TheChek News Flow

Investment bank reports that Bao Fan is assisting Chinese authorities with investigation

China Renaissance said its missing founder Bao Fan was “co-operating in an investigation” with Chinese authorities, more than a week after the investment bank disclosed it had been unable to contact him.

In a terse stock exchange filing late on Sunday in Hong Kong, the company said its board had “become aware that Mr Bao is currently co-operating in an investigation being carried out by certain authorities in the People’s Republic of China”.

The disappearance of Bao, a former Morgan Stanley and Credit Suisse banker famed for wheeling and dealing on behalf of the most powerful corporate groups in China’s technology sector, has cast a pall over the industry just as it appeared set to draw a line under a protracted regulatory crackdown by Beijing.

Bao rose to prominence through China Renaissance, founding the boutique tech investment firm in 2005 to provide initial public offering and other capital markets services to the country’s rising tech stars.

The board of the investment bank said its operations “are continuing normally”. It added that the company “will duly co-operate and assist with any lawful request from the relevant PRC authorities, if and when made”.

Hong Kong-listed shares in China Renaissance have fallen 29 per cent since it revealed on February 16 that it was unable to contact Bao, the face of the investment bank and its main rainmaker thanks to his personal relationships with many of China’s tech billionaires.

But the steady business provided by those ties has dried up in recent years during a period of intense regulatory scrutiny for the sector that began shortly after ride-hailing group Didi Chuxing’s botched New York listing, on which China Renaissance served as bookrunner.

Didi pushed ahead with its $4.4bn share sale in 2021 despite national security concerns from regulators, and the group was forced to delist in June last year.

Bao’s involvement in a government investigation also makes him the second executive at China Renaissance to be summoned by authorities in relation to an official probe.

In September, China’s securities regulator demanded that Cong Lin, the bank’s president and head of its securities unit, came in for a “supervisory discussion”. Cong exited key positions at the securities unit within days and was detained by Chinese authorities around that time.

Cong was hired by China Renaissance after playing a key role in a strategic partnership between the investment bank and ICBC International, a division of China’s state-run bank ICBC.

As part of that partnership, announced in 2017, ICBC International provided a $200mn credit line to China Renaissance backed by pledged shares in the investment bank, with the stipulation that the funds be paid back soon after its Hong Kong listing.

Companies including Vattenfall and Orsted want government help as prices of turbines increase sharply

Several big wind farm developers, including Sweden’s Vattenfall and Denmark’s Orsted, are seeking tax breaks from the UK government or enhanced subsidies as a sharp rise in costs puts British projects at risk.

Several companies that won contracts in a large UK government auction last year to build new renewable power generating capacity from 2024 have warned ministers the projects will be difficult to deliver at the prices agreed, according to people involved in the talks.

Supply chain inflation over the past year has led to a big increase in wind turbine prices, while rising interest rates have pushed up financing costs.

“There is a real jeopardy right now with that capacity [secured last year in the government auction],” said one person involved in the industry talks with ministers.

Any delays or cancellations to projects that were procured through the auction would represent a big setback to the UK government’s efforts to meet climate targets and improve security of supply by increasing domestic energy sources following Russia’s invasion of Ukraine.

Last year’s subsidy auction was the UK’s biggest to date and secured enough capacity to provide 12mn homes with cheap, low carbon power. Offshore wind dominated, with about 7GW of the total of almost 11GW contracted.

The UK has 13.7GW of offshore wind capacity operational but is seeking to increase that to 50GW by 2030 as part of an energy security strategy drawn up by ministers last year, shortly after the full-scale invasion of Ukraine.

But some wind farm developers that secured contracts in last year’s auction have either delayed or are hesitating to take final investment decisions on those projects.

This reflects how cost increases of between 20 and 30 per cent over the past 12 months made it more difficult to justify that spending without extra government incentives, said the people involved in the discussions between the industry and ministers.

Vattenfall confirmed it was seeking tax breaks in chancellor Jeremy Hunt’s March 15 Budget to help justify investing in the UK.

A person with knowledge of the talks between ministers and the sector confirmed Orsted was also among the companies seeking investment allowances, a form of tax relief. Orsted declined to comment.

Developers of renewable energy projects are traditionally incentivised to invest in new schemes through annual auctions involving state subsidy agreements, known as “contracts for difference”.

These contracts help developers secure financing for projects by guaranteeing a price for their power output. If wholesale prices fall below the level agreed in the deals, companies receive a top-up subsidy. If market prices are higher, companies pay the difference to the state.

Another person briefed on the talks between ministers and the sector described the pressures facing the wind farm industry as “unprecedented”.

They cited factors such as turbine makers increasing their average selling prices by more than 33 per cent since the end of 2021 to offset rises in the costs of raw materials such as steel and copper.

Higher financing costs, as a result of rising interest rates, was another significant factor, said this person.

Vattenfall is planning to build several large wind farms off the coast of Norfolk, which on a combined basis would power 4mn homes.

The Swedish state-owned company secured an agreement in last year’s subsidy auction known as AR4 for the first phase of its Norfolk project, the 1.4GW Boreas offshore wind farm.

Offshore wind farm developers that were successful in the auction were guaranteed prices of £47 per megawatt hour in today’s money, once their projects are operating. The contract prices are linked to inflation and guaranteed for 15 years.

Rob Anderson, Norfolk project director at Vattenfall, said the company was still committed to the project but called on the UK government to provide further help given the cost pressures.

He also warned the UK was in a competition for capital with the US and the EU, which are racing to attract clean energy investments. US president Joe Biden’s recent Inflation Reduction Act includes $369bn worth of tax credits, grants and loans to boost renewable energy and slash emissions.

Anderson said: “Given the challenging macroeconomic circumstances, [the wind farm] industry has been discussing the delivery of AR4 projects with government.

“Other parts of the world have announced major support for the offshore sector in the face of dramatically increasing costs. The UK government must do the same so we can build the clean, secure power generation we need here. Vattenfall believes that the best way forward is for support for AR4 projects to be provided via capital allowances in the spring Budget.”

The largest project procured in last year’s auction was Orsted’s 2.85GW Hornsea 3 wind farm off the coast of Norfolk.

Orsted had originally been expected to take a final investment decision on whether to press ahead with the scheme at the end of 2022 but is yet to do so, according to people familiar with the company’s plans.

Another person briefed on the discussions between ministers and the industry said some other developers were examining possible changes to subsidy agreements.

These included delaying the start date of their contracts so the initial power output from projects could be sold at higher market prices than the lower guaranteed levels stipulated in contracts.

Developers of renewable energy projects are also concerned that pricing levels for the next auction this summer will be set too low by the government.

Simon Virley, UK head of energy and natural resources at KPMG, said the government had “to find a way forward that enables these projects, and their associated supply chain investments, to go ahead” given the “exceptional cost and supply chain pressures” facing wind farm developers.

The government said that the contracts for renewables companies “already provide[d] protection to energy generators” given they were linked to inflation.

“We are taking significant action to encourage investment in renewable generation, including committing £30bn to support the domestic green industrial revolution and our renewable energy auctions have been hugely successful, contracting record capacity of almost 11GW of clean energy just last year,” it added.

One house is in transition, the other is in a process of consolidation, but Gucci and Jil Sander both offered wonderful surprises, writes Tim Blanks.

MILAN — Gucci was a surprise. We had heard that the brand’s need for a calmer, more classic approach to design had precipitated the departure of the shamanistic genius Alessandro Michele, and his studio would be delivering transitional collections until the new creative director Sabato De Sarno’s first show in September. “Transitional” normally suggests something bland, half-assed, but that’s not what happened on Friday. Yes, the collection was a mess, with a let’s-try-anything vibe, but here that suggested less desperation than a peculiarly joyful letting go. The press notes told us that there are people in the studio who worked for Tom Ford nearly thirty years ago. They’d weathered the Giannini Interregnum (consigned by this collection, at least, to the trashcan of history) and the Michele Renaissance, and this was their leadup to “a new chapter.” A moment to reflect on what was, what might have been, and what will be.

The only thing half-assed was the complexity of the staging, though it certainly suggested nothing short of full commitment to Gucci’s nowness. The models arrived and departed by elevators, like a mechanical embodiment of the ups and downs of fashion. (In Klumspeak, “One day you’re in, the next day you’re out.”) The arena centred on two circular structures, apparently symbolic of “the creative wheel … that is always spinning at Gucci.” They looked more like sunken conversation pits from the 1950s, stocked with a few dozen of the brand’s most familiar KOLs, who, rumour had it, all received a memo advising them to dress down, in observance of the quieter, more classic Gucci that was about to be unveiled. That memo clearly dodged at least half of them. Anyway, it scarcely mattered when the collection itself erred quite comfortably on the side of excess from the moment the first model stepped out of the elevator and onto the catwalk in a floor-length black satin skirt and a metallic GG bralet (slightly more covered than Stella Tennant in Chanel Spring/Summer 1996). To be fair, the next look was a double-breasted grey overcoat. And that was kind of the way the show rolled, a shouting match between sparkle and sobriety, showgirl and Miss Prudence.

As is the modern way, catwalk stars of yore were brought back to strike a chord. But these women were the Faces from the glory days of Ford’s Gucci. Amy Wesson wore baggy jeans, a banker stripe shirt and a trench. Guinevere Van Seenus had a sheer, sparkly tank and skirt over red knickers and tights, wrapped up in a skunk fake fur. Somewhere in the middle was Liisa Winkler in a grey wool bodysuit and a charcoal topcoat. That was one of the few fingers tentatively pointed at a more sober future. But until that day dawns, the current design team was blissfully happy to swamp itself in piles of paillettes and barely-there slip dresses. Still, when the team — dozens of them — trooped on stage to wild applause at show’s end, it did feel a little like a last hurrah. The next chapter is a huge challenge that this transitional moment, joyous though it was, could scarcely even begin to address.

The lighting shrank Jil Sander’s cavernous show space into tiny illuminated pools. Zen staging demanded a zen overture — strings gently plucked, ivories gently tinkled. A reverential, intimate mood was established. All was as it always is in Sanderland. But then Bjork kicked in, and Lucie and Luke Meier took us somewhere bigger and bolder than usual. Biker leathers, with Jil Sander embossed like a go-fast biker logo. “The visual of speed,” Luke called it. That’s why the models’ heads were wrapped, like they were about to don motorcycle helmets for a motocross rally. Then came sporty volumes and layers, over-sized parkas, anoraks, tanks and trackies, zippers defining seams as a decorative detail. The emblematic shades of Sander minimalism — white, black, grey —were juiced with tangerine, electric blue, lime green, lilac, lemon, rose pink. And, all the time, those incredible coats.

Luke likes to talk about the rigour of the Meiers’ process, and that has always applied in the past, but there was a skittish magic in this collection: a fizzing column of tinsel, a full-sleeved, high-waisted dress embroidered with starbursts, a black cape clustered with dark camellias, all of them breathed a different kind of oxygen than usual. “I think it’s always important for us to create something in a magical way because we all need it,” said Lucie.

The lime-green devoré gown suggested a different state, an absinthe-induced reverie, which tied in with the Victorian rose prints towards the end. I scented a dark fairy tale element but Luke shot that down. He said he and Lucie had gone back to the moment when they decided to become designers — late 1990s, the breakdown of genres between art and fashion and music, drum and bass in particular. Those were the days when the Meiers could feel truly positive about technology, about the future, and they wanted to convey the same feeling here. There was positivity in that colour palette. There was positivity in the fabulously incongruous graphics (Melting chocolate cherries? You would, wouldn’t you?). There was positivity in a sci-fi dress sense that felt more pristine utopia than last-stand dystopia. And, all the time, those incredible coats. With shoes and bags to match. If accessories truly, boringly are the enduring tentpoles of retail’s future, might as well buy a bag or a boot that serves that future, however bright or bleak it turns out.

Tiffany & Co. is firing on all cylinders under its new owner LVMH, and it’s just the beginning. Two years after being acquired by the French luxury giant for $16 billion, the New York jeweler has seen the sales of its high jewelry rocket. Its average selling price has doubled and demand for its new “Lock” collection has grown solidly, its chief executive told Miss Tweed in an exclusive interview.

Tiffany is following a similar strategy to Louis Vuitton, who have just hired pop star Pharrell Williams as creative director for menswear. The two brands share the vision of LVMH boss Bernard Arnault, who believes luxury is about selling culture. While Louis Vuitton plans to wow the crowds with Pharrell’s creativity, Tiffany will stand out by teaming up with Beyoncé, queen of pop music. They have already done witty things like releasing joke campaigns about yellow being the new official color, as well as collaborating with sports brands such as Nike.

Some industry experts have criticized the Nike initiative, saying Tiffany was trying too hard to woo the 15-25-year-old age bracket and risked losing more mature customers with such fashions as $400 sneakers in robin’s egg blue, with a black side swoosh. But CEO Anthony Ledru disagreed. “It’s not a mistake,” he told Miss Tweed. “You may not like it but it shows we have audacity.”

Ledru said Tiffany’s strategy was to do unexpected, zany things that made it look less serious and uptight than other jewelers. Richemont’s Cartier is regarded as statutory, its best-sellers like “Love” and “Juste un Clou” collections being seen as status symbols. Sister brand Van Cleef & Arpels also sticks to conservative marketing, centrered around nature and its best-selling clover-shaped collection, “Alhambra”.

Ledru noted that Tiffany had always done off-the-wall collaborations in the same way Louis Vuitton had with numerous artists and brands such as Supreme. Collaborations are overseen by Bernard Arnault’s 30-year-oldson Alexandre, who is in charge of products and communications at Tiffany.

For Ledru, “Tiffany is part of pop culture”. For example, the 2021 campaign featuring Beyoncé and Jay-Z, next to a Jean-Michel Basquiat painting that used what looked like Tiffany’s trademark blue, expressed the brand’s close association with America’s pop culture. “It was completely pop,” he said.

Pop culture is often defined as a form of expression that reflects the shared values of a social system and is appreciated by the greatest number. It contrasts with an elitist or avant-garde culture that is only appreciated by a small number of educated people. “We surf on pop culture. We believe in it,” Ledru said. The brand could have no better ambassador than Beyoncé. “Beyoncé is regarded as an aristocrat in the United States. She’s Queen Beyoncé,” he said.

LVMH’s strategy is to turn Tiffany into the “Louis Vuitton of jewelry”, not only in terms of cultural relevance but also size and product offering. Louis Vuitton is the world’s biggest luxury brand, generating more than €20 billion in annual revenue. Tiffany today sells many more expensive items than it did two years ago. The entry price has increased and the brand has expanded its range of accessible products for aspirational customers, items costing a few hundred dollars as opposed to less than $100 before.

Like Vuitton, Tiffany wants to be regarded as elitist and democratic at the same time: a brand that attracts both the masses and the wealthy customer interested in that one-of-a-kind piece fetching millions. Similarly,Louis Vuitton sells $300 keychains and custom-made, LV-embossed trunks costing thousands.

Ledru has the Louis Vuitton chip in his brain, having spent six years at the French brand. The 49-year-old industry veteran, who previously worked for Cartier and Tiffany at an earlier stage of his career, was Louis Vuitton’s No. 2 in charge of retail before becoming Tiffany’s new boss in January 2021 as Miss Tweed predicted in August 2020.

LVMH is pumping huge resources into Tiffany and this will yield significant increases in sales and profitability, industry experts predict. The U.S. jeweler may never be the size of Cartier, whose revenues are estimated at more than $10 billion, but it is catching up. Tiffany’s sales are estimated to have reached around $5 billion in 2022. They represent more than half of the €10.6 billion revenue made in 2022 by LVMH’s Watches and Jewelry division, which Tiffany joined in January this year.Comparing apples with apples, Cartier’s pure jewelry sales are roughly $6-7 billion. The balance is made up of other things such as watches, perfumes and accessories.

Ledru said Tiffany’s high jewelry was the segment that had really taken off. “It has just exploded,” he said. “We doubled (sales) last year and quadrupled them in the past two years.” This was partly due to the sourcing of “exceptional stones”, which were “incomparable to what we had two-three years ago”. High jewelry is estimated to represent around 10 percent of the brand’s jewelry sales, around the same as for Cartier.

Like haute couture in fashion, high jewelry tries new ideas and pushes the limits of creativity. It is crucial for a jeweler’s image. It puts the focus on the prowess of the skilled craftsmen and allows a brand to build relations with the world’s most affluent customers. If done right, it can be very profitable. When a piece costs $10 million in stones and work, and you sell it for $25 million, you see the margins this represents for a jeweler.

Tiffany scouts the world for exceptional stones. Ledru said the brand had bought the last batch of Argyle diamonds (red and pink), which come from a mine in Western Australia that closed more than two years ago. There were 35 of them. As these are small, very expensive diamonds, he wants to keep them for one very special customer.

Ledru pointed out that Tiffany was the only jeweler that had a name for its high jewelry collection. It’s called Blue Book and goes back to the original Blue Book that founder Charles Lewis Tiffany started sending customers in 1845 to show them his collections. Ledru said Tiffany was intent on using only stones that were naturally perfect, meaning they needed no heat treatment to get rid of flaws. “Blue Book uses only untreated stones. I think we're the only ones to do that.” Tiffany plans to present its new high jewelry collection later this spring.

Ledru said Tiffany’s growth was also propelled by its gold collections. He described the recent launch of its new “Lock” bracelet, advertised by Beyoncé and K-pop star Rosé, as a success. The U-shaped bracelet, from the brand’s archives, features a clasp that works like a padlock. “The launch of the ‘Lock’ is the biggest success in the history of Tiffany in year one. In year two, we're going to be on a trend that's going to be way beyond what ‘T’ was when it was launched (in 2014),” Ledru said.

The French executive said business had improved in many categories, from items costing $1,000 to $10,000 and $100,000. “Tiffany’s growth today is mainly driven by exceptional products… We've doubled our average price,” he said. Ledru made clear Tiffany still had a lot of firepower both in terms of sales growth, profitability and new products.

“We're just at the beginning of ‘Lock’, we're just at the beginning of ‘Hardware’, we're pretty mature on diamonds. We have to admit that. We have a high level. And we have a huge potential that we haven't deployed yet on quality gifts and accessories, such as tableware and candles. Tiffany has always had a gift culture that goes back to the 60s and 70s. Gifts that New York socialites liked to buy.”

Ledru said the brand’s “Hardware” collection, introduced in 2017 and recently revamped and advertised by a new campaign, was popular. It appealed to the trendy customer, he said. “It's unique. No one else has this on the market. It's our second pillar after ‘T’ by Tiffany”. The “T” collection was designed by Francesca Amfitheatrof, now creative director of Louis Vuitton’s jewelry.

Another collection on which Tiffany plans to work is the enamel bracelet designed by artist Jean Schlumberger, hired by the jeweler back in the 1960s. Jackie Kennedy used to wear that bracelet. “It still needs a little re-engineering. I think I would like to lighten it up a little bit.” That could be another winner.

One of the brand’s recent highlights was this month’s launch of Tiffany’s “Bird on a Pearl” collection in Qatar. It gives a new twist to Schlumberger’s “Bird on a Rock” – a little bird perched on a stone which can be a citrine, amethyst or other. For Ledru, Schlumberger’s designs embody Tiffany’s audacity but also its sophistication and refinement.

For “Bird on a Pearl”, Tiffany managed the tour de force of acquiring one of the world’s most impressive pearl collections, assembled by Qatari businessman and renowned pearl trader Hussain Ibrahim Al Fardan. For years, Cartier tried to buy it. Ledru secured it thanks to his long-standing friendship with Al Fardan.

The businessman goes way back with Tiffany, since his company has been distributing its jewels in the Gulf for many years. Ledru got to know him when he worked for Harry Winston in 2011-2013. He kept in touch and sent him good wishes at New Year. Luxury is not only about business but also about alliances and personal relationships. In the end, that’s what makes the difference and leads to success.

“The best in pearls is Mr. Al Fardan's collection and the best for Tiffany is Schlumberger’s ‘Bird on a Pearl’, who takes off from New York and lands in Qatar,” Ledru said. The 25-piece-collection, presented with great pomp this month, received a lot of coverage by Middle Eastern and international media.

The initiative allows Tiffany to enter the strategically important market of Qatar by celebrating its culture while at the same time selling the U.S. jeweler’s heritage and expertise. “Let’s not forget that the pearl was used as a currency in the Middle East for centuries,” Ledru said. “Pearls are the gems of the ocean.”

In many ways, what Ledru has achieved harks back to what former Louis Vuitton CEO Yves Carcelle used to do when he entered a new market 15-20 years ago. To get local customers to get to knowLouis Vuitton and warm up to the brand, he would first build strong ties with local businessmen and authorities and celebrate the country’s culture and uniqueness.

Ledru said there was a six-month waiting list for “Bird on a Rock” brooches, which cost from $1-2 million. He said Tiffany planned to widen the collection to include not only earrings but also pendants, rings and necklaces. “The Bird is for me the ultimate emblem of Tiffany. It's a funny little bird from Australia. It's quirky and phantasmagorical. Let’s remember that Schlumberger was friends with Surrealist artists like Cocteau and Dali.”

In New York, the Tiffany flagship has been undergoing refurbishment for over four years in a project that is pharaonic in its scale and ambition. As well as jewelry and a high jewelry atelier, there will be art exhibitions and a “very pop” blue restaurant, with a menu by a famous French chef Tiffany is keeping secret until the launch.

“This landmark is not only going to be the biggest jewelry store in the world, it’s going to be a cultural hub,” said Ledru, predicting it would feature in the top-10 tourist attractions in New York.

One of Tiffany’s strengths, Ledru said, was that around 50 percent of its production was located in the US. “I think we are the only brand that makes high jewelry in upstate New York.” The brand has a workshop in Pelham and a production hub in Rhode Island. Tiffany also relies on workshops in Italy and in France. “We have a lot of different suppliers. You have to stay agile and smart,” Ledru said. As demand grows, production is going to be a challenge. But having waiting lists is not necessarily a bad thing – as Hermès knows all too well.

As Milan stirs with fashion week and Paris catwalks prepare for Monday’s opening, it’s easy to forget that other events exist. But they do, and some offer a different kind of lens on where fashion might go next.

That’s surely not lost on Paris. Because, while next week may belong to the physical collections, on Friday, the blockchain and all things digitally collectible were hot topics, thanks to NFT Paris, a tech and culture conference that has become a magnet for artists, investors, enthusiasts and brands, like Rtfkt and Ledger.

Rtfkt, a Web 3.0 brand known best as the digital sneaker darling acquired by Nike in 2021, joined the blockchain security company to announce a brand new partnership, a new limited-edition capsule collection of devices and products and a new mission to educate the Rtfkt community and others about safeguarding their blockchain assets.

The education is vital, because as every cybersecurity expert in the world knows, there is no tech that offers 100-percent foolproof protection — not even the blockchain. Rtfkt chief operating officer NikHil Gopalani knows that firsthand. In January, he disclosed a massive phishing attack that ransacked his wallet and made off with more than $173,000 in NFTs. But regardless of the bounty, whether NFTs and crypto or online account logins, there’s a fundamental truth about tech security: The biggest point of vulnerability is often human behavior. People just can’t stop being people. But at least they can learn how to avoid some of the top threats and the solutions that can help them. They just need to be willing, even compelled, to take them up.

Enter fashion and design. Here, the collab uses them at multiple stages. For Ledger, it was a natural fit.

“[One brand] was telling us this that the link between NFTs and luxury was a very natural one, because both were about creativity, scarcity and community,” Sébastien Badault, vice president of metaverse at Ledger, told WWD. “I think that that resonates with most brands. They really feel this incredible new way to interact with their community of fans or community of users or potential buyers.”

With outreach via social media or video platforms, there’s always an intermediary between the brand and consumers, he continued. “Whereas here, I think what really resonates is this idea of having a direct line into the users and fans. And if they’re going to be doing that, if they’re going to be empowering these communities, they have to make sure that they secure them. And that’s where we play a role.”

The connection between fashion and technology is also obvious in the physical look of Ledger’s Nano, its flagship product. The hardware, which comes in two versions — the Nano S Plus and the upgraded Nano X — is a compact unit that looks like a USB thumb drive. Rtfkt and Ledger recreated it with a simple minimalism in mind, casting it in white metal. Looking at it, it is literally a clean slate.

But that belies the technical powerhouse on the inside. Nano can hold private keys, send and receive cryptocurrency and much more, and because it holds the data locally, it’s isolated from remote hacking attempts. That’s just one of several layers of security. Another is that it requires a physical button push to transact, which would foil malicious online actors. It even houses a processor, like a computer, which can calculate the security keys that protect the owner’s bitcoin or other assets.

Although it’s tempting to think of the wee gadget as a key that unlocks virtual experiences and products, Ledger prefers to describe it as a hardware blockchain wallet. It’s a place to stash information and IDs (or authentication), so that makes sense. But that may not paint the whole picture. Instead, imagine holding that key, stuffing it into a wallet with several other keys, then putting the whole billfold into a high security safe and activating lasers all around a vault that sits in a building surrounded by a moat. It’s not impervious, but it may be as close as anyone can come to it.

All that security is necessary for blockchain assets, which today often means cryptocurrency or NFTs. Because once those digital coins, designer NFT wearables or digital couture artworks are gone, there is no getting them back. If the tech becomes ubiquitous, defying the skeptics and thrilling blockchain evangelists, the stakes grow too, especially if institutions adopt it at scale. Losing a digital sneaker hardly compares to seeing financial data, medical history, academic records, driver’s licenses and more compromised.

Ledger would argue that this is what its Nanos were built to prevent.

Ian Rogers, Ledger’s chief executive officer, the blockchain looks like an inevitability. Take retail, for instance, where “token-gated commerce is on the rise [and] Shopify just announced token-gated capabilities for its platforms.” From there, he plots a trajectory that looks straightforward. But not simple.

“The reality, he said, is that all of our digital value will be tokenized in the near future.” He sees a pivotal role for his platform in enabling that, then securing it. Indeed, this is the company’s sweet spot. If everything becomes blockchain bound, and people keep tokens and keys on them all the time, and in myriad ways, design will matter more than ever, whether it’s stashed in a pocket, worn on the wrist, hanging from a necklace or tucked into purpose-built clothes.

Now that is fashion’s sweet spot.

The Rtfkt collaboration already appears to be dipping a toe into blockchain accessories with the Nano and case, a set that’s meant to be worn around the neck together.

The announcement called this as a “super rare silver pendant with the Rtfkt logo on the end caps, which will come with a Nano X. With allow lists for Clone X and Genesis Pass Holders, this more exclusive drop will be available on [Ledger] Market.”

But there’s a twist with the design: It takes cues from a previous and very popular Rtfkt NFT vial. Owners of specific NFTs could break open, or “burn,” this digital bottle to unleash new styles, colors and designs on certain Rtfkt sneaker NFTs. It’s a clever way to give those visuals a fresh new look.

The other twist is that only Pagotto’s Clone X and Genesis NFT owners can pick up the physical vial. Pn the up side, physical version of the vial, a.k.a. Nano case. inside, so it’s always close by. “It’s totally made to be a flex,” he said. If anyone else said that, from anyone else, it would be easier to write off. But he’s proven over and over that he knows what excites the community. It’s his specialty, and he has a knack for proving that he knows how to create items that people want and deliver them in a way that peaks demand, even when the product doesn’t actually exist.

Pagotto landed on fashion’s radar in 2021, when his digital sneaker NFT collab with artist Fewocious stunned the industry by pulling in more than $3 million. Within a year, Rtfkt went from a small two-person operation to a multi-million-dollar business backed by Andreessen Horowitz to a Nike company and key player in the parent company’s metaverse initiatives.

But, he makes it clear that Rtfkt is still a brand with an indie spirit, and even under a large sneaker giant, it still enjoys autonomy. Its ties with Ledger is a good example. Their relationship has evolved over time, but still allows room for innovative approaches, without being micromanaged by the rigid rules of a huge corporation.

Indeed, even in the way they offer these products speaks to both of their DNA, not conventional retail or e-commerce.

To purchase one of the Nanos, customers must buy the related NFT first through Ledger Market, and then redeem it for the physical product, only 10,000 of which will be available for each model. The limited quantity speaks to the rarity. The Nano case will be even rarer — fleavailable to holders of Rtfkt’s Clone X and Genesis NFTs. That’s just for starters. More products, experiences and opportunities will follow at a later time, the partners promised.

On the surface, the companies appear to hang at the blockchain’s opposite ends, but the differences may be a strength and there’s enough overlap where it matters, namely in their attention to design and fashion. Ledger, apart from being a hardware and security company, also runs a marketplace called Ledger Market, as well as other services and devices — such as the touchscreen-enabled Nano Stax, a larger device that was created by Tony Fadell, the renowned designer behind Apple’s legendary iPod.

Many of those elements fold into a design-centric strategy, and this powers an entire Ledger ecosystem that spans enterprise to consumer, but manages to appeal to both pragmatists and aesthetes.

Where Ledger brings technical and security expertise, Rtfkt has an apparent talent for building community and inherently understanding its values, needs and wants. Those types of skills have never been more valuable, particularly for a fashion sector that has been hyper-focused on community. Smart companies will be watching the way crypto native brands and other emerging businesses operate among gamers, metaverse clans and NFT communities. Because these are important lessons, and those teachings that could come to define Web 3.0, the metaverse or whatever the virtual or online world brings.

As for consumers, if the gap in knowledge of blockchain fundamentals grows, a new type of digital divide could be on the horizon. Rtfkt and Ledger seem to sense that, because they’re making the tech, safety and security education a core part of the partnership.

Future collaborations, they said, will come with experiences geared toward sharing and distributing knowledge through “Rtfkt Quests.” Ledger established its own “Ledger Quests,” which rewards the NFT learning process by awarding crypto. The goal through these other efforts, from crypto basics to blockchain security and safety, is to demystify the tech. Even make the learning process fun.

It remains to be seen if they can pull it off, especially since blockchain security and crypto education can come off as dry, technical and abstract. But if anyone can move the needle to fun, funny and appealing, it might be a group passionate about community, design and technology.

Chief executive plans to recruit 12,000 workers as European nations arm Ukraine and bolster their own defences

French defence group Thales will grow its workforce by 15 per cent this year, according to its chief executive, as Europe’s efforts to support Ukraine’s war against Russia drive defence spending higher.

Chief executive Patrice Caine said it will recruit 12,000 new workers this year, having already recruited 11,500 people last year. That compares with the average 5,000 to 8,000 that the company has added to its ranks during the past eight years.

“All our activities — in defence, in security, aeronautics and space and cyber security — are all growing, which explains our recruitment needs, particularly for young talent,” Caine said in an interview with weekly publication Le Journal du Dimanche.

Thales’s growth comes as defence spending in Europe booms following Russia’s invasion of Ukraine a year ago. European nations are supplying Ukrainian president Volodymyr Zelenskyy’s government with military hardware to help fight the Russians and are also seeking to bolster their own defences at home.

The company’s share price has increased by nearly 60 per cent since the start of the war last year, well above the Stoxx Europe Total Market Aerospace & Defense industry index.

Shares in other defence companies have also surged in recent months, as investors bet on a protracted war, although some companies have been hampered by parts shortages.

Caine, whose business employs more than 80,000 people around the world, credited the company’s €4bn research and development budget and army of researchers for the “historically elevated” levels of orders it has received. “Thales proves there is an exciting future for our industry . . . not in low cost, low tech but in cutting-edge innovation.”

Most recently the group, which is Europe’s largest provider of defence electronics, was contracted by the French government to provide GM200 radars to Ukraine, which are used to detect drone and plane attacks.

President Emmanuel Macron said last month that French defence spending would increase markedly in the coming years, with the budget until 2030 set to rise by a third to €413bn.

However, Caine warned that France needs to increase its pipeline of engineering graduates in order to continue to feed demand for talent from groups such as Thales.

“Traditionally, we train a lot of engineers in Europe. It’s one of our strengths. But the situation has evolved. In France, there are 40,000 per year. We need to double that,” he said, adding that the decline in graduates in Stem subjects — science, technology, engineering and mathematics — was worrying.

“If we don’t do anything to halt it and restore the level, this decline could become a pitfall. The teaching of these subjects has perhaps not been sufficiently modernised,” he added.

Thales reports full-year earnings on March 8.

Big rounds dominated last week, but this week were hard to come by. Only two companies raised nine-figure rounds after a half-dozen startups raised such rounds last week. Oddly, neither company that raised those large rounds hail from California or other big states known for venture — but rather Nebraska and New Jersey. Weird to say the least.

1. Spreetail, $208M, retail: It’s rare a Nebraska-based company is this high on the list, but not unheard of. Last July, Lincoln-based Monolith — which produces clean hydrogen, carbon black and ammonia — closed a $300 million round and topped this list. This week it’s Lincoln-based e-commerce logistics firm Spreetail’s turn, after a $208 million funding round. The company said the round “was supported by McCarthy Capital, internal management, and other investors.” Founded in 2006, the fresh round is the company’s first outside investment, per Crunchbase data. Spreetail serves more than 500 brands, helping them to push their e-commerce sales — through analytics, insights and logistics — onto large platforms such as Amazon, Walmart.com and other sites. Funding to so-called “Amazon aggregator startups” has dropped since the highs of 2020-21, when online retail was hitting new all-time levels due to pandemic lockdowns and consumers relying more on delivered goods.

2. Vytalize Health, $100M, health care: Value-based care provider Vytalize Health closed a $100 million funding round led by Enhanced Healthcare Partners and Monroe Capital this week to further advance its virtual and in-home primary care offerings for seniors. Vytalize Health partners primary care practices with more than 250,000 patients to help with point of care recommendations based on data. The company tries to fill in the gaps around necessary and regular medical visits for seniors to avoid unnecessary trips to the emergency room. Founded in 2014, the Hoboken, New Jersey-based startup has raised nearly $176 million, per Crunchbase data.

3. ProsperOps, $72M, cloud: Most companies are using the cloud, and unfortunately — for them — paying more and more to do it. Those firms are using more cloud services while prices are increasing. So how do they manage costs? Maybe with a startup like Austin-based ProsperOps. The company just received a $72 million investment led by H.I.G. Growth Partners and other strategic investors. The firm offers a cloud cost optimization platform, so customers can watch their usage, unlock savings and maximize their dollars. Speaking of maximizing dollars, this marks the startup’s first outside funding round since being founded in 2018, according to Crunchbase data.

4. Tome, $43M, artificial intelligence: It’s hard to get too far down this list these days without getting to a company that uses the term “AI-powered,” and this week we have Tome. The San Francisco-based startup uses AI to help turn users’ ideas into a more compelling visual narrative. In a sense, it can replace something like a more stagnant powerpoint presentation. The company raised a $43 million Series B led by Lightspeed Venture Partners at a reported $300 million valuation. Founded in 2020, Tome has now raised $81 million, according to the company.

5. (tied) Finch, $40M, human resources: San Francisco-based Finch, a provider of APIs for employment systems, raised a $40 million Series B led by existing investors General Catalyst and Menlo Ventures. In an environment where it is getting harder to raise money, it’s worth noting Finch raised a $15 million Series A in June. The company will use the new cash to extend coverage to more payroll, HR and benefits systems, and move into new employment data verticals. Founded in 2020, Finch has raised $58.6 million, according to the company.

5. (tied) Transcend Therapeutics, $40M, biotech: More than 50 million Americans suffer from neuropsychiatric diseases, including post-traumatic stress disorder. New York-based biotech firm Transcend Therapeutics is looking to help some of those unfortunately affected. The company closed a $40 million Series A led by Alpha Wave Global and integrated Investment Partners to help in those efforts. The firm plans to use the cash infusion to launch multiple clinical trials, including a phase II study, with its next-generation psychoactive compound. Founded in 2021, Transcend has raised nearly $42 million to date, per the company.

7. (tied) Aeroseal, $30M, climate tech: Ohio-based Aeroseal raised a $30 million Series B led by OGCI Climate Investments. Founded in 2010, the company has raised $52 million, per Crunchbase.

7. (tied) Vitally, $30M, SaaS: New York-based customer success platform Vitally closed a $30 million Series B led by Next47. Founded in 2017, the company has raised nearly $40 million, according to Crunchbase data.

9. Here Not There Labs, $26M, Web3: San Francisco-based Web3 startup Here Not There Labs closed a $25.5 million Series A round led by a16z crypto. It is the startup’s first raise — per Crunchbase — and will be used to build Towns, a web-based chat app.

10. Electra Vehicles, $21M, EVs: Boston-based startup Electra Vehicles, a maker of electric vehicle software, raised a $21 million round led by United Ventures. Founded in 2015, the company has raised more than $25 million, according to Crunchbase.

Steep sell-off has wiped more than 60% from value of group’s publicly traded companies

Gautam Adani’s business empire has had more than $145bn wiped from its value in the month since a US short seller alleged fraud, laying bare the battle the Indian tycoon still faces in regaining the confidence of investors.

The sell-off triggered by Hindenburg Research, which accused Adani of stock manipulation and accounting fraud, has erased more than 60 per cent from the value of Adani’s publicly traded companies and rocked an empire that spans ports to airports to energy.

Adani has strenuously denied Hindenburg’s allegations, but shares have remained under pressure. Falls on Friday left the overall market capitalisation of the listed groups at the lowest level since Hindenburg levelled its accusations.

The crisis that engulfed the sprawling set of businesses has helped reduce the billionaire’s own fortune by $79bn since the start of the year, allowing rival Indian industrialist Mukesh Ambani to reclaim the title of wealthiest person in Asia.

“Some of the companies were expensive, overly expensive, at more than 100 times PE valuation,” said Abhishek Jain, head of research at Arihant Capital in Mumbai. He added that the “hammering” by investors meant some of the stocks were now at more attractive prices and “can be interesting to have a look [at]”.

Before this year’s turmoil, Adani had expanded his empire at breakneck speed, taking on more debt and pushing into areas that required substantial investment, including hydrogen and solar businesses.

But there are now signs of retrenchment. Several Adani companies have paused upcoming investments, including an $847mn coal power plant acquisition. Last week, an agreement by Adani Power Maharashtra Limited to establish a cement grinding unit with Orient Cements was called off.

“We will not make new commitments till we settle this volatility period,” group chief financial officer Jugeshinder “Robbie” Singh told analysts, following results this month from Adani Enterprises, the group’s flagship company.

A decision to ditch a $2.4bn share sale by Adani Enterprises at the start of the month was one of the most striking blows inflicted by the crisis. Since then, rating agency Moody’s has cut its outlook on several Adani Group companies.

Dollar bonds issued by Adani businesses have sold off, with separate $750mn bonds from Adani Green Energy and Adani Ports, maturing in 2024 and 2027 respectively, each trading at around $0.80 on the dollar.

“People have no problem buying Indian credit,” said the head of Asia bond syndication for a western investment bank. “It’s Adani they won’t touch.”

With the Adani empire still under intense scrutiny, analysts have said that the group should focus on reducing leverage and reassuring investors over the robustness of its underlying businesses.

“He needs to focus on conserving the cash, prepaying the debt,” said Varun Fatehpuria, founder and chief executive of Kolkata-based digital wealth management platform Daulat. “People are looking for more clarity and transparency into the actual health of the business.”

The turmoil on the stock market has also led to stresses over loans taken by Adani’s family backed by shares in the listed companies. Earlier this month, Adani repaid a $1.1bn share-backed loan after facing a margin call of more than $500mn.

According to a person familiar with the matter, executives at the Adani Group want to pay off a further $1bn worth of outstanding share-backed loans taken by the family or “promoters”.

In an effort to reassure bondholders, Adani companies are paying some creditors ahead of schedule. Adani Ports and Special Economic Zone managing director Karan Adani said the company would repay or pre-pay more than $600mn of loans in the coming financial year, to bring down its debt to earnings ratio. The company repaid Rs5bn ($60.3mn) to an Indian mutual fund against maturing commercial papers last week.

“To boost the sentiment of market participants or bondholders, they’ve been paying off a lot of debt early,” said Abhishek Jain, head of research at Mumbai-based Arihant Capital.

Despite the retrenchment in recent weeks, there are signs Adani retains his international ambitions — it is one month since Adani visited Israel to complete the group’s joint acquisition of Israel’s strategic Haifa Port. Meanwhile, Adani Group said it had bid for an under-construction steel plant in the central Indian state of Chhattisgarh, which the government is selling.

In a video released shortly after the Adani Enterprises share sale was ditched, Adani said “we will continue to focus on long-term value creation and growth”.

Energy Department’s revised assessment is based on new intelligence

WASHINGTON—The U.S. Energy Department has concluded that the Covid pandemic most likely arose from a laboratory leak, according to a classified intelligence report recently provided to the White House and key members of Congress.

The shift by the Energy Department, which previously was undecided on how the virus emerged, is noted in an update to a 2021 document by Director of National Intelligence Avril Haines’s office.

The new report highlights how different parts of the intelligence community have arrived at disparate judgments about the pandemic’s origin. The Energy Department now joins the Federal Bureau of Investigation in saying the virus likely spread via a mishap at a Chinese laboratory. Four other agencies, along with a national intelligence panel, still judge that it was likely the result of a natural transmission, and two are undecided.

The Energy Department’s conclusion is the result of new intelligence and is significant because the agency has considerable scientific expertise and oversees a network of U.S. national laboratories, some of which conduct advanced biological research.

The Energy Department made its judgment with “low confidence,” according to people who have read the classified report.

The FBI previously came to the conclusion that the pandemic was likely the result of a lab leak in 2021 with “moderate confidence” and still holds to this view.

The FBI employs a cadre of microbiologists, immunologists and other scientists and is supported by the National Bioforensic Analysis Center, which was established at Fort Detrick, Md., in 2004 to analyze anthrax and other possible biological threats.

U.S. officials declined to give details on the fresh intelligence and analysis that led the Energy Department to change its position. They added that while the Energy Department and the FBI each say an unintended lab leak is most likely, they arrived at those conclusions for different reasons.

The updated document underscores how intelligence officials are still putting together the pieces on how Covid-19 emerged. More than one million Americans have died in the pandemic that began more than three years ago.

The National Intelligence Council, which conducts long-term strategic analysis, and four agencies, which officials declined to identify, still assess with “low confidence” that the virus came about through natural transmission from an infected animal, according to the updated report.

The Central Intelligence Agency and another agency that officials wouldn’t name remain undecided between the lab-leak and natural-transmission theories, the people who have read the classified report said.

Despite the agencies’ differing analyses, the update reaffirmed an existing consensus between them that Covid-19 wasn’t the result of a Chinese biological-weapons program, the people who have read the classified report said.

A senior U.S. intelligence official confirmed that the intelligence community had conducted the update, whose existence hasn’t previously been reported. This official added that it was done in light of new intelligence, further study of academic literature and consultation with experts outside government.

The update, which is less than five pages, wasn’t requested by Congress. But lawmakers, particularly House and Senate Republicans, are pursuing their own investigations into the origins of the pandemic and are pressing the Biden administration and the intelligence community for more information.

Officials didn’t say if an unclassified version of the update would be issued.

The Covid-19 virus first circulated in Wuhan, China, no later than November 2019, according to the U.S. 2021 intelligence report. The pandemic’s origin has been the subject of vigorous, sometimes partisan debate among academics, intelligence experts and lawmakers.

David Relman, a Stanford University microbiologist who has argued for a dispassionate investigation into the pandemic’s beginnings, welcomed word of the updated findings.

“Kudos to those who are willing to set aside their preconceptions and objectively re-examine what we know and don’t know about Covid origins,” said Dr. Relman, who has served on several federal scientific-advisory boards. “My plea is that we not accept an incomplete answer or give up because of political expediency.”

An Energy Department spokesman declined to discuss details of its assessment but wrote in a statement that the agency “continues to support the thorough, careful, and objective work of our intelligence professionals in investigating the origins of COVID-19, as the President directed.”

The FBI declined to comment.

China, which has placed limits on investigations by the World Health Organization, has disputed that the virus could have leaked from one of its labs and has suggested it emerged outside China.

The Chinese government didn’t respond to requests for comment about whether there has been any change in its views on the origins of Covid-19.

Some scientists argue that the virus probably emerged naturally and leapt from an animal to a human, the same pathway for outbreaks of previously unknown pathogens.

Intelligence analysts who have supported that view give weight to “the precedent of past novel infectious disease outbreaks having zoonotic origins,” the flourishing trade in a diverse set of animals that are susceptible to such infections, and their conclusion that Chinese officials didn’t have foreknowledge of the virus, the 2021 report said.

Yet no confirmed animal source for Covid-19 has been identified. The lack of an animal source, and the fact that Wuhan is the center of China’s extensive coronavirus research, has led some scientists and U.S. officials to argue that a lab leak is the best explanation for the pandemic’s beginning.

U.S. State Department cables written in 2018 and internal Chinese documents show that there were persistent concerns about China’s biosafety procedures, which have been cited by proponents of the lab-leak hypothesis.

Wuhan is home to an array of laboratories, many of which were built or expanded as a result of China’s traumatic experience with the initial severe acute respiratory syndrome, or SARS, epidemic beginning in 2002. They include campuses of the Wuhan Institute of Virology, the Chinese Center for Disease Control and Prevention, and the Wuhan Institute of Biological Products, which produces vaccines.

An outbreak at a seafood market in Wuhan had initially been thought to be the source of the virus, but some scientists and Chinese public-health officials now see it as an example of community spread rather than the place where the first human infection occurred, the 2021 intelligence community report said.

In May 2021, President Biden told the intelligence community to step up its efforts to investigate the origins of Covid-19 and directed that the review draw on work by the U.S.’s national laboratories and other agencies. Congress, he said, would be kept informed of that effort.

The October 2021 report said that there was a consensus that Covid-19 wasn’t the result of a Chinese biological-weapons program. But it didn’t settle the debate over whether it resulted from a lab leak or came from an animal, saying that more information was needed from the Chinese authorities.

The U.S. intelligence community is made up of 18 agencies, including offices at the Energy, State and Treasury departments. Eight of them participated in the Covid-origins review, along with the National Intelligence Council.

Before that report, the Energy Department’s Lawrence Livermore National Laboratory prepared a study in May 2020 concluding that a lab-leak hypothesis was plausible and deserved further investigation.

The debate over whether Covid-19 might have escaped from a laboratory has been fueled by U.S. intelligence that three researchers from the Wuhan Institute of Virology became sick enough in November 2019 that they sought hospital care.

A House Intelligence Committee report concluded last year that this disclosure didn’t strengthen either the lab-leak or the natural-origin theory as the researchers might have become sick with a seasonal flu. But some former U.S. officials say the sick researchers were involved in coronavirus research.

Lawmakers have sought to find out more about why the FBI assesses a lab leak was likely. In an Aug. 1 letter to FBI Director Christopher Wray, Sen. Roger Marshall, a Kansas Republican, requested that the FBI share the records of its investigation and asked if the bureau had briefed Mr. Biden on its findings.

In a Nov. 18 letter, FBI Assistant Director Jill Tyson said the agency couldn’t share those details because of Justice Department policy on preserving “the integrity of ongoing investigations.” She referred the senator to Ms. Haines’s office for information on what briefings were arranged for the president.