SEC Regional Director Erin Schneider is joining us at Disrupt

If ever there was a time when working at the Securities and Exchange Commission was a dull affair, that’s no longer true. The federal agency that’s responsible for protecting investors and maintaining fair and orderly functioning of our securities markets is busier than ever, thanks to the rise of SPACs, cryptocurrencies and new rules around how startups raise money. And that’s just the tip of the iceberg.

In just a few of its many cases, it this week charged App Annie, the mobile data and analytics firm, as well as its co-founder and former CEO and Chairman Bertrand Schmitt, with securities fraud.

The charges come hot on the heels of another case that the SEC announced late last month against Manish Lachwani, the former CEO of Silicon Valley startup HeadSpin, who has been accused of defrauding investors out of $80 million by falsely claiming HeadSpin had achieved stronger and more consistent growth on the customer and revenue front than was the case.

It also still has an active case against former Theranos president “Sunny” Balwani, who, unlike Theranos and its founder Elizabeth Holmes, has refused to settle with the agency.

Of course, in the midst of its active fieldwork, it’s getting used to grappling — publicly — with powerful tech CEOs. It famously became a target of Elon Musk several years ago when it filed securities fraud charges against him tied to his social media activities. (It continues to try reining in the tweets of Musk, who has openly mocked the agency.)

More recently, it found itself the target of a Twitter tirade by Coinbase CEO Brian Armstrong.

Leading the charge in each of these cases and many more is Erin Schneider, who attended UC Berkeley as an undergraduate and law student and who, after a brief stint as a staff accountant at PWC and as a lawyer with a global law office, headed to the SEC as a staff attorney. She has steadily worked her way up since, and in May 2019 was appointed as the head of its San Francisco office, which leads enforcement and examinations in not only Northern California but also the Pacific Northwest.

Because she and her colleagues have their hands particularly full, you can imagine how excited we are that Schneider is coming to Disrupt (September 21-23) to discuss some of the agency’s many current challenges — as well as its victories.

If you’re interested in learning more about the SEC’s ever-evolving approach to Silicon Valley startups, and why you shouldn’t expect its interest to dissipate any time soon, you really won’t want to miss this conversation.

Disrupt is coming up fast. Don’t miss our conversation with Schneider or with Brian Armstrong himself, or actor-entrepreneur Ryan Reynolds, or investor Chamath Palihapitiya, or the many other powerful speakers who will be gracing our virtual stage this year. Get your ticket now for less than $100 — and we’ll see you soon.

#erin-schneider, #events, #tc, #tc-disrupt-2021, #u-s-securities-and-exchange-commission

OpenSea admits incident as top exec is accused of trading NFTs on insider information

The “eBay of NFTs” is running into a scandal as it admits one of its employees traded the crypto digital assets using insider information from the platform.

Yesterday, a top executive at NFT platform OpenSea was accused of front-running sales on the platform, purchasing pieces from NFT collections before they were featured on the homepage of the platform. According to Twitter user @ZuwuTV, the startup’s Head of Product was using secret crypto wallets to buy drops before they listed on the main page of OpenSea, selling them shortly after they were highlighted publicly by OpenSea, and funneling the profits back to his main account. Users linked to a handful of transactions from accounts linked back to the executive on the public blockchain including an NFT drop that was, at the time, actively listed on the front page of the platform.

Today, OpenSea seemed to acknowledge the incident, saying in a blog post that it had “learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly.” The company did not identify the employee but said that they were conducting an “immediate” review of the incident. The startup, which was recently valued at $1.5 billion after raising a $100 million Series B from Andreessen Horowitz, added in the unsigned blog post that this incident was “incredibly disappointing.”

“We’re conducting a thorough review of yesterday’s incident and are committed to doing the right thing for OpenSea users,” OpenSea CEO Devin Finzer said in a tweet.

OpenSea, which did a record $3.4 billion in transaction volume last month, appears not to have had any rules in places preventing employees from using confidential information to buy or sell NFTs on its own platform to its own users. The company detailed that it was now implementing a policy that team members could not buy or sell “from collections or creators while we are featuring or promoting them,” and that they are “prohibited from using confidential information to purchase or sell any NFTs, whether available on the OpenSea platform or not.”

Most NFTs are not generally assumed to be securities, despite little official guidance from the SEC on the crypto asset class. Some in the space have questioned whether different mechanics around buying and selling, alongside ongoing rewards structures may be pushing some NFT sales further into securities territory.

“Many have been enticed by dramatic jumps in the value of new digital assets,” Senate Banking Committee Chairman Sherrod Brown said in a hearing yesterday — as transcribed by The Block — where the relationship between crypto markets and SEC enforcement was discussed. “Some professional investors and celebrities make earning millions look easy. But, as we are reminded time and again, it’s never that simple – and too often, someone’s quick profit comes at the expense of workers and entire communities.”

We’ve reached out to OpenSea for further comment.

#andreessen-horowitz, #blockchains, #ceo, #chairman, #cryptocurrencies, #cryptocurrency, #cryptography, #distributed-computing, #ebay, #ethereum, #executive, #head, #opensea, #tc, #u-s-securities-and-exchange-commission

App Annie and co-founder charged with securities fraud, will pay $10M+ settlement

The U.S. Securities and Exchange Commission (SEC) has charged App Annie, a leading mobile data and analytics firm, as well as its co-founder and former CEO and Chairman Bertrand Schmitt, with securities fraud. App Annie and Schmitt have agreed to pay over $10 million to settle the fraud charges which are related to “deceptive practices and making material misrepresentations about how App Annie’s alternative data was derived,” the SEC said.

App Annie is one of the largest sellers of mobile app performance data, offering details that are useful to developers, publishers, advertisers, and marketers — like how many times an app is downloaded, how often it’s used, the revenue it generates, and other competitive analysis and insights. This is what trading firms call “alternative data,” because it’s not detailed in their financial statements or other traditional data sources, the SEC explains. App Annie told app makers it would not disclose their data to third parties directly, but would rather use the data in an aggregated and anonymized way to provide app insights. Specifically, companies were told the data would be used to build a statistical model to generate estimates of app performance.

However, the SEC says from late 2014 through mid-2018, App Annie used non-aggregated and non-anonymized data to alter its model-generated estimates in order to make them more valuable to sell to trading firms. It also says that the company and Schmitt then misrepresented to its customers how it was able to generate the data, saying it did so with the appropriate consent from customers, and that it had effective internal controls to prevent the misuse of confidential data, ensuring it was in compliance with federal securities laws. Trading firms were making investment decisions based on this data and App Annie had even shared ideas as to how they could use the estimates to trading ahead of earnings announcements.

In the full complaint, the SEC further explains Schmitt had agreed to an internal policy where certain public company “Connect Data” — “Connect” being App Annies’ analytics product — would be excluded from its statistical model in late 2014. But he didn’t actually direct anyone at App Annie to document this policy until April 2017. And then when it was documented, it only said to exclude app revenue data from public companies whose app revenue exceeded 5% of the company’s total revenue. It never said to exclude app download or usage data.

The SEC says the documented policy was never properly enforced. It wasn’t until after App Annie learned of the SEC investigation in June 2018 that it amended the policy to exclude public company Connect Data from its estimate generation process, and began to fully implement the policy.

The investigation also discovered that App Annie engineers in Beijing, China were directed by Schmitt to manually alter estimates that would be of most interest to the company’s highest-paying customers. It did so by looking at the confidential Connect Data, which is one of the ways its estimates were able to be more accurate than rivals.

“The federal securities laws prohibit deceptive conduct and material misrepresentations in connection with the purchase or sale of securities,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division, in a statement. “Here, App Annie and Schmitt lied to companies about how their confidential data was being used and then not only sold the manipulated estimates to their trading firm customers, but also encouraged them to trade on those estimates—often touting how closely they correlated with the companies’ true performance and stock prices,” Grewal added.

The SEC says App Annie and Schmitt violated the anti-fraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5. App Annie, without either admitting or denying the findings, consented to a cease-and-desist order and is paying a penalty. App Annie agreed to pay a penalty of $10 million. Meanwhile, Schmitt is ordered to pay a penalty of $300,000 and is prohibited from serving as an officer or director of a public company for three years.

Reached for comment, App Annie’s current CEO provided a statement:

“Since I have taken over as CEO, we have established a new standard of trust and transparency for the newly created alternative data market. App Annie is uniquely positioned to be the first to deliver on a unified data AI vision,” said Theodore Krantz, CEO at App Annie. “Many businesses may be unknowingly leveraging data reliant on confidential public company information without explicit consent which we believe puts companies using digital/mobile market data at significant risk. It is our opinion that the entire alternative data space needs to be regulated.”

In a newsroom post, the company also pointed out that the SEC investigation does not relate to its “current products,” nor did it relate to “our current relationships with customers.” And it says in the three years since the violating practices, it has appointed a new CEO and executive team, changed how it built its data estimates, and established a company-wide “culture of compliance,” which included the appointment of a Head of Global Compliance. It also documented its procedures for ensuring confidential data is excluded from its process of generating market estimates.

App Annie’s mobile market data solution was one of the first to serve the growing app ecosystem when it launched in 2010. Today, its firm counts more than 1,100 enterprise clients and over a million registered users, according to its corporate website.

The details of the complaint and settlement are below.

This story is breaking and may be updated. 

 

#app-annie, #app-store, #apps, #beijing, #ceo, #china, #co-founder, #computing, #director, #mobile-app, #officer, #software, #u-s-securities-and-exchange-commission

Founders Fund backs Royal, a music marketplace planning to sell song rights as NFTs

Founders Fund and Paradigm are leading an investment in a platform that’s aiming to wed music rights with NFTs, allowing user to buy shares of songs through the company’s marketplace, earning royalties as the music they’ve invested in gains popularity.

The venture, called Royal, is led by Justin Blau, an EDM artist who performs under the name 3LAU, and JD Ross, a co-founder of home-buying startup Opendoor. Blau has been one of the more active and visible figures in the NFT community, launching a number of upstart efforts aimed at exploring how musicians can monetize their work through crypto markets. Blau says that as Covid cut off his ability to tour, he dug into NFTs full-time, aiming to find a way to flip the power dynamics on “platforms that were extracting all the value from creators.

Back in March, weeks before many would first hear about NFTs following the $69 million Beeple sale at Christies, Blau set his own record, selling a batch of custom songs and custom artwork for a collective $11.7 million worth of cryptocurrency.

Royal’s investment announcement comes just as a broader bull run for the NFT market seems to reach a fever pitch with investors dumping hundreds of million of dollars worth of cryptocurrencies into community NFT projects like CryptoPunks and Bored Apes. While visual artists interested in putting their digital works on the blockchain have seen a number of platforms spring up and mature in recent months to simplify the process of monetizing their art, there have been fewer efforts focused on musicians.

Paradigm and Founders Fund are leading a $16 million seed round in Royal, with participation from Atomic — where Ross was recently a General Partner. Ross’s fellow Opendoor co-founder Keith Rabois led the deal for Founders Fund.

The company isn’t sharing an awful lot about their launch or product plans, including when the platform will actually begin selling fractionalized assets, but it seems pretty clear the company will be heavily leveraging Blau’s music and position inside the music industry to bring early fans/investors to the platform. Users can sign-up for early access on the site currently.

As NFT startups chase more complex ownership splits that aim to help creators share their success with fans, there’s plenty of speculation taking off around how regulators will eventually treat them. While the ICO boom of 2017 led to plenty of founders receiving SEC letters alleging securities fraud, entrepreneurs in this wave seem to be working a little harder to avoid that outcome. Blau says that the startup’s team is working closely with legal counsel to ensure the startup is staying fully compliant.

The company’s bigger challenge may be ensuring that democratizing access to buying up music rights actually benefits the fans of those artists or creates new fans for them, given the wide landscape of crypto speculators looking to diversify. That said, Blau notes there’s plenty of room for improvement among the current ownership spread of music royalties, largely spread among labels, private equity groups and hedge funds.

“A true fan might want to own something way earlier than a speculator would even get wind of it,”Blau says. “Democratizing access to asset classes is a huge part of crypto’s future.”

#blockchain, #business, #co-founder, #companies, #cryptocurrency, #cryptopunks, #founders-fund, #keith-rabois, #musicians, #opendoor, #paradigm, #startup-company, #tc, #u-s-securities-and-exchange-commission

Pearson to pay $1M fine for misleading investors about 2018 data breach

Pearson, a London-based publishing and education giant that provides software to schools and universities has agreed to pay $1 million to settle charges that it misled investors about a 2018 data breach resulting in the theft of millions of student records.

The U.S. Securities and Exchange Commission announced the settlement on Monday after the agency found that Pearson made “misleading statements and omissions” about its 2018 data breach, which saw millions of student usernames and scrambled passwords stolen, along with the administrator login credentials of 13,000 schools, district and university customer accounts.

The agency said that in Person’s semi-annual review filed in July 2019, the company referred to the incident as a “hypothetical risk,” even after the data breach had happened. Similarly, in a statement that same month, Pearson said the breach may include dates of birth and email addresses, when it knew that such records were stolen, according to the SEC.

Pearson also said that it had “strict protections” in place when it actually took the company six months to patch the vulnerability after it was notified.

“As the order finds, Pearson opted not to disclose this breach to investors until it was contacted by the media, and even then Pearson understated the nature and scope of the incident, and overstated the company’s data protections,” said Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit. “As public companies face the growing threat of cyber intrusions, they must provide accurate information to investors about material cyber incidents.”

While Pearson did not admit wrongdoing as part of the settlement, Pearson agreed to pay a $1 million penalty — a small fraction of the $489 million in pre-tax profits that the company raked in last year.

A Pearson spokesperson told TechCrunch: “We’re pleased to resolve this matter with the SEC. We also appreciate the work of the FBI and the Justice Department to identify and charge those responsible for a global cyberattack that affected Pearson and many other companies and industries, including at least one government agency.”

Pearson said the breach related to its AIMSweb1.0 web-based software for entering and tracking students’ academic performance, which it retired in July 2019. “Pearson continues to enhance its cybersecurity efforts to minimize the risk of cyberattacks in an ever-changing threat landscape,” the spokesperson added.

#articles, #computer-security, #cyberattack, #cybercrime, #data-breach, #data-security, #federal-bureau-of-investigation, #pearson, #security, #u-s-securities-and-exchange-commission

EU hits Amazon with record-breaking $887M GDPR fine over data misuse

Luxembourg’s National Commission for Data Protection (CNPD) has hit Amazon with a record-breaking €746 million ($887m) GDPR fine over the way it uses customer data for targeted advertising purposes.

Amazon disclosed the ruling in an SEC filing on Friday in which it slammed the decision as baseless and added that it intended to defend itself “vigorously in this matter.”

“Maintaining the security of our customers’ information and their trust are top priorities,” an Amazon spokesperson said in a statement. “There has been no data breach, and no customer data has been exposed to any third party. These facts are undisputed.

“We strongly disagree with the CNPD’s ruling, and we intend to appeal. The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation.”

The penalty is the result of a 2018 complaint by French privacy rights group La Quadrature du Net, a group that claims to represent the interests of thousands of Europeans to ensure their data isn’t used by big tech companies to manipulate their behavior for political or commercial purposes. The complaint, which also targets Apple, Facebook Google and LinkedIn and was filed on behalf of more than 10,000 customers, alleges that Amazon manipulates customers for commercial means by choosing what advertising and information they receive.

La Quadrature du Net welcomed the fine issued by the CNPD, which “comes after three years of silence that made us fear the worst.”

“The model of economic domination based on the exploitation of our privacy and free will is profoundly illegitimate and contrary to all the values that our democratic societies claim to defend,” the group added in a blog post published on Friday.

The CNPD has also ruled that Amazon must commit to changing its business practices. However, the regulator has not publicly committed on its decision, and Amazon didn’t specify what revised business practices it is proposing.

The record penalty, which trumps the €50 million GDPR penalty levied against Google in 2019, comes amid heightened scrutiny of Amazon’s business in Europe. In November last year, the European Commission announced formal antitrust charges against the company, saying the retailer has misused its position to compete against third-party businesses using its platform. At the same time, the Commission a second investigation into its alleged preferential treatment of its own products on its site and those of its partners.

#amazon, #apple, #big-tech, #companies, #computing, #data-protection, #data-security, #europe, #european-commission, #facebook, #general-data-protection-regulation, #google, #policy, #privacy, #spokesperson, #tc, #u-s-securities-and-exchange-commission

True ‘shift left and extend right’ security requires empowered developers

DevOps is fundamentally about collaboration and agility. Unfortunately, when we add security and compliance to the picture, the message gets distorted.

The term “DevSecOps” has come into fashion the past few years with the intention of seamlessly integrating security and compliance into the DevOps framework. However, the reality is far from the ideal: Security tools have been bolted onto the existing DevOps process along with new layers of automation, and everyone’s calling it “DevSecOps.” This is a misguided approach that fails to embrace the principles of collaboration and agility.

Integrating security into DevOps to deliver DevSecOps demands changed mindsets, processes and technologies. Security and risk management leaders must adhere to the collaborative, agile nature of DevOps for security testing to be seamless in development, making the “Sec” in DevSecOps transparent. — Neil MacDonald, Gartner

In an ideal world, all developers would be trained and experienced in secure coding practices from front end to back end and be skilled in preventing everything from SQL injection to authorization framework exploits. Developers would also have all the information they need to make security-related decisions early in the design phase.

If a developer is working on a type of security control they haven’t worked on before, an organization should provide the appropriate training before there is a security issue.

Once again, the reality falls short of the ideal. While CI/CD automation has given developers ownership over the deployment of their code, those developers are still hampered by a lack of visibility into relevant information that would help them make better decisions before even sitting down to write code.

The entire concept of discovering and remediating vulnerabilities earlier in the development process is already, in some ways, out of date. A better approach is to provide developers with the information and training they need to prevent potential risks from becoming vulnerabilities in the first place.

Consider a developer that is assigned to add PII fields to an internet-facing API. The authorization controls in the cloud API gateway are critical to the security of the new feature. “Shifting left and extending right” doesn’t mean that a scanning tool or security architect should detect a security risk earlier in the process — it means that a developer should have all the context to prevent the vulnerability before it even happens. Continuous feedback is key to up-leveling the security knowledge of developers by orders of magnitude.

#agile-software-development, #api, #column, #computer-security, #computing, #cybersecurity, #developer, #devops, #ec-column, #ec-cybersecurity, #security, #security-testing, #software-development, #software-testing, #sql, #startups, #u-s-securities-and-exchange-commission, #vulnerability

What the growing federal focus on ESG means for private markets

The increasing regulation of ESG (environmental, social, governance) disclosure reporting may have started in the public markets, but will almost certainly have downstream effects for private market actors — for founders, companies and investors.

Since his confirmation as the chair of the U.S. Securities and Exchange Commission in April, Gary Gensler has made reforming ESG disclosures concerning climate change risk and human capital a top priority. The SEC’s regulatory agenda confirms as much. And Gensler is not alone in his focus on ESG at the federal level.

President Joe Biden issued an executive order encouraging regulators to assess climate-related financial risk. At the end of March, Treasury Secretary Janet Yellen wrote on Twitter that “our future livelihoods … depend on the financial sector to build a more sustainable and resilient economy.” Congress is considering measures that would require increased ESG disclosures, including the Improving Corporate Governance Through Diversity Act, the Diversity and Inclusion Data Accountability and Transparency Act and the Climate Risk Disclosure Act.

This renewed federal focus on ESG issues will bolster the SEC’s effort to create disclosure practices for public companies and mutual funds. Regardless of whether these federal policies around ESG come to pass, they reflect a momentum that will almost certainly impact private markets:

  • Firms that want to go public — whether via SPAC, direct listing or traditional IPO — may have to seriously consider board diversity or environmental reporting in conjunction with — or well in advance of — their debuts.
  • Private companies seeking to align with public companies as vendors or partners may be expected to meet specific ESG requirements before the engagement.
  • Startup founders and venture funds raising capital may work to maintain the largest target market by proactively scoping ESG engagements to ensure they meet criteria for investors who may have their own ESG-focused investment requirements.

In his confirmation hearing before the Senate in early March, Gensler said, “Markets — and technology — are always changing. Our rules have to change along with them.”

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies.

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies. These requirements are a response to the changing markets — demands from consumers, scrutiny from investors and a general insistence for higher corporate standards from society at large.

Private markets aren’t immune to these forces. Already, three-quarters of investors in a 2020 survey said it was very important to measure the success of sustainability initiatives, but they also said there’s been a lack of clarity on how to define and measure outcomes.

To be sure, private markets are not headed toward full-scale adoption of ESG regulations. They will not be subject to the same reporting or disclosures framework as their public counterparts. Not today, and possibly not for some time.

But we may begin to see private investors, funds and companies adapting to get ahead of ESG regulation and position themselves to effectively operate in a new — albeit adjacent — regulatory environment. In their case, the rules may not change — but the game could.

#column, #congress, #environmentalism, #esg, #federal-government, #government, #greentech, #joe-biden, #opinion, #policy, #private-equity, #senate, #tc, #u-s-securities-and-exchange-commission, #venture-capital

Exclusive: Hepsiburada CEO sets out her vision, as it becomes first ever Turkish Nasdaq IPO

Hepsiburada — Turkey’s giant online shopping platform considered the Amazon of its country — floats on the Nasdaq today, for a valuation likely to exceed $3.9 billion on current projections, especially with shares being marked up to $14 apiece (up from the previously predicted $12 pricing). Bu this isn’t the end of the journey for this break-out Turkish tech and e-commerce company, for long-time founder and chairwoman Hanzade Doğan Boyner – who started the business in 1998 no less, and still has overall control of the company – considers this closer to a growth round of funding, enabling her ambitious plans to mine Turkey’s fast-developing market even further, as well as expand into Central and Eastern Europe. Doğan Boyner, a scion of the powerful Doğan family in Turkey, continues to hold three-quarters of the voting power in the company, according to the prospectus filed to the SEC.

Hepsiburada’s IPO comes after it more than doubled its revenue during the pandemic, as Turkey’s largely offline population was forced to switch to online shopping in what might well be characterized as a sort of enforced ‘Great Leap Forward’ for the country. 

Hepsiburada (which translates as “everything is here”) is also making history as the first-ever Turkish, NASDAQ IPO.

With a massive logistics platform spread across Turkey, the company now offers 2hr deliveries, with around 43 million products available on the platform, available from a more Chinese-like ‘super-app’ which can offer everything from groceries to flights, to payment services, via is ‘Alipay-like’ service called Hepsipay. And in Turkey, many people prefer to buy things on installments, a service Hepsiburada has pre-built into its platform.

Turkish people have also enjoyed its frictionless returns, where goods can be returned for free, involving a super-efficient logistics network.

After growing at about 50% year on year for the last five years, the company says it doubled in size last year, taking advantage of the exponential growth in Turkey’s e-commerce penetration into its 82 million-strong population.

The IPO comes after a mere $100m was invested in the platform over the last 20 years, and a profit-making period until 2018 when Doğan Boyner started investing more in the platform, prior to this moment.

TC: What brought you to this moment in time in terms of the IPO?

Doğan Boyner: “Almost 20 years ago I started with e-commerce and from day one we built it with new features, new services, and today we manage a fully integrated ecosystem, from last-mile delivery to payment to groceries. Hepsiburada is the super app that makes our customer’s lives easier. They can get their groceries or their toys for next-day delivery or flight tickets. Why are we listing now? Because the Turkish e-commerce market is at 10% penetration, and we believe that its penetration will double by 2025. It’s an inflection point. It’s a large market, and as Hepsiburada we are a pioneering platform reaching maturity towards becoming a public company. With the funds raised through the IPO, we will accelerate our growth and continue to execute our vision.”

TC: “Are you satisfied with the $3.9 billion valuation?”

Doğan Boyner: “Today’s valuation is not very important for me. It’s not where you start, it’s where you go. I’m not selling any shares, and this is primarily for growth funding. This is just the beginning. You know, the market is still low penetration, and we have an exciting journey ahead of us. I want the stock to perform well for my investors, but what the value today is irrelevant for me.”

TC: “You’re going to use some of this funding to add on new products onto the platform like booking flights or money transfers and other kinds of new products, what are some of the other kinds of expansion plans you have?”

Doğan Boyner: “One is to continue building our infrastructure, such as frictionless returns, which gives such peace of mind to our consumers. The second is Hepsi Express. It’s still only at 4% penetration. This will change the consumer’s grocery shopping habit because we have such a strong model where we partner with a lot of national chains, regional chains, Mom-and-Pop shops, so we turn those stores into our ‘dark stores’. Plus we sometimes do our own picking from the stores or sometimes the retailer does the picking. So the customer offering is very strong. You can get something in half an hour, or you can schedule it for next day, whenever you want. You can do the weekly shopping, or just get something for that night. Express is an area that we will scale. Payment is another focus. We are the only platform with a payments license. Soon it will be an open wallet and our Fintech capabilities will increase post IPO.”

TC: Are you following a sort of Alibaba / Alipay strategy?

Doğan Boyner: “We will leverage our current customers and marketplace, and we will turn them into our wallet customers. Super apps don’t really exist in Europe or the US. So it’s our vision to digitalize commerce. We are in our customer’s pocket. We want to make life easier for them.”

TC: “How did you shift operations during the pandemic?”

Doğan Boyner: “We almost became a lifeline, not just for consumers but for our merchants as well. So we rose to the occasion to not only scale operationally. We had to onboard 1000s of drivers and employees, very, very fast, but we also had to secure the well-being of our employees. While all of us were isolating we had to ask our employees to work, which, which I think we’ve done a very, very good job of, in terms of providing PPE, and providing health coverage. It was a chance to live up to our values. Our consumers experimented with us as new consumers, and they’re happy with the service so they will stay with us and our merchants appreciated us as well, because in a time when their shops were closed, they could generate revenues through us.”

TC: You’ve been a big advocate of women in your company and also in your country, you’ve created many programs for women and girls and engaged in a great deal of advocacy. Where do you feel you are on that journey?

Doğan Boyner: “Half far our workforce is female, 33% of our management is female – which should be 50%! Our woman entrepreneur program has been very impactful. We tell women entrepreneurs to come, we will teach you ecommerce, we will onboard your products, we will give you free shipping, we will prioritize your products or listing pages, we will give you real estate on our home page. Some 19,000 women have benefitted from this. Women have sent me their inspiring stories. They start small and hire two people, and then they create their own brands. Having said that, when I look at where we are in terms of gender equality globally, the needle doesn’t move much. You look at the number of CEOs in the FTSE 500, the number doesn’t change. So, I will keep doing whatever I can, because every ‘small drop’ counts. And hopefully, it will. I also think there should be a new conversation, a global conversation about gender equality in general. The 19,000 women who benefited from our program became economically more empowered. They gained skills and tools and confidence to trade on a platform like Hepsiburada, which is very meaningful.”

TC: Are you concerned that perhaps your success may attract the attention of government regulation in Turkey, in the future?

Doğan Boyner: “We are considered a national champion. Turkey has different dynamics. I think it’s an inspiration that national champions can come out and be successful.”

TC: You’ve been very hugely successful, you’re a big advocate for women in your country, do you have any political aspirations?

Doğan Boyner: “No.”

#alibaba, #alibaba-group, #alipay, #amazon, #brookings-institution, #business, #central-europe, #e-commerce, #eastern-europe, #entrepreneur, #europe, #jack-ma, #online-shopping, #real-estate, #tc, #turkey, #u-s-securities-and-exchange-commission, #united-states

Andreessen Horowitz triples down on blockchain startups with massive $2.2 billion Crypto Fund III

While the cryptocurrency market’s most recent hype wave seems to be dying down after a spectacular rise, Andreessen Horowitz’s crypto arm is reaffirming its commitment to startups building blockchain projects with a hulking new $2.2 billion crypto fund.

It’s the firm’s largest vertical-specific fund ever — by quite a bit.

Andreessen Horowitz’s 2018 crypto fund ushered in $300 million of LP commitments and its second fund, which it closed in April of last year, clocked in at $515 million. The new multi-billion dollar fund not only showcases how institutional backers are growing more comfortable with cryptocurrencies, but also how Andreessen Horowitz’s assets under management have been quickly swelling to compete with other deep-pocketed firms including the ever-prolific Tiger Global.

With this announcement, Andreessen now has some $18.8 billion assets under management.

LPs are likely far less wary to take a chance on crypto after Andreessen Horowitz’s stake in Coinbase equated to some $11.2 billion at the time of the direct listing’s first trades, though the stock has slid back some 30% in recent months as the crypto market has shrunk.

Some of the firm’s other major crypto bets include NBA Top Shot maker Dapper Labs which hit a $7.5 billion valuation this spring. Blockchain infrastructure startup Dfinity raised at a $9.5 billion valuation this past September. Last year, the firm led the Series A of Uniswap, which is poised to be a major player in the Ethereum ecosystem. In addition to equity investments, a16z has also made major bets on the currencies themselves.

An earlier report from Newcomer last month reported a16z was targeting a $2 billion crypto fund and that they had already unloaded some of their crypto holdings before most cryptocurrencies took a major dive in recent weeks.

Crypto Fund III will continue to be managed by GPs Chris Dixon and Katie Haun, but the firm has also begun spinning out a more robust management team around the crypto vertical.

Anthony Albanese, who joined the firm last year from the NYSE, has been appointed COO of the division. Tomicah Tillemann, who previously served as a senior advisor to now-President Joe Biden and as chairman of the Global Blockchain Business Council, will be a16z Crypto’s Global Head of Policy. Rachael Horwitz is also coming aboard as an Operating Partner leading marketing and communications for a16z crypto; leaving Google after a stint as Coinbase’s first VP of Communications as well.

A couple other folks are also coming on in advisory capacity, including entrepreneur Alex Price and a couple others who will likely be a tad helpful in regulatory maneuverings including Bill Hinman, formerly of the SEC, and Brent McIntosh, who recently served as Under Secretary of the Treasury for International Affairs.

#andreessen-horowitz, #blockchain, #blockchains, #chairman, #chris-dixon, #coinbase, #cryptocurrencies, #cryptocurrency, #dapper-labs, #decentralization, #entrepreneur, #ethereum, #finance, #google, #gps, #joe-biden, #joseph-lubin, #katie-haun, #money, #national-basketball-association, #nba, #rachael-horwitz, #tc, #technology, #tiger-global, #u-s-securities-and-exchange-commission, #uniswap

Google’s Gradient Ventures leads $8.2M Series A for Vault Platform’s misconduct reporting SaaS

Fixing workplace misconduct reporting is a mission that’s snagged London-based Vault Platform backing from Google’s AI focused fund, Gradient Ventures, which is the lead investor in an $8.2 million Series A that’s being announced today.

Other investors joining the round are Illuminate Financial, along with existing investors including Kindred Capital and Angular Ventures. Its $4.2M seed round was closed back in 2019.

Vault sells a suite of SaaS tools to enterprise-sized or large/scale-up companies to support them to pro-actively manage internal ethics and integrity issues. As well as tools for staff to report issues, data and analytics is baked into the platform — so it can support with customers’ wider audit and compliance requirements.

In an interview with TechCrunch, co-founder and CEO Neta Meidav said that as well as being wholly on board with the overarching mission to upgrade legacy reporting tools like hotlines provided to staff to try to surface conduct-related workplace risks (be that bullying and harassment; racism and sexism; or bribery, corruption and fraud), as you might expect Gradient Ventures was interested in the potential for applying AI to further enhance Vault’s SaaS-based reporting tool.

A feature of its current platform, called ‘GoTogether’, consists of an escrow system that allows users to submit misconduct reports to the relevant internal bodies but only if they are not the first or only person to have made a report about the same person — the idea being that can help encourage staff (or outsiders, where open reporting is enabled) to report concerns they may otherwise hesitate to, for various reasons.

Vault now wants to expand the feature’s capabilities so it can be used to proactively surface problematic conduct that may not just relate to a particular individual but may even affect a whole team or division — by using natural language processing to help spot patterns and potential linkages in the kind of activity being reported.

“Our algorithms today match on an alleged perpetrator’s identity. However many events that people might report on are not related to a specific person — they can be more descriptive,” explains Meidav. “For example if you are experiencing some irregularities in accounting in your department, for example, and you’re suspecting that there is some sort of corruption or fraudulent activity happening.”

“If you think about the greatest [workplace misconduct] disasters and crises that happened in recent years — the Dieselgate story at Volkswagen, what happened in Boeing — the common denominator in all these cases is that there’s been some sort of a serious ethical breach or failure which was observed by several people within the organization in remote parts of the organization. And the dots weren’t connected,” she goes on. “So the capacity we’re currently building and increasing — building upon what we already have with GoTogether — is the ability to connect on these repeated events and be able to connect and understand and read the human input. And connect the dots when repeated events are happening — alerting companies’ boards that there is a certain ‘hot pocket’ that they need to go and investigate.

“That would save companies from great risk, great cost, and essentially could prevent huge loss. Not only financial but reputational, sometimes it’s even loss to human lives… That’s where we’re getting to and what we’re aiming to achieve.”

There is the question of how defensible Vault’s GoTogether feature is — how easily it could be copied — given you can’t patent an idea. So baking in AI smarts may be a way to layer added sophistication to try to maintain a competitive edge.

“There’s some very sophisticated, unique technology there in the backend so we are continuing to invest in this side of our technology. And Gradient’s investment and the specific we’re receiving from Google now will only increase that element and that side of our business,” says Meidav when we ask about defensibility.

Commenting on the funding in a statement, Gradient Ventures founder and managing partner, Anna Patterson, added: “Vault tackles an important space with an innovative and timely solution. Vault’s application provides organizations with a data-driven approach to tackling challenges like occupational fraud, bribery or corruption incidents, safety failures and misconduct. Given their impressive team, technology, and customer traction, they are poised to improve the modern workplace.”

The London-based startup was only founded in 2018 — and while it’s most keen to talk about disrupting legacy hotline systems, which offer only a linear and passive conduit for misconduct reporting, there are a number of other startups playing in the same space. Examples include the likes of LA-based AllVoices, YC-backed WhispliHootsworth and Spot to name a few.

Competition seems likely to continue to increase as regulatory requirements around workplace reporting keep stepping up.

The incoming EU Whistleblower Protection Directive is one piece of regulation Vault expects will increase demand for smarter compliance solutions — aka “TrustTech”, as it seeks to badge it — as it will require companies of more than 250 employees to have a reporting solution in place by the end of December 2021, encouraging European businesses to cast around for tools to help shrink their misconduct-related risk.

She also suggests a platform solution can help bridge gaps between different internal teams that may need to be involved in addressing complaints, as well as helping to speed up internal investigations by offering the ability to chat anonymously with the original reporter.

Meidav also flags the rising attention US regulators are giving to workplace misconduct reporting — noting some recent massive awards by the SEC to external whistleblowers, such as the $28M paid out to a single whistleblower earlier this year (in relation to the Panasonic Avionics consultant corruption case).

She also argues that growing numbers of companies going public (such as via the SPAC trend, where there will have been reduced regulatory scrutiny ahead of the ‘blank check’ IPO) raises reporting requirements generally — meaning, again, more companies will need to have in place a system operated by a third party which allows anonymous and non-anonymous reporting. (And, well, we can only speculate whether companies going public by SPAC may be in greater need of misconduct reporting services vs companies that choose to take a more traditional and scrutinized route to market… )

“Just a few years back I had to convince investors that this category it really is a category — and fast forward to 2021, congratulations! We have a market here. It’s a growing category and there is competition in this space,” says Meidav.

“What truly differentiates Vault is that we did not just focus on digitizing an old legacy process. We focused on leveraging technology to truly empower more misconduct to surface internally and for employees to speak up in ways that weren’t available for them before. GoTogether is truly unique as well as the things that we’re doing on the operational side for a company — such as collaboration.”

She gives an example of how a customer in the oil and gas sector configured the platform to make use of an anonymous chat feature in Vault’s app so they could provide employees with a secure direct-line to company leadership.

“They’ve utilizing the anonymous chat that the app enables for people to have a direct line to leadership,” she says. “That’s incredible. That is such a progress, forward looking way to be utilizing this tool.”

Vault Platform’s suite of tools include an employee app and a Resolution Hub for compliance, HR, risk and legal teams (Image credits: Vault Platform)

Meidav says Vault has around 30 customers at this stage, split between the US and EU — its core regions of focus.

And while its platform is geared towards enterprises, its early customer base includes a fair number of scale-ups — with familiar names like Lemonade, Airbnb, Kavak, G2 and OVO Energy on the list.

Scale ups may be natural customers for this sort of product given the huge pressures that can be brought to bear upon company culture as a startup switches to expanding headcount very rapidly, per Meidav.

“They are the early adopters and they are also very much sensitive to events such as these kind of [workplace] scandals as it can impact them greatly… as well as the fact that when a company goes through a hyper growth — and usually you see hyper growth happening in tech companies more than in any other type of sector — hyper growth is at time when you really, as management, as leadership, it’s really important to safeguard your culture,” she suggests.

“Because it changes very, very quickly and these changes can lead to all sorts of things — and it’s really important that leadership is on top of it. So when a company goes through hyper growth it’s an excellent time for them to incorporate a tool such as Vault. As well as the fact that every company that even thinks of an IPO in the coming months or years will do very well to put a tool like Vault in place.”

Expanding Vault’s own team is also on the cards after this Series A close, as it guns for the next phase of growth for its own business. Presumably, though, it’s not short of a misconduct reporting solution.

#abuse, #airbnb, #allvoices, #angular-ventures, #anna-patterson, #artificial-intelligence, #boeing, #corporate-law, #corruption, #deception, #europe, #european-union, #fundings-exits, #google, #gradient-ventures, #kindred-capital, #london, #louisiana, #managing-partner, #misconduct, #natural-language-processing, #saas, #u-s-securities-and-exchange-commission, #united-states, #vault-platform, #workplace

AI cybersecurity provider SentinelOne files for $100M IPO

SentinelOne, a late-stage security startup that helps organizations secure their data using AI and machine learning, has filed for an IPO on the New York Stock Exchange (NYSE).

In an S-1 filing on Thursday, the security company revealed that for the three months ending April 30, its revenues increased by 108% year-on-year to $37.4 million and its customer base grew to 4,700, up from 2,700 a year prior. Despite this pandemic-fueled growth, SentinelOne’s net losses more than doubled from $26.6 million in 2020 to $62.6 million.

“We also expect our operating expenses to increase in the future as we continue to invest for our future growth, including expanding our research and development function to drive further development of our platform, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations,” SentinelOne wrote in its filing.

The Mountain View-based company said it intends to list its Class A common stock using the ticker symbol “S” and that details about the price range and number of common shares to be put up for the IPO are yet to be determined. The S-1 filing also identifies Morgan Stanley, Goldman Sachs, Bank of America Securities, Barclays and Wells Fargo Securities as the lead underwriters.

SentinelOne raised $276 million in a funding round in November last year, tripling its $1 billion valuation from February 2020 to $3 billion. At the time, CEO and founder Tomer Weingarten told TechCrunch that an IPO “would be the next logical step” for the company.

SentinelOne, which was founded in 2013 and has raised a total of $696.5 million through eight rounds of funding, is looking to raise up to $100 million in its IPO, and said it’s intending to use the net proceeds to increase its visibility in the cybersecurity marketplace and for product development and other “general corporate processes.”

It added that “may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions, or businesses that complement our business.” The company’s sole acquisition so far took place back in February when it bought high-speed logging startup Scalyr for $155 million.

SentinelOne is going public during a period of heightened public interest in cybersecurity. There has been a wave of high-profile cyberattacks during the COVID-19 pandemic, with hackers taking advantage of widespread remote working necessitated as a result.

One of the biggest attacks saw Russian hackers breach the networks of IT company SolarWinds, enabling them to gain access to government agencies and corporations. SentinelOne’s endpoint protection solution was able to detect and stop the related malicious payload, protecting its customers.

“The world is full of criminals, state actors, and other hostile agents who seek to exfiltrate and exploit data to disrupt our way of life,” Weingarten said in SentinelOne’s SEC filing. “Our mission is to keep the world running by protecting and securing the core pillars of modern infrastructure: data and the systems that store, process, and share information. This is an endless mission as attackers evolve rapidly in their quest to disrupt operations, breach data, turn profit, and inflict damage.”

#artificial-intelligence, #barclays, #ceo, #cloud, #companies, #computing, #goldman-sachs, #initial-public-offering, #machine-learning, #morgan-stanley, #scalyr, #security, #sentinelone, #solarwinds, #system-administration, #u-s-securities-and-exchange-commission

Canoo is being investigated by the SEC

Canoo, the Los Angeles-based electric vehicle startup that debuted on the Nasdaq public exchange earlier this year, is being investigated by the U.S. Securities and Exchange Commission, just months after its merger with special purpose acquisition company Hennessy Capital Acquisition Corp.

The investigation is broad, covering the Hennessy’s initial public offering and merger with Canoo, the company’s operations, business model, revenues, revenue strategy, customer agreements, earnings and other related topics, along with the recent departures of certain of the company’s officers, according to a quarterly earnings report posted Monday. Canoo learned of the investigation on April 29. Canoo’s share price fell more than 3% in after-hours trading following the release of its first-quarter earnings.

“The SEC has also informed the Company that the investigation does not mean that it has concluded that anyone has violated the law, and does not mean that it has a negative opinion of any person, entity or security. We intend to provide the requested information and cooperate fully with the SEC investigation,” Canoo noted in the regulatory filing. Canoo added that it does not consider the investigation or other lawsuits it is facing to be material to its business.

The SEC investigation follows a string of executive departures, a change to some of the core pieces of its business model, the loss of a key automotive partnership and at least one lawsuit brought by shareholders. And that’s just the activity since the first of the year.

Canoo started as Evelozcity in 2017, founded by former Faraday Future executives Stefan Krause and Ulrich Kranz. The company rebranded as Canoo in spring 2019 and debuted its first vehicle several months later. It was this first vehicle, as well as Canoo’s plan to offer it only as a subscription, that captured the attention of investors, companies and the media. Last year, Hyundai announced a partnership with Canoo to co-develop EVs, but that deal fell apart in early 2021 after the company changed its business model and decided to not offer engineering services to other automakers, according to comments made by the company’s chairman and now CEO Tony Aquila in a March investors’ call.

Canoo has sustained numerous executive departures, including co-founder and CEO Kranz, general counsel Andrew Wolstan, CFO Paul Balciunas and its head of powertrain development. Krause, who was the company’s first CEO, stepped down in August 2019. Last month, Canoo was also named as a defendant in two class-action complaints filed by shareholders.

Amid the executive exits and business pivots, the company has managed to narrow its quarterly losses despite an increase in R&D expenditures and no revenue. The company reported Monday a net loss of $15.2 million, or 7 cents a share, in the first quarter, compared to a loss of $30.9 million, or 37 cents a share, in the same period last year. The company said it ended the quarter with $641.9 million in cash and equivalents.

#automotive, #canoo, #electric-vehicles, #hyundai, #sec, #tc, #u-s-securities-and-exchange-commission

What private tech companies should consider before going public via a SPAC

The red-hot market for special purpose acquisition companies, or SPACs, has “screeched to a halt,” according to CNN. As the SPAC market grew in the past six months, it seemed that everyone was getting into the game, with celebrities from Shaquille O’Neal to former House Speaker Paul Ryan leading their own SPACs.

But shareholder lawsuits, huge value fluctuations and warnings from the U.S. Securities and Exchange Commission have all thrown the brakes on the SPAC market, at least temporarily. So what do privately held tech companies that are considering going public need to know about the SPAC process and market?

Despite some warning signs, there are still hundreds of SPACs on the market looking to close deals, and this process can still have plenty of upsides.

SPAC perks

First, the upside of SPACs: They’re a much more efficient way for a private company to go public than a traditional IPO. By merging with a SPAC instead of launching an IPO, a private company can avoid the rigamarole of working with underwriters, hosting roadshows, preparing a prospectus and other complexities of the public filing process.

Furthermore, it can potentially be a fast track into an IPO with a seasoned partner who has experience navigating the process.

There are also big potential financial upsides. For example, stockholders of the private company will often roll over their stock and provide significant cash liquidity. SPACs also offer more certainty about a private company’s valuation than a traditional IPO, and some experts believe that a SPAC can add up to 20% to a company’s sale price compared to a typical private equity transaction.

And, especially when the SPAC market was hot, multiple SPACs could create a bidding war to increase value and generate more favorable terms for a transaction than through the traditional capital markets.

Lastly, partnering with an experienced management team and impressive industry insiders can help a private company accelerate its financial growth and create long-term value.

Warning signs

All these benefits led to a dramatic increase in SPAC transactions in late 2020 and early 2021. But the market cooled substantially in April, in part because of high-profile problems in the market and signs that the SEC will be scrutinizing the entities more closely in the future.

#column, #ec-column, #finance, #private-equity, #special-purpose-acquisition-company, #u-s-securities-and-exchange-commission

Fund managers can leverage ESG-related data to generate insights

Almost two centuries ago, gold prospectors in California set off one of the greatest rushes for wealth in history. Proponents of socially conscious investing claim fund managers will start a similar stampede when they discover that environmental, social and governance (ESG) insights can yield treasure in the form of alternative data that promise big payoffs — if only they knew how to mine it.

First, let’s be clear: ESG is not on the fringe.

There may be some truth to that line of thinking if you take some of the rhetoric and advertising out of the equation.

First, let’s be clear: ESG is not on the fringe. The European Union has implemented new financial regulations via the Sustainable Finance Disclosure Regulation (SFDR). These improve ESG disclosures and considerations and help to direct capital toward products and companies that benefit people and the planet. As we write, the U.S. Securities and Exchange Commission is also considering drafting and implementation of ESG-related regulations.

Whether enacted or currently under consideration, these rules encourage fund managers to integrate sustainability risks into their business processes, report on them publicly, stamp out greenwashing, and promote transparency and knowledge among investors. Accordingly, it will become easier to compare firms’ sustainability efforts, too, allowing stakeholders from all corners to make more informed decisions.

Incorporating ESG factors into investment strategies is not new, of course. The world’s largest asset managers have been practicing it for years. According to the Governance & Accountability Institute, 90% of companies listed on the S&P 500 now produce sustainability reports, an increase of 70 percentage points from more than a decade ago.

Yet some are still groaning about adopting an ESG investing mindset; they see ESG as a nuisance that detracts from their mission of earning high returns. But could this mindset mean they are missing important opportunities?

Don’t wait

Waiting for new mandatory ESG reporting and compliance framework standards in the U.S. puts Americas-focused managers at a significant disadvantage. Fund managers can start gaining insights today from alternative data originating in ESG-related data stemming from climate change, natural disasters, harassment and discrimination lawsuits, and other events and information that can be mined.

#column, #ec-column, #ec-food-climate-and-sustainability, #environmentalism, #esg, #europe, #european-union, #finance, #governance, #greentech, #investment, #startups, #u-s-securities-and-exchange-commission, #venture-capital

Hustle Fund backs Fintor, which wants to make it easier to invest in real estate

Farshad Yousefi and Masoud Jalali used to drive through Palo Alto neighborhoods and marvel at the outrageous home prices. But the drives sparked an idea. They were not in a financial position to purchase a home in those neighborhoods (to be clear, not many people are) either for investment or to live. But what if they could invest in homes in up and coming cities throughout the U.S.?

Then they realized that even that might be a challenge considering that with all their student debt, affording a down payment would be impossible.

“There was nothing available out there besides a crowdfunding platform, which when we first signed up, took away $1,000 from our account that we didn’t have, and then our capital would be locked up for 3 to 10 years,” recalls Yousefi.

So the pair started doing research and spoke to 1,000 individuals under the age of 35. Eight out of 10 said they would like to invest in real estate but were deterred by all the barriers to entry.

“There is clearly a large demand for access to real estate,” Yousefi said. “And we wanted to give people a way to invest in it like they can in stocks, via a mobile app.”

And so the idea for Fintor was born.

Yousefi and Jalali founded the company in 2020 with the goal of purchasing homes via an LLC, and turning each into shares through a SEC-approved broker dealer. Individuals can then buy shares of the homes via Fintor’s platform. Its next step is to sign agreements with individual real estate investors or bigger real estate development firms to list their properties on the platform and give people the opportunity to buy shares.

And now Fintor has raised $2.5 million in seed money to continue building out its fractional real estate investing platform. The startup aims to “fractionalize” houses and other residential property, giving people in the U.S. access to investment opportunities “starting with as little as $5.” The company attracted the interest of investors such as 500 Startups, Hustle Fund, Graphene Ventures, Houston-based real estate investor Manny Khoshbin, Mana Ventures and other angel investors such as Cindy Bi, Skyler Fernandes, VU Venture Partners, Minal Hasan, Andrew Zalasin, Alluxo CEO and Founder Safa Mahzari, SquareFoot CEO and founder Jonathan Wasserstrum and Teachable CEO and founder Ankur Nagpal.

Image Credits: Fintor

Fintor is eying markets such as Kansas City, South Carolina, and Houston, Texas, where it already has some properties. It’s looking for homes in the $80,000 to $350,000 price range, and millennials and GenZers are its target demographic.

“Fintor can give the same return as the stock market, but at half the risk,” Yousefi said. “As two [Iranian] immigrants, we’ve seen how much this country has to offer and how real estate sits at the top of everything, yet is so inaccessible.”

The pair had originally set out to raise just $1 million but the round was quickly “way oversubscribed,” according to Yousefi, and they ended up raising $2.5 million at triple the original valuation.

Jalali said the company will use machine learning technology to filter and rate properties as it scales its business model.

“We’ll use ML to categorize neighborhoods and to come up with the price of properties to offer to potential sellers,” he added. “Our ultimate goal is to create indexes so that people can invest in multiple properties in a given city. That creates diversification right away.”

.Elizabeth Yin, co-founder and general partner of Hustle Fund, believes that Fintor is solving a generational problem with real estate.

“Retail investors have almost no access to great real estate investments today and the best opportunities are reserved for the select few,” she told TechCrunch. “Not to mention that in addition to access, retail investors often need a lot of capital in order to have a diversified portfolio or be accredited to join funds.”

Fintor’s approach to securitize real estate assets will give millions of investors who are not accredited investors access they would otherwise not have had, Yin added. 

“Simultaneously, it provides increased liquidity to property owners, while improving the user experience for both parties,” she said. “Effectively this becomes a new asset class, because it’s entirely turnkey and is fractionalized, which opens up many new pockets of investors.”

#ankur-nagpal, #articles, #ceo, #cindy-bi, #crowdfunding, #elizabeth-yin, #entrepreneurship, #financial-technology, #fintech, #funding, #fundings-exits, #graphene-ventures, #houston, #hustle-fund, #kansas-city, #machine-learning-technology, #ml, #palo-alto, #proptech, #real-estate, #recent-funding, #retail-investors, #south-carolina, #squarefoot, #startups, #tc, #technology, #texas, #u-s-securities-and-exchange-commission, #united-states, #venture-capital

Elon Musk declares you can now buy a Tesla with Bitcoin in the U.S.

Tesla made headlines earlier this year when it took out significant holdings in bitcoin, acquiring a roughly $1.5 billion stake at then-prices in early February. At the time, it also noted in an SEC filing disclosing the transaction that it could also eventually accept the cryptocurrency as payment from customers for its vehicles. Now, Elon Musk says they’ve made that a reality, at least for customers in the U.S., and he added that the plan is for the automaker to ‘hodl’ all their bitcoin payments, too.

In terms of its infrastructure for accepting bitcoin payments, Tesla isn’t relying on any third-party networks or wallets — the company is “using only internal & open source software & operates Bitcoin nodes directly,” Musk said on Twitter. And when customers pay in bitcoin, those won’t be converted to fiat currency, the CEO says, but will instead presumably add to the company’s stockpile.

In February when Tesla revealed its bitcoin purchase, observers either lauded the company’s novel approach to converting its cash holdings, or criticized the plan for its attachment to an asset with significant price volatility. Many also pointed out that the environmental cost of mining bitcoin seems at odds with Tesla’s overall stated mission, given its carbon footprint. Commenters today echoed these concerns, noting the irony of Tesla accepting the grid-taxing cryptocurrency for its all-electric cars.

As for how the bitcoin payment process works today, Tesla has detailed that in an FAQ. Customers begin the payment process from their own bitcoin wallet, and have to set the exact amount for a vehicle deposit based on current rates, with the value of Tesla’s cars still set in U.S. dollars. The automaker further notes that in the case of any refunds, it’s buyer-beware in terms of any change in value relative to the U.S. dollar from time of purchase to time of refund.

Musk also said that the plan is to expand Bitcoin payments to other countries outside the U.S. by “later this year.” Depending on the market, that could require some regulatory work, but clearly Musk thinks it’s worth the effort. Meanwhile, Bitcoin is up slightly on the news early Wednesday morning.

#bitcoin, #car, #ceo, #cryptocurrencies, #cryptography, #currency, #digital-currencies, #electric-vehicles, #elon-musk, #mining, #mobility, #open-source-software, #tc, #tesla, #u-s-securities-and-exchange-commission, #united-states

SpaceX’s new $850 million raise confirmed in SEC filing

SpaceX hasn’t issue any public statement about the $850 million in fresh funding CNBC reported it raised last week, but a filing with the U.S. Securities and Exchange Commission (SEC) published today confirms the round. SpaceX’s funding was said to value the company at around $74 billion, with a per-share value moon the round set at around $420.

Investment firm Sequoia led the considerable raise, and has now put over $600 million into the Elon Musk-led space company overall between this and a round it participated in in 2020, according to Bloomberg. CNBC’s report also said that a secondary sale of existing shares generated an additional $750 million in capital for the company, putting the total new money available for SpaceX’s use at $1.6 billion – not too far shy of the $2 billion it raised at a valuation of $46 billion last August.

That probably seems like a lot of money to raise in such less than a year. But few companies – private or otherwise – have the kind of capital needs of SpaceX. While it’s been able to build a thriving launch business on the money raised during the first part of its now nearly two-decade existence, that hasn’t slowed the rate at which it’s been undertaking big new projects with tremendous upfront costs.

Currently, SpaceX is rapidly building new prototypes of its Starship, a next-generation reusable rocket with multiple times the cargo capacity of its current Dragon spacecraft and Falcon 9 cargo nosecone. It has flown a number of prototypes – and lost two in the process due to missed landings. The company typically has at least two new prototypes under construction simultaneously, and had been operating at that pace for many months now, with a highly manual production process for both the rockets and the new engines that power them.

Meanwhile, it’s also building out Starlink – the global broadband internet satellite constellation that it wants to scale from its current 1,000+ size, to more than 12,000 for final, world-spanning coverage reach. To scale it quickly and get its service operational (which it now is, to select areas in North America), SpaceX has been launching its own dedicated Falcon 9 rockets with 60 Starlink satellites on each. Since the company is its own customer for the majority of those missions, they’re entirely operating expenditure. Musk has estimated that fully deploying Starlink will take around $10 billion.

Both of these projects – Starship and Starlink – carry massive upfront costs, but they also have a lot of potential long-term upside; hence the skyrocketing valuation as both efforts begin to produce positive results, between Starship’s high-altitude tests, and Starlink’s initial service availability.

#aerospace, #broadband, #elon-musk, #falcon, #falcon-9, #hyperloop, #north-america, #outer-space, #sequoia, #space, #spacecraft, #spaceflight, #spacex, #starlink, #tc, #u-s-securities-and-exchange-commission

MetroMile says a website bug let a hacker obtain driver’s license numbers

Car insurance startup MetroMile said it has fixed a security flaw on its website that allowed a hacker to obtain driver’s license numbers.

The San Francisco-based insurance startup disclosed the security breach in its latest 8-K filing with the U.S. Securities and Exchange Commission.

MetroMile said a bug in the quote form and application process on the company’s website allowed the hacker to “obtain personal information of certain individuals, including individuals’ driver’s license numbers.” It’s not clear exactly how the form allowed the hacker to obtain driver’s license numbers or how many individuals had their driver’s license numbers obtained.

The disclosure added: “Metromile immediately took steps to contain and remediate the issue, including by releasing software fixes, notified its insurance carrier, and has continued its ongoing operations. Metromile is working diligently with security experts and legal counsel to ascertain how the incident occurred, identify additional containment and remediation measures, and notify affected individuals, law enforcement, and regulatory bodies, as appropriate.”

Rick Chen, a spokesperson for MetroMile, said that the company has so far confirmed that driver’s license numbers were accessed, but that the “investigation is still ongoing.”

MetroMile has not disclosed the security incident on its website or its social channels. Chen said the company plans to notify affected individuals of the incident.

News of the security incident landed as the company confirmed a $50 million investment from former Uber executive Ryan Graves, who will also join the company’s board. It comes just weeks after the auto insurance startup announced it was planning to go public via a special-purpose acquisition company — or SPAC — in a $1.3 billion deal.

#articles, #automotive, #computer-security, #computing, #data-security, #driver, #executive, #insurance, #law-enforcement, #metromile, #ryan-graves, #san-francisco, #security, #security-breaches, #startup-company, #u-s-securities-and-exchange-commission, #uber

Institutional trust is the real meme

Hello friends, this is Week in Review.

Last week, I dove into the AR maneuverings of Apple and Facebook and what that means for the future of the web. This week, I’m aiming to touch the meme stock phenomenon that dominated American news cycles this week and see if there’s anything worth learning from it, with an eye towards the future web.

If you’re reading this on the TechCrunch site, you can get this in your inbox every Saturday morning from the newsletter page, and follow my tweets @lucasmtny.


Robin Hood statue in Nottingham

(Photo by Mike Egerton/PA Images via Getty Images)

The big thing

This week was whatever you wanted it to be. A rising up of the proletariat. A case of weaponized disinformation. A rally for regulation… or perhaps deregulation of financial markets. Choose your own adventure with the starting point being one flavor of chaos leading into a slightly more populist blend of chaos.

At the end of it, a lot of long-time financiers are confused, a lot of internet users are using rent money to buy stock in Tootsie Roll, a lot of billionaires are finding how intoxicating adopting a “for-the-little-guy!” persona on Twitter can be, and here I am staring at the ceiling wondering if there’s any institution in the world trustworthy enough that the internet can’t turn it into a lie.

This week, my little diddy is about meme stocks, but more about the idea that once you peel away the need to question why you actually trust something, it can become easier to just blindly place that faith in more untrustworthy places. All the better if those places are adjacent to areas where others place trust.

The Dow Jones had its worst week since October because retail investors, organized in part on Reddit, turned America’s financial markets into the real front page of the internet. Boring, serious stocks like Facebook and Apple reported their earnings and the markets adjusted accordingly, but in addition to the serious bits of news, the Wall Street page was splashed with break neck gains from “meme stocks.” While junk stocks surging is nothing new, the idea that a stock can make outrageous gains based on nothing and then possibly hold that value based on a newly formed shared trust is newer and much more alarming.

The most infamous of these stocks was GameStop. (If you’re curious about GameStop’s week, there are at least 5 million stories across the web to grab your attention, here’s one. Side note: collectively we seem to have longer attention spans post-Trump.)

So, Americans already don’t have too much institutional faith. Looking through some long-standing Gallup research, compared to the turn of the century, faith in organized religion, the media, most wings of government, big business and banks has decreased quite a bit. The outliers in what Americans do seem to trust more than they did 20 or so years ago are small businesses and the military.

This is all to say that it’s probably not stellar that people don’t trust anything, and me thinking that the internet could probably disrupt every trusted institution except the military probably only shows my lack of creative thinking when it comes to how the web could democratize the Defense Department. As you might guess from that statement, I think democratizing access to certain institutions can be bad. I say that with about a thousand asterisks leading to footnotes that you’ll never find. I also don’t think the web is done disrupting institutional trust by a long shot, for better or worse.

Democratizing financial systems sounds a lot better from a populist lift, until you realize that the guys users are competing against are playing a different game with other people’s money. This saga will change plenty of lives but it won’t end particularly well for a most people exposed to “infinite upside” day trading.

Until this week, in my mind Robinhood was only reckless because it was exposing (or “democratizing access to” — their words) consumers to risk in a way that most of them probably weren’t equipped to handle. Now, I think that they’re reckless because they didn’t anticipate that OR how democratized access could lead to so many potential doomsday scenarios and bankrupt Robinhood. They quietly raised a $1 billion liquidity lifeline this week after they had to temporarily shut down meme stock trading, a move that essentially torched their brand and left them the web’s most hated institution. (Facebook had a quiet week)

This kind of all feeds back into this idea I’ve been feeding that scale can be very dangerous. Platforms seem to need a certain amount of head count to handle global audiences, and almost all of them are insufficiently staffed. Facebook announced this week in its earnings call that it has nearly 60,000 employees. This is a company that now has its own Supreme Court; that’s too big. If your institution is going to be massive and centralized, chances are you need a ton of people to moderate it. That’s something at odds with most existing internet platforms. Realistically, the internet would probably be happier with fewer of these sweeping institutions and more intimate bubbles that are loosely connected. That’s something that the network effects of the past couple decades have made harder but regulation around data portability could assist with.

Writing this newsletter, something I’m often reminded is that while it feels like everything is always changing, few things are wholly new. This great NYT profile from 2001 written by Michael Lewis is a great reminder of that, chronicling a 15-year-old who scammed the markets by using a web of dummy accounts and got hounded by the SEC but still walked away with $500k. Great read.

In the end, things will likely quiet down at Robinhood. There’s also the distinct chance that they don’t and that those meme traders just ignited a revolution that’s going to bankrupt the company and torch the globals markets, but you know things will probably go back to normal.

 

Until next week,
Lucas Matney


Facebook CEO Mark Zuckerberg testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law

(Photo by MANDEL NGAN/POOL/AFP via Getty Images)

Other things

SEC is pissed
I’ll try to keep these updates GameStop free, but one quick note from the peanut gallery. The SEC isn’t all that happy about the goings ons in the market this week and they’re mad, probably mostly at Robinhood. They got pretty terse with their statement. More

Facebook Oversight Board wants YOU
Zuckerberg’s Supreme Court wants public comment as it decides whether Facebook should give Trump his Instagram and Facebook accounts back. I’m sure any of Facebook’s executives would’ve stopped building the platform dead in its tracks in the years after its founding if they knew just how freaking complicated moderation was going to end up being for them, but you could probably have changed their mind back by showing them the market cap. More

Apple adtech-killing update drops in spring
After delaying its launch, Apple committed this week to the spring rollout of its “App Tracking Transparency” feature that has so much of the adtech world pissed. The update will force apps to essentially ask users whether they’d like to be tracked across apps. More

Robert Downey Jr. bets on startups
Celebrity investing has been popular forever, but it’s gotten way more common in the venture world in recent years. Reputation transfer teamed with the fact that money is so easy to come by for top founders, means that if you are choosing from some second-tier fund or The Chainsmokers, you might pick The Chainsmokers. On that note, actor Robert Downey Jr. raised a rolling fund to back climate tech startups, we’ve got all the deets. More

WeWork SPAC
Ah poor Adam Neumann, poor SoftBank. If only they’d kept their little “tech company” under wraps for another couple years and left that S-1 for a kinder market with less distaste for creative framing. It seems that WeWork is the next target to get SPAC’d and be brought onto public markets via acquisition. I’m sure everything will go fine. More

Tim Cook and Zuckerberg spar
Big tech is a gentlemen’s game, generally big tech CEOs play nice with each other in public and save their insults for the political party that just fell out of power. This week, Tim Cook and Mark Zuckerberg were a little less friendly. Zuckerberg called out Apple by name in their earnings investor call and floated some potential unfair advantages that Apple might have. Them’s fighting words. Cook was more circumspect as usual and delivered a speech that was at times hilariously direct in the most indirect way possible about how much he hates Facebook. More


Extra things

Tidbits from our paywalled Extra Crunch content:
The 5 biggest mistakes I made as a first-time startup founder
“I and the rest of the leadership team would work 12-hour days, seven days a week. And that trickled down into many other employees doing the same. I didn’t think twice about sending emails, texts or slacks at night and on weekends. As with many startups, monster hours were simply part of the deal.”

Fintechs could see $100 billion of liquidity in 2021
“For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index. While the underlying performance of these companies was strong, the pandemic further bolstered results as consumers avoided appearing in-person for both shopping and banking. Instead, they sought — and found — digital alternatives.”

Rising African venture investment powers fintech, clean tech bets in 2020
“What is driving generally positive venture capital results for Africa in recent quarters? Giuliani told TechCrunch in a follow-up email that ‘investment in Africa is being driven on the one hand by a broadening base for early-stage ecosystem support organizations, including accelerators, seed funds, syndicates and angel investing,” and “consolidation,” which is aiding both “growth-stage deals and a burgeoning M&A market.’”

 

#adam-neumann, #africa, #america, #apple, #apple-inc, #banking, #computing, #department-of-defense, #facebook, #gamestop, #lucas-matney, #mark-zuckerberg, #mike, #robinhood, #softbank, #supreme-court, #tc, #technology, #the-social-network, #tim-cook, #u-s-securities-and-exchange-commission, #week-in-review, #wework

SEC issues statement on past week’s turbulent market activity prompted by Reddit-fueled GameStop run

The U.S. Securities and Exchange Commission (SEC) has issued an official statement on the tumult of the past week in the public stock market. It’s a relatively brief statement, and doesn’t mention any of the key players by name (aka GameStop, Reddit, Robinhood and others), but it does say acknowledge that “extreme stock price volatility has the potential to expose investors to rapid and severe losses” which could “undermine market confidence,” and basically says the Commission is watching closely to ensure that it doesn’t.

The SEC statement does specify that it believes the “core market infrastructure” remains intact despite the heavy trading volumes of the past week, which were prompted primarily by activity organized by retail investors acting in concert through organization on r/WallStreetBets, a subreddit dedicated to day trading. These retail investors resolved to collectively purchase and hold GME stocks (and subsequently, shares in other companies like movie theater chain AMC) in a bid to sweat out hedge funds with significant short positions in the same.

The ensuing high volume of trading activity from individual retail investors led to various actions from platforms that provide free trading to these individuals, including Robinhood, Webull, Public and M1. Robinhood initially cited “protecting” its users as the reason for limits imposed, but later revealed that a lack of funding to cover trade clearances likely caused the temporary measures, since it tapped $500 million to $600 million in credit facility and raised $1 billion in funding overnight.

The SEC’s statement includes a callout that seems specifically directed at entities like Robinhood, and it’s fair to interpret it as a warning:

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

Robinhood has already had run-ins with the financial regulator for unrelated business practices. Meanwhile, lawmakers from both the House and the Senate, as well as NY AG Letitia James have all expressed their intent to review the event and all surrounding activities, which likely involves the role trading platforms like Robinhood played in the week’s events.

#amc, #economy, #finance, #gamestop, #investor, #letitia-james, #money, #robinhood, #senate, #startups, #stock-market, #tc, #u-s-securities-and-exchange-commission

Robinhood raises $1B after trading halts to keep its platform running

After a turbulent week for the stock market and halts to the trading of certain speculative securities including GameStop (GME) and AMC, consumer investing app Robinhood has raised new capital. The new funds total more than $1 billion, with the company telling TechCrunch that they were raised from its existing investor base.

The New York Times reports that the company raised the new equity capital after tapping its credit lines for $500 to $600 million; the company did not answer a question from TechCrunch regarding its credit lines.

The reported drawdown matches reporting from yesterday indicating that Robinhood had accessed nine-figures of capital to ensure it had enough funds on hand to meet regulatory minimums and other requirements related to its users’ trading activity.

Individual retail investors, along with institutional capital, have attacked short positions in some stocks in recent weeks, leading to a tug-of-war between bullish investors and bearish wagers; the resulting tumult led to surging volume for volatile stocks, leading to Robinhood needing more capital to keep its gears turning.

In a post discussing its decision yesterday to restrict trading on select securities, Robinhood wrote that it has “many financial requirements, including SEC net capital obligations and clearinghouse deposits,” adding that “some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.”

The unicorn consumer fintech company halted trading in stocks like GameStop that had become the center of the trading storm yesterday, leading to frenetic accusations from incensed users that something nefarious was afoot. Later in the day the clearing house entity powering trading for other consumer trading services also halted service for a similar set of stocks.

Robinhood told users that it would allow trading to begin in some fashion today in shares it had previously restricted.

It does not appear that the current trading scrap will abate soon. Shares of GameStop, the most famous so-called “meme stock” in the current trading war, is up just under 94% this morning in pre-market trading, implying that many investors are willing to continue pushing its value higher in hopes of breaking short bets laid by other investors.

One result of the current climate is a boom in demand for trading apps. Today on the US iOS App Store, Robinhood is ranked first; Webull, a rival service is second; Reddit, a hub for trading gossip mostly via r/WallStreetBets is third; Coinbase a popular crypto trading service is fourth in line. Square’s Cash App, which allows for share purchases is ranked seventh, Fidelity’s iOS app comes in tenth place, and TD Ameritrade is 16th. Finally, E*Trade’s own app is ranked 18th. That’s a good showing for fintech, both startup and incumbent alike.

No one knows what comes next, how the trades play out, and if the present-day surge in retail interesting in stock trading will persist. What does seem clear, however, is that today is going to be very silly.

#apps, #coinbase, #economy, #etrade, #finance, #gamestop, #money, #robinhood, #startups, #tc, #td-ameritrade, #the-new-york-times, #u-s-securities-and-exchange-commission

The somewhat boring reason it appears that Robinhood yanked trading on some securities

After enduring a day’s worth of taking a beating across social media, government, and the various app stores of the mobile world, Robinhood took to its own blog and CEO’s Twitter account to explain why it had halted trading of some stocks earlier today.

That Robinhood had restricted trading in a number of securities was bombshell news after the consumer trading platform had become synonymous with not only a rise in retail investing, but also a risky wager by some individual investors to push shares of heavily-shorted companies, including GameStop, AMC and others higher. Speculation that Robinhood was limiting the trading ability of those users at the behest of, pick your poison, Citadel, the US government, hedge funds, Janet Yellen, or others, ran rampant.

But none of it was true – at least according to Robinhood’s telling. In its post, Robinhood wrote that (emphasis TechCrunch):

[a]mid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.

That reads like Robinhood ran low on capital and had to make some hard decisions, quickly. The securities its users wanted to trade likely generated the highest capital obligations given how volatile they proved and how long it takes for trades to settle, so Robinhood had to shut off some trades to stay on the right side of its capital needs. (Not great, not terrible?)

Reporting from Bloomberg indicates that Robinhood “tapped at least several hundred million dollars” from credit lines today makes sense in this context. As does the unicorn’s decision to allow for some trading of the afore-limited securities in the near future (“starting tomorrow, we plan to allow limited buys of these securities,” the company wrote); now reloaded with more capital, Robinhood can afford to let its users get back, somewhat, to business.

Of course Robinhood could have been more clear about all of this earlier in the day. Instead, unfairly or not, it became the face of theoretical corruption and other nefarious forces. (Here’s a tip, if your theory sounds like it could fit inside the Qanon orbit, try again?)

Nothing is settled. Congress has its hackles up. Other trading platforms had to suspend trading in GameStop and other stocks for a spell as well. Social media is pissed. Some Robinhood users were forced to liquidate positions. And somehow GameStop closed the day worth more than $196 per share. And after-hours it is up $72.40, or 37.40% to $266 per share.

Who knows what comes next. But grains of salt, please, as we continue this bizarre adventure.

#amc, #apps, #ceo, #congress, #finance, #gamestop, #hedge-fund, #investment, #money, #robinhood, #social-media, #startups, #tc, #u-s-securities-and-exchange-commission, #united-states, #us-government

Could meme stocks like GameStop kill bitcoin’s rise?

Cryptocurrencies, more so than most other things, are only valuable because of a shared agreement that they are valuable. Their value is a product of digital handshakes over millions of transactions firming up that consensus. For bitcoin, the trust that it has worth has turned more valuable in the past several months; it’s been on a tear.

The (very bizarre) question is whether a new avenue of applying blind trust by brigading trashcan-level stocks and turning them into memes could threaten the appeal of cryptocurrencies for retail investors.

Over the past several days, we’ve seen stocks ranging from GameStop, Blockbuster and AMC make unjustifiable gains as a result of Reddit users in the r/WallStreetBets subreddit triggering a stampede towards stocks being heavily shorted by institutional investors. That in turn has led to a short squeeze troubling hedge funds, causing the price of a stock worth around $5 for the majority of 2020 to swell well above $300 today. In some ways it’s just an Occupy Wall Street protest being held on Robinhood, in other ways it’s a complete rejection of efficient markets and a reinvention of institutional trust.

Bitcoin holds fundamental differences from publicly traded stocks, many of which might matter an awful lot to those betting on the coin as a currency of the future. But to retail investors who aren’t hardcore proponents, I’d imagine FOMO was one of the most intriguing pulls into the cryptocurrency space. But if Bitcoin’s purpose for the time being is merely a “store of value,” I think there’s a world where individual investors might be evolving their interests elsewhere.

Bitcoin and other cryptocurrencies haven’t seen notable price movement in recent days  — Bitcoin is down around 6% in the past 24 hours, a hiccup as far as crypto moves go — but after a few weeks hovering well above $30k and peeking above $40k, the currency seems poised to dip below the $30k range soon unless its trend reverses course.

All that said, Bitcoin is certainly an entity of a different scale than all of these meme stocks bundled together with a market cap above $560 billion and a 24-hour trading volume of $56 billion. Bitcoin has seen stratospheric growth over the past few months so barring an outsized crash, it’s perhaps unlikely that retail investors are going to fully abandon it in favor of buying up crusty old shares of Blockbuster stock. That said…

It’s cheaper to trade these meme stocks and easier for retail investors to get leverage via options. In short, for investors looking to have a good time or shoot the moon, meme stock are a more fun place to be than crypto is.

 

The main thing to consider is what happens if GameStop, for no reason at all, becomes a long-term store of value? When investors collectively begin placing blind trust in more financial assets for the long-haul, does that devalue blind trust itself and the mammoth entities that had more of a monopoly on it? Most investors aren’t expecting this to happen, but stocks like Tesla are beginning to live comfortably at ridiculous premiums that analysts can’t understand. Tesla and GameStop are very different beasts, but if anything I think institutions have a better grasp of GameStop’s rise.

The foil to all of this is whether this pandemonium births some regulatory backlash, a possibility which of course does not exist in quite the same way for cryptocurrencies from a central governance standpoint. TD Ameritrade and Schwab are already limiting trades of some of these meme stocks tday and I think there is certainly a universe in which the SEC aims to take a pot shot at this saga by means of promoting market sanity and I am much more confident that there’s a world where Reddit is pushed to at least temporarily ban r/WallStreetBets for some unclear reason.

#articles, #bitcoin, #blockchains, #cryptocurrencies, #cryptocurrency, #decentralization, #digital-currencies, #ethereum, #gamestop, #tc, #td-ameritrade, #technology, #u-s-securities-and-exchange-commission

23andMe raises $82.5 million in new funding

DNA testing technology company 23andMe has raised just shy of $82.5 million in new funding, from an offering of $85 million in total equity shares, according to a new SEC filing. The funding, confirmed by the Wall Street Journal, comes from investors including Sequoia Capital and NewView Capital. It brings the total raised by 23andMe to date to over $850 million.

There’s no specific agenda earmarked for this Series F round, according to a statement from the company to the WSJ, beyond general use to continue to fund and grow the business. 23andMe’s business is based on its distribution of individual home genetic testing kits, which provide customers with insights about their potential health and their family tree based on their DNA.

While the company’s pitch to individuals is improved health, and more knowledge about their ancestry and family tree, the company has also turned its attention to conducting research based on the data it has collected in aggregate, both for its own studies including a recent one that examined how genetic markers could affect a person’s susceptibility to COVID-19, and also for use in supporting the work of third-parties – though it stresses that data is only shared in aggregate, de-identified formats for those purposes.

In January, 23andMe confirmed layoffs affecting roughly 14% of its global workforce. The company’s work this year around COVID-19 has, however, perhaps put the value of its platform in a new light, in the face of this pandemic and the potential of future similar global health issues that may arise.

#23andme, #biology, #biotech, #funding, #genetic-testing, #genetics, #health, #newview-capital, #sequoia-capital, #tc, #technology, #the-wall-street-journal, #u-s-securities-and-exchange-commission, #wall-street-journal

Ripple’s XRP cryptocurrency crashes following announcement of SEC suit

The value of one of the world’s most valuable cryptocurrencies is crashing and a recently filed SEC complaint is at the root of the free fall. According to CoinMarketCap, the XRP token’s value has declined more than 42% in the past 24 hours and is down more than 63% from its 30-day high of $0.76. It now sits at just $0.27.

XRP’s price volatility has rivaled the most capricious of cryptocurrencies. Since reaching an all-time-high of $3.84 back in January of 2018, the coin has spent much of the past two years drifting closer and closer to pennies. In the past month, on the back of major rallies from other cryptocurrencies, XRP has seen its biggest rally in years, but those gains were all erased this week by the Ripple CEO Brad Garlinghouse’s admission that the SEC was planning to file a sweeping lawsuit against the company during the current administration’s final days.

The SEC’s fundamental argument is that XRP has always been a security and that it should have been registered with the commission from the beginning more than 7 years ago. The SEC claims that the defenedants in the case — namely the company Ripple, CEO Bran Garlinghouse and executive chairman Chris Larsen — had generated more than $1.38 billion from sales of the XRP token.

The company’s line has been that XRP is not a security but is, in fact, a tool for financial institutions though the coin’s volatility has discouraged banks from actually adopting the token. Meanwhile, XRP is present on a number of cryptocurrency exchanges, a fact which could expand the scope of this legal complaint and affect more players in the space.

In a blog post published yesterday that went live shortly after the SEC’s suit was filed, Garlinghouse wrote that the SEC’s claims were “completely wrong on the facts and law’” and that the company was “confident” they would “ultimately prevail before a neutral fact-finder.”

#brad-garlinghouse, #ceo, #cryptocurrencies, #finance, #money, #ripple, #ripple-labs, #tc, #u-s-securities-and-exchange-commission

Nikola’s stock crashes after announcing cancelation of contract with Republic Services for 2,500 garbage trucks

The undoing of Nikola continues. Today, the company announced the termination of its contract with Republic Services for 2,500 garbage trucks. Announced back in August, the deal had Nikola building garbage trucks in 2023 with on-road testing scheduled for 2024. This is the latest deal to unravel for Nikola as it tries to patch up following devastating reports.

According to Nikola, the separation of the two companies was mutual though it’s hard to picture Nikola’s SEC troubles didn’t weigh heavily upon Republic Services.

“This was the right decision for both companies given the resources and investments required,” said Nikola CEO Mark Russell said in a released statement. “We support and respect Republic Services’ commitment to achieving environmentally responsible, sustainable solutions for their customers. Nikola remains laser-focused on delivering on our battery-electric and fuel-cell electric commercial truck programs, and the energy infrastructure to support them.”

News of this deal is sending Nikola’s stock down 10% in pre-market trading. If this level holds upon the stock market’s open, Nikola will be trading at its lowest levels following it’s monumental rise over the summer months.

The deal with Republic Services was originally a victory banner for the once-high flying electric vehicle startup. Signaled as mainstream acceptance of the company, Republic Services’ contract came before a mega $2 billion investment from General Motors. That deal is also cancelled following several key revelations about the company that lead to an SEC investigation and the company’s chairman stepping down.

In a statement, Nikola says deliveries will begin of Nikola Tre battery-electric semi-trucks in the US in 2021 and the company expects to break ground on its first commercial hydrogen station in 2021, too. And then in 2023, the company expects to produce its fuel-cell-electric semi-trucks at Nikola’s Coolidge, Arizona facility.

#arizona, #ceo, #chairman, #companies, #electric-vehicle, #electric-vehicles, #general-motors, #laser, #nikola, #nikola-motors, #tc, #u-s-securities-and-exchange-commission, #united-states