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 Lots of activity in the Canadian VC space this past week, as well as Lightspeed’s NYSE debut. Sophic client, Kontrol (KNR-CSE), had positive news of another successful test of its Covid detection product, BioCloud.

Canadian Technology Capital Markets & Company News

Early tests suggest new Canadian technology could detect the coronarvius in the air. Kontrol Energy (KNR-CSE, Sophic client) developed the product at its office in London, Ont. and had it tested by two independent labs. The company says it has developed a wall-mounted device that detects the presence of the novel coronavirus in the air and triggers an alert system to warn of the detection. One scientist who has reviewed the product suggests it works. Kontrol Energy of Vaughan created the technology, known as BioCloud, at its office in London, Ont., and the company’s CEO, Paul Ghezzi, said he’s working to have it installed in schools by November. Ghezzi says it can also be used by mass transit systems. The company has been working on the technology at its London office since March and arranged for testing at two independent labs that are part of Western University, Ghezzi said.There are no immediate plans for developing a unit that would work in the home. Ghezzi said the company has considered the concept of a breathalyzer that would detect the coronavirus, but it would require a longer development cycle and the approval by Health Canada. Ghezzi said, for now, the primary focus of the company is to sell its technology to schools, hospitals and mass transportation systems. https://bit.ly/2Zt4Kn

Lightspeed (LSPD-TSX, LSPD-NYSE) announces pricing of initial public offering in The United States. Lightspeed POS Inc. announced the pricing of its previously-announced marketed public offering of subordinate voting shares in the United States and Canada. The underwriters have agreed to purchase, at a price of US$30.50 per share, an aggregate of 10 million subordinate voting shares from the Company and 1.65 million subordinate voting shares from Caisse de dépôt et placement du Québec (“Caisse”), for aggregate gross proceeds to the Company of US$305 million and to Caisse of US$50 million. The subordinate voting shares of the Company began trading on the New York Stock Exchange under the symbol “LSPD” on September 11, 2020, and will continue to trade on the Toronto Stock Exchange under the symbol “LSPD”. The offering is expected to close on September 15, 2020, subject to customary closing conditions. https://bit.ly/2Frp41j

Gatekeeper upsizes financing to $6 million, accelerates intelligent temperature sensing systems for school buses. The Company intends to use a portion of the funds from the Financing to accelerate sales and delivery of the Company’s Intelligent Temperature Sensing Systems (ITSS) which has been designed to efficiently measure the body temperature of students while boarding a school bus or entering schools. Doug Dyment, CEO of Gatekeeper, commented: “There is increasing interest from our school district customers for the use of ITSS as a solution to meet the various State authority guidelines relating to the safe reopening of public schools. For more than a decade we have delivered innovative technology-based solutions to over 3,000 school district customers to improve the safety of the 25 million schoolchildren who ride 500,000 school buses daily in the US alone. We are in constant dialogue with our school district customers to offer helpful solutions as they manage through this pandemic, and we are proud to launch ITSS as the industry’s best intelligent temperature sensing solution for school buses and transit authorities.” https://bloom.bg/2FsHX3

Cleantech startup GHGSat raises $39.5 million in Series B financing. Montreal-based global emissions monitoring company GHGSat has closed a $39.5 million in what the startup called the first tranche of its Series B financing. The financing brings the company’s total funding to date to $72.4 million. Led by Investissement Québec, the participants in the tranche also include OGCI Climate Investments, Business Development Bank of Canada, Fonds de solidarité des travailleurs du Québec, Space Angels, and Schlumberger. Proceeds from the financing will be used to support the build and launch of three new satellites, and will allow the startup to open a global intelligence centre in the United Kingdom. https://bit.ly/33iCvc

Vancouver-based Klue raises $19.7 million Series A. Vancouver-based artificial intelligence startup Klue, which has developed software aimed to give enterprises a better view of their competitors, has raised a $19.7 million Series A round of financing. The investment brings the company’s total funding to $24.9 million. Silicon Valley-based Craft Ventures led the financing. Other participants included HWVP, existing investors OMERS Ventures, Rhino Ventures, and BDC Capital, and several angel investors, including Frederic Kerrest, co-founder of Okta, and Zach Coelius. The funding will be used by Klue to accelerate product and machine learning development. https://bit.ly/2FvSGL7

Truck electrification startup Effenco Development raises $10 million. Montreal-based heavy-duty vehicle electrification and connected mobility startup Effenco Development has closed $10 million in financing. The round, which closed July 31, was led by an existing private investor, which Effenco refused to disclose. Other participants in the financing included the Business Development Bank of Canada (BDC), the Center of Excellence in Energy Efficiency, Investissement Québec, and David Arsenault, who is the founder and president of Effenco. Effenco classified the round as Series A financing, however, the startup raised a $12 million Series A round in 2018. https://bit.ly/3mj6Wr

Athennian reveals $10 million in financing as legaltech startup sees growth amid pandemic. Athennian, a Calgary-based startup with software geared towards helping law firms manage legal entities, has announced $10 million in financing, which was raised over the last year. The $10 million breaks down to a recently closed $8 million Series A round and a previously unannounced seed round that closed around July 2019, at $2 million in equity. https://bit.ly/339FEe

Kitchener’s BinSentry raises $10 million Series A to take AgTech sensors global. Kitchener-Waterloo startup BinSentry has developed an Internet of Things (IoT) solution that enables feed mills and livestock producers to monitor on-farm inventory. In order to further develop its product and take the solution global, BinSentry recently closed a $10 million Series A round led by United States-based food and agriculture-focused investment firm Lewis & Clark AgriFood. The round also included BDC Capital’s Industrial Innovation Venture Fund, a $250 million commitment launched last year to invest in agriculture, foodtech, resource extraction, and advanced manufacturing. https://bit.ly/2RlyGx

Brüush raises $6.5 million Series A as it looks to disrupt oral care market. Brüush, a Vancouver-based direct-to-consumer e-commerce startup selling electric toothbrushes, has raised $6.5 million in Series A financing. Brüush has refused to disclose who invested in its Series A round, but told BetaKit the syndicate included institutional investors. The funds will be put toward strategic marketing initiatives, increasing brand awareness, and growing Brüush’s subscriber base. The startup claims this round was oversubscribed, surpassing its original $4 million target. https://bit.ly/35rSEi

Toronto engineer wins $1 million Leaders Prize for fake news solution ‘It hasn’t sunken in yet,’ winner says after winning Canada-wide competition launched at True North Festival. Purveyors of fake news had better beware: A machine-learning engineer who took up the challenge of sorting the false from the true has created an artificial intelligence-driven program to defeat you, and won a $1-million prize in the bargain. Bill (Yu) Wu was announced Thursday as having bested a field of 150 programmers, designers and engineers who took up the challenge posed by the Leaders Prize, first revealed at Communitech’s signature tech-for-good event, the True North Festival, in 2018. At the 2019 Festival, the specific challenge was issued: Find a way to use AI to solve the global problem of fake news and misinformation that has been undermining democracies. https://bit.ly/2RmvkK

Brightspark closes $60 million for new venture fund. Brightspark Ventures has announced a new venture fund, securing $60 million as part of a third close, with the ultimate goal of raising $75 million. LPs for the Brightspark Canadian Opportunities Fund (BCOF), as it is called, include BMO Capital Partners, Fondaction, Investissement Québec, RBC, Teralys Capital through its Teralys Capital Fonds Amorçage Québec (TFAQ2019) fund, individuals investors, and family offices. https://bit.ly/2R7TKY

Shopify, suddenly worth US$117 billion, is one of the biggest pandemic winners. The coronavirus pandemic has forced many small businesses to finally open online stores—and turned e-commerce software provider Shopify into one of the biggest winners of the retail shakeout. Millions of small businesses have had to adapt to a world where online sales abruptly jumped to levels that weren’t expected for years. U.S. e-commerce sales surged 37% to US$200 billion in the second quarter, according to the Commerce Department. The company’s share price nearly tripled from its March lows and crossed above US$1,000 in August. Even after last week’s selloff, Shopify’s market value of roughly US$117 billion is bigger than eBay Inc. and Target Corp. combined, even though Shopify has a fraction of their sales or profits. Since March, Shopify has introduced a 90-day free trial for new subscribers, gift-card options, online tipping, a curbside pickup option and a new Shop application, where customers can search for products within the Shopify universe. The company also expanded its financing program to other countries and is planning to launch Shopify Balance, which will serve as a business account for merchants. https://on.wsj.com/2R6z1D

E-commerce startup Mobify to be acquired by Salesforce. Vancouver based E-commerce software startup Mobify has signed a definitive agreement to be acquired by customer relationship management software company Salesforce. The purchase price of the deal was not disclosed. Founded in 2007, Mobify has created a platform for headless commerce, an approach that separates an e-commerce platform’s frontend design from the backend infrastructure. Headless commerce is used to give full-stack e-commerce solutions more flexibility when dealing with a complex set of business touchpoints. Mobify’s platform works on top of its clients’ existing systems with APIs, and offers built-in infrastructure to host, secure, integrate, and scale a storefront. Some of Mobify’s customers include brands like Under Armour and Shiseido, and some of the startup’s investors include Acton Capital, BDC Capital, Plaza Ventures, and Vistara Capital Partners. Mobify’s last financing round was $15 million in growth capital financing, raised in 2017.  https://bit.ly/35memU

Techstars Toronto startups preferring Canada to U.S. while COVID, travel bans still an issue. Sunil Sharma, Techstars Toronto’s managing director, told Crunchbase News that many entrepreneurs are now banned from entry into the United States, while others are experiencing issues with maintaining their U.S. visa status. In addition, many are not choosing to live here due to the current political climate, he added. Prior to joining Techstars, Sharma was a consul general in California and said he saw firsthand the challenges of H-1B visas. This type of visa enables American employers to hire highly-skilled nonimmigrants. When he was back in Canada, Sharma challenged the government to fast-track talented people into the country which resulted in the Start-up Visa Program. “It allows investors to find a team of founders and help them get permanent residency, like a U.S. Green Card, without immigration challenges,” he said. “We think it is an unfair advantage as an investor and something that has become more pronounced today with the U.S. travel bans and more severe lockdown on visas.” Meanwhile, Toronto is the fourth-largest city in North America, and the tech scene is exploding there, Sharma said. In 2017, Statista estimated that there were between 2,100 and 2,700 startups operating in the Toronto-Waterloo ecosystem, while StartupBlink, a Swiss-based website that provides data on the best places on the planet for starting a new business, ranked Toronto’s startup ecosystem as the 24th best in the world. https://bit.ly/3bS2WJu

Global Markets: IPOs, Venture Capital, M&A

Opendoor in talks to list via Social Capital II merger. Opendoor, a property technology startup, is in advanced talks to go public through a merger with Social Capital Hedosophia Holdings Corp. II, according to people with knowledge of the matter. Social Capital II, the blank-check company led by chairman Chamath Palihapitiya, is discussing raising fresh equity to help fund the transaction with prospective investors, said some of the people, who asked not to be identified because the talks are private. The combined company would be valued at around $US5 billion in the deal, which is expected to be announced in the coming weeks, the people said. The transaction isn’t yet finalized and talks could still fall apart. San Francisco-based Opendoor, led by Chief Executive Officer Eric Wu, buys homes digitally, makes minor repairs and lists the properties for sale, charging a fee for the service. The company was valued at US$3.8 billion in a March 2019 fundraising round, and at the time said it had raised US$1.3 billion from investors including Softbank Vision Fund, General Atlantic, Khosla Ventures, NEA and Norwest Venture Partners. https://bloom.bg/3iqIJ0

Palantir is being valued around US$10.5 billion ahead of direct listing as investors question growth story. As Palantir gears up for its stock market debut, the company has a long way to go to convince potential shareholders that it’s worth the US$20 billion price tag that investors gave it almost five years ago. Palantir held a virtual event for investors on Wednesday. The company, whose software helps government agencies and large corporations make sense of vast amounts of data, also released an updated prospectus, indicating that the number of shares outstanding increased in the third quarter, to 1.64 billion from 1.53 billion in the prior period. Based on an average share price transaction in the latest quarter of US$6.45, investors are valuing the company at just over US$10.5 billion. But the numbers are all over the map. In July, Palantir raised US$410.5 million by selling shares at US$4.75 a piece, according to the filing, which comes out to a valuation of about US$7.8 billion. Transactions during the quarter took place at anywhere from US$4.17 a share to US$11.50 a share, suggesting a range of US$6.83 billion to US$18.8 billion. The math gets even fuzzier when considering that Palantir had a reported valuation of US$20.4 billion in 2015, when the share price was US$11.38. That price, based on the supplied share count as of Sept. 1, would indicate a current valuation of US$18.6 billion. https://cnb.cx/3ihF5p9

Nikola sinks another 18% as Citron Research calls it a ‘total fraud’ and investors shun a rebuttal of the original short-seller report. Nikola tanked as much as 18% on Friday as investors continued to flee following the release of a scathing short-seller report. The slump extended losses on Thursday after Hindenburg Research accused the electric-vehicle company and its CEO, Trevor Milton, of overhyping its truck’s capabilities. The firm, which has a short position in Nikola, also accused Nikola of filling its multibillion-dollar order book “with fluff.” Citron Research backed up the claims on Friday morning and congratulated Hindenburg in a tweet, saying it was “exposing what appears to be a total fraud” with Nikola. https://bit.ly/33mURZ

Airbnb is experiencing a resurgence while hotels are still suffering. Airbnb filed to go public last month, a seemingly strange move for a company that was forced to lay off a quarter of its workforce in May. Estimates from Edison Trends show Marriott and other hotel chains seeing much lower spending than at this time last year. At Airbnb, by contrast, spending is hitting new all-time highs. Airbnb spending is running a whopping 75% higher than this time last year, says the research shop, based on a panel of spending data including more than 65,000 Airbnb transactions. That means Airbnb’s revenues have comfortably surpassed Marriott’s, for the first time. The bottom line: Airbnb’s pandemic boost won’t last forever. But if nervousness about sharing enclosed spaces persists, and if remote work becomes more broadly accepted, both will be good news for the startup. https://bit.ly/2F87b7

China would prefer TikTok shut down in the US before selling to Microsoft or Oracle. With the TikTok US ban deadline around the corner, things are heating up as the Chinese government has reportedly taken the stance that it would rather see the app’s US operations shut down than sold to an American company. Three anonymous sources close to the matter told Reuters today that China is opposed to the sale so much that it would prefer to see the social media service just close up shop in the US. Beijing opposes a forced sale of TikTok’s U.S. operations by its Chinese owner ByteDance, and would prefer to see the short video app shut down in the United States, three people with direct knowledge of the matter said on Friday. https://bit.ly/2Rk8rY

Pandemic tech spending in China lifts Alibaba’s cloud. Spending on China-based cloud services hit a record high in the second quarter as Chinese companies increased the use of online business tools in the aftermath of the coronavirus pandemic. The gains were buoyed by Chinese government restrictions on foreign technology firms and growing trade tensions with the U.S., which has kept many of the world’s largest cloud providers from competing in the Chinese market, industry analysts say. Companies in China spent a record US$4.3 billion on cloud services in the first half of the year, up 70% from the same period a year ago, according to estimates by research firm Canalys. Part of that growth was fueled by an increased use of online information-technology tools by businesses during the Covid-19 outbreak as employees began working from home, Canalys said. Broadband adoption has also expanded across the country in recent years, it said. As of June, China accounted for an estimated 12.4% of the global cloud market, up from 9.6% in the year-earlier period, the research firm said. Local tech giant Alibaba Group Holding Ltd. took in about 40% of total cloud spending in China in the second quarter, more than double its closest rivals, including Huawei Technologies Co. and Tencent Holdings Ltd. https://on.wsj.com/2FsEGlr

Emerging Technologies

Walmart testing drone delivery in North Carolina. Walmart on Wednesday announced a limited pilot program with drone delivery company Flytrex, marking the commerce giant’s entrance in the drone wars. Customers located in Fayetteville, North Carolina will be able to have certain lightweight grocery products and household essentials delivered to their home via an autonomous drone, according to the announcement. The news comes just a week after Amazon won approval from the Federal Aviation Administration to deliver packages to U.S. customers using its own fleet of drones, putting the tech giant at least one major step ahead of Walmart. Flytrex’s drones are part of a novel pilot program with the Federal Aviation Administration, which aims to bring the private sector and government agencies together to determine how best to integrate drones into the National Airspace System. Flytrex said that it has also partnered with the North Carolina Department of Transportation to “standardize backyard drone delivery.” https://bit.ly/2ZofWBL

Apple to begin iPhone 12 mass production soon, AirTags production already started. Apple is set to begin mass production of the iPhone 12 later this month, according to a report from Nikkei. It says at least one of the four 5G-enabled iPhone 12 models will ramp production in mid-September, about one month later than a normal year. Production lines for the entire lineup will start up later in the month and the first weeks of October. https://bit.ly/35eVxmf

Ahead of Apple’s AirTags, Tile unveils new subscription that will reimburse you for lost items. As Apple reportedly prepares its own AirTag item trackers for release as soon as this year, Tile is looking to differentiate its offerings. The company has introduced a new Premium Protect subscription service that reimburses you up to US$1,000 per year if you’re unable to locate a lost item with your Tile tracker. The Premium Protect subscription service runs US$100 per year, and it essentially serves as another layer of protection against losing your items. Tile told Engadget that 90% of items marked as lost are able to be found through the Tile network, so this new Premium Protect service isn’t an indication that Tile item trackers aren’t useful: The idea of this service might make you a little uneasy that the Tile tracker isn’t very reliable, but the company of course says that the Tile network is able to find 90 percent of items marked as lost. That still leaves around 10 percent that can’t be found (which the company says can be due to the tracker being out of range, or if the network isn’t dense enough in that area), which is what this additional protection service is for. https://bit.ly/3bKKP8

England’s long-delayed COVID-19 contacts-tracing app to launch on September 24. The U.K.’s long-delayed coronavirus contact-tracing app finally has a release date: The Department of Health and Social Care (DHSC) announced today that the app will launch in England and Wales on September 24. The other regions of the country, Scotland and Northern Ireland, already have their own COVID-19 contacts-tracing apps — the latter launching an app this summer. The Protect Scotland app was released yesterday, where it went on to clock up more than 600,000 downloads in a matter of hours. England and Wales have had a far lengthier-than-expected wait for an app after a false start back in May, when government ministers had suggested in daily coronavirus briefings that an app would be landing shortly. Instead, the launch was delayed, and DHSC took over development of the NHS COVID-19 app from the National Health Service’s digital division, NHSX, after it ran into problems related to the choice of a centralized app architecture — which triggered privacy concerns and saw the test app plagued by technical issues around iPhones’ device detection. https://tcrn.ch/2Rnhesl

Media, Streaming, Gaming & Sports Betting

‘Mulan’ drove Disney+ app downloads up 68% week-over-week, but didn’t beat ‘Hamilton’. Disney’s live-action remake of “Mulan” skipped theaters to instead stream on Disney+ over the weekend, for the added fee of US$30. According to early data, the launch helped grow Disney+ mobile installs by 68%, compared with one week prior. Consumer spending in the app also grew by 193% during the same time period. This data comes from app store intelligence firm Sensor Tower, which also noted that “Mulan” didn’t deliver quite as big a bump to downloads as Disney’s release of “Hamilton” did. While Sensor Tower data only focused on percentage growth, another app intelligence firm, Apptopia, offered an early estimate for Disney+ app downloads. From Friday, September 4 through Sunday, September 6, the firm estimates the Disney+ mobile app was downloaded approximately 674,000 times worldwide, with 400,000 of those from the U.S. (This data doesn’t include the Indian Hotstar app.) The firm says this represents an increase of 42.7% over the average seen during the previous four weekends. Apptopia says “Hamilton” brought in approximately 458,000 new users in the U.S., and 780,000+ new users worldwide, excluding India. https://tcrn.ch/3iey6g

Apple countersues Epic Games for damages in latest escalation of Fortnite/App Store battle. It’s unclear exactly how much money Apple is seeking in damages from Epic. But it may not be a huge sum as it appears Apple is trying to recover the money it lost during the few hours that Epic snuck its own payment method into Fornite on iOS before being pulled. The other part of the countersuit is Apple asking the court for a “permanent injunction” to ban Epic’s direct payment option. Apple is now going one step further, asking the court to hold Epic liable for breach of contract and other counts, seeking restitution of all money Fortnite collected through its payment system, and seeking a permanent injunction banning its external payment mechanism in all apps, including Fortnite. In the new court filing, Apple describes Epic’s actions as a “sneak assault” and its direct payment feature as “commission-theft functionality.” Unbeknownst to Apple, Epic had been busy enlisting a legion of lawyers, publicists, and technicians to orchestrate a sneak assault on the App Store. Shortly after 2:00 a.m. on August 13, 2020, the morning on which Epic would activate its hidden commission-theft functionality, Mr. Sweeney again emailed Apple executives, declaring that “Epic will no longer adhere to Apple’s payment processing restrictions.” https://bit.ly/3bGwWb

Epic Games says ‘Fortnite’ users on iPhone have plummeted 60%, and it’s trying to force Apple to reinstate the game to the App Store. Epic Games, the creator of “Fortnite,” is still trying to force Apple to restore the game to the App Store while the two companies duke it out over whether Apple’s rules on in-app purchases are legal. Epic in a new filing submitted to the court late last Friday said iOS usership had plummeted since Apple effectively booted ‘Fortnite’ off the App Store on August 27. Epic also revealed in its filing iOS users make up the biggest chunk of “Fortnite” players overall. Out of 350 million registered users, more than 116 million are iOS users — equating to a third. “Fortnite” is also playable on Android, the Xbox One, PlayStation 4, Nintendo Switch, PCs, and macOS (from which it has also been booted). https://bit.ly/35nw5e

Twitch brings custom esports competitions to streamers in closed beta. Twitch launches Versus — a suite of competitive tools that will let creators on the site organize and manage their own tournaments — which promises to bring those agonies and ecstasies to any streamer who feels like pubstomping their community. While the feature is in closed beta for now, collegiate esports leagues, game devs, and Twitch Rivals competitors (along with some other Twitch streamers) will have access. Obviously, this isn’t Twitch’s first foray into esports. Twitch Rivals has been hosting competitions between streamers and pros since last year, and in April, the company rolled out an esports directory to keep viewers updated on the latest tournaments. What’s interesting about Versus is how it’s very similar to Facebook Gaming’s Tournaments. Twitch is playing catch-up! Even so, it’s cool to see good ideas make their way further into the mainstream. https://bit.ly/3k2grJ

Ninja signs deal to stream on Twitch once again. Popular Fortnite streamer and esports gamer Tyler “Ninja” Blevins has signed a new multiyear deal to livestream exclusively on Twitch. The move comes after Microsoft shut down its game streaming service Mixer earlier this year. Ninja had more than 14 million followers on Amazon-owned Twitch before switching to Mixer in a US$50 million 2019 exclusivity deal. Back then Ninja had cited toxicity in Twitch chat channels as one of many reasons for leaving. After Mixer shut down in June, it was unclear whether Ninja would head back to Twitch or possibly stream on YouTube. Terms of Ninja’s deal with Twitch weren’t disclosed. https://cnet.co/33sDhDH

Adtech, Privacy & Regulatory

Republican-led states expected to join U.S. antitrust suit against Google. About a dozen states are likely to join the Justice Department’s expected antitrust suit against Alphabet’s Google, reported Bloomberg News, which cited people familiar with the investigation. Many are led by Republican lawmakers. Texas Attorney General Ken Paxton is leading a probe of state attorney generals that’s running in parallel to the Department of Justice’s investigation. The state probe looks at whether Google has abused its position in online advertising—the technology that places digital ads for companies across the Internet—to gain unfair advantage over its rivals. The Justice Department has investigated both Google’s position in the ad tech market as well as its dominance in search. Google’s policy team for years has thought it could better defend itself against a case focused on ad tech, rather than search, The Information previously reported. Some state attorney generals have also looked at conduct involving Google’s Android operating system, Bloomberg reported. https://bit.ly/3ist8gi

eCommerce

Ambani’s Reliance to offer US$20 billion stake in retail arm to Amazon. Amazon has held discussions about investing in the conglomerate’s Reliance Retail Ventures Ltd. unit and has expressed interest in negotiating a potential transaction, the person said. Mumbai-based Reliance Industries is willing to sell as much as a 40% stake in the subsidiary to Amazon, the person said, asking not to be identified because the information is private. A deal, if successful, would not only create a retail behemoth in India but will also turn Jeff Bezos and Asia’s richest man from rivals into allies in one of the fastest-growing consumer markets in the world. At $20 billion, the deal would be the biggest ever in India as well as for Amazon, according to data compiled by Bloomberg. In India, where a lot of people still shop in tiny street-corner stores, the deal could be Amazon’s way of acknowledging that it needs a locally-entrenched partner with a strong on-the-ground presence. For Amazon, Reliance would provide a brick-and-mortar component to its ambitions in a country where online purchasing still accounts for a minuscule share of an estimated US$1 trillion retail market. https://bloom.bg/3iiBaZg

Fintech, Blockchain & Cryptocurrency

How bitcoin met the real world in Africa. Odunjo is one of many people at the heart of a quiet bitcoin boom in Africa, driven by payments from small businesses as well as remittances sent home from migrant workers, according to data shared exclusively with Reuters and interviews with around 20 bitcoin users and five cryptocurrency exchanges.  Monthly cryptocurrency transfers to and from Africa of under US$10,000 – typically made by individuals and small businesses – jumped more than 55% in a year to reach $316 million in June, the data from U.S. blockchain research firm Chainalysis shows. The number of monthly transfers also rose by almost half, surpassing 600,700, according to Chainalysis, which says the research is the most comprehensive effort yet to map out global crypto use. Much of the activity took place in Nigeria, the continent’s biggest economy, along with South Africa and Kenya. This represents a reversal for bitcoin which, despite its birth as a payments tool over a decade ago, has mainly been used for speculation by financial traders rather than for commerce. Why a boom in Africa? Young, tech-savvy populations that have adapted quickly to bitcoin; weaker local currencies that make it harder to get dollars, the de facto currency of global trade; and complex bureaucracy that complicates money transfers. The bitcoin users interviewed by Reuters, based in five countries from Nigeria to Botswana, said the cryptocurrency was helping people make their businesses nimbler and more profitable, and helping those working in places like Europe and North America hang on to more of the earnings they send home. Yet risks abound. Bitcoin and other cryptocurrencies are unregulated in many countries and their legal status is unclear, meaning there is no safety net and little recourse if you lose funds. For many, converting local currencies to and from bitcoin relies on informal brokers. Prices are volatile, and buying and selling is a complex process that demands technical knowledge. https://reut.rs/2F7QDNy

China plans caps on Ant’s lending rates to control risk. China’s financial regulators plan to cap the interest rates Ant Group can charge borrowers on quick consumer loans, a move that could curb the financial technology giant’s biggest revenue driver as it prepares for a mega initial public offering. Loans made by Ant Group and other consumer lenders will be subject to a ceiling imposed by a China Supreme Court ruling last month, said people familiar with the plans, who asked not to be named as the information is private. Linked to a benchmark rate, the cap is currently 15.4%. The court said the rule doesn’t apply to licensed financial institutions, but it so far hasn’t specified whether it would impact fintech firms such as Ant. While the rule isn’t targeting Ant specifically, the company is now the largest in online consumer lending, often helping smaller banks in competition with China’s largest lenders. Ant, the cornerstone of the Alibaba Group Holding Ltd. empire, tracks the spending behavior of hundreds of millions of users on China’s biggest online malls, helping analyze their creditworthiness. It’s said to be poised to raise US$30 billion in an IPO. Ant has worked with about 100 banks, doling out 1.7 trillion yuan (US$249 billion) of consumer loans and 422 billion yuan in small business loans as of June 30. Only about 2% of the loans sit on Ant’s balance sheet, while the rest are offered by third party banks or have been packaged as securities and sold on, according to its prospectus. It’s unclear what proportion of Ant’s loans are issued at a rate above the court’s threshold. Ant’s lending business has grown to become its biggest source of revenue as it faces growing competition in the online payments market. Lending revenue jumped 59% to 29 billion yuan in the first six months of the year, accounting for 40% of the group’s total. That’s underpinning Ant’s plans to seek a US$225 billion valuation in its pending IPO. https://bloom.bg/32eU6T

Klarna talks to investors on raising funds at over US$10 billion valuation. Swedish payments firm Klarna is in talks with investors for a new round of funding which would value it at more than US$10 billion, three sources said, as it attempts to expand its business in the United States. At that valuation, Klarna, whose service allows shoppers to buy online through its merchant partners and settle their dues in instalments using its “buy now, pay later” (BNPL), would nearly double its previous peak of US$5.5 billion in August 2019. But the privately-owned Swedish company will still be valued at less than its rival, Australia’s AfterPay (APT.AX), which has a market capitalisation of about US$15 billion. Klarna plans to raise just over US$500 million from a mix of old and new investors, two of the sources told Reuters, adding that a deal will likely be announced in the coming days. https://reut.rs/3ii0m1R 

Semiconductors

SoftBank nears US$40 billion deal to sell Arm Holdings to Nvidia. SoftBank Group Corp. is nearing a deal to sell British chip designer Arm Holdings to Nvidia Corp. for more than US$40 billion, according to people familiar with the matter, the latest in a series of big asset sales by the Japanese technology conglomerate. The cash-and-stock deal being discussed would value Arm in the low US$40 billions, the people said. The terms under discussion would mark a big win for SoftBank, which bought Arm four years ago for US$32 billion and had struggled to jump-start growth in the business. Arm and Nvidia have been in exclusive talks for several weeks and a deal could be sealed early next week, the people said—assuming it isn’t derailed at the last minute. Arm designs microprocessors that power most of the world’s smartphones. By joining forces with Nvidia, the combined company would be a powerhouse in the chip industry.  A sale to Nvidia could prompt scrutiny from antitrust regulators and potentially pushback from Arm’s customers, which include major chip makers and electronics manufacturers such as Intel Corp., Samsung Electronics Co. and Apple Inc. The Wall Street Journal reported in July that SoftBank was exploring options for Arm including a full or partial sale or an IPO. Arm had said it planned to transfer two Internet of Things services units into new entities that would be owned and operated by SoftBank as part of a move to focus on its core semiconductor-IP business. It later reversed course on that move, saying it would instead keep the operations in-house. https://on.wsj.com/3bRZKh4

ESG

Panasonic to expand battery capacity at Tesla Gigafactory. Panasonic is adding another production line to the massive factory it operates with Tesla in Nevada, an expansion that will increase battery cell capacity by 10%. The Sparks facility, dubbed Gigafactory 1, is the centerpiece of Tesla’s plan to expand global battery capacity and reduce the cost of electric vehicles. Panasonic has been its most important partner in that project, which, based on a recent agreement, should last until at least 2023. Tesla and Panasonic initially planned for the Gigafactory to have the capacity to produce 35 gigawatt hours of batteries each year. That goal was achieved with 13 production lines. This latest expansion, which was first reported by the Reno Gazette Journal and confirmed by TechCrunch, will add a fourteenth line. https://tcrn.ch/35kwLR

GM pairs with ‘Nikola’ to make electric trucks. General Motors on Tuesday said it would manufacture an electric pickup truck designed by Nikola, a six-year-old company that hasn’t produced any vehicles for sale and went public three months ago by merging with an already-public holding company. The deal, which gives GM an 11% stake in Nikola, shows how legacy automakers continue to chase the market pioneered by Tesla, the top seller of electric cars that also is designing electric trucks. Tesla has become the world’s most valuable carmaker primarily due to its growth rate. Tesla’s stock, however, sank 17% on Tuesday following news that it won’t be included in the S&P 500 stock market index. At US$325 billion, Tesla’s market cap is still US$100 billion higher than that of Toyota, the no. 2 most valuable carmaker. Stocks of GM and Nikola rose 9% and 49%, respectively, after the deal was announced. As with all things automotive, the fruits of the deal will take more than two years to materialize so the enthusiasm may be premature. https://bit.ly/2FqexD

Walmart and Schneider Electric announce groundbreaking collaboration to help suppliers access renewable energy. Walmart Inc. and Schneider Electric, the leader in the digital transformation of energy management and automation today announced a new collaboration that will provide increased access to renewable energy for Walmart’s US-based suppliers, enabling them to lead on climate action. The groundbreaking initiative, called the Gigaton PPA (GPPA) Program, is designed to educate Walmart suppliers about renewable energy purchases and accelerate renewable energy adoption by participating suppliers through aggregate power purchase agreements (PPA). The program directly supports Walmart’s Project Gigaton, which aims to avoid one gigaton (one billion metric tons) of carbon dioxide from Walmart’s global value chain by 2030. To date, more than 2,300 suppliers from 50 countries are participating in Project Gigaton. Suppliers have reported a cumulative 230 million metric tons of avoided emissions since 2017 – more than 20 per cent of the goal – through energy, waste, packaging, agriculture, forests, and product use and design. https://bit.ly/33DRE8j 

Sophic Capital Client Insights

Kontrol (KNR-CSE; KNRLF-OTCQB) – BioCloud can detect Covid-19 in buildings – breaking down the US$10 billion+ market opportunity to keep schools safe. Kontrol, a Sophic Capital client and an emerging leader in the Smart Buildings industry, is developing new technology called BioCloud® that detects and alerts for COVID-19 in real-time. BioCloud on September 10 announced that it received positive testing results, in a level 4 lab, against the live SARS-CoV-2 virus. Commercialization of BioCloud can now be expected by November. Kontrol will likely look to solidify a large government order. Kontrol anticipates selling BioCloud for US$12,000 which translates to a US$12 billion market opportunity in the USA and ~US$2 billion in Canada. BioCloud could be installed in hotels, airplanes, airports, restaurants, and public transportation. All these markets could be multiples of BioCloud’s school market. Kontrol is planning for up to 20,000 BioCloud units per month as manufacturing capacity. https://bit.ly/3mg7SwL

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