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Markross121_ July 4, 2019 No Comments

5 women-led firms crushing the gender gap in VC

As we settle into the second half of 2019, the VC industry in the US has already broken a handful of records to push the envelope for female founders and continue striving for gender equality.

For the first time in over a decade, companies founded solely by women have picked up more than 3% of the total capital invested in VC-backed startups in the US.

Capital investment crossed the $1 billion mark for female-founded startups in 1Q 2019—the highest ever for any quarter to date. And out of roughly 300 VC deals for companies led solely by females, four of those businesses have reached unicorn status so far this year. That number includes a high-profile exit from online luxury reseller The RealReal, which debuted on the NASDAQ last month.

While it’s no surprise that the venture industry remains male-dominated, several women are playing an active role on the other side of deal making. We’ve taken a look at five VC firms founded by women and who they’re investing in:

SoGal Ventures

“It took me months to believe in the idea that I, a twenty-four-year-old woman, could start a VC firm,” Pocket Sun wrote in a Medium post. Sun co-founded SoGal Ventures with Elizabeth Galbut in 2016 to invest in early-stage startups across Asia and the US. The firm has made more than 50 investments including EverlyWell, the developer of at-home diagnostic tests and Anomalie, an online wedding dress designer.
Halogen Ventures

Founded by talk show host Jesse Draper in 2016, Halogen Ventures is an early-stage VC fund that focuses on female-founded consumer tech startups. With roughly 50 companies under its belt, the LA-based fund added clothing rental platform Armoire to its portfolio in June. Other significant investments include theSkimm, an online newsletter geared toward female millennials and HopSkipDrive, a California-based provider of a ridehailing app for kids.
Forerunner Ventures

Forerunner Ventures was founded by Kirsten Green in 2010 and has a portfolio of more than 80 startups including mobile banking platform Chime and Modern Fertility, the developer of a personalized fertility test. Glossier, one of the most eminent female-founded unicorns on the block this year, raised $2 million in seed funding from the San Francisco-based firm back in 2013. Forerunner Ventures closed its fourth investment vehicle on a reported $360 million in 2018.
Brilliant Ventures

Santa Monica-based Brilliant Ventures was founded by Kara Weber and Lizzie Francis in 2016 with a focus on women-centric businesses. The firm’s notable investments include Haute Hijab, a direct-to-consumer fashion and lifestyle brand for Muslim women and The Riveter, a Seattle-based workspace community for female-led businesses.
Female Founders Fund

Female Founders Fund was one of the first VC firms that launched with a mission to invest exclusively in companies founded by women. In addition to its thriving portfolio of female-led businesses like Zola, BentoBox, Thrive Global and Rent the Runway, the firm’s ecosystem also provides a peer network for female founders to connect over their experiences and share advice. Founded by Anu Duggal in 2014, the fund has invested in Billie, a female-focused lifestyle brand and Spruce Up, the provider of a home décor platform.

The market’s showing sparks of life with recent mergers, acquisitions

While Main Street investors had some trepidation over their portfolios during the six-week-long pullback in the stock market, the pros see many positives.

Sell-offs are a common corrective action, which is needed in order to move higher.

The fact is, the stock market just rallied 1,200 points in the first two weeks of June. Much of that is due to the Federal Reserve admitting it went too far in raising rates.

Another positive sign is the quality of the current initial public offerings, and the volume of mergers and acquisitions.

There are some very good indications that this bull market may not be as fragile as the pessimists say.

The IPO market has been strong, with 14 offerings this year — up more than 50 percent from last year. And these aren’t hope-and-a-prayer companies, as in the dot-com era.

Today’s IPOs are coming out — in some cases — with billions in revenues and well-established business models in high-growth areas.

Sure, some are better than others in terms of stock performance. The biggest ones, Uber and Lyft, both got a flat reception and remain underwater from their IPO price. Their issues were valuation and offering size. But they are each credible, established businesses.

Oilfield services firms Keane Group, C&J Energy to merge

Keane Group Inc and C&J Energy Services Inc are set to merge in an all-stock deal that will create a new U.S. oilfield services company worth around $1.5 billion (£1.2 billion), three people familiar with the matter said on Monday.

The deal underscores the consolidation under way in the oil and gas industry, as exploration and production companies cut back on spending on new projects to return more money to their shareholders. This puts pressure on services providers to gain scale, so that they have more negotiating power and can save on costs by eliminating overlap.

The transaction between Keane and C&J, which will be presented to investors as a merger of equals, is set to be unveiled later on Monday, the sources said, asking not to be identified ahead of the official announcement. Keane and C&J could not be reached for comment outside normal business hours.

U.S. oil and gas producers are reluctant to commission new projects, preferring to instead return that cash to shareholders, which, in turn, is weighing on services firms such as Keane and C&J.

RBS shares jump after Saudi bank merger boosts capital

Royal Bank of Scotland shares have jumped this morning after the bank said a merger between two Saudi banks would boost its capital and reduce its risk weighted assets by £4.7bn.

Saudi Arabia’s Alawwal Bank and rival Saudi British Bank (SABB) completed a merger yesterday, creating the third-biggest lender in the kingdom.

RBS, through its Dutch subsidiary Natwest Markets NV, said it was part of consortium owning a 40 per cent stake in Alawwal bank – with RBS itself holding an equivalent 15.3 per cent stake in the bank.

Share in RBS jumped two per cent this morning following the completion of the merger and the bank was among the FTSE 100’s biggest risers. The UK bank said the merger had left the consortium with a 10.8 per cent stake in the new SABB, and RBS with a 4.1 per cent shareholder. It said it would receive £400m from the disposal of those shares and a reduction in risk weighted assets of £4.7bn. The bank’s CET1 core capital ratio would also rise by 60 basis points. Chief executive Ross McEwan said: “We are pleased that this merger has now concluded; it will help facilitate the future exit of our shareholding as we continue to focus on our key target markets. “The release of capital will also have a positive and material financial impact for RBS.”

Raytheon and United Technologies announce $121bn merger

Trump says he is a ‘little concerned’ about the deal and wants ‘to see that we don’t hurt our competition’

United Technologies and defense contractor Raytheon have agreed a $121bn merger that will create the world’s second-largest defense contractor.

The new company, to be called Raytheon Technologies, which will make Tomahawk missiles, the F-35 fighter jet engine and space suits for astronauts among other items, would have sales of about $74bn in 2019. It will be the second largest defense contractor behind Boeing and ahead of Lockheed Martin.

The merger, the largest of the year so far, will have to be approved by competition authorities and was questioned by Donald Trump on Monday. Trump told CNBC that he was a “little concerned” about the deal and that while he would like to see it go through he added: “I want to see that we don’t hurt our competition.”

Trump said aerospace companies had “all merged in so it’s hard to negotiate” with them and suggested the defense industry could be heading in the same direction.

UTC and Raytheon do not compete directly in many markets and the deal may not attract significant scrutiny. The companies expect approval by 2020. “I think from a regulatory standpoint, the beauty of this deal is there’s very little overlap … But really less than 10 jurisdictions have to approve this. We don’t have to go to China. We truly believe that we’re going to get this done relatively quickly,” Gregory Hayes, chairman and chief executive officer of United Technologies, said in a call with analysts.

There have been a series of mergers in the defense contracting sector in recent years, driven by modest growth in US spending. Companies have argued that they need greater scale to compete and spend on research and technology.

United Technologies’ aerospace business makes engines for Airbus as well as the F-35, which was developed by Lockheed Martin and is the most expensive military project in history. Last year United announced it was spinning off its escalator and air-conditioner businesses, which included the Otis elevator brand and Carrier air conditioners.

Raytheon makes missile defense and radar systems, including the Patriot missiles and other military technology used by militaries around the world.

Together the two companies employ about 180,000 people worldwide. United technologies said the merger would lead to $1bn in cost savings.

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Hayes. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities.”

Why AI is making tech giants like Google and Amazon even harder to beat

Taking on big tech.

The issue is becoming so popular it’s bringing together political adversaries like Donald Trump and Nancy Pelosi. Even Elizabeth Warren and Ted Cruz. Last week, the House Judiciary Committee announced it would be launching a bipartisan antitrust investigation into companies like Google, Facebook and Amazon.

Each of those tech giants has become enormously powerful, particularly as it relates to gathering personal data and influencing behavior. Increasingly, that control is being driven by AI & machine learning technologies—e.g., Google’s Assistant and YouTube algorithms; Facebook’s content flagging, filtering and moderation; and Amazon’s Alexa, purchasing recommendations and AWS tools.

It’s clear that AI is no longer a nascent prototype tech of the future. It’s being industrialized and commercialized at a massive scale, impacting billions of people at the behest of the world’s biggest companies.

“Essentially as AI/ML technology becomes more readily available, these huge firms are positioned to dominate and potentially be extremely hard to compete with—especially within certain core competencies,”. “It’s a look at what’s to come and how central AI/ML is going to be for essentially all internet users and enterprises alike.”

The tech giants have all made it clear that implementing AI/ML throughout their business and product offerings and by running open source frameworks—like TensorFlow and PyTorch—thathelp build an ecosystem of development around their platforms, creating a moat of sorts and attracting AI/ML talent.

Venture capital investors, however, are still making plenty of bets on smaller players trying to compete in the space, perhaps by carving out tangential or niche areas where the giants aren’t as firmly developed. According to PitchBook data, deal flow into US-based AI/ML startups has increased unabated for about a decade.

Premier Foods chairman to step down

Mr Kipling maker Premier Foods has revealed that its chairman is set to retire from his role this summer less than two years after taking on the job.

Keith Hamill, who was appointed chair of the firm in August 2017, has told the board of his decision to retire later this year at the group’s annual general meeting (AGM) in July.

The departure comes six months after the firm was rocked by the exit of its chief executive Gavin Darby, who stepped down in the wake of pressure from an activist investor.

A full recruitment process for a permanent chairman is underway, led by Richard Hodgson, who has been appointed senior independent director today.

Pam Powell has also been made chair of the remuneration committee this morning. Both have been non-executive directors for several years.

The board of the St Albans-based business has faced sharp criticism from activist fund Oasis Management in recent years over its falling share price, which had plunged from 46p to 30p between July 2018 and January 2019.

The share price has since recovered some its losses, climbing to 36p, but the group is still facing pressure as it continues its hunt for a new chief executive.

Could aviation ever be less polluting?

The aviation industry is under pressure to reduce carbon emissions, yet air travel continues to grow in popularity around the world. Can technological innovation help square this circle, or should we simply fly less often?

Once a byword for innovation and progress, many people now view aviation as dirty and dangerous to the environment.

It contributes about 2% of the world’s global emissions, and this is set to rise.

IATA, the airline trade body, predicts that passenger numbers will double to 8.2 billion a year by 2037. Planemaker Boeing forecasts there will be demand for 42,700-plus new aircraft over the next 20 years. Airbus predicts much the same.

Yet by 2050, the European Union wants the industry to reduce emissions of CO2 of 75%, of nitrogen oxides by 90%, and noise by 65%. And a new Carbon Offsetting and Reduction Scheme for International Aviation, agreed by 70 countries, comes into force in 2020.

So what is the industry doing to meet these formidable challenges?

Rolls-Royce, one of the world’s major aero-engine makers, says its new-generation UltraFan, more than 10 years in development and scheduled to be ready for service in the middle of the next decade, will be 25% more fuel efficient than its first generation Trent engine.

5G: Finally, it’s here in the UK – but so what?

After years of hype – and sometimes confusion – the UK finally has a 5G network.

BT’s EE subsidiary is the first to launch a service – and if you’re feeling wealthy enough and live in the right place, you can sign up.

The lowest-priced deal is £54 a month plus a one-off £170 fee for a compatible handset.

But bear in mind that buys you only 10GB of data a month, which you will be likely to chew through fairly quickly if you take advantage of the next-generation technology to download lots of media.

For many people, it may make sense to wait – and not just to take advantage of rival offers from Vodafone, which starts its own 5G service in about five weeks.

The two operators are launching in select cities only.

And even there, the connectivity will be patchy, sometimes offering only outdoor connectivity, sometimes none at all – so customers will probably default to a slower 4G signal much of the time.

Chip-maker Qualcomm has promised the first 5G phones will offer “all-day battery life” – but second- and third-generation modems will inevitably be more energy-efficient and thus allow handset-makers to offer either longer life between charges or thinner phones.

What’s more, many of the innovations that promise to make 5G truly disruptive have yet to arrive. But more on that in a bit.

How fast will it go?

The communications watchdog Ofcom suggests that in time 5G could offer speeds of 20Gbps.

That is fast enough to download an ultra-high definition 4K movie in less time than it takes to read its description.

But for now, you should temper your expectations.

To start with, the fibre lines EE is using to link each 5G site to its network have a total capacity of only 10Gbps, which must be shared around.

The network has suggested that, on average, users will achieve about 150-200Mbps downloads at launch, with lucky individuals hitting about 1Gbps at quiet times.

So, wait times for such big files will still be measured in minutes rather than seconds.

Even so, this would still be an improvement on the 29.6Mbps that OpenSignal said that EE typically provided via its 4G network.

Of course, there’s another way to measure speed and that is in terms of latency – the lag between sending a command and getting a response.

In time, 5G is supposed to provide latencies of one millisecond or less, compared with the 20-70 milliseconds on offer today.

That will make playing videos games powered by a cloud-based service a more responsive experience and will pave the way for new use cases – such as remote-controlled vehicles, surgical robots, and live-streamed virtual reality.

To start with, however, things won’t be close to that level.

EE says to expect latency of about 20 milliseconds at launch, falling to 10 milliseconds within the next decade.

Is it just about faster phones?

No – though that’s undoubtedly the short-term hook to attract subscribers.

One of the biggest long-term benefits of 5G will be the ability for mobile networks to provide more connections at once.

In theory, 5G will be able to simultaneously support more than a million devices per sq km (0.4 sq miles), a big jump over the 60,000-odd devices that 4G technology maxes out at.

But to make this possible, antennas will be needed all over the place – from lamp-posts to bus shelters, in addition to more of the rooftop masts we’re already used to.

These in turn will support hundreds of thousands of data-capturing sensors that will allow the authorities and businesses to gain deeper insights about behaviour and provide “smarter” services.

Futurists envisage benefits such as a customer’s smart-home automatically ordering the ingredients for meals that have been nutritionally tailored to their activities, while retailers make use of related data to ensure they have the right amount of stock to hand, thus minimising lost sales and goods going to waste.

Sports Illustrated becomes latest legacy magazine gobbled up by PE

It’s become a familiar story for the media industry. A legacy publication struggles because of declining print advertising revenue. Digital advertising revenue fails to offset the losses. A private investor emerges to try to save the business.

The latest example came with a twist Tuesday when Authentic Brands Group agreed to buy the intellectual property of Sports Illustrated from media conglomerate Meredith for $110 million. As part of the unique partnership agreement, Meredith will continue to operate SI’s editorial arm for at least the next two years under the same schedule, while maintaining editorial independence under the direction of publisher Danny Lee and editor-in-chief Chris Stone. The iconic sports publication’s future after that is unclear.

In the meantime, ABG will try to drive revenue by using SI’s brands, which include the company’s namesake, Sports Illustrated Kids, Sportsperson of the Year, SI TV and the company’s iconic swimsuit edition. The company also purchased the rights to more than 2 million images from SI’s photography archives, which it reportedly hopes to monetize.

“We are now perfectly positioned, with the support and resources of ABG, to thrive in many other spaces: events and conferences, licensing, gambling and gaming, IP development, especially in video and TV, to name a few, all while continuing to benefit from Meredith’s industry-leading track record in operating media companies,” Stone said in a press release.

Launched in 2010 with a $250 million investment from Leonard Green & Partners, Knight’s Bridge Capital and founder Jamie Salter, ABG specializes in managing retail, entertainment and sports brands. And its list of clientele is fairly diverse, with the brands of Shaquille O’Neal, Muhammad Ali and Marilyn Monroe among its holdings.

But it remains to be seen if ABG can recharge SI, which has struggled along with the rest of the magazine industry to adapt to the digital landscape. Once heralded for employing a range of legendary sports writers such as Frank Deford and Rick Reilly, the company has seen its market share dwindle from a range of digital online competitors, including the The Ringer, Barstool Sports and The Athletic, which was valued at around $200 million in its latest funding round.

Meredith acquired SI in early 2018 as part of its roughly $1.8 billion deal for Time Inc., with Koch Equity Development contributing $650 million to the purchase. In the ensuing 18 months, the business has unloaded the company’s assets in pursuit of paying down $1 billion worth of debt. It sold Time magazine to Salesforce founder Marc Benioff and wife Lynne Benioff for around $190 million and Fortune magazine to Thai entrepreneur Chatchaval Jiaravanon for $150 million. It’s also shopping FanSided, an SI-affiliated blog network that focuses on sports and pop culture, for a reported $30 million, along with ad platform business Viant.

On a broader scale, the shifting media landscape hasn’t kept investors from dabbling in the US publishing industry, though deal count dropped about 5% in 2018, per Pitchbook data. And 2019 is off to a fairly benign start, with just six completed PE-backed acquisitions to date. The most notable came in January when Penske Media, a New York-based digital media company backed by the Saudi Arabia Public Investment Fund, bought the remaining 49% stake it didn’t already own in Rolling Stone magazine.

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