Here’s how likely your startup is to get acquired at any stage

By Jason Rowley for Techcrunch.com

Let’s say you randomly selected 1,000 seed-stage startups based in the United States. How many of those would go on to raise a Series A? Of companies that go on to raise a Series A, how many would go on to raise a Series B? You could keep this process going until only a few companies remain.

But it’s not enough to just ask what the survival rate of companies is from round to round. The bigger question is what happens to those that don’t make it through the fundraising gauntlet? Sure, mortality is a fact of startup life. But there are also happier reasons for not making it to the next round, like when companies exit the funding rat race by way of acquisition or IPO. So what share of those companies find an exit?

Today, we’re going to answer those questions with funding data from around 15,600 U.S.-based technology companies founded between 2003 and 2013. Let’s first take a look at the survival curve and just how steep the drop-off is.

The steep startup survival curve

Below, you’ll find a chart that answers how many (or how few) startups that raised capital in previous rounds raise in the next one:

Out of our hypothetical 1,000 startups that successfully close a Pre-Series A round (e.g. a Seed or Angel round, a convertible note or equity crowdfunding round), we’d expect to see a little over 400 of them make it to Series A. In other words, our data set suggests that around 60 percent of companies that raise Pre-Series A funding fail to make it to Series A or beyond.

On a linear scale, the drop-off rate is quite dramatic. But a fair bit of detail is lost after Series E on that chart. Let’s take a look at the same data using a logarithmic scale:

(This is the same data as the chart from above, just displayed on a scale that helps to show the near-exponential decline in the population of startups moving through the fundraising cycle.)

According to our analysis, only roughly 1 percent of companies founded between 2003 and 2013 have successfully raised a Series F round. Out of around 15,600 companies in our data set, just four — Pivot3, Smule, Glassdoor and Aquantia — raised Series H rounds.

Last exit on the right

As we discussed earlier, there are plenty of reasons for companies to stop fundraising.

For those companies that don’t close up shop or achieve financial sustainability, an exit from the fundraising cycle comes in one of two varieties: an acquisition or an IPO. Let’s take a look at when companies are most likely to make one of those exits by way of acquisition. In our data set, there were more than 16 times as many companies that took the acquisition path compared to going public.

We’ll map out this path to exit in two ways. First, we’ll zoom in to analyze just the set of companies that have been acquired to find out the stages at which acquisitions are most likely to occur. And finally, we’ll take a look at the overall chance of being acquired as a company moves through the fundraising cycle. On to the first.

Stage of acquisition

When do most companies get acquired? Intuition might suggest it’s when the stock in that company is the least expensive, so acquisitions are likely to happen at a relatively early stage. But just how early? It might be surprising just how few steps down the fundraising alphabet one needs to take to account for as much as 90 percent of the acquisitions.

Here’s what the cumulative distribution of acquisitions looks like, starting with companies that didn’t raise anything beyond Pre-Series A funding all the way through those that closed Series H rounds:

To adjust for the (rapidly) declining population of startups as we move forward through the funding cycle, we divided the number of exited companies at each stage of financing and divided it by the total number of companies listed as acquired through that stage. This produces the proportional share of companies that were acquired after each round of funding, showing the relative likelihood of an exit.

To reiterate: The chart above does not suggest that around 92 percent of companies are acquired after raising a Series C round. It shows that, of the companies in our data set that were acquired and have raised venture financing, around 92 percent of those raised through Series C. So entrepreneurs, if you’re dead set on starting a company that gets acquired, you have a one in 10 shot at being acquired at or after Series C.

Companies acquired at each stage of funding

The chart above shows when startups that have been acquired do get acquired, but it doesn’t answer an obvious question. Let’s just give it to you straight: Here’s the share of companies that have been acquired through each stage of funding:

The proportion of the total startup population that winds up getting acquired maxes out at around 16 percent at Series E-stage companies, with only the slightest variation after that. Ultimately, roughly one in six companies in our data set ended up being acquired to date.

Revisiting the drop-off in funding

Like we mentioned earlier, there are several reasons why companies stop raising money. Some achieve financial sustainability, others close up shop and still others find an exit through acquisition or going public. As far as exits go, we focused primarily on acquisitions. That’s the exit most companies take, and it’s the exit option for which we had the most data to draw conclusions from.

The cause of the very steep drop-off in the population of early-stage startups is complicated, but if one thing is clear, it’s that most of the exit opportunities come early, as do the primary causes of startup failure. Team breakups, running out of capital before finding product-market fit, failing to scale, simple bad luck and plenty of other company-killing pitfalls are just more prevalent when startups are, well, starting up.

There are other factors to be mindful of here, like the possibility that later-stage rounds were labeled as “private equity” because of the type of investors involved, which we didn’t account for here. It’s possible that the scenario we painted is a bit more dire than reality, but if so, it isn’t by much. It’s still hard to raise money.

Out of all the things that make starting a successful company difficult, the steep curve of startup survival through the fundraising process might be one of the most significant. So if your company isn’t too far down the alphabet of VC funding rounds and you’re having a hard time finding a path out of the woods, exit if and while you can. You won’t be alone in doing so.

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Banks pour $107M into blockchain consortium R3

By Penny Crosman for American Banker

R3, the bank consortium that’s building a distributed ledger specifically for financial institutions, received its first wave of funding Tuesday morning — a cool $107 million from 40 of its backers.

The money should give a boost to R3, which has suffered several defections in recent months. JPMorgan Chase, Goldman Sachs, Banco Santander, Morgan Stanley and National Australia Bank have pulled out of the group.

“I think it’s a massive vote of confidence,” said Charley Cooper, managing director at R3. “It’s a lot of money. And unlike venture capitalist firms that sprinkle money around various places and hope that something hits, bank investment committees and investor groups are far more diligent and exacting in the type of review they do before they’re willing to cut a check.”

Although R3 has lost some major names, it has added members, too. The group currently has 84 members, most of which are financial institutions.

The members involved in the raise include Bank of America Merrill Lynch, Wells Fargo, Citigroup, TD Bank, BBVA, Bank of New York Mellon, Northern Trust, HSBC, Barclays, UBS, Intel and Temasek.

“Having been an active part of the R3 journey from the very start, it is rewarding to see the initiative and the technology taking shape,” said Hyder Jaffrey, head of strategic investment and fintech innovation at UBS Investment Bank. “From the outset, marketwide engagement has always been a key factor to realize the benefits of this technology for both our markets and clients. R3 is now uniquely positioned to deliver on this promise.”

Blockchain chart

To be sure, banks are hedging their bets on distributed ledger technology. Many of the bank members of R3 are also members of the two other largest distributed ledger technology groups, Hyperledger and the Enterprise Ethereum Alliance. BBVA and BNY Mellon are members of all three groups. UBS and ING Group are in R3 and the Enterprise Ethereum Alliance. JPMorgan belongs to Hyperledger and the Enterprise Ethereum Alliance and also has its own distributed ledger, called Quorum, which is based on Ethereum.

And the landscape for the development of blockchain in banking is continually evolving. On Monday, 84 companies joined the Enterprise Ethereum Alliance, which now has 116 members, and eight joined Hyperledger, bringing its total to 142 members.

Much of the $107 million will go into hiring — mostly technologists, platform engineers, designers and other software specialists, Cooper said. R3 currently has a staff of 110 people.

These added technologists should speed up the development of R3’s Corda open source platform and an enterprise-grade version of the software that will be announced later this year. They’ll also continue working with partners like Calypso Technology and HQLAX to build specific applications for the Corda platform.

“We will have various pieces of the platform and the network itself stood up over the next couple of months,” Cooper said. “The goal is to have at least one commercial product ready to go and live by the end of the year.”

Tuesday’s raise encompasses the first two tranches of a three-part effort, Cooper explained. The first two were reserved for members that joined R3 in 2015 and 2016, respectively. The early members voted to let in Intel and Temasek, a Singapore-based sovereign fund. The third phase, which will be open to nonmembers as well as members, is expected to be carried out later this year.

R3 would not disclose how much each bank put in, but Cooper said that no one bank was allowed to invest a significantly greater amount than the others.

“We wanted to encourage as broad and diverse an investor base as possible,” Cooper said. “And we didn’t want to be in a position where any one or two banks were able to exercise outsize influence or control. If you only raise money from five or 10 banks, you end up taking significant chunks from particular institutions, which then try to drive the organization to their own interests.”

The membership is global: About a third of members are in the Americas, a third in Europe, the Middle East and Africa, and a third from Asia Pacific.

“That was very intentional and by design,” Cooper said. “We wanted to encourage as global a consortium as possible because there’s always a risk that you become too country-focused. Then you end up making decisions that might work for that one country’s markets.”

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BankThink Open banking is inevitable. Let’s rethink data security, too

By Kevin Paul Murphy for American Banker

The move to the digital marketplace is no longer aspirational but inevitable for the modern financial enterprise. It is now more accurate to describe a bank as a technology company. But the change in identity means banks must adjust the way they ensure the security of their enterprise.

The regulators in the U.K. and Europe provide the best indication of the future banking landscape. The U.K.’s Competition Market Authority and the European Banking Authority have been at the forefront of leading banks into the era of open banking. The European Union’s PSD2 (the revised Payment Service Directive) is the most prominent policy move encouraging open banking, with a compliance date of January 2018. Similar moves are expected by the regulators in the United States and Asia.

The objective of open banking is to increase the level of choice available to customers and to drive competition through the use of application programming interfaces — technology that lets third parties access customer transactional data that has traditionally been secured by a bank.

The opportunities for the customer are endless based on their payment history alone — for example, notifications of cheaper energy suppliers, mortgages and groceries could all occur. The opportunities for banks are less well defined but still real. The immediate challenge is to develop app-based services that can make the most of this environment. This will inevitably involve banks working with third parties that wish to gain access to customer accounts. But for those banks that provide easy integration for third parties, it is clear they will attract more customers and new revenue models.

Success in open banking will be dictated by which banks maximize API integration with third parties. But this open approach to banking has its limits too.

Its maxims may not translate well to cybersecurity in an API environment where, by definition, there will be more points of entry for potential attackers. Legislation such as PSD2 has mandated third parties will have to meet certain operational and security requirements before being authorized to obtain data. While this affords some protection, it is also clear banks will need to reassess their own security posture before fully embracing open banking. Therefore, the top five security considerations for banks entering open banking include:

API governance: It is likely there will be a massive rush in API creation and collaboration with third parties. APIs are the same as any other technological asset; their continued use should be assessed periodically from a risk management perspective, identified with clear ownership information and subject to security reviews including penetration testing and vulnerability scanning so any weaknesses can be identified and remediated.

Protect information flows: With increased interaction between banks and third parties, open banking will increase the complexity of data flows in and out of the enterprise. Data owners should understand the information life cycle and ensure sensitive information is encrypted in transmission and when stored.

Patching: As APIs become integral to the digital marketplace, hackers will increasingly target these applications for disruption, theft of credentials and financial gain. As was seen by the recent Wannacry cyberattack that affected organizations globally, attack vectors often exploit known vulnerabilities; in this case, a weakness in the Microsoft Office system. Due to the complexity of modern banking, it is not possible to apply every software update (patch) as this would place an overwhelming burden on resources. Banks should, however, have a well-defined patch management procedure that assesses risk and then categorizes patches based on the likelihood of exploitation (threat intelligence) and potential impact.

Security testing: As interfaces into a bank’s internal systems increase, greater scrutiny should be placed on both the end point and internal network. Red-teaming penetration testing — where the simulated attacker uses the same tactics as a hacker in a controlled environment — will become a crucial control in ensuring both the perimeter and connection points with third parties remain secure.

Incident response: Preparation is the most effective component of response. Moving into the open banking environment, response teams should practice scenarios where a successful attack exposes vulnerable APIs and involves an authorized third party. This form of readiness will ensure breaches are contained and disruption to services is minimized.

The new world of open banking is upon us. In the rush to engage new business models, we must remember the core pillars of information security — confidentiality, integrity and availability — will remain the foundation of success.

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Kickstarter set to launch in Japan, where hardware startups are finding it hard

By Steven Millward for Tech in Asia

Nearly one year after Kickstarter first began opening up to Asia, the popular crowdfunding store is set to venture into Japan.

Once enacted later this year, it’ll be much easier for Japanese entrepreneurs to take to Kickstarter. For the first time, they’ll be able to raise funds in yen and register projects under their local business credentials.

There have been a number of Japanese hardware startups raising money on Kickstarter in the past few years – such as Fove with its eye-tracking VR headset – but they’ve had to jump through some tricky hoops to do so.

“It will remove a barrier for Japanese creators – some had to find a partner in the US to run a campaign, which added friction,” says Benjamin Joffe from HAX, an investor in young hardware companies. Indeed, the Tokyo-based Fove team linked up with an associate in San Francisco before it could raise US$480,000 on Kickstarter for its VR gizmo.

Sony yet so far

Kickstarter’s Japanese expansion looks set to be a boost to local gadget startups, which have been slow to make the kind of impression made by illustrious forebears like Sony and Nintendo.

Entrepreneurship is becoming cool in Japan,” said James Riney, 500 Startups’ Japan boss, last year. The late start is seen in the amount of venture capital pumped into startups in the country, which falls short of the amount pumped into tiny Singapore. (2016 saw US$689 million for Japan versus US$1.4 billion for Singapore’s startups, according to the Tech in Asia database.)

Joffe describes the state of Japanese hardware startups right now as “not great.”

“The number of startups is quite low, and many [hardware] projects are more like design or niche projects than high-tech startups,” he goes on. “The gap has widened between ‘makers’ and ‘startups’ – and Japan hasn’t quite crossed that bridge yet.”

It’s almost suicidal professionally and financially.

Of the 201 gadget-producing startups that Joffe has invested in with HAX, only two had Japanese co-founders. While he sees Kickstarter and rival platforms as being important to that growth, a lot more is needed.

“I think the problem is more fundamental: the lack of safety nets in Japan for entrepreneurs makes it almost suicidal professionally and financially,” he states. “As long as conditions do not change, I do not expect a rise in the number of startups” making hardware in Japan.

“For things to change, companies need to start valuing the startup experience, and hire or re-hire startup people,” the hardware expert explains. “This is truly the number one thing to fix – and corporates should realize that all the ‘open innovation’ talk will not work well without startup people on the inside. A few other things could be adjusted on the regulatory front: let entrepreneurs keep social benefits when they start a company, until they have a regular income, or allow sabbaticals from jobs.”

Once conditions do change, the lay of the land can transform quickly. “Surprisingly, France has been improving a lot on those safety nets and was much more visible than Japan at the latest CES in Las Vegas,” says Joffe, referencing startups, not major gadget brands. “Maybe some inspiration there.”

 

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To Understand the Future of the Financial Services Industry, We Must Look Beyond FinTech

By Elena Mesropyan for LTP

While businesses are catching up with the rise of e-commerce and the mobile-first world, physical interfaces altogether are gradually falling into obsolescence. The year 2017 gives strong reasons to believe that working on the enhancement of the experience with any physical interface could be a wasteful attempt to better feed a horse instead of investing in a car (if we were to use Ford’s terms).

The problem is, however, not only in the situation where businesses are still catching up with basic trends, not speaking of exploring the vast opportunities RegTech opens, or all-in-one business banking solutions. The community of business, FinTech, banking consultants/professionals, in addition, tends to heavily rely on false indicators in an attempt to remain relevant and make predictions. FinTech, often, is one of those wrong indicators, and I will further try to expand on why.

FinTech trends do not predict the future, they often only represent an immediate business opportunity that spun out of control and beyond reason

There is a massive community of 7.2K+ FinTech startups around the world, bringing undeniable benefits across segments – democratization of remittances resulted in better inclusion, cross-border payments solutions that shed barriers for businesses, inclusion through economic identity on the blockchain, and a lot more.

On the other hand, every entrepreneur is a businessman/woman, and every startup is a business venture, pursuing an adequate goal to gain traction, and eventually to profit. While assessing the business opportunity, among other things, entrepreneurs exercise their predictive abilities by estimating market size, potential demand, and industry trends in various segments, as well as look at role models that are successfully working in the segment of interest.

Let’s look at what happened in payments. Stripe, Square Cash, PayPal, M-Pesa, AliPay, and Venmo are among those role models that opened the floodgates for 1K+ payments startups around the world. And why not use the opportunity? After all, in Q3 2016, PayPal processed nearly $26 billion in mobile payments, up 56% from last year, and representing 29% of PayPal’s total payments volume for the quarter. Looking forward, the company’s CEO Schulman predicted that PayPal would generate $100 billion in mobile payment volume within next 12 months.

Not surprisingly, payments and lending/funding have steadily been the most represented and well-funded segments. Within the payments segment, mobile wallets/payments represent the largest piece of the pie, according to MEDICI data – about 34% of companies.

To Understand the Future of the Financial Services Industry, We Must Look Beyond FinTech

Data source: MEDICI

Coupled with a very clear trend across industries that we live in a mobile-first world, the opportunity with mobile payments seems obviously lucrative. Despite the long-worn-off “wow” effect of mobile payments, we see mobile payments startups being launched right and left, without regard to logical questions – do consumers really need another payment app on their phone? Is the experience with every new mobile payment option radically, 10X different than any other payment solution out there? Is this a Blue Ocean situation at all? The answer will most likely (or even definitely) be “NO.”

Speaking of the consumer, in 2015, Gallup’s research indicated that only 13% of adults in the US had digital wallets on their smartphones. Moreover, 76% of those who had a digital wallet have never used it or have almost never used it to make a purchase from a retailer in the past 30 days. Disjoint experiences and disconnected islands of mobile payments solutions now serve as an obstacle to the whole segment to develop.

To Understand the Future of the Financial Services Industry, We Must Look Beyond FinTech

Moreover, apps overall are having trouble with retention – estimates suggest that <25% of people return to an app the day after initial install, and overall app retention drops to around 11% within a week of install. After 45 days, that number is less than 5%, before hitting 4.1% after 90 days.

I won’t even go into long-time-back questioned business models of FinTech startups and the lending segment, in particular. I also won’t be touching slowly-but-steadily-evolving banking apps that almost caught up with mobile payments app inconvenience, and now also have a strong footing in the market aside from basic credit/debit account view functionality. Unique markets like India are ahead of the world; the technologies and business models utilized deserve special attention, but that is, as I mentioned, unique.

  • The undeniable silver lining

Admittedly, we cannot downplay significant achievements that were prompted by the FinTech community. Just to mention a few:

Follow cross-industry leaders to understand where the world is really moving (including the financial services industry)

As pointed earlier, looking solely at the FinTech stage to understand what’s happening is like looking into space – the light that is hitting us now will have started from the object quite a long time ago, so in effect we aren’t looking at what the object looks like now but what it looked like some time ago. The same way, modern saturation of the payments market indicates the success the pioneers that started out a decade ago had/have. It does not mean, however, that mobile payments represent the hottest opportunity right now.

So, how do we make a better case in understanding the direction of development in the financial services industry, whether it’s about institutional banking or FinTech startups? Well, an option could be to look at the advancements that are happening in the areas bootstrapping financial services – IT, computing power advancements, etc. In other words, how does the underlying technology (hardware and software) change, and who facilitates and owns that change?

Let’s look at some examples of ‘unrelated’ changes that happen across industries and can give a hint to who is gaining power, and why:

  • Gradual obsolescence of physical interfaces in favor of voice and VR

There are a few developments that have been assertively moving interactions between businesses and consumers beyond screens, and physical interfaces overall. More importantly, those developments are not coming from the financial world (whether institutional or the startup community). Let’s look at a few examples of non-financial companies that are advancing alternative interactive interfaces:

Apple

Apple and its fascinating patent for a voice-first home hub and more. Brian Roemmele, Pay Finders, digs into this curious patent and how Siri will evolve through one of the examples in the patent describing that in this embodiment Siri can answer the front door and mediate interactions with guests.

“This is a far more sophisticated Siri that has high context and uses a shared blackboard system to interact. We can see Apple diving far deeper into the home with ambient Voice-First technology. There are a lot of embodiments that go even deeper into how the new Siri platform will extend in this patent,” Roemmele adds.

Amazon

Amazon’s latest release of the feature-rich voice-first device with a screen and a camera has been well-reviewed under the microscope, bringing together:

Amazon is also making its voice-control technology available to all, giving developers access to the same tools that power its digital assistant Alexa. The platform is called Amazon Lex, and bundles in both speech recognition, text recognition, and conversational interactions. It was first announced in a “preview phase” in late 2016, but according to a new report from Reuters, it is now rolling out to all developers.

Google

Google Assistant rapidly gains functionality, and gets smarter in understanding and performing a variety of tasks. The assistant will be able to interact with other assistants, manage calendars. Among other things, Roemmele notes 70 different smart home manufacturers that will work with Google Home, an open developer platform to add more.

Moreover, just recently, on May 18th, Google was reported to be adding a shared rooms feature to YouTube VR as part of an update to the app as well as an update to the Daydream platform in general. The feature is not live yet and won’t be added into the app until later in 2017; but once it launches, YouTube users will be able to do things like engage in voice chat and watch 360-degree videos together for a unique way to experience YouTube that is more akin to enjoying content together with friends who may be in the same room. Users will be able to enter into a shared room for a specific 360-degree video and their personas will be represented by the likes of 3-dimensional avatars.

Facebook

Facebook is now betting its future on augmented reality, the nascent technology that promises to overlay virtual information onto the real world and eventually replace smartphones with something like a pair of glasses or even contact lenses.

Insurance and the financial services industry examples, demonstrating the expansion of interactive dimensions
  1. Voice Recognition technology is already gaining traction in the insurance industry, Chipin reports. In early January 2017, Fukoku Mutual Life decided to replace 34 employees with IBM’s Watson Explorer AI, which is capable of analyzing and interpreting an unstructured text, audio, and video data to calculate payouts.
  2. In December 2016, Capital One became the first financial institution to sign up for Cortana and leverage existing investments in voice technology to enable customers to efficiently manage their money through a hands-free, natural language conversation with Cortana.

  • One company leapfrogged the whole world in delivering unprecedented computing/processing power (and it’s neither a financial services company nor a FinTech startup).

The underlying advantage that FinTech startups had over institutional solutions for a long time was the technology component. But just a few days ago, even FinTech superiority has been overshadowed by a company that has a very remote connection to financial services and FinTech – IBM.

The Big Blue announced the prototype of the first commercial quantum computing processor. It’s an industry-first initiative to build commercially available universal quantum computers for business and science. Professionalsemphasize that by thinking beyond ones and zeroes, the platform can already solve problems that were considered too complex for classical computer systems to handle – which means it can solve problems that we haven’t even thought of yet in fields like pharmaceuticals, artificial intelligence, financial services, and logistics.

While technologies like AI can find patterns buried in vast amounts of existing data, quantum computers will deliver solutions to important problems where patterns cannot be found and the number of possibilities that you need to explore to get to the answer is too enormous ever to be processed by classical computers. With its initiative, IBM invites interested parties to join it in exploring what might be possible with this new and vastly different approach to computing.

IBM Q has successfully built and tested two of its most powerful universal quantum computing processors to date, shadowing Watson: 16 qubits for public use and a 17 qubit prototype commercial processor. In an instant, a large technology corporation took away the technological competitive advantage that startups had in such data-focused segments as RegTech, AI, robo-advisors, trading and investment platforms, and any other segment that feeds its innovation off of the capability to process and drive value from enormous and complex data, structured and unstructured.

“The significant engineering improvements announced today will allow IBM to scale future processors to include 50 or more qubits, and demonstrate computational capabilities beyond today’s classical computing systems,” says Arvind Krishna, director of IBM Research and Hybrid Cloud. “These powerful upgrades to our quantum systems, delivered via the IBM Cloud, allow us to imagine new applications and new frontiers for discovery that are virtually unattainable using classical computers alone.”

A few things we should learn from mentioned examples

  • The next big thing in FinTech, and in the financial services industry overall, will not be always powered by ‘discoveries’ within either, but from the environment that comprises the foundation of any solution – the underlying hardware and technology. The next leap will be perpetuated by technology companies that define modern standards and advancements in computing/processing power and accessibility of those capabilities for commercial use. ‘Regular’ data centers will no longer ensure long-term sustainability for solutions that are run in the cloud on their rails.
  • Startups in any segment that ground their competitive advantage in anything that has to do with driving value from, or dealing with data and information, should consider an upgrade to the different level of processing capabilities + understand how interactive interfaces evolve to deliver that value through the right channel. Those segments include, but are not limited to, the ones developing AI solutions, RegTech, investments, and trading, robo-advisors (JPMorgan already casts doubt over the future of robo-advisors).
  • Traditional interfaces are challenged by external stakeholders (Amazon, Google, Facebook, Apple) in two ways – voice assistants and VR. Connected assistants become smarter and add functionality with the enhancement of NLP and image recognition. Betting on physical interfaces, and mobile, in particular, can no longer ensure long-term relevance as voice-first solutions evolve. With Facebook obsessed on killing the smartphone to own a virtual space, classic interfaces and solutions developed for them will gradually fall out of grace.

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SoftBank Vision Fund Now Over $93 Billion

By Crowdfund Insider

The SoftBank Vision Fund announced its first major close yesterday with over U.S. $93 billion of committed capital.

In addition to SoftBank Group Corp (SBG) and the Public Investment Fund of the Kingdom of Saudi Arabia as previously announced, investors also include the Mubadala Investment Company of the United Arab Emirates, Apple Inc., Foxconn Technology Group, Qualcomm Incorporated and Sharp Corporation. The Fund is targeting a total of U.S. $100 billion of committed capital, with a final close within six months.

SBG created the SoftBank Vision Fund because of a strongly held belief that the next stage of the Information Revolution is underway, and building the businesses that will make this possible will require unprecedented large scale long-term investment.

The Fund will be SBG’s primary vehicle to realise its SoftBank 2.0 vision, with preferred access to investments of U.S. $100 million or more that meet the Fund’s investment strategy.

“Technology has the potential to address the biggest challenges and risks facing humanity today. The businesses working to solve these problems will require patient long-term capital and visionary strategic investment partners with the resources to nurture their success. SoftBank has long made bold investments in transformative technologies and supported disruptive entrepreneurs,” said Masayoshi Son, Chairman & CEO of SoftBank Group. “The SoftBank Vision Fund is consistent with this strategy and will help build and grow businesses creating the foundational platforms of the next stage of the Information Revolution.”

The Fund will target long-term investments in companies and foundational platform businesses that seek to enable the next age of innovation via both majority or minority stakes.

The Fund said it will be active across a wide range of technology sectors, including but not limited to: IoT, artificial intelligence, robotics, mobile applications and computing, communications infrastructure and telecoms, computational biology and other data-driven business models, cloud technologies and software, consumer internet businesses and financial technology (Fintech).

The Fund will have the right to acquire certain investments already acquired (or agreed to be acquired) by the SoftBank Group, including 24.99% of its holding in ARM, and investments in Guardant Health, Intelsat, NVIDIA, OneWeb and SoFi.

The Fund will be advised by wholly-owned subsidiaries of SBG, known collectively as “SB Investment Advisers”.

Rajeev Misra will serve as the CEO of SB Investment Advisers and will be a member of the Investment Committee. He will play a key role in all Fund transactions, supported by a highly- experienced global team across offices in London, San Carlos, and Tokyo.

Nizar Al-Bassam and Dalinc Ariburnu of newly formed Centricus, who advised on structuring and fund raising efforts for the Vision Fund, will continue their roles as advisers.

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