October 16, 2022: Higher Cost Of Capital May Slow M&A Despite Falling Valuations

Last week, the Dow Jones Industrial Average rose 1.2%, the S&P 500 fell 1.5% and the Nasdaq composite tumbled 3.1%. Major indexes reversed after a higher open on Friday giving up most of Thursday’s surprise upside. Instacart cut its internal valuation a third time, to US$13 billion. Patreon’s internal valuation fell 70% over the past year, according to a memo sent to staff in September. Vista Equity Partners has struck a deal to purchase cybersecurity provider KnowBe4 for US$4.6 billion in an increasingly rare leveraged buyout as financing for such deals has become harder to secure. ForgeRock Inc., a maker of identity-verification software, said it will be acquired by Thoma Bravo in an all-cash deal valued at about US$2.3 billion. Volkswagen will take a 60% stake in US$2 billion tech JV with China’s Horizon Robotics. Renault and Nissan said Monday they were discussing ways to reinforce their partnership, including the possibility of an investment by Nissan in Renault’s new electric-vehicle unit. Nutanix stock rockets toward a 5-month high after WSJ report of buyout interest. TSMC earnings topped estimates as chip industry braces for slowdown, and Asia’s top chip stocks tumbled Tuesday, ensnared in an escalating US-China tech race that has erased more than US$240 billion from the sector’s global market value. Apple’s new mixed reality headset is expected to include an iris scanning feature that allows people wearing it to login to the device and make payments from it. Sophic Client Jasper Commerce Inc. (JPIM-CA) will acquire Cartika, expanding into managed Infrastructure as a Service (IaaS) for mid-market businesses.  This accretive and shareholder friendly acquisition should nearly double Jasper’s Fiscal 2023 (Jul 2023) revenue to $3.5-4 million, YoY from the Company’s ~$1.7 million F2022 guidance and accelerate EBTIDA break-even by nearly a quarter. The transaction is to be funded with Jasper’s existing balance sheet. Management hosted an investor webinar to discuss the acquisition HERE. Sophic Client Edge Total Intelligence (CTRL-TSXV, UNFYF-OTCQB, Q5I-FRA) announced its U.S. listing on the OTCQB under symbol “UNFYF”.

Sophic Client Jasper Commerce Inc. (JPIM-CA) to acquire Cartika, expanding into managed Infrastructure as a Service (IaaS) for mid-market businesses.

The Company entered into a share purchase agreement to acquire 100% of the shares of Cartika Internet Solutions Provider Inc. and its affiliated and subsidiary companies. For the 12 months ended December 31, 2021, Cartika had revenues of approximately $1.5 million with EBITDA of $128 thousand. Cartika has over 200 customers, and over 95% of its revenues are recurring. This accretive and shareholder friendly acquisition should nearly double Jasper’s Fiscal 2023 (Jul 2023) revenue to $3.5-4 million, YoY from the Company’s ~$1.7 million F2022 guidance and accelerate EBTIDA break-even by nearly a quarter. The transaction is to be funded utilizing cash on hand, common shares of Jasper, Vendor-Take-Back, and an earn-out payable in common shares of Jasper. Management hosted an investor webinar to discuss the acquisition. https://bit.ly/3yJqywK

Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) announces proposed amendments to outstanding 10% unsecured convertible debentures.

The Company announced that it has reached an agreement with holders of its outstanding 10% unsecured convertible debentures (the “Debentures”) to amend the terms of the Debentures as follows: extending the maturity date of the Debentures from November 1, 2022 to November 1, 2024, increasing the interest rate under the Debentures from 10% to 12% per annum, decreasing the exercise price of the common share purchase warrants forming part of the units issuable on conversion of the Debentures from $0.35 per common share to $0.32 per common share; provided, however, that this amendment will not apply to Debentures held by insiders of the Company. https://bit.ly/3Tmqbjx

Sophic Client Edge Total Intelligence (CTRL-TSXV, UNFYF-OTCQB, Q5I-FRA) announces U.S. listing on OTCQB under symbol “UNFYF”.

The Company  received approval from OTC Markets Group Inc. to commence trading on the OTCQB Venture Market (the “OTCQB”) under the symbol “UNFYF”. Trading on the OTCQB commenced on October 11, 2022. Jim Barrett, CEO, commented, “Our listing on the OTCQB is an important milestone for edgeTI, and provides both visibility and access to U.S.-based investors. This listing should promote increased liquidity and simplify transactions for U.S. investors and allow them to participate directly in our success as we advance our growth efforts to help Governments, service providers, and global enterprises move at the speed of relevance.” https://bit.ly/3TqcCiY

Mogo’s (MOGO-TSX, MOGO-NASDAQ) portfolio company, Coinsquare, announces new status as Canada’s first IIROC-regulated cryptocurrency dealer and marketplace member.

Coinsquare, in which Mogo is an approximate 34% shareholder, received approval from the Investment Industry Regulatory Organization of Canada (“IIROC”) for its investment dealer registration and IIROC membership through its wholly owned subsidiary Coinsquare Capital Markets Ltd. This regulatory status will now position Coinsquare as the first crypto-only, IIROC registered investment dealer and marketplace member across all provinces and territories of Canada. https://bit.ly/3CDPvKX

NorthOne raises $92.1 million to build new working capital, credit products.

Canadian-founded FinTech startup and challenger bank NorthOne has announced the closing of its $92.1 million (US$67 million) Series B round. The financing, which closed in “late summer,” included participation from Battery Ventures, Don Griffith, retired National Football League player Drew Brees, Ferst Capital Partners, FinTLV, Next Play Capital, Operator Stack, Redpoint Ventures, Tencent, and BetterCompany founder Tom Williams. NorthOne noted that the Series B round brings its total funding to US$90.3 million raised since it launched. https://bit.ly/3z3MrXV

Parity raises $8 million to target wasteful emissions in buildings.

Parity, a startup that uses AI to eliminate energy waste in multi-residential buildings, is hoping to take advantage of new rules in the US that will fine buildings that produce high emissions. The startup just announced an $8 million raise and plans to partially use the new capital to expand both in Canada and the US. The New York Times reports that “nearly all the 50,000 buildings subject to the law will be in compliance for the first deadline, Jan. 1, 2024, according to city estimates. But that leaves 2,700 buildings across the city where action is needed to avoid fines — heating systems tuned up, leaky windows replaced and energy-efficient lighting installed.” Parity’s total funding to date is $14.25 million. https://bit.ly/3EFfXGS

Shinydocs, Encircle, Proto receive cumulative $7.5 million from FedDev Ontario.

The Federal Economic Development Agency for Southern Ontario has announced a cumulative investment of $7.5 million into three tech companies based in Kitchener-Waterloo. From this funding, Shinydocs secured $4 million, Encircle received $2.1 million, and Proto Research got $1.4 million. Since 2015, FedDev Ontario claims to have invested over $745 million in more than 300 technology projects across southern Ontario, creating nearly 20,000 jobs. https://bit.ly/3EFT0mO

Quandri raises $2 million to automate time-consuming, repetitive tasks for insurance industry.

Vancouver-based Quandri experimented with the idea of providing bots-as-a-service to small and medium-sized businesses in a bunch of different sectors before landing on insurance a year and a half ago. Quandri’s business has grown as insurance industry players have been forced to digitize during the pandemic, become more open and capable of adopting new solutions, and the sector contends with a tight labour market. These tailwinds have made tools like the bots Quandri provides an attractive option. To keep pace with demand and tackle this opportunity, Quandri has closed $2 million (US$1.5 million) in seed funding from California’s Aviso Ventures, Markham-based Good News Ventures, and Toronto’s N49P Ventures, with support from undisclosed angel and strategic investors. https://bit.ly/3VpDCRx

Instacart cuts internal valuation third time, to US$13 billion.

Instacart, the instant delivery company gearing up to go public, has slashed its internal valuation to about US$13 billion, according to two people familiar with the matter. It’s the third time the San Francisco startup has reduced its internal valuation this year, in a period when public delivery stocks have continued to shed value. The new price represents a two-thirds drop from the US$39 billion valuation Instacart was given by Andreessen Horowitz, Sequoia Capital and other private market investors in 2021. The lower internal price cuts the price of new stock-based compensation issued to employees and could also help Instacart reset investor expectations ahead of its public listing, in which it plans to sell mostly employee shares. Instacart’s internal valuation is what’s known as a 409a valuation, in which an independent third party evaluates the worth of a company’s stock. In March, Instacart said it reduced its internal valuation to US$24 billion, down 38% from its last private-investor valuation. In May, Instacart announced it had confidentially filed to go public. In July, Instacart cut its valuation a second time to US$44 a share, implying a valuation of US$15 billion in July, Barrons reported. Instacart’s new internal valuation values its common stock at US$38.37, according to a person familiar with the matter. Earlier this year, shares were priced at more than US$70. https://bit.ly/3CZJUA4

Patreon’s valuation dropped 70%.

Patreon’s internal valuation fell 70% over the past year, according to a memo sent to staff in September, Insider reported. The 409A valuation, calculated by a third party firm to measure the value of one share of its stock, is different from the US$4 billion post-money valuation it fetched in April 2021 when it raised  US$155 million in Series F funding round from Tiger Global. In August, it conducted a tender offer, which let stockholders in the private company sell their shares, at a US$4.5 billion valuation, the report said. Using the 70% drop as a guide, the company would now be worth around US$1.35 billion. Patreon offers creators a platform to sell subscriptions to fans and earns money by taking a 5% to 12% cut of those subscriptions, which put it on pace to earn hundreds of millions of dollars in annual revenue, The Information reported in January. According to the memo, which was written by senior vice president of finance Carlos Cabrera, Patreon has postponed its plans to go public in order to preserve more cash. The startup still intends to go public in the future and aims to “avoid the need for fundraising for 3+ years,” the report notes. The Information in January last year reported Patreon was considering a public listing as soon as 2021. https://bit.ly/3g9JvlO

Socionext defies chip slump with Japan’s biggest IPO this year.

Making its market debut on Wednesday, Japan’s Socionext Inc bucked softening sentiment toward chips by surging 15% in Tokyo’s biggest initial public offering of the year so far. Shares in the fabless system-on-chip design company closed up 15.07% at 4,200 in their debut on Tokyo’s prime market from the initial offer price of 3,650 yen. The total deal size was 76.8 billion yen (US$525 million), including an overallotment of 2.74 million shares. https://reut.rs/3T0HuqG

Vista Equity strikes deal to acquire cybersecurity provider.

Private-equity firm Vista Equity Partners has struck a deal to purchase cybersecurity provider KnowBe4 for US$4.6 billion in an increasingly rare leveraged buyout as financing for such deals has become harder to secure. Under the terms of the deal KnowBe4 shareholders are to receive US$24.90 a share in cash. In September, KnowBe4 said it had received a nonbinding proposal from Vista to acquire the company for US$24 a share in cash, a nearly 40% premium to the closing price on the last day of trading before the announcement. The take-private deal is one of three Vista has struck so far this year. In August, the technology-focused firm agreed to acquire the tax-software company Avalara Inc. for about US$8.4 billion including debt. In January, Vista said it would acquire Citrix Systems Inc., a cloud-computing company, for US$16.5 billion including debt, alongside Elliott Management Corp.’s private-equity arm, in one of the biggest buyouts of the year. https://on.wsj.com/3g6RqQU

ForgeRock to be bought by Thoma Bravo in US$2.3 billion cash deal.

ForgeRock Inc., a maker of identity-verification software, said it will be acquired by Thoma Bravo in an all-cash deal valued at about US$2.3 billion. The San Francisco-based company’s investors will receive US$23.25 in cash and the deal is expected to close in the first half of 2023, the company said in a statement Tuesday.  https://bloom.bg/3CWqMTQ

Getir in talks to buy Gorillas.

The instant delivery market is consolidating further. Getir is in “advanced talks” to buy Gorillas, Bloomberg reported Monday, for a mix of cash and equity. Getir, based in Turkey, has shown signs of resilience even as rivals have shrunk or gone out of business. It raised $768 million in March at a valuation of US$11.8 billion, according to PitchBook, and expanded into the U.S. Gorillas, meanwhile, has been looking to link up with another firm, as The Information reported last month. The merger talks come as fundraising becomes harder, forcing firms to look for other ways to amass scale and cut costs. https://bit.ly/3gdMw4I

Volkswagen to take 60% stake in US$2 billion tech JV with China’s Horizon Robotics.

Volkswagen’s software unit Cariad will spend more than US$2 billion and take a 60% stake in a new venture with Chinese technology firm Horizon Robotics, it said on Thursday, tackling two big challenges: software and the Chinese market. The carmaker will invest US$1 billion in Horizon Robotics and a further 1.3 billion euros (US$1.26 billion) in the joint venture, with the transaction to be completed in the first half of 2023. Together the companies will develop technology that can integrate numerous functions for autonomous driving onto a single chip that will be available only in China. The venture will mean Volkswagen has a supplier in each major region – North America, Europe and China – given its existing supply relationships with U.S. chipmaker Qualcomm and Franco-Italian STMicrolectronics. https://reut.rs/3T2ULPB

Nissan confirms it is in talks over investment in Renault EV unit.

Renault and Nissan said Monday they were discussing ways to reinforce their partnership, including the possibility of an investment by Nissan in Renault’s new electric-vehicle unit. The discussions over the possible Nissan investment are part of broader talks by the two auto makers over reorganizing their alliance, which dates back more than two decades, people with knowledge of the talks said last week. https://on.wsj.com/3exCAlX

Nutanix stock rockets toward a 5-month high after WSJ report of buyout interest.

Shares of Nutanix Inc. soared 20.2% toward a five-month high in premarket trading Friday, after The Wall Street Journal reported that the cloud services company has received buyout interest and is exploring a sale. The WSJ report, which cited people familiar with the matter, said Nutanix is expected to target private-equity and industry players for a sale. It is still very uncertain if a deal can be made, the WSJ report said, as a buyer would likely have to pay a large premium to Nutanix’s stock closing price of US$21.15 on Thursday, which implied a market capitalization of US$4.80 billion. The stock, which is on track to open at the highest price seen during regular-session hours since May 5, has run up 48.7% over the past three months through Thursday, while the S&P 500 has slipped 3.2%. https://on.mktw.net/3yGnAJe

Twitter seeks documents related to Federal investigation of Elon Musk.

Twitter Inc.’s lawyers tried again last week to learn what Elon Musk had told federal authorities who were investigating his attempt to take the social media company private. Attorneys for Twitter wrote to a Delaware judge on Oct. 6 saying they needed documents about the probes, according to a letter unsealed in court Thursday. Musk had by that point reversed himself on walking away from the US$44 billion takeover, but he and the social media company were still adversaries in court – and their fight had not yet been officially put on hold.  https://bloom.bg/3CVtlFE

Uber, Lyft, DoorDash sink as Biden administration eyes gig-worker rule.

Gig-work stocks DoorDash, Lyft and Uber all fell Tuesday after the Labor Department unveiled a proposal on how companies classify workers. The proposed rule would base the determination of whether to classify a worker as a contractor or employee on a broad assessment, such as if the gig work is an “integral” part of a company’s business. That could ease the way to reclassifying drivers from independent contractors to full-scale employees, entailing additional costs and requirements. The companies have long argued that the contractor classification is more attractive for their drivers and often point to the benefit of flexible schedules. Labor advocates, however, say the practice is merely an attempt to keep company costs low and prevent workers from unionizing or qualifying for employer healthcare. Shares of Uber tumbled 7.6% to US$25.43 in midday trading, while DoorDash fell 3% to US$46.21, and Lyft plummeted 7.4% to US$11.86.  https://bit.ly/3MwVPJ4

Semiconductor stocks fall across Asia as Japan, Korea return from holiday. 

Asia’s top chip stocks tumbled Tuesday, ensnared in an escalating US-China tech race that has erased more than US$240 billion from the sector’s global market value. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, plunged a record 8.3% while Samsung Electronics Co. and Tokyo Electron Ltd. also declined. The selloff spread to the foreign-exchange market as investors tally up the damage from the sweeping curbs the US is imposing on companies that conduct technology business with China. https://bloom.bg/3CQO2m3

TSMC earnings top estimates as chip industry braces for slowdown.

Taiwan Semiconductor Manufacturing Co. slashed its 2022 capital spending target by roughly 10%, a dramatic sign of trouble for the technology industry from the world’s most valuable chip company. TSMC said it expects to spend about US$36 billion in 2022 on capital equipment, down from at least US$40 billion previously. The sharp reduction in expenditure – an important indicator of its own expectations for growth across sectors from smartphones to servers and electric vehicles – suggest the Taiwanese firm is bracing for a broader-than-anticipated downturn. https://bloom.bg/3EMmpvA

Apple’s headset to include iris scanning feature.

Apple’s new mixed reality headset is expected to include an iris scanning feature that allows people wearing it to login to the device and make payments from it. Those were among the new capabilities for the device revealed in a story on Friday in The Information. The iris scanning features will be made possible by cameras inside the Apple headset. While the new Quest Pro headset from Meta Platforms also has cameras throughout the device, the product won’t do iris scanning. Apple’s headset, which is expected to be introduced next year, represents the company’s biggest bet on a new technology platform in years. It will join Meta in the market, a company that has released multiple VR headsets over the span of seven years. https://bit.ly/3rYofSx

Microsoft US Army LoloLens goggles gave soldiers nausea, headaches.

US soldiers using Microsoft Corp.’s new goggles in their latest field test suffered “mission-affecting physical impairments” including headaches, eyestrain and nausea, according to a summary of the exercise compiled by the Pentagon’s testing office. More than 80% of those who experienced discomfort had symptoms after less than three hours using the customized version of Microsoft’s HoloLens goggles, Nickolas Guertin, director of Operation Test and Evaluation, said in a summary for Army and Defense Department officials. He said the system also is still experiencing too many failures of essential functions. https://bloom.bg/3g88tSC

Microsoft unveils premium version of Teams, deepens ties with Cisco.

Microsoft and Cisco Systems are working together to integrate the former’s Teams workplace collaboration software with the latter’s WebEx video hardware devices. Sometime in the first half of next year, Cisco’s WebEx customers will be able to set Teams as their default collaboration software. Microsoft and Cisco have worked together on various tech initiatives for many years. What’s notable about this latest tie-up is that the companies compete for many of the same customers for collaboration business. And while Teams seems to have momentum in terms of user growth (Microsoft doesn’t break out its revenue), Cisco has been struggling to gain traction in the collaboration market, with sales of these products increasing 2% last quarter compared to the previous year following four consecutive quarters of annual declines. Meanwhile, Microsoft, at its Ignite developer conference, unveiled a new premium version of Teams that reportedly uses an AI-powered digital assistant to generate text-based meeting summaries and hone in on key topics. The new version comes as Zoom is preparing to expand its range of offerings to include email and calendar services and follows a flurry of new features that Slack unveiled last month at Salesforce’s Dreamforce conference, which include a version of its workplace chat service designed for government customers. https://bit.ly/3EL1WHS

EVs could be charged within 5 minutes with NASA tech.

Researchers have found that NASA technology developed for use on the International Space Station could also be used to charge electric vehicles at a much faster rate than in currently possible. The complex cooling technique, which has been developed to help certain electrical systems in space maintain proper temperatures, can deliver almost five times the current of other electric vehicle chargers currently on the market, NASA said in a blog post. The system could, in theory, allow electric cars to be charged in just five minutes, NASA said. Higher electrical currents generate more heat, meaning the more current flowing, the higher likelihood of components overheating. NASA’s complex heat transfer system, known as “subcooled flow boiling,” can cool cables carrying high charges, potentially allowing for a faster flow of electricity without the risk of components overheating, according to the blog post. The US government has been ramping up investment in electric car charging to meet its target of installing 500,000 electric-car chargers across the country by 2030. https://bit.ly/3z04OwT

Apple is quietly pushing a TV ad product with media agencies.

Apple’s growing designs on the ad industry are already well-documented with the iPhone maker’s media unit already generating $4 billion per year on search. But now it would appear it is further stepping up its efforts by serving ads on even more screens. Apple, Digiday has learned, is preparing a more serious push into monetizing its original video content with an ad play, according to several media agency sources that held separate exploratory discussions with the digital giant. Apple TV has already been carrying ads on its coverage of Major League Baseball games, but those ads have been sold by the league itself, not Apple. But there’s no shortage of original programming, including the multiple-Emmy winner Ted Lasso, on which to run ads. The question is, when will it start? One agency source said Apple was not asking for that media agency network to put aside client dollars in the fourth quarter, so it seems more likely to be in early 2023. https://bit.ly/3S1lhHB

TikTok parent ByteDance sets sights on Spotify with music-streaming expansion.

TikTok parent ByteDance Ltd. has begun talks with music labels about expanding its music-streaming service globally to compete with industry leaders including Spotify Technology SA, according to people familiar with the discussions. Significant hurdles remain in the negotiations, the people said, but ByteDance wants the service to eventually be integrated within TikTok and to serve as a major platform for distributing music around the world. https://on.wsj.com/3evd0y3

BeReal tops 53 million installs, but only 9% open the app daily, estimates claim.

Gen Z social media app BeReal encourages its users to take a photo every day — a format designed to create a daily habit. But only a small number of the app’s users are currently doing so, new estimates from a third-party app intelligence firm indicate. According to research from Sensor Tower, BeReal is demonstrating significant traction across some metrics — it topped 53 million worldwide installs across the App Store and Google Play and has seen its monthly active users jump by 2,254% since January 2022, for example. But only 9% of its active Android installs are opening the app every day as of the third quarter of this year, it found. That’s far behind Instagram and TikTok. Instagram leads this category with 39% of its active installs opening the app every day, while TikTok comes in second with 29%. This is followed by Facebook, Snapchat, YouTube and Twitter at 27%, 26%, 20% and 18%, respectively. https://tcrn.ch/3evDnnp

With TikTok’s new ad offering, brands only pay if users watch the ad.

TikTok announced several new updates to its advertising offerings ahead of a gathering for brands in New York on Thursday. At TikTok World, the company’s second global product summit, it will announce a new ad offering called Focused View, where brands only pay when viewers have watched a commercial for at least 6 seconds or when they’ve interacted with the ad in the first 6 seconds, such as liking or commenting. “In an ever-changing digital marketing world where returns on ad spend are increasingly valued, Focused View offers a way for brands to engage with their audiences more effectively and cost-efficiently,” TikTok wrote in a blog post. The short-form video app also said its creator marketplace, which connects advertisers and creators for deals now has improved search capabilities and a new recommendation feature that automatically creates a list of relevant influencers. The ByteDance-owned company is also looking to boost movie ticket sales thanks to its app. In the U.S., movie studios can promote their new films by showing a full trailer on TikTok. TikTok said it will now provide showtimes and theater information based on the users’ location, and users can also click out to a separate ticketing website and buy tickets. https://bit.ly/3MyWhGA

TikTok chases Amazon with plans for U.S. fulfillment centers.

TikTok is planning to build its own product fulfillment centers in the U.S., creating an e-commerce supply chain system that could directly challenge Amazon, as indicated by more than a dozen new job openings posted in the past two weeks to LinkedIn. The move signifies TikTok’s commitment to e-commerce as its next major revenue stream, following the explosive growth of its ads business. For now, it does not appear that TikTok plans to build out its own transportation unit like Amazon. The job postings imply that TikTok would work with vendors to handle shipping, parcel consolidation and transportation. https://bit.ly/3yJdoQa

Amazon second prime day: shoppers pick household goods over pricey tvs, laptops.

Amazon.com Inc. shoppers are largely skipping pricey purchases during the company’s Prime sale sequel – favoring pantry items and affordable gifts over big-ticket items like televisions and laptops. The average order size as of 1 p.m. in New York Wednesday was US$46.44, down 23% from the “Prime Day” sale in July, according to Numerator, which based its most recent data on 19,512 orders from nearly 9,500 households.  https://bloom.bg/3TlszqH

Apple card to offer savings account for daily cash.

Apple says the savings account option will be available “in the coming months,” but it did not reveal what the interest rate will be for Daily Cash balances. Goldman Sachs’ existing online high-yield savings account Marcus currently has a 2.15% APR. As with all Apple Card features, users will be able to manage the savings account through the Wallet app. Once the account is set up, all Daily Cash received from that point on will be automatically deposited into it, unless a user opts to continue having it added to their Apple Cash card. Users can change where their Daily Cash is sent at any time. Apple Card offers 2% Daily Cash on any purchase made with Apple Pay, and 3% Daily Cash on purchases made with Apple Pay at select retailers, including Apple, Uber, Uber Eats, Walgreens, Nike, Panera Bread, T-Mobile, ExxonMobil, and Ace Hardware. https://bit.ly/3yG5I1c

Bank of New York Mellon to hold crypto.

Bank of New York Mellon launched a new service for cryptocurrencies on Tuesday that will allow its customers–institutional investors–to hold and transfer the two largest digital assets by market cap, bitcoin and ether. BNY Mellon is the first of the major banks to offer such a custody service. The bank will custody those assets and offer bookkeeping much the same as it currently does with stocks, bonds, and commodities. Until now, the bank was custodying its clients’ cryptocurrencies with an outside provider, according to The Wall Street Journal. For its new service, the bank is using software made by Fireblocks, a cryptocurrency custodian startup valued at US$8 billion in January, which BNY itself has invested in. The company is also using software from Chainalysis, a startup valued at US$8.6 billion in May, a funding round that The Information first reported. The bank said in a press release that a survey it conducted found that 91% of institutional investors would like to invest in “tokenized products” and that 41% of institutional investors currently have cryptocurrencies in their portfolio. The old guard of finance has slowly begun creeping into cryptocurrencies with various offerings. In August, BlackRock said it was partnering with crypto exchange Coinbase to provide its institutional investing clients access to bitcoin. Fidelity Investments earlier this year began offering companies the option to let employees hold a portion of their 401(k) in bitcoin. https://bit.ly/3To8Cj3

Google says Coinbase customers can use cryptocurrency to pay for cloud.

Coinbase said Tuesday it will use Google Cloud to power its business while Google said Coinbase customers could pay for Google Cloud services using cryptocurrencies. Coinbase would likely have to convert the crypto to fiat currency, though the companies didn’t specify. The announcement lifted Coinbase’s stock by 4% on the expectation that the deal would lead to more revenue for the beleaguered crypto exchange firm. It also comes after Coinbase in May told employees it would slash costs, including cloud spending on Amazon Web Services, a bigger rival to Google Cloud, The Information reported at the time. The new deal implies Coinbase will increase its spending with Google, which has had to find more ways to grow and generate press attention as it struggles to turn a profit and lags far behind AWS. In the second quarter, operating losses for Google Cloud widened by 45 per cent to US$858 million. Meanwhile, revenue grew 35.6%, just slightly more than AWS. https://bit.ly/3es4sbi

iPhone 14 helped TSMC grow revenue by 48%, as others struggle.

Strong sales of the iPhone 14 helped TSMC increase its third-quarter revenue by 48%, at a time when other chipmaking companies are suffering. There have been fears that rising inflation and interest rates would dampen demand for the iPhone 14, but this appears not to be the case… TSMC recently reported record September revenues, and a Bloomberg analysis looks at the likely total for the company’s fiscal quarter. The shortage of legacy chips like display drivers has constrained supply of a huge range of electronic devices, with knock-on effects for more advanced chips. But TSMC appears to have escaped the industrywide slowdown. The company itself reported that its fiscal third-quarter revenue was higher than expected, with analysts estimating NT$603B. Bloomberg’s own estimates are higher, at $NT613B (US$19.4B), representing 48% growth. https://bit.ly/3eqao4m

Intel reportedly cutting thousands of jobs as PC market slows.

As reported by Bloomberg on Tuesday, Intel is internally planning a “major reduction in headcount.” The report heard from sources familiar with the matter that the number of employees laid off could reach into the thousands. Although the news hasn’t been confirmed by Intel, Bloomberg says the layoffs will be announced any day now. Intel currently has about 113,700 employees. The report also mentions that the divisions most affected by the cuts will be sales and marketing, which will be reduced by 20%. On October 27, the company will release its fiscal 2022 third quarter earnings report, so Intel wants to cut headcount before then. The last time Intel made a significant employee cut was in 2016, when about 12,000 people were laid off. Analysts expect Intel’s revenue to be down 15% in the third quarter, as will the company’s profit margins. Earlier this year, the chipmaker warned that 2022 sales would be about US$11 billion lower than expected. A report from IDC revealed that the PC market dropped 15.3% year-on-year to 71.3 million units in Q2 2022. https://bit.ly/3g6CL8l

Amazon will invest €1 billion to electrify its delivery fleet in Europe.

Amazon will spend €1 billion over five years to electrify its delivery fleet in Europe, the retail giant announced. The money will be used to “double” the number of EVs in Europe to 10,000 vans and 1,500 “electric heavy goods vehicles.” The company has said it aims to be net-zero carbon emissions by 2040. Jassy said that Amazon’s investment will hopefully spur the installation of more public EV chargers in Europe, as well as serve as an incentive to the auto industry to make more electric delivery vehicles. The announcement comes as Amazon’s carbon output has ballooned last year despite the company’s efforts to sell itself as a leader in climate action. Its carbon dioxide emissions grew an eye-popping 18 percent in 2021 compared to 2020, according to its latest sustainability report. https://bit.ly/3SWHKXy

Sony and Honda plan to start selling their electric cars in the US in 2026.

Sony and Honda have announced that they plan to start selling their jointly-developed electric vehicles in the US in early 2026. The US has been chosen as the first market because of its well-developed taste for EVs. The cars will then go on sale in Japan later the same year, and then, perhaps, in Europe. Preorders for the vehicles will open in 2025, with sales and vehicle customization pushed through online channels. The two Japanese companies announced they would be working together on a new 50-50 venture earlier this year, with the company later named Sony Honda Mobility. The alliance is intended to unite Honda’s expertise in car manufacture with Sony’s prowess in the fields of sensors, software, and entertainment. The companies hope that by joining forces they can catch up with newer EV manufacturers, like Tesla in the US and China’s BYD. https://bit.ly/3fTTiw4

Honda’s bringing a US$4.4 billion EV battery plant to Ohio.

Honda first announced plans to partner with LG Chem to build a US$4.4 billion electric vehicle (EV) battery plant back in August, and the two companies confirmed that the factory’s coming to Fayette County, Ohio. Establishing a US-based EV plant will allow Honda’s upcoming line of plug-in vehicles to qualify for the country’s EV tax credits. Construction on the factory will begin early next year, with mass production of EV batteries set to start by the end of 2025. Honda says the factory will have an annual production capacity of 40GWh and will supply about 2,200 jobs. In addition to the joint venture with LG Chem, Honda’s also investing US$700 million to retool three of its existing Ohio-based car plants for EV production. https://bit.ly/3RZpVpE

Polestar steers toward the mass market with its first electric SUV.

EV maker Polestar has unveiled the Polestar 3, its first SUV designed to help propel the startup to bona fide mass market automaker. Priced from US$83,900, the 489-horsepower Polestar 3 will achieve an estimated 300-mile range, according to Polestar – a competitive set of figures designed to compete with a forthcoming crop of battery-electric luxury SUVs from Mercedes-Benz, Maserati and the like. The Swedish electric performance car company is still small by any measurement – delivering just 6,638 cars in the U.S. for the first nine months of the year, compared with Tesla’s 390,814. But so far the company seems to be one of the few EV SPACs still going strong, in part due to support from its largest shareholders, Volvo and Geely. Polestar went public in a SPAC deal with Gores Guggenheim in June. It is one of the few EV SPACs with actual production vehicles on the road and more coming. Polestar has said it’s on track to deliver 50,000 cars worldwide this year, and plans to scale up to 290,000 cars annually by 2025 – about 10 times the automaker’s 2021 sales. https://tcrn.ch/3TiGkGJ