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Tesla layoffs add to Elon Musk’s woes

Within the past two weeks, three different companies created by Elon Musk have parted ways with portions of their staff—although the cuts were much less severe at one of the billionaire’s offspring.

Last Friday, Musk announced in an email to workers at Tesla that the electric automaker would be laying off about 7% of its staff; the same day, Musk’s The Boring Company tunnel-building startup fired five employees for performance reasons, out of about 80 overall workers. Those moves came about a week after space exploration giant SpaceX revealed plans for about 600 layoffs, or 10% of its staff, per Reuters.

The reductions at Tesla come after a 30% employee increase during the past year, per an internal email sent by Musk and obtained by CNBC. Despite now having fewer workers, Musk also wrote that Tesla must increase both the production rate and quality of its Model 3s, saying there “isn’t any other way” to be “a viable company.” The personnel changes at The Boring Company were not part of any cost-cutting move, again according to Recode.

SpaceX recently reached a private valuation of more than $30 billion, making it one of the most valuable VC-backed companies in the US, while Tesla has been publicly traded since 2010. Musk, meanwhile, has reportedly poured more than $100 million of his own cash into The Boring Company.

Together, the three companies demonstrate the stunning depth of their founder’s ambitions, his commitment to achieving them, and the strange (sometimes juvenile, sometimes illegal) ways he will go about attempting to do so. You can probably count on one hand the number of other entrepreneurs who would devote such enormous resources to moonshots like space travel, electric cars and large-scale infrastructure. But it’s difficult to imagine Richard Branson, Jeff Bezos or one of those other billionaire few attempting to fund their goals by selling flamethrowers for the everyman, or becoming entangled in a very expensive brouhaha with the SEC because they were trying to make their pop-star girlfriend laugh at a marijuana joke.

In pure business terms, though, it perhaps makes sense that companies with such unique and far-reaching goals might be more prone than some of their peers to boom-and-bust cycles of hiring and firing. No other company has ever done what Tesla and SpaceX are trying to do, so both businesses are largely building their own road maps. That said: It’s highly unfortunate that some of the detours on those maps include people losing their jobs.

 

Read More – www.pitchbook.com

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Sainsbury’s says confidence in securing Asda has not changed

Sainsbury’s, Britain’s No. 2 supermarket chain, said its belief that the competition regulator would clear its 7.3 billion pound takeover of rival Asda had not diminished since the deal was announced in April.

“It (confidence) remains exactly the same…We remain confident in the case we are making to the CMA (Competition and Markets Authority),” Chief Executive Mike Coupe told reporters.

“In that respect nothing has changed,” he said.

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First impressions from CES: Crypto optimism, sleeptech and the internet of anything

Did you just say bitcoin?

It’s 2019, and there is still plenty of attention around crypto, even though the space has seen a significant decrease in total market capitalization during the past 12 months. The bullish consensus here at CES is that all new technologies have historically gone through a bubble phase before reaching wide-scale adoption— such as railroads, the internet and so forth—and that crypto will follow the same path.

“Crypto is alive and well”

—Matthew Roszak, co-founder and chairman of Bloq, at CES

Aside from sideline speculation, the technology still faces many challenges, like regulation, security, scalability and latency. With tempered expectations for crypto, companies like Devvio, which just announced its new blockchain protocol Devv, are developing solutions to help solve these blockchain technology issues. Regardless of the roller-coaster development within the crypto space, bitcoin is still a great accomplishment, in which a white paper released 10 years ago has achieved over a $70 billion valuation based on market capitalization.

The internet of ANYthing

At CES Unveiled, Wilkinson Baking Company showed off its fully automated breadmaking machine, The BreadBot. This machine takes in raw ingredients such as flour and yeast to produce direct-to-consumer fresh bread. The pitch here is that The BreadBot will be placed in grocery stores and can produce fresh bread on demand, without preservatives, in a much smaller footprint than a typical in-store bakery.

I need to get some sleep

If there has ever been a city that never reminds you to sleep, it’s Las Vegas. Coincidentally (or perhaps not?), I have been reminded to get some good sleep everywhere I walk here at CES. I recently read “Why We Sleep” by Matthew Walker, in which the author expressed concern that society’s general lack of sleep has become a major health epidemic.

Innovators here at CES have also caught on to the latest health trend of getting awesome sleep. From rocking beds to pillows that detect and stop snoring, there is no shortage of new and creative ways to improve overall sleep health. And it’s not only for adults as well: At CES, LA-based Miku launched a baby monitor designed to analyze a baby’s sleeping and breathing pattern to provide parents with a status of their baby’s sleep health. And PE-backed SleepScore Labs, which provides an app and other products to enable improved sleep, just announced a venture partnership with Dr. Oz, SleepScore Ventures. The venture aims to invest solely in companies and products focused on sleep improvement.

Read More – www.pitchbook.com

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The key trends that will shape European PE and VC in 2019

Growth trajectory

While Europe has traditionally been very good at creating new companies, it hasn’t been as apt at growing them, according to Draper Esprit CEO Simon Cook. He thinks this will change. “One trend we have been tracking closely is the proportion of companies which raise early-stage money and which then go on to raise growth money,” he said. “We think this is key to building a sustainable entrepreneurship in Europe. In the US, almost 85% of all businesses that raise seed go on to raise growth capital ($5 million to $75 million). In Europe, it has previously been much less. We expect the gap between the US and Europe to close this year, and to see far more growth deals in Europe.”

Green is a go

Among Europe’s new companies, there’s one sector in particular that Matt Bradley, investment partner at Forward Partners, believes will take off in 2019.

“You’ve probably noticed—in stores, restaurants and conversations—an embrace of all things not meat,” he said. “Vegetarianism, veganism and the curiously defined flexitarianism are on the rise. Whether it’s due to animal welfare concerns, the environment or health and diet-related interest, there’s been a huge shift in public appetites and taste. The trend shows little sign of abating. That means the market size that entrepreneurs can go after is large and increasing rapidly; a great foundation from which to start a business.”

These types of companies have already seen success in 2018 with investments including vegan meal delivery business AllPlants’ £7.5 million funding round from Octopus Ventures. But, Bradley said there’s still plenty of room for innovation:

“In the offline world, I’d expect more and more vertical-focused restaurant concepts to pop up. There’s clearly appetite for more plant-based products for those entrepreneurs willing to take on food formulation and creation. In the online world, all those businesses and business models that we’ve seen prosper relating to food—marketplaces in all parts of the supply chain, on-demand, subscriptions, et cetera—are increasingly attractive. As the market grows more and more, investors are likely to want a piece of the action too.”

Impact’s breakthrough year

It’s not just the food industry that’s going green, according to Sir Ronald Cohen, chairman for the Global Steering Group for Impact Investment. He expects that 2019 will be a “breakthrough year” for impact investing, which he believes will develop into a multitrillion-dollar market.

According to Cohen, impact investing not only more than matches returns generated by more traditional investment strategies, but is also the answer to some of society’s biggest challenges.

“On a global level, I am concerned by the tensions that are building in societies around the world,” he said. “Migration, inequality, the widening gap between the ‘haves’ and the ‘have-nots’ and the resulting erosion of some of our most trusted institutions are all causes for great concern. If we want to maintain a market-based system, we have to face these challenges head-on.

“I believe impact investing can contribute to a solution in a meaningful way, not by fixing issues at the edges, but by putting us on the path to systemic change. Impact investment moves us away from the doctrine of maximizing profit alone to a new paradigm. It brings impact to the center of our consciousness, measures it, and shifts us to optimize risk-return-impact when making business and investment decisions.”

Business as usual

While societal challenges and political events such as Brexit have created a fair amount of uncertainty, Andres Saenz (pictured), EY global private equity leader, expects European activity to remain robust.

“2018’s fundraising market was notable for closings by a number of large European funds and one of the best years on record,” he said. “We expect continued strength in 2019, while recognizing that there are fewer such vehicles currently in the pipeline.”

Saenz anticipates the coming 12 months will keep up the pace after a busy 2018: “We expect continued momentum heading into 2019, given record levels of dry powder and an overall accommodative financing environment. Tech, healthcare and consumer products remain powerful trends and platforms for growth, and we expect continued appetite for deals in these spaces.”

The end of an era

However, not everyone shares an optimistic view for the year ahead. Richard Clarke-Jervoise, partner and head of the Stonehage Fleming Private Capital, claims that private equity has reached the end of its “Golden Age.”

“I think we, like many people, have been preparing for a downturn for a number of years,” he said. “We’ve been very conscious that it has been a good sellers’ market and a tougher buyers’ market. The period from 2012 to 2018 will be remembered as private equity’s ‘Golden Age’ due to exceptionally benign economic conditions, very strong interest from investors and a strong bull market for equities. Private equity managers have taken advantage of various innovations: GP-led restructuring, GP-stake transactions and a growing willingness for LPs to support multiple strategies. However, cracks have started to show in 2018 as it closed on an uncertain note.”

He continued: “The technology space has suffered from falls in public market valuations, IPOs trading below their listing price and the first signs of the impact of trade wars. This has led to a palpable sense of caution from most GPs and we’re getting closer to the top of the market, if we’re not there already. This means that it’s time to be cautious rather than piling on a lot of risk. We’ve tried to be very disciplined in the way we commit money and really focus on managers with a huge amount of experience; they’ve seen a lot of cycles and we think that has a lot of premium in a volatile period.”

 

Read More – www.pitchbook.com

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Swiggy nabs $1B as Indian food tech industry matures

From tangy, chutney-dipped samosas to spicy chicken curries, Indians are enthusiastic when it comes to their food. And so are venture capitalists.

Indian food delivery startup Swiggy has announced a $1 billion round led by Naspers, with participation from DST Global, Coatue Management and Meituan Dianping. Tencent, Hillhouse Capital and Wellington Management also participated in the funding.

Founded in 2014, Swiggy has partnered with more than 50,000 restaurants across 50 cities in India. Naspers first backed the Bengaluru-based business in 2017, before leading a $100 million round for Swiggy this February at an estimated valuation of $725 million, followed by another $210 million round in June at an estimated valuation of $1.3 billion.

In a country with more than 1.3 billion people who seem to love their food, it’s not difficult to see the scope of investment opportunities in food tech and restaurant tech. Swiggy’s latest fundraise comes at the end of a big year for Indian food startups securing VC funding. Even excluding Swiggy’s massive round, the current year has seen more VC funding in the space than each of the last three years, with $762 million invested across 23 deals.

Read More – www.pitchbook.com

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Bestival music events firm bought for £1.1m

The Bestival and Camp Bestival music festivals have been snapped up by a multi-millionaire Dorset entrepreneur just days after a collapse into administration.

Richmond Group, controlled by the loan broker James Benamor, is buying the festival business after offering £1.1m for Bestival’s assets and brand. Richmond had lent Bestival Group £1.6m in February last year.

Benamor founded Amigo Loans, a Bournemouth-based company that offers quick guarantor-backed loans, which was floated on the stock exchange in July. The business is valued at more than £1bn and Benamor’s Richmond Group has a stake of 61%.

Julie Palmer, of the advisory firm Begbies Traynor, who was appointed administrator on 20 September, said she had received more than one offer for the business but Richmond’s was the best bid.

Bestival was launched in 2004 by DJ Rob Da Bank and this year was headlined by the performers Chaka Khan, Grace Jones and Thundercat. It began on the Isle of Wight but relocated to Lulworth Castle in Dorset in 2017.

Its sister festival, Camp Bestival, which launched in Dorset in 2006, is aimed at a family audience and this year featured Simple Minds and Rick Astley alongside Peppa Pig and Paddington.

In a statement Benamor said: “We have been fans and supporters of Bestival since the beginning. Our children have grown up with wonderful memories of these festivals. Bestival is an example of Dorset being world class and we are keen to ensure that this fantastic institution goes on to delight families and local businesses for many years to come.”

On the Camp Bestival website it said that tickets for the 2019 festival remained valid and there was “no reason to believe Camp Bestival won’t go ahead as planned”.

Hundreds of 2018 Camp Bestival attendees are still hoping for a refund after the festival was forced to close a day early in July because of poor weather. The company said the cancellation of the festival’s Sunday line-up this year was not the reason for its financial difficulties but said it had not been “a positive factor for the business”.

Richmond Group said that under the terms of its offer all Camp Bestival 2019 tickets sold so far would be honoured.

Read More – www.theguardian.com

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Uber Unveils New Division

Elon Musk introduced us to the hyperloop. Now, thanks to Uber, we have a Powerloop, too.

That’s the name of the new service the ridehailing company unveiled Wednesday, which will involve renting pre-loaded trailers to shipping carriers in an effort to help smaller carriers connect to businesses with plenty of goods to move—including Anheuser-Busch, which is one of Powerloop’s first clients. Powerloop will be affiliated with the existing Uber Freight unit, which uses an app to direct truckers with empty trailers to cargo waiting to be hauled.

The announcement came a day after reports emerged indicating that Uber has been in discussions with investment banks regarding a public debut that could be worth up to $120 billion. The San Francisco-based company and its primary rival, Lyft, are both making progress toward enormous IPOs that are expected in 2019.

Uber isn’t the only VC-backed company with its eye on reshaping the world of shipping. Last month, Convoy confirmed it had raised $185 million at a $1.1 billion valuation, essentially tripling its valuation from barely a year prior, while Cargomatic brought in $35 million in August. Both companies have similar aims to Uber Freight, using a platform to connect available trucks to clients with goods to ship.

Powerloop’s trailer-pool services are already available in Texas, with plans to expand throughout the US. The division represents Uber’s latest effort to diversify away from its flagship ridehailing business. That unit, the company’s Freight division and its UberEats subsidiary are all currently unprofitable, per The Wall Street Journal, with UberEats expected to be the first of the units to get into the black.

Read More – www.pitchbooks.com

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Billionaire VC Doug Leone reveals Sequoia’s spending power

SAN FRANCISCO—Sequoia global managing partner Doug Leone has accumulated a net worth of $3.8 billion over his three decades at the firm, according to the latest Forbes estimate. In the process, Leone has helped the VC juggernaut expand its investment scope well beyond its Menlo Park headquarters, with the firm opening additional offices in China, India, Israel and Singapore.

“We looked for places that we thought were going to grow rapidly and be very large,” Leone said Thursday at TechCrunch Disrupt. “We didn’t go to Europe because it was large but not growing. We didn’t go to Vietnam because it was growing but not large.”

Many VCs have shied away from investing in China because of its opaque financial regulations and strict government oversight that, among other things, requires companies to get licenses for IPOs, Leone explained, but Sequoia has done just the opposite. The firm now spends half its money in the region, and that trend isn’t likely to slow down anytime soon.

“It all depends on if you want to go where the puck is or where the puck is going to be,” Leone said. “It’s our belief that four or five years from now China is going to be a little different. There’s a lot of pressure now that China will become more open over time.”

The country has already received increased attention in the VC industry over the past year, following the launch of SoftBank’s $100 billion Vision Fund. Sequoia has responded by targeting $8 billion for its latest investment vehicle, in what marks the largest US-based VC fund ever. The firm had reportedly raised $6 billion toward its massive target as of May, and Leone confirmed Thursday the fund has reached its $8 billion goal.

Why invest in China-based businesses, given the drawbacks? Leone argued that there are some advantages.

“Chinese founders in some ways are a little more desperate,” Leone said. “And you see it in the crazy work ethic that I’m not endorsing, nor condoning, nor disapproving. But I’ve had dinner in China at 10 pm. And people go to work after 10 pm. And we don’t see that in the US.”

Leone said Sequoia doesn’t directly compete with SoftBank and hasn’t lost out on any deals to the telecom giant. He disclosed that his firm has already made a pair of $400 million investments from its new $8 billion fund—totals that are more reminiscent of money spent by a private equity firm than a VC that specializes in growth investments.

“The reason we raised it is the large companies want to stay private longer,” Leone said. “They want to fight the global fight as private companies, not as public companies, and they require a lot more money in the private markets.

“Let me be clear, we have never lost a single company in this large fund to anybody because we have a preexisting relationship,” he added. “Having said that, we’re not going to get a discount price. We have to pay the market price.”

Read more – www.pitchbooks.com

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How Important Is The UK To EU Venture Landscape?

While arguments ring on about whether the UK will end up leaving the EU as scheduled by next March 29, there is no denying that the exit will have a profound effect on Britain and the bloc politically, socially and economically.

This is particularly true for the continent’s venture industry, with questions arising over how LPs will react, whether leaving will put pressure on UK startups in terms of funding options and retaining international talent, and how entrepreneurs will feel about setting up new companies in Britain.

But exactly how big a part is the UK of the EU venture landscape?

We’ve put together a datagraphic highlighting how much of the bloc’s VC fundraising and investing take place in the UK. Click on the individual tabs to see info on fundraising, deals or exits, and click on the toggle button to see how the data changes with or without the UK as a part of the EU.

Read Full Article – www.pitchbooks.com

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Project Neptune News

Client

Large UK Company seeking to acquire in the SME Sector

Aim

To add to its comprehensive portfolio by purchasing 100% shareholding of qualifying business’s in the SME sector.

Sector

Client has ‘sector agnostic’ approach and will review each opportunity on its merits. Previous sectors have included Engineering, Manufacturing, Medical, Travel & Leisure, Tech Software Solutions, Construction, Facilities Management, Packaging & Print, Recycling, Medical and Energy.

Budget

Current budget for next round of targeted acquisitions stands at £53.4 Million UK pounds.

Timescale

All targets to be ready for Phase 1 Project sign off by end of September 22nd 2018.

Qualifying Crietria

Previous evidence of stable performance.

Must be capable of 3+ x growth factor.

Acquiring Client can create infrastructure for this, whether by back office, sales, increased staffing levels, funding large projects or frameworks and injection of cash funds.

Directors/Owners Must agree to qualifying handover period.

Deal profile

80% of total remuneration on completion. Remaining balance paid over 12 Months in quarterly payments in arrears.

Further details and scoring criteria available from Mark Roberts – mark@achieve-corporation.com