Headline Developments
Coinbase (COIN) is under scrutiny from the SEC, receiving a subpoena from the regulator relating to its yield-generating product dubbed Lend (allowing users to earn double-digit yields on deposits of USDC on its platform). According to a series of tweets from Coinbase CEO and co-founder Brian Armstrong (outlined below), he says that the SEC has refused to meet with the company, that they have complied with all requests and that the company’s door remains open for constructive discussions.
This comes in the same week of an SEC investigation into Uniswap (UNI-c), the world’s largest decentralised exchange (DEX). According to the WSJ, the SEC’s investigation will focus on how the company’s users trade on the platform and, more specifically, how such trading circumvents regulations (including how they are marketed to users).
None of this comes as a surprise as the SEC, and other regulators around the world, grapple with understanding these instruments, the potential risks to ‘investors’ and how to monitor effectively against money laundering, tax evasion and other erroneous activity. Such regulatory scrutiny will only intensify as more and more money is poured into the sector.
All this comes as El Salvador became the first country to formally adopt Bitcoin (BTX-c) as legal tender. To celebrate ‘Bitcoin Day’, El Salvador’s President Nayib Bukele announced the country’s purchase of 400 bitcoins in a series of tweets on Monday…..followed by a further purchase of 150 bitcoins as Bukele bought “the dip”.
Reports surfaced during the week that ‘several’ Beijing-based companies (include State-Owned Enterprises) were looking to acquire a stake in ride-sharing conglomerate Didi (DIDI). The proposal, which has since been denied by Didi, indicated such entities taking a ‘sizeable slice of Didi’ or ‘a nominal stake accompanied by a golden share with veto power and a board seat’. The latter move would be in line with what we’ve recently seen over at TikTok parent Bytedance (private).
Apple (AAPL) announced a new product unveiling for next Tuesday 14th September. Despite the company being mute on details, the expectations are for new product drops for the iPhone 13 and Apple Watch Series 7 (and possibly Apple’s AirPods 3). As with all/most of these events, any updates are expected to be ‘incremental’ (i.e. battery duration, smaller notch, camera improvements, faster processor etc). Design-wise, all should remain the same, although the Apple Watch Series 7 is expected to have a bit of makeover, dropping the curved edge for a flat-edge design below (mocked up by Mac Rumours and 91mobiles).
Other Developments
Not to be outdone, EssilorLuxottica’s (EL.PA) Ray-Ban and Facebook (FB) will be launching a pair of smart glasses on 9th September - something they call a stepping stone towards “full augmented reality glasses”. If this video from Facebook’s VP of AR and VR Andrew Bosworth is anything to go by, the expectation is that the upcoming glasses will offer wearers ‘point of view’ recording….much like Snap’s (SNAP) upcoming Spectacles 3.
The Texan city of Taylor plans on offering substantial property tax breaks to Samsung (005930.KS) as the Korean giant weighs up the location of its $17b chip plant. Samsung is also eyeing off Austin as well as the states of Arizona and New York. Under Taylor’s proposal, Samsung would be offered a grant equivalent to 92.5% of assessed property tax for 10 years, 90% for the following 10 years and 85% in the 10 years thereafter.
NASA is finally set to launch the James Webb Space Telescope (JWST), which was originally set for launch in 2007 (and then 2018) to replace the Hubble Space Telescope (which launched 30 years ago). JWST, now launching on 18th December, will enable NASA to detect earlier galaxies and distant planets with far greater precision and detail than its predecessor.
Sila Nanotechnologies (private), a leading developer of next-gen lithium-ion material for batteries, will debut its new battery technology in the Whoop 4 fitness and health wearable. The battery in the device replaces graphite with silicon to create a more energy-dense (and cheaper) battery pack - one which gives Whoop 17% higher energy density, enabling a suite of new features (pulse oximeter, skin temperature, health monitor) whilst maintaining a 5-day battery life. This is a small step towards much broader ambitions which will ultimately lead to EV production, in collaboration with BMW (BMW.DE) and investor Daimler (DAI.DE).
Onto some auto innovation now…..
Hyundai Motors (005380.KS) have gone big on hydrogen, announcing that it will provide hydrogen fuel cell versions for all its commercial vehicles by 2028, with the aim of being at price parity with EVs around the same time. This aligns with other majors like Toyota, Hino, GM, Daimler, Volvo, Cummins, Nikola and Hyzon who are all backing the technology for heavy, long-range vehicles. The company also shared details of its high-performance hydrogen sports car, the Vision FK, with a 500kW fuel system capable of accelerating to 100km/h in under 4 seconds, with a range of 600km - as well as glimpses of a hydrogen-fuelled tram and trailer drone (all highlighted in the video below).
Nikola (NKLA) and shareholder Bosch (private) have struck an agreement for Bosch hydrogen fuel cell modules to be used to power two of Nikola’s semi-trucks - the Nikola Tre (below) and Nikola Two sleeper. Bosch will also supply fully assembled power systems, with the agreement to have no impact on an existing non-binding with GM’s Hydrotec fuel cell system.
Daimler’s (DAI.DE) Mercedes-Benz has introduced a range of new EVs including the electric G-Class SUV (below), its first high-performance AMG and a sedan. The EQS sedan (a more affordable version of its flagship EQS) will have 288hp (vs 329hp for the EQS) whilst the AMG EQS will have 761hp at “race start” (658hp standard), hitting 100km/h in 3.4 seconds. However, the real show stoppers are the concept vehicles - the EQG G-Class (below right) and the Maybach EQS SUV (inset left).
Toyota (7203.JP) has committed $13.6b to batteries up to 2030, with $9b going towards battery production. As part of this goal, the company is setting ambitious goals on battery longevity and cost. The company believe that the battery cost for the upcoming bZ4x will halve from 2025, with that same battery set to retain 90% of their battery capacity after 10 years of use. In the US, regulations state that batteries should be guaranteed for at least 8 years, after which point they should retain 70% of their capacity.
Wrapping up the week’s EV news is Rivian (private). The automaker, backed by Amazon (AMZN) and Ford (F), announced that the EPA has released range estimates for both the truck and the R1S SUV - an important milestone before customer sales kick off this (or next) month. The launch editions of both vehicles will have a range of just over 500kms (although a larger battery will be capable of over 640km of range). Once Rivian sales kick in, it will usher in a whole wave of EV trucks, including the Ford F-150 Lightning, the GMC Hummer and…..at some point….the Tesla Cybertruck.
New Listings
Reddit (private) is reported to have hired bankers and lawyers as it sets its eyes on a potential $15bn NYSE listing. As of October last year, Reddit had ~52m DAUs and over 100k communities but, given the rise in meme stocks over the past year, that number is likely to be considerably higher (likely in excess of 80m DAUs). The company has also previously disclosed ~$100m in advertising revenue in 2Q (up almost 3x YoY).
Sportradar Group (private), the world’s leading supplier of sports and betting-related data and services, announced terms of its IPO during the week, aiming to raise $504m and valuing the company at ~$7.4b. According to the company, they are the biggest provider by revenue of B2B solutions for sports betting globally, acting as an intermediary (below) between 83 sports and 900 sports betting operators (and media companies). According to the company’s prospectus, they cover over 750k events, pulling in over $480m in revenues annually.
M&A | Cap Raise | Earnings
Another week, another BNPL deal. This time it’s PayPal (PYPL) paying $2.7b for Japan’s Paidy (private) - a two-sided payment service between consumers and merchants offering a monthly instalment service called ‘3-Pay’ (not to be confused with PayPal’s ‘Pay in 4’!). The platform has 6m registered users in Japan and gives PayPal a nice foothold in the third-largest e-commerce market in the world.
Jeff Bezos has reportedly invested in anti-ageing startup Altos Labs (private). According to the MIT Tech Review, the company was founded earlier this year and is poaching university scientists with salaries as high as $1m to pursue biological reprogramming technology to rejuvenate cells and, it is hoped, ultimately lead to the prolonging of life. Elon Musk was also quick to throw his two cents in, tweeting “and if that doesn’t work, he’s gonna sue death!”. A big of a dig at Bezos’ current tussle with NASA.
Gaming studio ProbablyMonsters (private) has raised a whopping $200m to work on a series of triple-A games (i.e. high budget/big dev/high quality). According to Forbes, this is the biggest Series A of any video game company in history. For ProbablyMonsters, this money ensures they can retain key talent to work on a pipeline of projects over a longer-term. The company currently has three internal development studios with Firewalk working on a multiplayer game (to be published by Sony), Cauldron developing a “single-player, adventure-driven game” and a third unnamed division working on a “next-gen open-world co-op experience that will bring players together”,
Malaysia’s Carsome (private) is now worth $1.3b after raising $170m from a list of investors including MediaTek (2454.TW), MUFG, Gobi Partners and 500 Startups. Carsome is the preeminent used car platform in South East Asia, enabling a seamless user experience between buyers and sellers (as well as dealerships). The company is looking to almost treble its revenue this year to nearly $1b according to Reuters. The company are also currently looking to a US listing in the next twelve months as it continues to ride a wave of success catalysed by a growing middle-class and increased digital adoption back home and within Thailand and Indonesia.
Have a great week.
Charlie
LinkedIn or E-Mail (cnave@granitebaycap.com)
Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity. Any views expressed in this article are those of the author(s) and do not constitute financial advice.