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Future of investments in a tech world dominated by Internet giants

Recently I had some discussions with investors and founders about the state of investments in tech…

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Recently I had some discussions with investors and founders about the state of investments in tech companies. We also discussed the outlook and my investment strategy going forward.

I posted several times my disbelieve in B2C focused investments due to the development of Internet giants in that space. I monitored the trend of those companies rather developing their own products based on their own technology stack rather than acquiring those startups and CBInsights Tweetstorm seams to agree with me. The exception of this trend were Yahoo and Microsoft. We will see soon if those two companies will change their strategy regarding B2C, but my assumption is they will. Yahoo rather based on their overall strategy shift and Microsoft based on their experience with these kind of deals. Both will be saturated with deals for one reason or the other very soon. Startups acqui-hiring other Startups was also a long term hope for investors as we have seen over the last years. But this will end also when those companies will focus on their own core products. There are companies like Zalando being on a acqui-hire strategy recently after their announcement on Slush to grow the tech team substantially.

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In this world where Amazon can pull a Netflix and a Spotify business from a technology perspective just like that and pushing this new service to the Prime customers for almost no price risking a 99% loss making margin there is no room for a profitable business model of a one-trick-pony like those two companies. The end is near for both of them if they focus on the technology platform with their slowly shrinking user base. The real defendable assets in a world dominated by Internet giants lies in content and user base. Sounds simple.

A huge loyal customer base acquired over years is a defendable asset. This user base has grown over various businesses and years. Amazon customers will stay the same as Google and Apple customers as long as the companies keep them happy with new products and additional services. Just be on the watch so your customers will find what they want in your own shops and not being forced to look somewhere else. Streaming music, on demand videos, online storage just to name a few commodities these days. You might have some time — 2–4 years tops — for evaluating a new service. But after not too long you have to offer it to your customers to keep them loyal with your cash cow businesses. Ask Apple for iPhone and Google for Google Apps. Innovate and keep the common features included in your basic offerings. In a complete digital world everybody can move to new service — especially when it is a new service and migration is not blocked by legacy.

The other unique asset is content. With content comes exclusivity — to sell your commodity services with. In commodity services prices will turn to zero. If everybody offers it there is no need to pay for it from a user perspective. Once a product reaches a commodity level the price will go away. Only exception of this rule if royalty fees are connected to this service, which can only be connected to content when your product is pure digital. This will not apply to hardware obviously where patents are the comparable value to content royalty fees in the digital age.

Latest with Taylor Swift taking off here content from Spotify and than later signing an exclusivity deal with Apple Music this has become very obvious. Apple is struggling to move over users to their own service even while having direct ownership over their iPhones. Why is it difficult for Apple? because the service is commodity — aka equal to Spotify and other competing services — and prices can not be pushed to zero due to royalty fees for labels and musicians. What is left to challenge the competition is content. This leads to exclusivity deals with the leading stars of the industry. Those services who own the Top 5 actors will take over the industry. So expect more Apple Music deals with musicians from this list: Drake, Rihanna, Ed Sheehan, The Weekend, Kanye West, Eminem, Nicki Minaj, Beyonce, Arianna Grande, Lana del Rey. Bare in mind that Taylor Swift pulled here music from Spotify so she can not be on this list. There are some calculations what Adele and Taylor Swift non streaming strategy will have in the future for those companies.

The content paradigm is true for gaming as well. So the rational behind high exit valuations for Supercell, King and others is just based on their IP for certain games. Like movies for studios those games will have a defendable assets for the future. Distributing and publishing games will generate a user base, which lowers customer acquisition costs (good old economy of scale). Ownership of games IP will provide the fuel to keep the fire burning. Gaming studios can be replaced and rearranged. But the original IP has a higher value. If the IP lies with the studio, this will become the target for some trade sale activities.

Because investors can’t invest in those large scale user base of Internet giants they will focus on content and creation of IP. Those are interesting times with high risk and high rewards metrics for investors. Welcome to the good old times of ‘content is king’ rational for investors. We haven’t heard this in a very long time.

Source: https://thomasgr.tumblr.com/post/135402129445

Private Equity

Ordermark Funded $120M to Expand its Virtual Business

Virtual

Ordermark is based in Los Angeles, CA, one of the leading online ordering management solutions for restaurants and virtual restaurant concepts.

Ordermark was funded $120 million series C round funding. The funding was led by prominent technology investor SoftBank Vision Fund and joined by returning investor Act One Ventures. The grant will use to help more restaurants transition to online ordering during the pandemic and beyond.

The company’s software consolidates incoming orders from multiple platforms and sends them to a single printer. Ordermark also operates a company

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The post Ordermark Funded $120M to Expand its Virtual Business appeared first on Funded.com.

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Ordermark is based in Los Angeles, CA, one of the leading online ordering management solutions for restaurants and virtual restaurant concepts.

Ordermark was funded $120 million series C round funding. The funding was led by prominent technology investor SoftBank Vision Fund and joined by returning investor Act One Ventures. The grant will use to help more restaurants transition to online ordering during the pandemic and beyond.

The company’s software consolidates incoming orders from multiple platforms and sends them to a single printer. Ordermark also operates a company called Nextbite, a portfolio of 15 readymade virtual brands such as CraveBurger, Firebelly Wings, and HotBox by Wiz, a collaboration with rapper Wiz Khalifa. Restaurants can offer these delivery-only brands out of existing kitchens, opening up additional revenue streams.

Jeff Housenbold, the Managing Partner at SoftBank Investment Advisers, said. They believe Ordermark is a leading technology platform and innovative virtual restaurant concepts transform the restaurant industry. And they are excited to support their mission to help independent restaurants optimize online ordering and generate incremental revenue from under-utilized kitchens.

The rise of ghost kitchens and virtual restaurants, often referred to as the 3rd wave of food delivery, have paved the way for a broader addressable market for online food delivery.

The statement of Alex Canter, the chief executive officer behind Ordermark 2020, has been a tough year for restaurants. That’s why they are focus on providing products and services to help keep their doors open. This funding allows them to offer more restaurants with innovative ways to reach more consumers.

By: K. Tagura

Author statement:

Funded.com is the leading platform for accredited investors network worldwide. We monitor and provide updates on important funding events. Angel Investors and Venture Funding can be a key growth for a startup or existing business. Whether it is a first, second or third round financing having a strategic alliance with an Angel Investor or Venture Capital financing can propel a business to the next level and give the competitive edge.

Source: https://www.funded.com/blog/2020/10/ordermark-funded-120m-to-expand-its-virtual-business/

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Private Equity

Alternative Investments/ESG: Amundi Launches Sustainable ETF With Exposure To Japanese Stocks

The Amundi Index MSCI Japan SRI UCITS ETF offers exposure to large and mid-cap companies with outstanding Environmental, Social, and Governance (ESG) ratings in the Japanese market. The new ETF is an extension of Amundi’s range of sustainable ETFs.

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Alternative Investments/ESG: Amundi Launches Sustainable ETF With Exposure To Japanese Stocks

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Amundi’s new ESG ETF invests in large and mid-cap Japanese stocks.

The Amundi Index MSCI Japan SRI UCITS ETF offers exposure to large and mid-cap companies with outstanding Environmental, Social, and Governance (ESG) ratings in the Japanese market.

The new ETF is an extension of Amundi’s range of sustainable ETFs. (ETF Stream)

Amundi Index MSCI Japan SRI UCITS ETF

The ETF tracks the performance of the MSCI Japan SRI Filtered ex Fossil Fuels Index, which in turn is an equity index based on the MSCI Japan Index (the parent index). The index is representative of the large and midcap stocks of the Japanese market.

It excludes issuers involved in Nuclear, Tobacco, Thermal Coal, Alcohol, Gambling, Controversial Weapons, Conventional Weapons, Civilian Firearms, Oil & Gas, Fossil Fuels, Genetically Modified Organisms (GMO), and Adult Entertainment.

Its total expense ratio is 0.18%. No performance fees apply.

It is an accumulation fund and will be managed by Amundi Luxembourg SA, an entity that is part of the Amundi group.

The ETF is market-cap weighted and includes a 5% capping on issuer weights. It comprises 68 stocks, compared to 320 names in its parent index.

The fund’s largest holding is Nintendo with 5.6% weighting ahead of Daikin Industries with 5% and Sony with 4.7%.

It is listed on the Deutsche Boerse and Euronext Paris.

ESG ETFs continue record run

European ESG ETFs continued their strong trend and set a record for assets gathered in a month (€3.9 billion), according to the latest Money Monitor report from Lyxor ETF for September.

Related Story:  Amundi Expands ESG Range With Two New ETFs

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Source: https://dailyalts.com/alternative-investments-esg-amundi-launches-sustainable-etf-with-exposure-to-japanese-stocks/

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Private Equity

Artificial Intelligence: Intel First To Deploy AI “On Edge” In Space

Intel (NASDAQ: INTC) has the distinction of launching the first onboard AI processing chip into space. Earlier this month, the European Space Agency and Intel announced the successful deployment in space of PhiSat-1, the first-ever satellite with onboard AI-processing capabilities. Launched from a rocket dispenser on September 2, the PhiSat-1 is positioned about 530 km above our heads, moving at a speed of 27,500 km per hour in a sun-synchronous orbit.

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Artificial Intelligence: Intel First To Deploy AI “On Edge” In Space

https://dailyalts.com/wp-content/uploads/2020/10/Intel-AI-Satellite-4-scaled.jpg

A satellite the size of a cereal box, carrying a camera and an AI chip, is now in orbit.

Intel (NASDAQ: INTC) has the distinction of launching the first onboard AI processing chip into space. Earlier this month, the European Space Agency and Intel announced the successful deployment in space of PhiSat-1, the first-ever satellite with onboard AI-processing capabilities. (Business Insider)

Launched from a rocket dispenser on September 2, the PhiSat-1 is positioned about 530 km above our heads. It is moving at a speed of 27,500 km per hour in a sun-synchronous orbit.

PhiSat-1

The satellite’s objective is to monitor polar ice and soil moisture, as well as to test inter-satellite communication systems.

The satellite carries a hyperspectral-thermal camera and an Intel Movidius™ Myriad™ 2 Vision Processing Unit (VPU). The latter is responsible for the AI heavy lifting operations onboard the spacecraft.

Myriad’s immediate function is to curate the huge mass of data captured by the camera.

AI at the ultimate edge – space

The big problem facing the scientists was the sheer volume of data generated by the hi-fidelity camera onboard the PhiSat-1. The camera unfortunately does not know how to differentiate between a cloudy and clear environment.

It, therefore, takes a large number of photographs that are useless because, at any given time, clouds envelop two-thirds of the earth’s surface.

The junk photos consume precious internet bandwidth to send down to earth. After all that, scientists would likely delete the unclear photos.

The scientists decided to use onboard AI (also known as “on edge” processing) to curate the photos. Myriad-2 would examine the images, trash the useless ones, and send only the good ones to earth.

By discarding the cloudy images at the source, they saved nearly 30% of bandwidth.

“Artificial intelligence at the edge came to rescue us, the cavalry in the Western movie,” says Gianluca Furano, data systems and onboard computing lead at the European Space Agency.

“Space is the ultimate edge,” says Aubrey Dunne, chief technology officer of Ubotica, the Irish startup that built and tested PhiSat-1’s AI technology. “The Myriad was absolutely designed from the ground up to have an impressive compute capability but in a very low power envelope, and that really suits space applications.”

Ubotica worked with cosine, the maker of the camera, in addition to the University of Pisa and Sinergise.

After three weeks of testing, the team could establish that Intel’s Myriad AI onboard the PhiSat-1 was working fine.

ESA then announced “the first-ever hardware-accelerated AI inference of Earth observation images on an in-orbit satellite.”

Satellite-as-a-service!

Scientists can now visualize multiple applications of AI on satellites.

For example, the satellite, during one orbit, could switch from spotting wildfires on land to rogue ships or environmental accidents at sea such as oil spills.

It could measure crops and soil moisture over farms and forests, and assess the ill effect of climate change on melting ice caps.

Related Story:   Satellites and AI Could Together Predict Wildfires Accurately

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Source: https://dailyalts.com/intel-first-to-deploy-ai-on-edge-in-space/

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