With a major unsecured notes offering announced by CGI (GIB.A-TSX, GIB-NYSE) seeking to raise US$1 billion, and funding for another couple hundred million dollars announced by private VC backed Canadian companies, September is of to a good start by the Canadian innovation sector in capital markets. In addition M&A, remains an active theme, with a major acquisition and exit announced in the space this past week. Stripe is discussing a 2022 public listing, which could be an interesting stock to look out for, as well as Sportradar, which could go public soon. SoftBank announced a Deutsche Telekom share swap deal, and in addition will borrow against its remaining T-Mobile stock, which could aid global VC funding as SoftBank’s Vision Fund 2 is trying to invest more in European tech companies. On the regulatory front, a judge just ruled a massive blow against Apple’s App Store business. With a Japanese acquisition, PayPal gains a buy now, pay later (BNPL) service platform, even as some US data suggested credit risk in this segment. In the ESG space, we saw ambitious long term US solar plans, per a NY Times article, which could move the US towards producing almost half of its electricity from the sun by 2050 and a major investment into car battery tech by Toyota.
Canadian Technology Capital Markets & Company News
CGI (GIB.A-TSX, GIB-NYSE) announces proposed private placement of notes.
The company has commenced a private offering of senior unsecured notes seeking, subject to market conditions, an aggregate principal amount of approximately US$1 billion. The notes would be issued in two tranches of different maturities, carrying different interest rates. CGI intends to use the net proceeds from the offering to repay indebtedness under its unsecured committed term loan credit facility maturing in March 2023. https://bit.ly/3EbZOG7
WELL Health Technologies (WELL-TSX) announces inclusion in the S&P/TSX Composite Index.
The company’s common shares will be added by Dow Jones Canadian Index Services to the S&P/TSX Composite Index effective Monday, September 20, 2021, prior to the open of trading on the Toronto Stock Exchange (the “TSX”). https://bit.ly/2YILCUR
TIMIA Capital (TCA-TSXV) to acquire Pivot Financial.
Timia Capital has announced that it has entered into a series of agreements to acquire Pivot Financial, a Canadian-based private lender. The deal comprises a purchase price of approximately $6 million plus a combination of a common shares valued at $0.30 per share, and series A preferred shares with a deemed value of $1 per share. The deal will include 5 million common shares, 2 million Preferred Shares, and $1 Million in cash payable to Ken Thompson, the sole shareholder of Pivot Financial Services Inc to acquire all of the outstanding common shares of Pivot Financial Services Inc. The deal will also send 1.5 million Preferred Shares issuable to Pivot Financial Inc to acquire, “The loan book and other assets, and assume specific related debt of Pivot Financial Inc.”. https://bit.ly/38WskgQ
Rebranded Nuula secures US$120 million for real-time data app, loan offering for small businesses.
Nuula is a newly branded FinTech company, now headquartered in Toronto. The company was formerly known as BFS Capital, which operated for 20 years offering small business loans. Based out of the United States, BFS Capital began its transformation to a company with a real-time data and analytics app in 2019. Now, Nuula has secured US$120 million in a mix of credit facility and equity financing to support its shift from a company solely focused on loans to “re-imagining” how small businesses access capital and business metrics after the pandemic. Over this year, it launched an app offering real-time data and analytics for business metrics that will fuel a new line of credit product as well as a financial partner services ecosystem. The financing to support its launch includes $20 million in equity led by FinTech investor Edison Partners (Nuula declined to disclose the other investors in the round) and a $100 million credit facility from funds managed by the Credit Group of Ares Management Corporation, the latter for Nuula’s loan offering. https://bit.ly/2Yz0uVJ
Cohere raises US$40 million to make natural language processing more accessible.
Toronto-based artificial intelligence (AI) startup Cohere, which provides natural language processing (NLP) models, has secured US$40 million USD in Series A financing. The round was led by Index Ventures, and saw participation from Section 32, return investor Radical Ventures, as well as several AI experts, including Turing Award winner Geoffrey Hinton, Fei-Fei Li, Pieter Abbeel, and Raquel Urtasun. As part of the round, Mike Volpi, partner at Index Ventures, is joining Cohere’s board. Cohere, which was founded by two former Google Brain researchers and a founding engineer of Cortex, emerged from stealth in May. https://bit.ly/3lfCIpk
Shopify (SHOP-NYSE, SHOP-TSX) makes another bet on surging e-commerce partner, investing in Israeli online marketing firm.
Shopify has made a strategic investment in Israeli e-commerce company Yotpo, Inc., the latest in a string of deals from the Ottawa based software giant to deepen financial ties to vendors that serve its 1.7 million customers. Yotpo stated in a press release that the deal will, “Position Yotpo as one of the early launch partners for new Shopify development features.”. The terms of the deal were not disclosed but Israeli publication Globes reported the amount of the investment being worth US$ 30 million. Yotpo currently sells five products through Shopify’s app store that merchants use to manage their stores. The products include customer engagement features that help with loyalty and referrals, and text message marketing and reviews. https://bit.ly/38U0vpp
Irwin secures $20 million Series A funding to modernize capital markets software.
Irwin, a capital markets financial technology company, announced the closing of a $20 million Series A financing round led by K1 Investment Management (“K1”), a leading investment firm focusing on high-growth enterprise software companies. https://bit.ly/3ltcgcj
ShopperPlus secures $20 million to expand online marketplace.
Québec-based startup ShopperPlus has raised $20 million in Series A financing to bring its e-commerce platform and delivery service to more customers. The round was led by California-based Celtic House Asia Partners, and supported by the Canada Business Growth Fund, Ottawa’s Celtic House Venture Partners, and National Bank. ShopperPlus’ Series B round also saw participation from Wish co-founder Danny Zhang and Kevin Pan, managing director of Sequoia Capital China. https://bit.ly/3jPJ27D
AON3D gets $14.4 million in Series A funding, announces partnership with private space agency.
Montreal’s AON3D is literally over the moon with its latest round of funding after securing $14.4 million and a partnership with a private space agency. SineWave Ventures led AON3D’s round of Series A funding with participation from AlleyCorp, Y Combinator Continuity, BDC Capital, EDC, Panache Ventures, MANA Ventures, social-media influencers Josh Richards and Griffin Johnson, and undisclosed “leading” Silicon Valley angels. AON3D currently supplies printers for more than customers in 25 countries around the world, including Blue Origin, NASA, and the United States Air Force. The global 3D printing market is projected to grow from US$15.26 billion in 2021 to US$68.71 billion in 2028, according to a report from Fortune Business Insights. https://bit.ly/3hnqDNM
Creative Layer secures backing from Shopify (SHOP-NYSE, SHOP-TSX) CEO, Celtic House for personalized printing platform for Shopify creators.
After selling Canvaspop in July, The Ottawa-based company has already secured $3 million in seed funding led by Shopify co-founder and CEO Tobi Lütke and Celtic House Venture Partners, both of whom previously invested in Canvaspop. The SAFE round, which closed in August, also saw participation from former Shopify CTO Cody Fauser, who invested in Canvaspop, as well as Adam McNamara, former Shopify VP of product and current founding partner at Ramen Ventures, and Leonard Teo, founder of Art Station. The newly launched startup aims to capitalize on the growth of the creator economy, the rise of e-commerce platforms like Shopify, and an increase in the demand for personalized products. Over the next couple of months, the startup aims to launch as a Shopify app. https://bit.ly/2YJJ7lk
Gallea raises $1.5 million in seed funding to expand art distribution network.
Art tech company and distribution network Gallea announced on Wednesday that it raised $1.5 million in a seed funding round. The round, which closed in June, was led by Telegraph Hill Capital, a venture capital firm based in San Francisco, California. It also included Canadian investors Real Ventures, ACET Capital, Anges Quénec, National Social Value Fund and Dispatch Venture. Its global investors were Manford Technologies and undisclosed angel investors from Canada, the United States and China. Gallea’s platform centralizes and automates the sale and exhibition process for artists to amplify their presence both in online and offline communities. Gallea is one of the companies in the FounderFuel 2020 cohort where it was provided with mentoring and coaching by entrepreneurs over a three-month residency in Notman House. https://bit.ly/3k2duLW
Clio acquires San Francisco’s Lawyaw as it ramps up merger and acquisition efforts.
Clio has made its third acquisition to date as the legaltech startup increases focus on a merger and acquisition (M&A) strategy to bolster its product offerings. The Burnaby-based company has purchased San Francisco startup Lawyaw, which creates digital workflows for legal documents. The financial terms of the deal were not disclosed. The deal marks Clio’s second acquisition this year and third overall; the startup’s first acquisition was client intake and relationship management platform Lexicata in 2018 followed by automated court calendar-focused firm CalendarRules this year. The increase in M&A activity follows $136 million in Series E capital raised earlier this year, which gave Clio a US$1.6 billion USD valuation. https://bit.ly/3z0t1A0
Canon to acquire British Columbia semiconductor company Redlen for $341 million.
Renowned camera company Canon Inc. is set to take control of British Columbia-based semiconductor company Redlen Technologies for $341 million. Canon announced the deal September 9 noting Redlen is set to become a wholly-owned subsidiary of Canon and the deal is part of a broader plan to expand into the medical business. Canon is set to expand its ownership of Redlen from 15 percent to 100 percent as part of the deal.Redlen is seen as a leading manufacturer in its field of semiconductors and, according to Crunchbase, has raised $29.4 million to date. Its backers have included Pangaea Ventures, which first invested in 2014; Yaletown Partners; and BC Advantage Funds among others. https://bit.ly/3jW7dkJ
Facebook makes payments product available off platform, starting with US Shopify (SHOP-NYSE, SHOP-TSX) merchants.
Facebook began rolling out Facebook Pay for merchants beyond its own platforms for the first time, beginning with Shopify merchants based in the United States (US). Facebook initially announced the plans in July. They come after a series of agreements between Facebook and Shopify, as the two tech companies look to capture a larger segment of the e-commerce market by expanding the reach of their payments products. The move comes after a series of payments-related agreements between Facebook and Shopify, as the two firms look to capture more of the e-commerce market. The Facebook Pay move follows the recent expansion of Shopify’s Shop Pay online checkout offering to Shopify merchants selling on Facebook and Instagram, after the two companies struck a deal in February. In June, Shopify announced that Shop Pay will also be available to non-Shopify merchants selling on Facebook and Google. Shopify said this would give it access to over one million merchants across both platforms, as well as the more than 1.8 billion people that log on to Facebook and one billion shopping sessions that occur through Google per day. https://bit.ly/3C6uxCy
Facedrive fracas heats up as company confirms it filed suit against its co-founder.
Imran Khan, the co-founder and former president of Facedrive, alleged the company could be facing insolvency proceedings. In its claim filed in the Superior Court of Justice of Ontario against Khan and ISRR Holdings Inc., Facedrive alleges – though the allegations have not yet been proven in court – that between July 29, 2021 to August 21, 2021, Khan sold a total of 491,300 common shares of Facedrive and benefited from the sale in excess of $3.5 million with knowledge of material facts communicated to him on a confidential basis in the necessary course of business. Facedrive’s shares on the TSX Venture Exchange have dropped from a high of $60 to $1.78 as of September 8. https://bit.ly/3k18HdS
Global Markets: IPOs, Venture Capital, M&A
Stripe is discussing public listing for 2022 with bankers.
Stripe Inc., the digital payments company last valued at nearly US$100 billion, is in early discussions with investment banks about going public as soon as next year, according to people with knowledge of the matter. The 11-year-old company is considering a market debut through a direct listing or initial public offering, the people said, asking not to be identified because the information was private. Its plans including the timing could still change, the people said. https://bloom.bg/3z0PqgF
Online betting company Sportradar eyes US$500 million in IPO proceeds.
Swiss-based online betting service Sportrader Group AG on Tuesday said it plans to offer 19 million shares at US$25 to US$28 per share in its upcoming initial public offering under the symbol SRAD on the Nasdaq. Based on the midpoint of the range, the company will raise about US$504 million. With about 1.1 billion Class A and Class B ordinary shares to be outstanding after the IPO, Sportradar will have a market capitalization of about US$29 billion based on the midpoint of the IPO price range.The company generated US$26.1 million of net income and revenue of US$478 million in 2020. https://on.mktw.net/38O3Tls
Thoughtworks could be valued at up to US$6.1 billion, after IPO terms set.
Thoughtworks Holdings Inc. has set terms of its initial public offering, which could value the Chicago-based technology consultancy company at up to US$6.10 billion. The company, which expects to change its name to Thoughtworks from Turing Holding Corp. with the IPO, said a total of 36.84 million shares will be offered in the IPO, with the company offering 16.43 million shares and selling shareholders offering 20.41 million shares. The company could raise up to US$328.6 million, as the IPO is expected to price between US$18 and US$20 a share. The stock is expected to list on the Nasdaq under the ticker symbol “TWKS.” Goldman Sachs and J.P. Morgan are the lead underwriters. https://on.mktw.net/3neJbUj
ForgeRock sets IPO terms, to be valued at up to US$1.9 billion.
ForgeRock Inc. has set terms for its initial public offering, in which the California-based identity security platform is looking to raise up to $264.0 million. The company said it is offering 11.0 million shares in the IPO, which is expected to price between $21 and $24 a share. That pricing would value the company at up to $1.91 billion. The stock is expected to list on the NYSE under the ticker symbol “FORG.” Morgan Stanley and J.P. Morgan are the lead underwriters. https://on.mktw.net/2X1CMke
ByteDance in talks to borrow up to US$5 billion to fund overseas expansion.
TikTok owner ByteDance is in talks with banks to borrow up to US$5 billion in a syndicated loan to refinance debt and pay for overseas expansion, people with knowledge of the matter said, as the path to an initial public offering appears unlikely this year. ByteDance plans to use more than half of the money to refinance its existing debt to take advantage of current low interest rates, while spending the rest on its operations in the U.S., Europe, Latin America and other parts of the world, where it needs to keep spending on growing headcount, marketing and computing power, the people said. The company and the banks have discussed raising between US$4 billion to US$5 billion, but the exact size of the loan hasn’t yet been finalized as the debt financing talks are still ongoing, the people added. https://bit.ly/3E4YMfj
SoftBank stock soars on Deutsche Telekom share swap deal.
SoftBank’s share price jumped 9.9% after the Japanese company announced a deal to acquire a 4.5% stake in Deutsche Telekom while selling part of its stake in T-Mobile US to the German telecom giant. In a statement, SoftBank said that the deal is part of a long-term strategic partnership. The share swap agreement will make SoftBank one of Deutsche Telekom’s largest shareholders with a board seat. SoftBank investors may view the deal as a positive development, in part because the alliance with Deutsche Telekom comes at a time when SoftBank’s Vision Fund 2 is trying to invest more in European tech companies, said Tokai Tokyo Research Institute analyst Masahiko Ishino. The deal also comes after SoftBank’s share price has struggled in the past few months amid the Chinese government’s escalating regulatory crackdown on the country’s internet companies including those backed by SoftBank. The crackdown has caused SoftBank to take a more cautious stance toward making major new investments in China. https://bit.ly/3hoA2oe
SoftBank to borrow US$3.85 billion against T-Mobile stake.
SoftBank will borrow about US$3.85 billion against the T-Mobile US shares it owns, according to a regulatory filing, in a move that could provide the tech investment company and its founder Masayoshi Son additional capital for more deals. The loans come just days after SoftBank announced a deal to swap some of its T-Mobile shares for a 4.5% stake in the U.S. telecom carrier’s German parent, Deutsche Telekom. The terms of the deal gave SoftBank, which owns a 3.3% stake in T-Mobile after the swap, the ability to borrow against its remaining T-Mobile shares as well as its newly acquired Deutsche Telekom shares. SoftBank said in a U.S. regulatory filing that its wholly owned subsidiary will take out a margin loan of about US$2.6 billion by pledging nearly 43 million T-Mobile shares. The unit also will borrow about US$1.25 billion in a separate bridge loan, according to the filing. https://bit.ly/3txfXB4
Coinbase falls 6% amid service outages as crypto sell-off spurs heightened market activity.
Coinbase fell as much as 6% on Tuesday amid an ongoing service outage that led to crypto transactions being delayed or canceled. The outage, according to Coinbase, was caused by “a sudden increase in network traffic and market activity” that led to a “degradation in our services.” As of 1:05 pm, Coinbase was still experiencing service issues and said funds settlement would be delayed as the company recovered, according to a tweet from Coinbase Support. Bitcoin swiftly fell as much as 17% on Tuesday, the same day El Salvador adopted the cryptocurrency as legal tender. Ether also dropped as much as 25%, while cardano, dogecoin, and litecoin staged steep sell-offs as well. Coinbase said in a tweet at 1:40 pm that it resolved the issues related to its service outages. The stock had pared its Tuesday losses to about 4% at time of publication. https://bit.ly/391I3LA
Cathie Woods Sells more than US$100 million of Tesla stock despite saying it will rise over 300%.
Cathie Wood’s Ark Invest has sold more than US$100 Million of Tesla stock despite giving the electric car company a US$3000 price target, more than 300% higher than the current share price of US$755. On Wednesday, trade reports show that ARK Invest sold a combined 142,708 Tesla shares worth around US$109 million. Ark hasn’t provided any reasoning for the sale, but Wood’s been quoted saying she, “likes to trade around the volatility of Tesla stock.”. After the sale, Tesla still remains as Ark Innovation ETF’s biggest holding making up 10.6% of the fund. After huge gains in 2020, Tesla is up only 4.9% this year, thanks to a shift away from tech stocks towards company that stand to perform better during an economic rebound, and a supply chain shortage that is affecting many automotive companies. https://bit.ly/3hmPlOx
Nio falls as the EV maker plans biggest US stock sale by a Chinese company since IPO.
Electric vehicle maker Nio saw shares fall as much as 6.8% on Wednesday after announcing plans to sell as much as US$2 billion in US-based shares, the biggest such offering since their IPO. Nio has previously signaled that they would pursue a second listing in Hong Kong, and analysts are disagreeing on whether the US$2 billion in US shares indicates further hurdles in that listing process. This announcement also came just after Nio announced a 25% decrease in vehicles delivered from July to August thanks to the supply issue of semiconductors. Automotive companies like Ford and Tesla are also struggling to get semiconductors with Ford having to slash the production of their flagship F-150, and Tesla needing to push back production of their Tesla Roadster to 2023 both related to semiconductor availability. https://bit.ly/3jWBXSW
Tencent and NetEase fall as China reportedly tightens restrictions on video games industry.
US-listed shares of Tencent and NetEase fell Thursday following a report the Chinese government has temporarily suspended approvals of new online video games, stepping up its crackdown on the video game industry. Shares of Tencent fell 7.5% in premarket trade. Nasdaq-listed NetEase lost as much as 7.5% then pared the decline to about 5%. Beijing’s campaign against addiction to video games among minors includes recently restricting playing time by children under 18 years to three hours a week. Shares of Tencent and NetEase were slammed in the wake of the order. https://bit.ly/3E642yX
PayPal acquires Japan’s Paidy for US$2.7 billion to crack the buy-now, pay-later market in Asia.
PayPal Holdings, the U.S. fintech company, announced an acquisition of Paidy, a Japanese buy now, pay later (BNPL) service platform, for approximately US$2.7 billion (300 billion yen), mostly in cash, to enhance its business in Japan. The transaction completion including the regulatory approval is expected in the fourth quarter of 2021. Japan is the third largest e-commerce market in the world, and so this is a significant move by PayPal to gain more market share both in the country and the region, specifically in the area of providing deferred payment services as an alternative to credit cards. Paidy has more than 6 million registered users, and the plan is to integrate PayPal and other digital and QR wallets with Paidy Link to connect further online and offline merchants. https://tcrn.ch/3z4K4Rq
Microsoft gives up predicting when its US offices will fully reopen.
Microsoft has shelved their plans to reopen headquarters on October 4th after ongoing COVID -19 uncertainty and a spike in cases. The company isn’t providing employees with a new opening date. The VP of modern work at Microsoft explained the decision saying, “Given the uncertainty of COVID-19, we’ve decided against attempting to forecast a new date for a full reopening of our US work sites in favour of opening US work sites as soon as we’re able to do so safely based on public health guidance.”. This decision was made after Microsoft projected to be fully back in office by July, later changing that to September, then October, and now to no projection of a return date. Data from Linkedin and Glint state that 87% of employees would prefer to stay remote at least half of the time. https://bit.ly/2X9rISl
Intel’s Mobileye will launch a robotaxi service in Germany in 2022.
Mobileye, the Intel-owned company that specializes in chips for vision-based autonomous vehicles, announced that it will launch a robotaxi service in Germany in 2022. It’s the latest big move by a company seeking to buck the trend in AV development by becoming both a supplier of autonomous driving technology as well as a fleet operator and service provider. The taxi service will be operated in partnership with German rental car company Sixt and Moovit, an Israel-based startup that specializes in mobility data that was recently acquired by Intel for US$900 million. Customers can hail a ride through either Sixt’s or Mobileye’s app. But it won’t be a full-fledged robotaxi service at launch. But it won’t be a full-fledged robotaxi service at launch. Mobileye says it will begin “early rider testing” in Munich in 2022, but it won’t shift from testing to fully commercial operations until it has received approval from German regulators. The vehicle’s will also include safety drivers behind the wheel “until regulatory approvals have been received,” a spokesperson said. https://bit.ly/3C2HQUD
Singapore sends out robots to search for ‘undesirable’ public behavior, like smoking or breaking COVID-19 rules.
Singapore is testing robots that patrol the streets looking for “undesirable social behaviours.” The two robots, called “Xavier,” have cameras that give them a 360-degree field of vision, and will search for people smoking in public, flouting COVID-19 rules, or illegally hawking, Singapore’s Home Team Science and Technology Agency announced last Sunday. Data from Xavier’s cameras feeds into AI video analytics software, the agency said. “Once Xavier detects any of the above, it will trigger real-time alerts to the command and control centre,” the agency said. https://bit.ly/3heOxeh
Facebook announces Ray-Ban Stories smart glasses, its new Snapchat Spectacles clone.
Facebook announced its first-generation smart glasses in partnership with Ray-Ban. Ray-Ban Stories, as the name suggests, is a “new way to capture photos and video, share your adventures, and listen to music or take phone calls.” A built-in partnership with Facebook and EssilorLuxottica, Ray-Ban Stories start at $299 USD. Facebook says this is the first product to come out of its multi-year partnership with EssilorLuxottica. https://bit.ly/3E53VDS
Home flipping becomes virtual reality.
You can now sell your home online as quickly as you can sell a pair of shoes on eBay or Poshmark. But what is the return policy? The pandemic bolstered already popular concepts like online shopping. But it also showed how more fringe applications could have mainstream use. We now know an entire workforce can function remotely, for example, though the risk to companies is that there are downstream costs to that convenience. A similar risk is increasingly being taken by online real-estate platforms using computerized algorithms to automate a nearly US$2 trillion industry with just about 1% online penetration today. The question is whether fortune will favor the bold. https://on.wsj.com/3zZtiVh
Media, Streaming, Gaming & Sports Betting
Amazon could pay the NFL US$2.5 billion to stream ‘Sunday Ticket’ games — and is seen as the frontrunner among bidders, reports say.
Amazon is in talks to acquire the rights to the NFL’s “Sunday Ticket” streaming package under a multi-year deal, CNBC reported on Friday, citing sources. The tech giant is said to have expressed a “serious interest” in the package that allows subscribers to stream out-of-market football games. The NFL is expected to set an annual price tag between US$2 billion and US$2.5 billion, and wants to settle discussions on the deal before the season winds down in February, CNBC said, citing two sources. Amazon isn’t the only interested party. Apple has also requested exclusive rights to the package, according to The Information. But it’s reportedly not seen as a serious contender due to its “reluctance to invest heavily in entertainment.” Disney has also had related discussions with the NFL, ESPN Chairman Jimmy Pitaro told Bloomberg recently. Meanwhile, NBCUniversal’s streaming service Peacock is not expected to make a bid, CNBC reported, citing a source. https://bit.ly/38Y5g11
Facebook controls over 90% of the social networking market, FTC says.
Facebook averaged a 92% share of the social networking market based on time spent with its products, between 2012 and 2020, according to a significantly less redacted version of the Federal Trade Commission’s antitrust that was filed Wednesday. After its initial lawsuit was thrown out over the summer, the FTC refiled its case with more detail in August. According to the less redacted lawsuit, Facebook’s market share based on time spent on its products didn’t fall below 82% between September 2012 and December 2020. Competitors including Snapchat, Google+, Myspace, Path, MeWe, Orkut, and Friendster didn’t have a combined market share of more than 18% and only Snapchat pushed past 10%. Facebook’s market share when calculated using daily and monthly active users, was slightly less, though more than 70%. In 2020, more than 80% of U.S. internet users used Facebook’s main site, while about 54% used Instagram, according to the lawsuit. Just 28% used Snapchat, the next largest competitor. The previously sealed numbers, sourced from data provider Comscore, will be central to whether the FTC can prove Facebook violated US antitrust laws with its 2012 and 2014 purchases of Instagram and WhatsApp, and should be required to sell off the companies. The FTC was criticized last month for saying that Facebook doesn’t compete with viral video app TikTok, which Facebook has highlighted as a key competitor, because TikTok doesn’t let people “connect and personally engage with friends and family” the way Facebook does. However, the less redacted version of the lawsuit cites internal Facebook communications from 2019 that says TikTok is “not directly competing in the core areas of focus for our business,”and that TikTok is not used “for sharing with friends and family.” https://bit.ly/3BXSf3S
Adtech, Privacy & Regulatory
A judge just ruled a massive blow against Apple’s App Store business.
The end of the months-long legal saga between Apple and “Fortnite” maker Epic Games finally came on Friday when Judge Yvonne Gonzalez Rogers issued a ruling with bad news for both parties — and a major blow to Apple’s App Store business. In Apple’s case, the App Store is being forced to allow app makers the ability to link out and sell items directly to their users via external payment methods. That means app makers will be allowed to directly link out to alternative ways for purchasing, giving them a new way to avoid App Store commissions that can cost as much as 30%. Apple is, “permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app,” the judge wrote in her permanent injunction ruling. The ruling will go into effect in 90 days unless any motions to delay or reverse the order are successful. https://bit.ly/3k52Lk2
Some WhatsApp messages can be seen by moderators, claims ProPublica.
A report by a reputable source suggests that parent company Facebook is somehow able to view the content of WhatsApp messages. This should, of course, not be possible with end-to-end encryption, where only message participants are able to decrypt the content, so would be an explosive revelation if it turned out to be true. https://bit.ly/3yVdZeT
Notorious Russian ransomware group ‘REvil’ has reappeared.
The infamous criminal ransomware group behind the JBS SA cyberattack has returned to the dark web after vanishing this summer. “REvil,” short for “Ransomware-Evil,” is among the most prolific cyber gangs to hold data for ransom. The group operates from Russia, according to cybersecurity firms and the U.S. government, and is accused of leading a flurry of attacks this year against companies and organizations, including JBS. The giant Brazilian meat supplier eventually paid an US$11 million ransom. https://bloom.bg/3tqzq6k
Google is under investigation by the EU for forcing Android phone makers to pre-install its voice assistant, report says.
On Thursday, Sam Wilkin, managing editor of regulatory news service MLex, tweeted that the tech giant faced another investigation from European authorities “over possibly forcing device manufacturers to use Google Assistant as the default voice assistant on Android devices.” Google Assistant, equivalent to Siri on the iPhone, has been a default feature on most new Android devices since 2017. The EU has already fined Google for anticompetitive behavior — involving search, shopping, and Android — three times in three years: first for $2.7 billion in 2017, again for $5 billion in 2018, and once more for $1.7 billion in 2019. https://bit.ly/3E1f4pv
California advances bill targeting Amazon labor algorithms.
California is close to enacting a first-of-its-kind law that would block Amazon and other companies from punishing warehouse workers who fail to meet certain performance metrics for taking rest or meal breaks. AB 701 does not explicitly name Amazon in its text, but both Republican and Democratic lawmakers recognize that the e-commerce giant would be greatly affected by the enactment of the legislation. “The bill is the first attempt to create transparency and protections against unsafe algorithmic-enforced quota systems used by corporations like to push warehouse workers’ bodies to the breaking point,” Assemblywoman Lorena Gonzalez (D) said in a tweet Wednesday. https://bit.ly/3k1AmLm
Amazon brings its cashierless tech to two Whole Foods stores.
Amazon is bringing its automated checkout technology to a pair of Whole Foods stores, the company announced Wednesday, marking the latest test of the grab-and-go system in a full-size supermarket. Amazon technology, called “Just Walk Out,” is coming to two Whole Foods locations scheduled to open in 2022. One store will be located in the Glover Park neighborhood of Washington, D.C., and the other in Sherman Oaks, California. Amazon’s “Just Walk Out” technology allows shoppers to enter a store by scanning an app and exit without needing to stand in a checkout line. Cameras and sensors track what items shoppers select and charge them when they leave. Shoppers who opt out of using Amazon’s cashierless technology will only be able to ring up their items using self-checkout or at a customer service booth. https://cnb.cx/3nhMDxz
Fintech, Blockchain & Cryptocurrency
Survey suggests just 6% of iPhone owners in the US use Apple Pay in stores.
A new survey from PYMENTS.com today suggests that just 6% of iPhone owners in the United States opt to use Apple Pay in stores, despite having the feature set up on their device. The survey shows that “93.9% of consumers with Apple Pay activated on their iPhones do not use it in-store to pay for purchases.” The data is based on a national study conducted by PYMENTS with 3,671 consumers in the United States. One interesting tidbit in the data is that mobile wallet usage declined amid the COVID-19 pandemic. https://bit.ly/3hnNJ7d
As ‘buy now, pay later’ surges, a third of U.S. users fall behind on payments.
A third of U.S. consumers who used “buy now, pay later” services have fallen behind on one or more payments, and 72% of those said their credit score declined, a new study published by personal finance company Credit Karma showed. The study, conducted by software firm Qualtrics, surveyed 1,044 adult consumers in the United States last month to measure their interest in buy now pay later (BNPL) and found 44% had used these services before. The usage figure was slightly up from a similar survey conducted by Credit Karma for Reuters in December, while missed payments was down from 38%. The latest survey found younger consumers were more likely to miss payments. More than half of Gen Z or millennial respondents– those born between the early 1980s and mid-to-late 1990s– said they had missed at least one payment. That compares with 22% of Gen X, who were born in the early 1960s to early 1980s, and 10% of Baby Boomers, those born between the mid-1940s and 1980. There has been a surge in usage of BNPL services, which allow consumers to easily split payments for purchases into installments. The boom in volumes by providers such as Klarna, Affirm Holdings, AfterPay and PayPal Holdings, has been driven in part by online shopping growth during the coronavirus pandemic. https://reut.rs/3twPfc1
Elizabeth Warren says crypto services are ‘spinning straw into gold’ – and blasts them as the new shadow banks.
Sen. Elizabeth Warren told the New York Times that cryptocurrency services are “spinning straw into gold,” as she criticized the way they operate outside financial industry rules. “Crypto is the new shadow bank,” she said, cited in a report published Sunday. “It provides many of the same services, but without the consumer protections or financial stability that back up the traditional system.” “It’s like spinning straw into gold,” Warren added. Shadow banking refers to transaction-based activities that take place outside the traditional banking sector, and therefore outside the realm of regulatory oversight. The system was a factor in the subprime mortgage crisis of 2007-08 that led to the global financial crisis. https://bit.ly/3trfznV
Trading bitcoin is like trading stamps and the cryptocurrency may ‘collapse,’ Sweden’s central bank governor says.
Sweden’s top central banker said bitcoin trading was like dealing in stamps and suggested that non-official money will eventually fail one way or another, according to a report from Bloomberg. Ingves’s comments are broadly in line with what other central bankers have said about bitcoin and crypto. Central banks across the world are looking into developing their own virtual money, known as central bank digital currencies. After some halting attempts in places like Venezuela and the Marshall Islands to launch CBDCs, the Bahamas was the first to successfully do so nationwide last year. https://bit.ly/38YoEv0
Bitcoin mining consumes 0.5% of all electricity used globally and 7 times Google’s total usage, new report says.
Bitcoin mining consumes around 91 terawatt-hours of electricity annually. That’s more annual electricity use than all of Finland, which is a country of 5.5 million people. That’s almost 0.5% of all electricity consumption worldwide, and a 10 times jump from just five years ago. That’s about the same amount of electricity consumed in the state of Washington each year, and more than a third of electricity used for residential cooling in the US annually. And it’s more than seven times the electricity used by all of Google’s global operations. As noted, the internal mining process itself has become more complex; according to the New York Times, a single desktop computer could easily mine bitcoin back in 2011, when the cryptocurrency had little following. Now, it takes roughly “13 years of typical household electricity” to mine a single bitcoin. https://bit.ly/3nlB8VT
Intel to build new chip factories in Europe.
Intel is planning to build two new chip factories in Europe, and possibly more, as part of a plan to invest as much as US$95 billion on semiconductor manufacturing in the region over the next decade, reported The Wall Street Journal. This is the latest example of the strategic direction Intel CEO Pat Gelsinger has pursued since taking the helm in February, which includes making chips for other companies and significantly boosting its overall manufacturing capacity amid the global chip shortage. But the jury is still out on another big part of Gelsinger’s turnaround plan, which is to avoid the kinds of chip manufacturing delays that plagued the company under former CEO Bob Swan. Intel is also facing intense competition from other contract chip companies like Foxconn and Taiwan Semiconductor Manufacturing Co. https://bit.ly/3hoVWIb
Facebook develops new Machine Learning chip.
Facebook has joined other giant companies like, Google, Amazon, and Microsoft to design their own computer chips from scratch. These companies have been spending millions on this development with the hope of long-term financial savings and better performance from servers. Facebook is developing a chip that powers machine learning for tasks like recommending content to users. Another chip that Facebook is working on aims to improve the quality of watching recorded and live streamed videos, which if successful the chip could be a cheaper but more powerful semiconductor which can help the company reduce their carbon footprint. https://bit.ly/3yZX9M5
From 4% to 45%: Energy Department lays out ambitious blueprint for solar power.
The Biden administration on Wednesday released a blueprint showing how the nation could move toward producing almost half of its electricity from the sun by 2050 — a potentially big step toward fighting climate change but one that would require vast upgrades to the electric grid. There is little historical precedent for expanding solar energy, which contributed less than 4 percent of the country’s electricity last year, as quickly as the Energy Department outlined in a new report. To achieve that growth, the country would have to double the amount of solar energy installed every year over the next four years and then double it again by 2030. https://nyti.ms/2X8rEm6
Toyota says it’s investing US$13.6 billion in car batteries over the next decade.
Toyota will invest around US$13.6 billion in battery tech over the next decade, including a US$9 billion investment in production, as it attempts to electrify its vehicle lineup, The Wall Street Journal reports. It reportedly plans to have 10 battery production lines by 2025, eventually increasing to around 70 across an unannounced number of factories around the world. Eventually, it could produce as much as 200GWh of batteries, the company’s chief technology officer, Masahiko Maeda, announced in a press briefing. Toyota’s commitments mirror similar investments planned by others across the auto industry. Volkwagen plans to produce around 240GWh of batteries in Europe alone by 2030, the WSJ notes, while Ford has said it plans to produce 240GWh globally by then, including 140GWh in North America. It’s a big investment from Toyota, and indicates the world’s largest car manufacturer by volume is getting more serious about electrifying its lineup. https://bit.ly/3A8wmhV
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