Headline Developments
Samsung (005930.KS) and Harvard University have published new research outlining the vision of copying the brain’s neuron wiring map into a 3D “neuromorphic” chip. The approach, outlined in this paper, aims to reverse engineer the brain by copying the synaptic connectivity map of the brain (below right) and pasting the map onto a high-density 3D solid-state memory network. In the short-medium term, this may lead to improvements in AI systems, including the flexibility to learn new concepts and adapt to change. However, the prospect of “downloading” the entire brain onto a chip is still way off (a human brain can store the equivalent of 2.5 billion gigabytes of digital memory (which is 2.5 million 1TB solid-state drives, below).
In keeping with the Black Mirror-esque theme, Amazon (AMZN) have just launched their very friendly-looking household robot called Astro (incidentally the name of the dog in Jetsons). This project is the culmination of four years of work, however, the practicality of it appears dubious or, as Wired put it “a robot without a cause”. But for Amazon, that’s fine. This first iteration (basically a robot vacuum with a tablet) isn’t meant to break sales records but is more of a beta release, to gather data and feedback on future use-cases for the device. It will surely also field a series of questions around privacy; which Amazon is keeping at bay for now by reinforcing that all data (maps, video, images, facial recognition) is stored locally on the robot.
Other Developments
The other company we trust least with our data, Facebook (FB), is spending $50m on “Building the Metaverse Responsibly”. According to Andrew Bosworth (current VP of Facebook Reality Labs and future CTO), this money will go into a research fund where Facebook will collaborate with the government, industry and academia to determine how to build these technologies responsibly. Through those collaborations/research, Facebook aims to address key ‘risks’ relating to privacy, safety and integrity, economic opportunity and equity and inclusion BEFORE it becomes a major issue. For example, independent external research is being conducted by Singapore’s NUS into privacy and data use, and by Seoul National Univesity and the University of Hong Kong into safety, ethics and responsible design.
Dolce & Gabbana (private) have released a nine-piece one-of-a-kind collection, called Collezione Genesi, that involves both a physical and digital version of items across women’s and men’s fashion and jewellery - including “The Impossible Tiara”, “The Lion Crown” and “The Doge Crown”. As of writing, the Doge Crown’s highest bid is 201 ETH (US$572k). As well as giving you the title of “King of Crypto” the Doge Crown, along with all other assets, gives you physical ownership of the crown, an original signed sketch (by Dolce & Gabbana), a digital version of the crown (4K rendered animation/stills and 1 custom digital recreation in 1 open metaverse of choice) plus a range of unique experiences (access to couture events, private atelier tour).
Users in the US will soon be able to deposit their entire paycheck (or part of it) into their Coinbase (COIN) accounts. Once the USD hits your Coinbase account, you can then choose how that money is deployed (converted into one of ~100 coins or retained for use with the Coinbase debit card). This feature removes the barrier of users having to transfer funds from other financial institutions to their Coinbase account whilst enabling seamless payments via the debit card. This new feature comes after the company recently dropped their DeFi lending product to appease regulators (who are scrambling to keep up with the rate of change with financial services).
Mastercard (MA) are turning up fashionably late for the BNPL party, announcing Mastercard Installments during the week, initially allowing merchants in the US, Australia and the UK to “plug in” to the Mastercard program and offer loans directly. Barclays (BCS), SoFi (SOFI), Synchrony (SYF) and Marqeta (MQ), who power the Coinbase card, are among those planning to use the platform. In Australia organisations like Qantas (QAN.AU) and Latitude Financial (LFS.AU) have jumped on board (interesting to see if this kills off Latitude’s in-house BNPL Latitude Pay whose traction has been hampered by the strength of domestic players like AfterPay and Zip).
The Defense Advanced Research Projects Agency (DARPA) has successfully completed a test flight of its new Hypersonic Air-Breathing Weapon Concept (HAWC). The missile, built by Raytheon (RTX), is powered by a Northrop Grumman (NOC) scramjet (supersonic combustion ramjet) which mixes compressed incoming air with hydrocarbon fuel to propel the missile at speeds greater than Mach 5 (5x the speed of sound). For comparison, Russia’s 3M22 Zircon Missile, India’s Shaurya Missile and the joint Indian/Russian BrahMos II hit Mach 9, 7.5 and 7 respectively. Russia’s capability here is of most concern, with the Zircon Missile reportedly developed to carry a nuclear warhead capable of “unlimited range” according to this hypersonic weapons report delivered to Congress.
Meanwhile, Korean are continuing to ramp up operations in the US.
Firstly, Ford (F) and SK Innovation (096770.KS) will invest $11.4b to build an electric F-150 assembly plant and three battery plants in the United States, with Ford also now expecting to have up to 50% of its global vehicle volume being all-electric by 2030 (up from 40% previously). Under the arrangement, assembly and battery plants will be opened in Tennessee with two additional battery factories launching in Kentucky. All plants are scheduled to open in 2025 and will be Ford’s single largest manufacturing investment in its 118-year history.
As previously reported, this investment comes as Samsung Electronics (005930.KS) come close to finalising a $17 billion semiconductor factory in Texas, with due diligence still proceeding around a number of other possible locations.
After years of prototypes, pre-orders and hype, the electric vehicle market is finally seeing some tangible strides forward with Lucid Motors (LCID) following Rivian’s (private) announcement for the delivery of their US-made luxury electric sedans - coming next month. Lucid Air is currently being produced at the company’s Arizona factory, with production expected to ramp up to around 90,000 cars per annum over the next couple of years. The Lucid Air Dream Edition (below) has received an official US government rating of a 520-mile (837 km) driving range, about 20% more range than its closes rival, the Tesla (TLSA) Model S.
General Motors (GM) is also jumping in on the action this week, launching a second van under its BrightDrop unit. The new addition, the EV410, will have 400 cubic feet of storage (50% smaller than the EV600) and fit into a standard parking space - making it suitable for a broader range of customers like Verizon (VZ) who will be customer number one for the new vehicle. Outside of the vehicle, BrightDrop also offers a fleet management platform with features like real-time fleet tracking, fleet management (including non-BrightDrop vehicles), remote commands, safety incidence recording, battery/charge management, driver coaching, route planning and more.
Separately, GM invested $300m into Chinese Automonmous Vehicle company Momenta (private) to help accelerate AV technology for their future vehicles in China. This follows similar moves by Toyota and Mercedes to invest in the platform. Rounding out a very busy week for the auto conglomerate, they also announced their end-to-end software platform Ultifi, which will give all future owners access to in-car subscriptions, over-the-air (OTA) updates, in-car cameras, automatic child-lock………….you name it.
New Listings
AutoStore (private) one of the more exciting logistics/robotics companies in the world, says it is seeking to raise $315m by listing on the Oslo exchange. Back in April, Softbank (9984.JP) bought a 40% stake in the company for $2.8b (valuing the company at $7b), with expectations that a $10b price tag is within the ballpark for the IPO. At present, the company has 600 installations in 30 countries, deploying 20,000 robots for customers like ASDA, Gucci, Puma and Siemens. As you’ll see in the below video, the platform works like a giant Rubix cube, storing different products in different ‘boxes’ which are collected 24/7 by one of the many robots skirting around the perimeter. This is a technology that does and will truly revolutionise fulfilment, both at a large (warehouse) scale and within smaller micro-fulfilment centres.
Swedish EV company Polestar (private) is going public via a SPAC deal, merging with Gores Guggenheim (GGPI) at an expected valuation of ~$20 billion. The company, whose investors include Geely (175.HK) and SK Holdings (private), have two vehicles in the market today (Polestar 1 and 2) with three premium vehicles (2x SUVs and a sports GT) in the pipeline for 2022-2024 (all manufactured in China). According to the investor presentation, the company aim to scale from 29,000 vehicles this year to over 290,000 by 2025 (at which point they expect to hit $17.8b in revenues and $1.6b in EBIT).
M&A | Cap Raise | Earnings
Mexican used-car marketplace Kavak (private) has raised an eye-watering $700m, putting its valuation at $8.7 billion (just five months ago it was valued at $4b when it raised $485m!). This, according to TechCrunch, makes it the second-largest startup in Latin America behind NuBank which was last valued at $30 billion. General Catalyst led the round, with Sea Ltd (SE), Softbank (9984.JP) and Tiger Global (and others) also participating. It’s also worth noting here that a large portion of Latin America’s population is unbanked (i.e. no credit history/bank account). That means they can’t get auto financing from traditional lenders which creates an opportunity for companies like Kavak to generate considerable income (and insights) via the creation of a financing arm (in a way, the car marketplace is a front for a much larger fintech lurking below the surface).
Singaporean logistics startup Ninja Van (private) also pulled in a whopping round, with Alibaba (BABA), France’s La Poste and Facebook co-founder Eduardo Saverin’s B Capital Group (and others) investing $578m in the Series E round. Ninja Van delivers approximately 2 million parcels per day, with more than 1.5m active shippers and 100m recipients across Southeast Asia.
Netflix (NFLX) has acquired video game developer Night School Studio (private) in the same week that the streaming company started to roll out a handful of mobile gaming titles in Europe. Night School Studios, the company’s first gaming purchase is best known for its debut title “Oxenfree” which is a bit of an indie version of Stranger Things. The company also developed a game for the widely popular TV series Mr Robot. So there are a number of synergies here that will make this a good fit for Netflix and their wider franchise of titles.
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.
Nice one Charlie, very well writtten!