first quarter, the company reported last month. And industry moves such as Apple’s recent software changes that make it easier for users to block advertisers from tracking them look poised to add more fuel to Amazon’s growth. https://cnb.cx/3ftpljY

eCommerce

Shopify, Google deepen partnership with new checkout integration.

Shopify announced it is expanding Shop Pay, the e-commerce company’s accelerated checkout solution, to Google. The expansion, set to go live later this year for US merchants, will allow merchants that enable Google’s native checkout feature (Buy on Google) to offer Shop Pay as a checkout option. The latest integration is part of a broader expansion between the two companies, which have teamed up on several new integrations amid intensifying rivalry with Amazon. Though Shopify and Google have been partners since 2012, the companies have looked to strengthen their partnership as of late. What is notable about these latest partnerships between Google and Shopify is that they place the firms in greater competition with Amazon, which has recently been aggressively consolidating market share across a number of sectors. https://bit.ly/34qqItr

Google opens door to more merchants in e-commerce battle with Amazon.

Google is broadening the range of merchants that can list products on its e-commerce platform through new partnerships with companies that help smaller retailers set up online stores as it continues to fight an uphill battle against Amazon. The Mountain View, Calif.-based search giant said Thursday it is partnering with a new group of companies— Square, GoDaddy and WooCommerce—that help retailers sell goods online. Together with a Shopify integration announced last week, the partnerships expand the universe of items listed through Google and let merchants list products through Maps and YouTube as well as Search. Google has for years tried to square up to e-commerce giant Amazon, with limited success. In recent years it has adopted a more open approach, dropping fees for listing goods and throwing open its doors to more sellers. https://bit.ly/2R0Tq0I

Fintech, Blockchain & Cryptocurrency

The Biden administration is reportedly looking at how to increase oversight of crypto to protect retail investors and prevent illegal activity.

The Biden administration is reportedly looking at how to increase oversight of the cryptocurrency market to protect retail investors, sources told The Washington Post Tuesday. The administration is also analyzing potential gaps that may be used to finance illicit activities, sources said. Earlier this month, White House officials and Treasury department staff were in discussion about the risks that the rapidly evolving digital space could bring, according to The Washington Post. Not looped in, however, were higher-ups, including Treasury Secretary Janet Yellen, The Post said. https://bit.ly/3fSyq4T

China’s regulators tell Tencent to reorganise fintech business.

China’s regulators have told internet giant Tencent to put its finance-related businesses into a new financial holding company that will be subject to more supervision, Caixin reported. Such a move would be in line with the Chinese government’s broader crackdown on China’s financial technology sector where Tencent, Alibaba and other tech giants operate popular platforms for payments, loans and insurance. Tencent’s WeChat Pay is one of China’s two major mobile payment services, along with Ant Group’s Alipay. Last month, Ant, the fintech arm of e-commerce giant Alibaba, said that it will apply to become a tightly regulated financial holding company. Ant faces a major restructuring after Chinese regulators in November forced the company to scrap its $37 billion initial public offering. Last week, Tencent President Martin Lau said that the company is making sure that its business is “compliant with the spirit of the regulators.” Regulators want more transparency in the fintech sector and are focusing on the sizes of lending businesses to make sure there is no overlending or overborrowing, Lau said. https://bit.ly/34tCRh8

China bitcoin mining: Huobi suspends domestic bitcoin mining amid global sell-off, wider Beijing scrutiny.

Cryptocurrency exchange Huobi has suspended bitcoin mining services and sales of mining equipment in mainland China, becoming one of the first Chinese-founded platforms to do so, as the price of bitcoin continues to fall after the central government announced a crackdown. “In order to be more focused on the expansion of our overseas presence, we will currently suspend provision of related services for new users in mainland China. For existing users, updated information and details will be announced shortly,” a spokeswoman at Huobi said in a statement to the South China Morning Post on Monday. https://bit.ly/2RY9H70

HSBC CEO says Bitcoin not for us. HSBC has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters.

Europe’s largest bank’s stance on cryptocurrencies comes as the world’s biggest and best-known, Bitcoin, has tumbled nearly 50% from the year’s high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support. It marks it out against rivals such as Goldman Sachs, which Reuters in March reported had restarted its cryptocurrency trading desk, and UBS which other media said was exploring ways to offer the currencies as an investment product. https://reut.rs/3hZbLpZ

PayPal will allow users to withdraw crypto funds into third-party wallets.

Online-payments giant PayPal Holdings is now allowing users to withdraw cryptocurrencies to third-party wallets, the company told CoinDesk on Wednesday. “We want to make it as open as possible, and we want to give choice to our consumers, something that will let them pay in any way they want to pay,” PayPal head of cryptocurrency Jose Fernandez da Ponte said during CoinDesk’s Consensus 2021 conference. For now, users cannot move cryptocurrencies out of PayPal although they can buy, sell, and hold digital currencies, a feature offered since October 2020. The new feature announced Wednesday also applies to Venmo, PayPal’s payments service. Venmo in April allowed users the option to invest in four crypto assets: bitcoin, ethereum, litecoin, and bitcoin cash. https://bit.ly/2RMRJVi

Bridgewater’s Ray Dalio Says he prefers bitcoin to bonds.

Should cryptocurrencies continue to gain traction, investors might decide to invest in them rather than government bonds, Dalio said in a recorded interview that was presented Monday at CoinDesk’s Consensus 2021 conference. The result is that governments lose control over their ability to raise money. Dalio has been bearish bonds for some time, saying in March that the economics of investing in bonds “has become stupid” because they pay less than inflation. Even with that view, a large percentage of the US$151 billion his firm manages is in U.S. Treasuries and other government bonds. “I have some Bitcoin,” Dalio said in the interview, which was recorded on May 6, according to CoinDesk. He didn’t say how much he owned. Dalio said in January he was considering cryptocurrencies as investments for new funds that would offer clients protection against the debasement of fiat money. https://bloom.bg/3fRYFIt

Former bitcoin skeptic Carl Icahn says he may pour more than US$1 billion into cryptocurrencies – but predicts many digital assets won’t survive.

Billionaire investor Carl Icahn told Bloomberg on Wednesday that he was looking to get involved in the cryptocurrency space, and may invest more than $1 billion into digital assets. “I mean a big way for us would be a billion dollars, a billion-and-a-half dollars,” he said in an interview. “I’m not going to say exactly.” Icahn has changed his tune on cryptocurrencies, after calling bitcoin and other similar assets “ridiculous” only three years ago. Telling CNBC in 2018 that he “wouldn’t touch that stuff,” he said his dislike perhaps stemmed from not understanding them. Icahn, who currently has a net worth of US$22 billion, said he hasn’t yet bought any crypto, but he’s exploring where the opportunities lie within the sector as a whole. He acknowledged cryptocurrencies are gaining mainstream acceptance as a consequence of rising inflation.  Icahn isn’t the only high-profile crypto skeptic to have changed his mind. Legendary investor Howard Marks said earlier this year he was being more open-minded towards bitcoin, and that his son Andrew “thankfully” owns a meaningful amount for the family. https://bit.ly/3wIrT3y

Semiconductors

Tesla may pay upfront for chips amid global shortage.

Electric-car maker Tesla has reportedly opened new fronts in the battle to secure chips amid an industry-wide shortage that includes paying in advance for those supplies and even buying its own plant. Tesla is specifically trying to secure chips with companies in Taiwan and South Korea, which make the newer generation models that it needs, but also the U.S., according to a Thursday report in the Financial Times, which cited industry sources. As for buying a plant outright, sources said those plans are in a much earlier stage, given such an endeavor could prove cost prohibitive. A spokesperson for Tesla could not immediately be reached for comment. The FT said a person familiar with chip giant Samsung’s view on direct chip buying by companies said it has production lines for this purpose and would be open to discuss it further. https://bit.ly/3vzu09E

ESG

Joe Biden opens up California coast to offshore wind.

The Biden administration announced that it will open up parts of the Pacific coast to commercial-scale offshore renewable energy development for the first time. The geography of the West Coast poses huge technical challenges for wind energy. But rising to meet those challenges is a big opportunity for both President Joe Biden and California Governor Gavin Newsom to meet their clean energy goals. Until now, technical constraints have generally prevented companies from installing turbines that are fixed to the seafloor in waters more than 60 meters deep. That’s left nearly 60 percent of offshore wind resources out of reach, according to the National Renewable Energy Laboratory (NREL). With the development of new technologies that could let wind turbines float in deeper waters, it looks like those resources might finally be within reach. The Department of Energy says that it has funneled more than US$100 million into moving floating offshore wind technology forward. There are only a handful of floating turbines in operation today, and no commercial-scale wind farms yet anywhere in the world. https://bit.ly/34teBM1

Sophic Capital Client Insights

GameSquare Esports (GSQ-CSE, Sophic Client) investor presentation.

Gen Z is driving the billion-dollar revenue esports industry, which is forecasted to grow to US$6.8 billion by 2027. However, brands are having trouble resonating with them. GameSquare Esports Inc. is a global media company bridging the gap between global brands and the gaming and esports communities. We’re hosting an investor presentation with GameSquare Esports CEO Justin Kenna and GameSquare President Kevin Wright to learn more. Date: Thursday, June 3, 2021, Time: 12pm ET / 9am PT, Register in advance for this meeting. https://bit.ly/3hYxqih

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