US elections dominated the news cycle this past week, with larger tech related questions pertaining to US antitrust & Section 230 regulations, as well as, US-China relations. The sudden change in ANT massive planned IPO was a very unexpected development for investors. Airbnb’s planned IPO, which could be announced next week, and its reception, could help shape the near term tech investing narrative. In Canada, we expect Lightspeed with its largest acquisition to date (US$440 million), to attempt emulate Shopify’s success in gaining support from an international investor audience.

Canadian Technology Capital Markets & Company News

Lightspeed (LSPD-TSX, LSPD-NYSE) to acquire ShopKeep for US$440 million, reports strong Q2 results. Montréal-based Lightspeed announced Thursday it is set to acquire ShopKeep, a New York City-based leading cloud commerce platform provider. The deal, which would be Lightspeed’s largest to date, comes as the company reported its second-quarter results for the period ending September 30, 2020. Lightspeed will acquire ShopKeep for approximately US$440 million, comprised of US$145.2 million in cash and the issuance of 9.5 million subordinate voting shares in Lightspeed. The deal is expected to close before the end of the company’s third-quarter ending December 31, 2020. Speaking with BetaKit earlier this year, Lightspeed founder and CEO Dax Dasilva emphasized the company’s goal to increase its brand awareness in the US. The decision to seek a dual listing on the New York Stock Exchange (NYSE) earlier this year, the CEO stated, was highly encouraged by Lightspeed’s investors who also hoped to make the company more accessible to American investors. https://bit.ly/2IcyNtU

VIQ Solutions (VQS-TSXV) announces upsize to previously announced bought deal public offering to $20 million. The company entered into an amendment to its previously announced agreement with Paradigm Capital Inc. pursuant to which Paradigm, on behalf of a syndicate of underwriters including Acumen Capital Partners, have agreed to increase the size of the previously announced bought deal financing. Pursuant to the Amendment, the Underwriters have agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, an aggregate of 4,705,900 common shares at a price of $4.25 per Common Share for aggregate gross proceeds to the Company of approximately $20 million. https://bwnews.pr/2U8ptdb

MacroHealth raises $54 million Series A to hire new talent in Vancouver. Healthtech startup MacroHealth, which offers a platform that optimizes the buying and selling of health services, has raised a $54 million Series A round of financing. MacroHealth is looking to tap more of Vancouver’s talent, which has seen a boom in recent years. https://bit.ly/38nmAgT

Terramera looking to build $730 million centre focused on fighting climate change through Agtech. Vancouver-based Agtech startup Terramera has revealed plans to create a new $730 million global centre focused on fighting climate change and strengthening the agriculture sector through technology. “Canada has the opportunity to lead the world in regenerative agriculture.” The proposed centre is aimed to bring new clean technologies to farmers and scale regenerative agriculture, which Terramera described as practices that pull carbon from the air and sequester (or store) it in the soil. Terramera’s main goal is to create “the world’s largest regenerative agriculture initiative” and help Canadian farms and ranches remove 78 gigatonnes of carbon dioxide out of the atmosphere by 2050. Terramera hopes to raise the $730 million from private investors as well as federal and provincial governments. The proposed $730 million in funding would go towards securing 250,000 to one million square feet of space for labs, classrooms, greenhouses, offices, and classrooms in British Columbia. A portion of the funding would also be allotted for an artificial intelligence and machine learning (AI/ML) engine for plant and soil health. Terramera said this computational engine would be powered by Microsoft Azure. “Microsoft Azure is perfectly suited to enable our AI/ML platform to perform at the national and global scale the Global Centre will entail,” noted Travis Good, CTO at Terramera. According to Terramera’s plan, the centre would also involve creating “carbon credits” for the carbon reductions farmers make every year. Those credits could be sold by farmers to improve their profitability. The centre would also create data-driven policy incentives for regenerative farming practices. https://bit.ly/34PK4Z

Ontario Securities Commission to launch regulatory sandbox for startups. The Ontario Securities Commission (OSC) is establishing a provincial “regulatory sandbox” which will allow startups to experiment with novel formats of raising capital while minimizing regulatory burden. The sandbox will allow the OSC to test new forms of capital formation, including crowdfunding. The decision to create a sandbox was included in a new charter published last week by the OSC, outlining priorities for its innovation office, which was first announced over the spring. The innovation office is being led by Pat Chaukos and is expected to be fully operational by March 2021. The OSC told BetaKit the sandbox will allow the agency to test new forms of capital formation, including crowdfunding and angel investment networks. The OSC said the sandbox program is open to any ideas that offer potential solutions that benefit investors, lower access and trading costs, increase transparency and foster capital formation. The OSC is still offering its Launchpad program, which was formed in 2016 with a goal of helping startups navigate securities regulations. LaunchPad provides support to early-stage FinTech businesses by helping them navigate regulatory frameworks, explore flexibility around current regulatory obligations, and gain informal guidance on potential securities regulation implications. https://bit.ly/2Gn56FI

Blue wave or not, a green wave is sweeping the Canadian oilpatch. In a sign of the changing environment in the oilpatch, North America’s largest pipeline company Enbridge Inc. set new net-zero emissions targets Friday and outlined how the company sees the global energy transition from carbon-based energy to renewables playing out over the next few decades. Enbridge’s target of net-zero emissions by 2050 aligns the Calgary-based pipeline and utilities giant with the country’s three largest oil producers Canadian Natural Resources Ltd., Suncor Energy Inc. and Cenovus Energy Inc., along with European oil majors Royal Dutch Shell Plc, Total SA and BP Plc. — all of whom have adopted net-zero targets. The move comes as the Canadian oilpatch is facing extreme pressure from influential pension funds and fund managers to reduce its carbon footprint, the federal government’s stringent environmental policy measures, and companies’ fears of being excluded from ESG-indexes which are attracting billions of dollars from a growing number of eco-conscious retail and institutional investors. https://bit.ly/2U1X6NG

Trudeau moves to force Netflix, Disney to promote Canadian shows. Justin Trudeau’s government is giving itself the power to regulate streaming services like Netflix Inc., including forcing them to contribute financially to Canadian shows. With a change to broadcasting legislation, the government says it is trying to create a more even playing field between digital giants and traditional domestic television networks, which are already required to pay minimum amounts toward Canadian programming. Requiring streaming companies such as Walt Disney Co. and Amazon.com Inc. to pay “at a similar rate to traditional broadcasters” would raise as much as $830 million (US$632 million) a year by 2023, the government said. The changes would also apply to music streaming services run by Apple Inc. and Spotify Technology SA, the content side of services offered by Facebook Inc. and Alphabet Inc.’s YouTube, as well as Canadian online companies. Tuesday’s announcement by Heritage Minister Steven Guilbeault comes as Trudeau weighs how to adapt laws to a media market that has largely moved online. The government is also considering how to tax global tech giants on income generated in Canada. The proposed reform would empower the federal broadcast regulator to impose “conditions of service,” which could include orders to make Canadian content easier for users to find. Online broadcasters would have to “make financial contributions to support Canadian music, stories, creators and producers,” according to a briefing note. https://bloom.bg/3pavK6f

Global Markets: IPOs, Venture Capital, M&A

Airbnb plans to file for its more than US$30 billion IPO as early as next week despite pandemic headwinds, according to report. Airbnb is planning to go public by the end of the year despite an ongoing rise in daily COVID-19 cases, according to a Reuters report. The US-based vacation rental company will make its initial public offering registration public next week, setting it up for a December debut on the stock market, Reuters said Thursday. Airbnb was initially reeling from the COVID-19 pandemic in the Spring as nearly all travel came to a halt, but has staged a strong comeback as customers preferred to rent out homes rather than hotel rooms in order to limit contact with people. In April, the company lined up emergency funding from investors so it could make it through the first wave of the COVID-19 pandemic on strong footing. By July, the company said its customers had hit more than one million in daily bookings, hitting pre-pandemic levels not seen since early March. Airbnb will likely raise proceeds of US$3 billion in a valuation that could reach US$30 billion, Reuters reported. An investor roadshow will likely commence in December, followed by plans to set an IPO price range and eventual public trading. https://bit.ly/2IcIDMn

Ant Group’s IPO could be delayed more than 6 months amid regulatory pressure that may slash its valuation, report says. General investors may have to wait up to 6 months to own a piece of Ant Group as regulatory pressure from Beijing ramps up, according to a report from the Financial Times,potentially further delaying its initial public offering. The Chinese fintech — which was set to go public this week in what would have been the largest IPO in history — could also see a reduced valuation as investor anxiety about what regulatory scrutiny the company may be exposed to is digested by investors, the FT reported, citing people directly involved in the deal. Ant Group’s planned dual listing on the Hong Kong and Shanghai exchanges was suspended on Tuesday, a day after founder Jack Ma was summoned to meet with Chinese regulators.According to Reuters, regulators told Ma and two Ant Group executives that Ant’s “lucrative online lending business would face tighter government scrutiny.” https://bit.ly/3eBshsF

Upstart files to go public. Upstart, an artificial intelligence-powered lending service, filed with the Securities and Exchange Commission to go public on Thursday. The financial technology startup uses non-traditional variables like employment status and education to determine creditworthiness. The San Mateo, Calif.–based firm recently eked a profit for the first time: in the nine months ended September 30, 2020, Upstart netted a profit of US$5 million. It generated US$164 million in revenue last year, up 65% from 2018, securities filings show. Upstart cited the Covid-19 pandemic as a risk factor, noting that as borrowers’ finances have taken a hit, origination volumes have, too. It was last valued at US$750 million in April 2019, PitchBook data shows. Upstart has raised US$165 million to date. https://bit.ly/3lc2B8m

ByteDance in talks to raise US$2 billion at US$180 billion valuation. ByteDance is in talks to raise US$2 billion from investors including Sequoia at a valuation of US$180 billion, Bloomberg reported. That’s a big lift in ByteDance’s valuation. The company last raised money at a US$75 billion valuation in 2018 although its shares recently have traded on the secondary market at a valuation of US$140 billion. The fundraising would come ahead of a planned public listing of ByteDance in Hong Kong, the story said. Aside from TikTok, which faces a U.S. ban, ByteDance owns popular Chinese apps such as Douyin and Toutiao. Word of the fundraising comes as the fate of ByteDance’s TikTok deal with Oracle remains uncertain. To avoid a U.S. ban proposed by President Trump, ByteDance agreed to sell a minority stake in TikTok to Oracle and Walmart, ahead of a planned restructuring whereby TikTok would become a standalone company. But the company still has to win approval from U.S. and Chinese authorities for the deal. https://bit.ly/35aTBed

ByteDance rival Kuaishou seeks to raise US$5 billion in Hong Kong IPO. ByteDance rival Kuaishou is seeking raise US$5 billion in a Hong Kong initial public offering. The Chinese short-video app founded in 2011 said it had 302 million daily active users, spending an average  85 minutes a day using it. Kuaishou competes with ByteDance’s similiar app, called Douyin, which has about 600 million users. The company said revenue rose 48% to the equivalent of US$3.8 billion in the first half of the year. Net losses in 2019 were roughly US$3 billion. The majority of Kuaishou’s revenue comes from live-streaming videos, where the app takes a cut from tips viewers pay to their favourite influencers. Its ads business, which accounts for 28% of the total revenue in the first half of the year, grew 13%. Although most of Kuaishou’s business is in China, it operates some apps overseas, including India, Latin America, Southeast Asia and the U.S. For instance, one of Kuaishou’s fast-growing short video apps, Snack Video, currently has more than 60 million daily active users in India.  https://bit.ly/38jUyTz

Ant’s record IPO suspended in Shanghai and Hong Kong Stock Exchanges. China called a sudden halt to the world’s biggest initial public offering, casting uncertainty over the future of financial-technology giant Ant Group Co. and delivering an extraordinary rebuke to its controlling shareholder, Jack Ma. The Shanghai Stock Exchange suspended Ant’s blockbuster IPO late Tuesday, a day after four regulatory agencies summoned Mr. Ma and the company’s top two executives to a closed-door meeting. The meeting and a changing regulatory environment constitute major events that have disqualified Ant from listing this Thursday, the bourse said. The company said a concurrent Hong Kong listing would also be suspended. Ant plans to return the funds it has collected from investors who subscribed to its IPO, which had been on track to raise at least US$34.4 billion in total. https://on.wsj.com/2GIfckS

Delivery giant Meituan said to weigh second listing in China. Meituan is considering a second listing in China as soon as next year after its Hong Kong shares more than quadrupled in the two years since its debut, according to people familiar with the matter. The world’s largest meal delivery service has held initial discussions with advisers for the potential share sale in China, said the people, who asked not to be identified. Meituan is weighing ChiNext, a Nasdaq-style board under the Shenzhen Stock Exchange, among possible listing venues in China, one of the people said. Deliberations are at an early stage and the company hasn’t made any final decisions on timing nor size of the potential offering, the people said. A representative for Meituan said the company has no plans or timetable for a secondary listing. Meituan, backed by Tencent Holdings Ltd., raised about US$4.2 billion in its Hong Kong initial public offering in 2018. The stock has since jumped more than 300% after the company turned profitable and demand for takeout service bounced back from a pandemic-induced disruption. Meituan has a market value of about US$224.6 billion.  https://bloom.bg/2JmUfg7 

Lidar startup Aeva to go public via US$2.1 billion SPAC merger. Aeva,  a Mountain View, California-based lidar company started by two former Apple engineers and backed by Porsche SE, is merging with special purpose acquisition company InterPrivate Acquisition Corp., with a post-deal market valuation of US$2.1 billion. The deal with InterPrivate, which is led by private equity investor Ahmed Fattouh, is expected to close by early 2021. Aeva is the latest company to eschew the traditional IPO path and go public via a SPAC merger. It’s also the third lidar company, following Velodyne and Luminar, to take this route to the public markets. Velodyne long dominated the lidar industry and supplied most AV developers with its products. Dozens of startups have popped up in the past several years aiming to carve away market share from Velodyne, each one pitching its own variation on the technology and business approach. https://tcrn.ch/3enr4VG

AT&T considers selling significant minority stake in DirecTV, AT&T Now and U-Verse pay-TV operations, sources say. AT&T is in discussions with private-equity firms, including Apollo Management, to sell a significant minority stake in its DirecTV, AT&T Now and U-Verse pay-TV businesses in a complicated transaction that would shift legacy assets off the wireless carrier’s balance sheet, according to people familiar with the matter. Under the terms of the proposed deal, AT&T would retain majority economic ownership of the businesses, and would maintain ownership of U-verse infrastructure, including plants and fiber. The buyer would control the pay-TV distribution operations and consolidate the business on its books. The deal could include 30% to 49% of the combined pay-TV distribution businesses, said the people, who asked not to be named because the discussions are private. Final bids are due in early December, the people said. While valuations haven’t been determined, a deal may value DirecTV at less than US$15 billion including debt, two of the people said. AT&T acquired DirecTV in 2015 for $67 billion with debt. A deal will not include DirecTV’s Latin American business, the people said. https://cnb.cx/3mWbYcH

Bezos sells US$3 billion of stock this week. Amazon founder Jeff Bezos has cashed in more than US$3 billion in stock less than a week after the e-commerce giant beat its expected earnings during the global coronavirus pandemic. Bezos sold when the company’s share price was around US$3,000 per share on Monday and Tuesday this week, according to recent public filings with the SEC. The stock on Wednesday rose 6.3% to US$3,241. It brings Bezos’ stock sales in Amazon for the year to more than US$10 billion, previously selling US$4 billion and US$3 billion lots in February and August. Despite the recent activity, Bezos still owns more than US$173 billion worth of Amazon stock. https://bit.ly/3esAr6B

Emerging Technologies

This AI can tell if you have Covid-19 just by listening to your cough, researchers say. The tool uses neural networks that can detect the subtle changes in a person’s cough that indicate whether they’re infected, even if they don’t have any other symptoms. Asymptomatic people infected with covid-19 are a vector for the virus that’s particularly tricky to manage, in part because they’re less likely to get tested because, duh, why would they if they’re feeling fine, right? Thus, carriers could infect others without even realizing it. But even asymptomatic carriers have one tell that shows they’re infected, MIT researchers found. It’s all in the cough. The difference between a healthy person’s cough and the cough of someone infected with the virus is so slight that it’s imperceptible to the human ear. So the team developed an AI to detect these minute differences using tens of thousands of recorded samples of coughs and spoken words. And it’s been ridiculously accurate in early tests, recognizing 98.5% of coughs from people with confirmed covid-19 cases, and 100% of coughs from asymptomatic people. https://bit.ly/32aIT5A

Coronavirus: NHS COVID app failed to record potential exposures due to error. The wrong threshold had reportedly been set for the app and was not recording those who were close enough to transmit the virus. An error with the NHS COVID app has left potentially thousands of people unaware that they were exposed to the coronavirus and needed to self-isolate. More than 19 million people have downloaded the English contact-tracing app since 24 September, but it has had the wrong settings to record whether these people were close enough to each other to transmit the coronavirus. According to The Sunday Times’ source, Android devices have been the worst impacted – meaning the error has had a disproportionate impact on low-income smartphone owners. https://bit.ly/34TK377

Amazon patents method of grouping toxic players together online. Amazon has devised a potential solution to toxic players spoiling multiplayer games for others — by making them only play against each other. A new patent filing, spotted by Protocol, details Amazon Technologies’ proposal for a system that allows “behaviour-aware player selection for multiplayer electronic games.” https://bit.ly/34RBSYV

5G: Using drones to beam signals from the stratosphere. Plans to beam 5G signals to the public via drones that stay airborne for nine days at a time have been announced by two UK firms. They want to use antenna-equipped aircraft powered by hydrogen to deliver high-speed connectivity to wide areas. Stratospheric Platforms and Cambridge Consultants say they could cover the whole of the UK with about 60 drones. But telecoms analysts question whether the economic case for this scheme is quite as simple as it sounds. https://bbc.in/3kSXgTu

Media, Streaming, Gaming & Sports Betting

Comcast in talks to partner with Walmart on Smart TVs. Comcast is in talks to partner with Walmart on smart TVs that would use Comcast’s technology and Walmart’s brand and distribution, the Wall Street Journal reported. Such a venture would be a threat to the likes of Roku, one of the biggest makers of streaming TV devices whose software is in many smart TVs. Roku’s stock dropped over 4%  on the news. Comcast’s software helps people find different streaming services but the move would also help it market its Peacock streaming service at one of the biggest retailers in the country. It will be interesting to see what this will mean for retailers of competing smart TV manufacturers like Samsung that that sell through Walmart. https://bit.ly/3mRzU0T

TikTok strikes new licensing agreement with Sony Music. TikTok announced this morning it has signed new licensing agreement with Sony Music Entertainment (SME) that will allow the short-form video app to continue to offer songs from Sony Music artists for use by creators on its platform. The agreement will also see the companies partnering on efforts to promote Sony artists, TikTok said. Deal terms were not specified. But the expanded agreement will give TikTok’s creator community access to sound clips from Sony Music’s catalog of current hits, new releases, emerging favorites, iconic classics and deep cuts, TikTok noted in its announcement. https://tcrn.ch/32bCTcR

Nintendo raises annual forecast for net profit By 50%. Nintendo raised its net-profit forecast for the fiscal year by 50% after sales outperformed expectations in the first half, it said. The revised projections show how video gaming has been one of the main beneficiaries of the Covid-19 pandemic as lockdowns and quarantines have boosted demand for at-home entertainment. The Japanese video-game and console maker said it expects net profit to be 300 billion yen (US$2.88 billion) in the year ending in March 2021, up from 200 billion yen previously. Nintendo said it recorded strong sales of both new releases and older video-game titles in the six months ending in September. It also sold 12.53 million Nintendo Switch consoles, up more than 80% when compared with the same period a year earlier. https://bit.ly/3jYcNQE

‘Animal Crossing’ is on track to become the best-selling Nintendo Switch game ever after selling more than 26 million copies. Between its March release and September 30, Nintendo sold 14.3 million copies of the hit game “Animal Crossing: New Horizons,” for a total of 26 million copies sold. This puts the relaxing island game on track to become Nintendo’s best selling ever — right now it is only behind Mario Kart 8 Deluxe, which has sold nearly 29 million copies since it was released in 2017. The game couldn’t have come out at a better time, as the newest edition in Nintendo’s long-running franchise where players can create a campsite, complete small tasks, and meet neighbors. “New Horizons” came out on March 20, just as COVID-19 lockdowns and stay-at-home orders were going into effect around the world. Sales are also up for the Nintendo Switch. Between July and September, the company sold 6.86 million Switches, up from 5.86 million the previous quarter. In the early days of lockdown through the summer, the Switch was a hot commodity akin to toilet paper or hand sanitizer. https://bit.ly/2U4vmrJ

Tencent claims record 100 million daily users on mobile game Honor of Kings. At its five-year anniversary gala graced by celebrities, esports stars and orchestras, Tencent’s mobile game Honor of Kings said it has crossed 100 million daily active users. The title has not only broken user records but generated other unprecedented accomplishments along the way. For one, it consistently ranks among the top-grossing mobile games worldwide, jostling with PUBG Mobile made by another Tencent studio Lightspeed & Quantum — gaming has long been the cash cow for Tencent, better known for its WeChat messenger. The brain behind Honor of Kings is TiMi Studios, which ramped up hiring in the U.S. this year to further global expansion. The game is credited for popularizing the multiplayer online battle arena (MOBA) category in China using clever designs like short sessions, friendly controls, esports integration, and social networking leverage, as games analyst Daniel Ahmad pointed out. The title has an unusually high female player base — around 50% — for a genre dominated by males. TiMi focused on creating a MOBA that was tailored to the expectations of mobile players. Which included shorter session lengths, touch friendly controls and automated systems. https://tcrn.ch/34QPO5w

Jackpot! Expansion of gambling in the US wins big at polls. The U.S. gambling industry won big at the polls Tuesday, with three states authorizing legal sports betting and three others either approving or expanding casino gambling. Maryland, South Dakota and Louisiana approved sports betting. That sets up a situation in which by the end of next year more than half the country could have legal sports betting, less than three years after a U.S. Supreme Court ruling cleared the way for all 50 states to adopt it if they chose. Virginia approved casino gambling in four locations, Nebraska authorized adding casino games at its horse racing tracks, and Colorado expanded the number and type of casino games it can offer, along with eliminating some wagering limits. By the end of 2021, at least 25 states and the District of Columbia could have legal sports betting in place. https://bit.ly/2UboGId

NFL players association acquires stake in US fantasy sports operator. The acquisition forms part of an exclusive long-term partnership between MKF and the NFLPA, the union for professional football players in the NFL, and OneTeam Partners, which helps athletes maximize the value of their name, image and rights. The multi-year deal includes a long-term licensing agreement, joint marketing commitment and significant player involvement in a broad assortment of MKF’s activities, with MKF serving as the official licensee of the NFLPA for daily fantasy sports. “With this deal we have taken another large step to solidifying the role of players being collectively involved in businesses that partner with their sport,” said NFLPA executive director and OneTeam board member DeMaurice Smith. “Monkey Knife Fight is an innovative daily fantasy provider that already has partnerships with some NFL teams and we are thrilled with the opportunity to build onto that platform for fans across sports.” Monkey Knife Fight founder and CEO Bill Asher said: “Monkey Knife Fight has always distinguished itself from other gaming platforms by letting fans play contests that are focused on their favorite athletes. “Our relationship with the NFLPA will allow us to connect fans to players on a whole new level. We are looking forward to this landmark partnership.” https://bit.ly/2Jz0n5d

Xbox Series X review: The future isn’t quite here yet. The Xbox Series X is billed as the most powerful video game console ever made. But with a meager lineup of games this year, that promise won’t mean much for a while. Microsoft Corp. releases a new pair of consoles on Tuesday, kicking off the next generation of video games with better visuals and shorter load times. Bloomberg spent the last two weeks testing both products—the high-end Xbox Series X, which will sell for $500, and its smaller, less-powerful counterpart, the Xbox Series S, which will go for $300. https://bloom.bg/3l3yX5n

Adtech, Privacy & Regulatory

Justice Department sues to block Visa’s US$5.3 billion deal for Plaid. The U.S. Department of Justice filed a lawsuit aimed at preventing Visa from acquiring the financial technology startup Plaid in a US$5.3 billion deal. The lawsuit, filed Thursday in federal court in Northern California, is an effort to stop Visa from buying a company that poses a longterm threat to Visa in the online debit business, The Wall Street Journal reported. Plaid provides the technology underlying digital payment apps such as Venmo and could eventually threaten the traditional credit and debit card business. The lawsuit said the deal could allow Visa to maintain a monopoly in online debt, leading to higher prices for consumers. The Justice Department’s effort to block the deal comes as lawmakers and consumer advocates argue for more forceful antitrust enforcement in the tech industry, including the blocking of proposed acquisitions and the unwinding of some that have already happened. https://bit.ly/3n3IvO9

California voters approve plan to fortify online privacy rules. California voters approved a proposal to buttress the state’s online privacy protections, which were already the most robust in the country, and increase fines for companies that violate certain rules. The measure will create a new state enforcement agency and make it harder for lawmakers to make changes to the rules. It also gives California residents more power to restrict how companies can use their personal data and raises fines for invasions of children’s privacy. The initiative, known as Proposition 24, passed 56 to 44. https://bloom.bg/2I6UY4V

Uber, Lyft, DoorDash win high-stakes California ballot initiative. “Gig economy” companies such as Uber late Tuesday were poised to win a critical voter ballot initiative in California, which the companies funded, to override a law that requires them to treat their drivers as employees with full benefits rather than independent contractors. With 60% of voting precincts reporting, support for the initiative, called Proposition 22, led the opposition to it by 16 percentage points, 58% to 42%, or by more than 1.6 million votes, according to the California Secretary of State’s website. The companies, which also included other taxi-like and food-delivery apps Instacart, DoorDash, and Lyft, set a record by spending more than US$200 million collectively to pass the initiative, greatly outspending union organizers who had convinced Democratic lawmakers to pass the earlier law late last year. The companies resisted complying with it, and state court judges effectively agreed to put off any changes until after the ballot measure could go to a vote. The companies’ fear was that a defeat for Prop 22 would mean many other states would try to adopt laws forcing them to employ drivers. Tuesday’s win is a particular sigh of relief for DoorDash, which is prepping an IPO later this year. When Prop 22 goes into effect in California, it would give gig economy drivers a minimum pay of 120% of the minimum wage plus 30 cents per mile driven while working for the app companies. It also requires the app companies to provide healthcare subsidies for people who drive at least 15 hours a week. App companies also said they would pay disability payments for injured drivers. A representative of one of the gig companies said the coalition would try to lobby for similar changes to employment laws in other states, to be more in line with the newly passed California measure. That would increase the companies’ costs but would help them avoid costly litigation against unions as well as the crippling effects of turning drivers into employees, which would crimp revenue growth because they would have to raise prices on customers. The next battlegrounds between gig companies and unions could be Massachusetts and New York state. https://bit.ly/32c7fvO

eCommerce

Walmart scrapped plans to let these 6-foot-tall robots check inventory at stores, after reportedly finding that it’s simpler to let humans do the job. Walmart has called off its plans to use six-foot-tall robots from startup Bossa Nova to check inventory following a 500-store trial. Walmart reportedly found that having staff check inventory was simpler – and worried about how shoppers would react to the robots. The retailer planned to use machines made by California-based robotics firm Bossa Nova to scan inventory in stores and send real-time alerts to staff about stock levels, automating the task and saving the grocer money. https://bit.ly/2I5BduH

Amazon plans for rural deliveries amid postal service problems. Amazon has explored expanding its already giant distribution network to rural areas, one of the few parts of the U.S. where it doesn’t now handle its own deliveries, under a new initiative called Wagon Wheel. The move would take business away from the U.S. Postal Service, which now handles most of Amazon’s deliveries to remote addresses in the U.S. Under the plan, the e-commerce giant intends to open small shipping hubs in rural communities around the U.S., a person familiar with the matter said. The program also was mentioned in a recent batch of job postings on the company’s website, where it was  described as “a new delivery business” aimed at improving Amazon’s service across “rural and super rural communities across North America.” https://bit.ly/2JyOmN5

Hims built a US$1.6 billion online empire by pushing prescriptions. Hims Inc. is a 3-year-old telehealth company in San Francisco. This year, as the pandemic created a surge of demand for online medical care, the startup began providing Covid-19 tests as well as primary care and mental health services. Mostly, though, it’s known for offering generic prescription drugs to treat erectile dysfunction and hair loss. Customers fill out an online questionnaire, perhaps exchange a few messages with a prescribing physician, then get the medication shipped to their homes without having to take a separate trip to the doctor. For this service, Hims charges a premium. It sells a month’s worth of a generic version of Viagra for US$4 per 40-milligram pill; at local pharmacies, a larger 50mg dose costs as little as US$1.70 each with a coupon. https://bloom.bg/2I0Efj6

Fintech, Blockchain & Cryptocurrency

WhatsApp finally begins rolling out payment service in India. The service lets users in India send and receive payments directly in chats. Facebook is rolling out its WhatsApp payment service for users in India after receiving approval from the country’s regulators. The service first launched in India as a beta in 2018, but a full rollout was delayed for years by concerns about data storage and sharing. It’s an important launch for what is WhatsApp’s biggest market, home to some 400 million users. India’s regulatory body for retail payments, the National Payments Corporation of India (NPCI), gave its approval to WhatsApp on Thursday, with Facebook confirming the rollout of the service just hours later in a blog post. But digital payment providers in India will face new challenges in the months ahead. As reported by TechCrunch, the NPCI also announced this week that it would be capping the amount of UPI transaction any single service can process to “[protect] the UPI ecosystem.” In future, no one service will be allow to process more than 30 percent of the total volume of UPI transactions, but it’s unclear how these limits will be enforced.WhatsApp will take a while to hit these limits, though the NPCI made it clear it will be reining in the Facebook-owned payment service from the get-go. The regulatory body said WhatsApp would only be allowed to launch the service in a “graded” manner, starting with “a maximum registered user base” of 20 million UPI customers. https://bit.ly/3lbc3c6

PayPal details its digital wallet plans for 2021, including crypto, Honey integration and more. PayPal this week laid out its vision for the future of its digital wallet platform and its PayPal and Venmo apps. During its third-quarter earnings call on Monday, the company said it plans to roll out substantial changes to its mobile apps over the next year to integrate a range of new features, including enhanced direct deposit, check cashing, budgeting tools, bill pay, crypto support, subscription management, buy now/pay later functionality and all of Honey’s shopping tools. The company aims to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first, initially in the U.S. Speaking to investors during the earnings call, Schulman also noted when PayPal plans to bring crypto to more users and geographies. He said the ability to buy, sell and hold cryptocurrencies will first arrive in the U.S., then will roll out to international markets and the Venmo app in the first half of next year. (Currently, PayPal is offering U.S. users to join a waitlist for the new crypto features in-app). This change will allow PayPal’s users to shop using cryptocurrencies across the company’s 28 million merchants without requiring additional integrations on merchants’ part. The company explained this is due to how it will handle the settlement process, where users will be able to instantaneously transfer crypto into fiat currency at a set rate when checking out with PayPal merchants. https://tcrn.ch/3l9EKGh

DOJ seizes over US$1 billion worth of bitcoin associated with the underground online marketplace Silk Road. The United States filed a civil complaint to forfeit thousands of Bitcoins, valued at over US$1 billion dollars, seized by law enforcement on November 3, 2020, announced United States Attorney David L. Anderson of the Northern District of California and Special Agent in Charge of the Washington DC Field Office, Internal Revenue Service Criminal Investigation (IRS-CI) Kelly R. Jackson. The seizure represents the largest seizure of cryptocurrency in the history of the Department of Justice. https://bit.ly/3n46Bs4

China’s sovereign digital currency pilot in ‘early stage’ as transactions hit US$300 million. People’s Bank of China’s (PBOC) governor Yi Gang said China is still in the early stages of developing its central bank digital currency even as the usage of the digital yuan expands rapidly across Chinese cities. Yi said usage of the digital yuan has increased rapidly over recent months and had been used in 4 million transactions valued at 2 billion yuan (US$299 million) in a trial across four Chinese cities, Shenzhen, Suzhou, Xiong’an and Chengdu. The figures showed the digital yuan pilot had expanded 21 per cent and 82 per cent from the 3.3 million transactions valuing at 1.1 billion yuan respectively as recently as late August. The PBOC’s pilot has discovered over 12,000 use cases for the digital yuan, up 80 per cent from the 6,700 ways to use the digital currency as of late August. The central bank’s digital yuan is accelerating the world’s second-biggest economy’s journey towards a cashless society by increasing the number of consumers paying for goods with e-wallets, rather than banknotes and coins. China’s digital payments transaction volume is expected to jump to 412 trillion yuan by 2025, up from 201 trillion yuan last year, according to consultancy iResearch. https://bit.ly/2HXbEeA

Hong Kong working with China, Thailand central banks to promote digital currencies, cross-border trade. Hong Kong Monetary Authority (HKMA) said it has been working with China’s central bank and other regional monetary authorities on how to use digital currencies and trade platforms for fostering cross-border payments in the “Greater Bay Area” development zone and Southeast Asia. Such a move would be a step towards reasserting the role of Hong Kong – already the largest offshore trading centre for the Chinese currency since a 2009 drive to push the yuan’s global use – in the internationalisation of the renminbi. A digital format of the Chinese currency, treated as M0, or notes and coins in circulation, will be a step in that direction.China is still in the early stages of developing the digital yuan, which will be issued and backed by the central bank. It has been used in 4 million transactions valued at 2 billion yuan (US$297.78 million) since a pilot roll-out in Shenzhen, Suzhou, Chengdu and in the Xiong’an new area outside Beijing in Hebei province. A nationwide launch and overseas usage have not been determined yet. https://bit.ly/3oX99Ks

Semiconductors

Apple to launch MacBooks with own chips next week. Apple Inc.’s 15-year relationship with Intel Corp. will officially begin to unwind next week when new Mac computers are revealed. The Cupertino, California-based technology giant said on Monday that it will hold an online event dubbed “One more thing” on Nov. 10. That “thing” will be Macs with main processors designed by Apple for the first time, replacing Intel chips that have been a mainstay since 2006. An Apple spokesman declined to comment. https://bloom.bg/2HZwryo

ESG

Green financing to help drive China’s 2060 push for carbon neutrality. Green bonds and other types of sustainable financing could play a major role in driving China’s pledge to be carbon-neutral within the next four decades, as sustainable investing gains more traction in investment portfolios, according to panellists at the South China Morning Post’s Asia Sustainability Conference. In September, Chinese President Xi Jinping said in a video address to the United Nations General Assembly that the country would scale up its voluntary emissions targets under the Paris climate accords, hitting peak emissions before 2030 and achieving carbon neutrality before 2060. Green finance will be an important tool for policymakers on the mainland as they try to achieve a goal of carbon neutrality by 2060, according to Fitch Ratings. China was the second-largest issuer of green bonds that met international standards after the United States last year, issuing US$55.8 billion of “labelled green bonds”, according to the non-profit Climate Bonds Initiative (CBI). Including bonds that only meet Chinese standards, China would have surpassed the US in issuance. About US$257.5 billion in labelled green and climate bonds were issued last year, according to CBI. That amount is expected to reach US$350 billion this year, a fraction of the US$100 trillion bond market globally. https://bit.ly/3l23PmG

This solar company’s stock has spiked 300% in 2020. Here’s why. Sunrun, America’s largest rooftop solar company, has spiked more than 300% so far this year. And the Invesco Solar ETF (TAN) has more than doubled in 2020. It’s part of a rally fueled in part by hopes of a blue wave that leads to more federal support for renewables, as Joe Biden has called for wiping out carbon emissions from the power grid by 2035. Meanwhile investors have been dumping fossil fuel stocks, particularly Big Oil companies, amid the rise of environmental, social and corporate governance (ESG) screens and socially conscious investing. ExxonMobil (XOM) is no longer America’s largest energy company by market value. It’s been dethroned by solar and wind company NextEra Energy (NEE). Jurich doubled down on that bet with a US$3.2 billion takeover of rival Vivint in July. The deal, which closed last month, combined the nation’s two largest rooftop solar companies. The Vivint takeover meant that Jurich was juggling a billion-dollar acquisition and her normal duties as a public company CEO — while working from home during the pandemic with her two young children. Jurich, the Sunrun boss, downplayed the impact of politics on the industry’s future. “In terms of the election, the interesting thing is that solar has huge bipartisan support,” she said. “That encourages us no matter which direction the election goes. Either outcome is supportive of the business.” Joe Biden has proposed nearly US$2 trillion of federal investment to address the climate crisis and create union jobs that can’t be outsourced. A Biden climate task force called for installing eight million solar roofs in part by cutting red tape to accelerate faster permitting. That’s an ambitious target considering the United States currently only has about 2.2 million residential solar installations, according to KeyCorp. Crucially, Biden’s tax plan also calls for Congress to expand renewable energy tax credits and restore the federal Energy Investment Tax Credit (ITC). The tax credit, which is available to homeowners who buy or finance rooftop solar installations, will be phased out by 2022. https://cnn.it/38o5Nui

Iberdrola plans US$88 billion of investment in energy transition. Iberdrola SA will invest 75 billion euros (US$88 billion) through 2025, part of a program to triple its renewable energy capacity by the end of the decade and take advantage of a shift toward cleaner forms of energy. The Spanish utility’s ambitions builds on a goal to make the company emissions free by the end of the decade in Europe, putting it at the vanguard of energy companies embracing ambitious goals for zeroing out fossil fuel pollution. Iberdrola will focus its investments on solar and offshore wind. It wants solar capacity to quadruple within the next decade, making up almost two-thirds of its additional installed capacity. Offshore wind is expected to grow seven-fold, while onshore wind is set to triple. The company, which last month boosted its presence in the U.S. with the US$4.3 billion acquisition of PNM Resources Inc., is hoping to capitalize on the energy transition and the push to cut greenhouse gas emissions in order to slow climate change.  https://bloom.bg/2IgnnoG

Sophic Capital Client Insights

Solar projects are shining due to strong economics. In spite of the Blue-Wave that didn’t materialize in the 2020 U.S. election, solar stocks and the Invesco Solar ETF are hot. Why? Solar projects are hot due to government and utility incentives as well as an abundance of solar project financing. UGE International (Sophic client, UGE-TSXV, UGEIF-OTC), a community solar project developer and operator, is a way to invest in the growing solar energy theme. https://bit.ly/3l2MJFl

Disclaimer

The information and recommendations made available here through our emails, newsletters, website, press releases, collectively considered as (“Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. You hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Company’s Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser under the securities legislation of any jurisdiction of Canada and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisory, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor.