FT : Europe’s largest online fashion retailer bets sales slump is just a blip

Europe’s largest online fashion retailer bets sales slump is just a blip
Zalando chief Robert Gentz pledges to avoid mass job cuts despite first-ever fall in revenue

Europe’s largest online fashion retailer Zalando is betting the current slump in internet shopping is just a blip and it can avoid the kind of mass job cuts being undertaken by rivals, co-founder and co-chief executive Robert Gentz told the Financial Times.

Consumer-facing tech groups including Amazon, Klarna and Shopify have cut thousands of jobs this year as the online shopping bonanza that kicked off in first two years of the pandemic has ground to a halt.

Berlin-based Zalando has also been hit hard, with revenues declining in the first half of the year for the time in its 14-year history as it suffered €668mn in cash outflows and generated €7mn of operating losses.

However, the group is adamant it can avoid mass cuts. “Our plan is to keep employment by the end of this year steady,” said Gentz. Since the end of 2019, its workforce increased by a quarter to more than 17,000 employees.

“But we have become much more cautious in hiring,” said Gentz.

Gentz describes the market ructions as a temporary blip that will not have a lasting impact on the retailer.

Zalando listed in Frankfurt in 2014 but its share price has fallen 68 per cent over the past year to leave the group with a market capitalisation of less than €8bn. “Two years of enormous growth lie behind us. When I think about the fashion industry, my [optimism] has not changed at all,” said Gentz.

He said revenues were still 60 per cent higher than in 2019, the last year that was unaffected by the pandemic. He noted that just above 3 per cent of all of Europe’s clothes purchases are processed thought Zalando, which counts 10 per cent of Europe’s population as active customers.

Gentz is confident that Zalando’s market share can more than triple over the long term. “What has changed a bit is the trajectory of getting there.”

He acknowledged that Zalando initially struggled to grasp the magnitude of the crisis in consumer confidence triggered by the Ukraine war and surging inflation, but said the group has switched into damage-control mode. “We just need to play a bit more defensively,” he said — not an easy change for a company that has grown by about 25 per cent each year since 2014.

Zalando has been able to offset the carrier and packaging cost inflation that it has been facing so far, said Gentz, adding that the company was focusing on its profitability. It has scaled back marketing spending and postponed the building of new logistics centres. It also scaled back free shipping offers to limit lossmaking small orders.

He also argued that the 29 per cent slump in net cash this year, to €1.6bn, was driven by temporary factors such as a surge in inventory triggered by the sudden drop in demand.

That stands in contrast to late last year, when gummed-up global supply chains hampered the industry.

The drain from higher inventories will peter out in the second half of this year, said Gentz, while the postponed investments will also help to preserve cash. “Cash is not a concern for us.”

FT : Polio virus reappears in rich economies, exposing gaps in immunisation

Polio virus reappears in rich economies, exposing gaps in immunisation
New York City finds evidence of long-suppressed virus linked to recent samples in UK and Israel

Public health authorities in wealthy economies are racing to head off a return of polio, after the virus has turned up in several countries where it had been all but stamped out.

Health authorities in New York City on Friday said they detected polio in samples taken from the sewage system. Last month a man in suburban New York was diagnosed with the US’s first case since 2013.

In London, health officials this week said they would offer polio vaccine boosters to hundreds of thousands of children after the virus was detected in London waste water. Israel earlier identified its first cases since 1988 and there has been a cluster in war-torn Ukraine, where health services are under huge strain.

The situation is raising concerns that vaccine hesitancy and global conflicts could allow a disease that was on the brink of global eradication to make a comeback.

For much of the 20th century polio, which is short for poliomyelitis, was one of the most feared childhood diseases, killing and disabling tens of thousands of people every year. But vaccine development in the 1950s and a global campaign against the disease begun in 1988 slashed the number of infections to just 175 cases by 2019 and reduced the number of countries where it is endemic to two — Pakistan and Afghanistan.

But its re-emergence in Europe and the US, along with the disruption of inoculation programmes — by the Covid-19 pandemic, and by war in places such as Ukraine and Afghanistan — have caused public health officials to raise the alarm.

“There has been a huge dip globally in the routine immunisation coverage, as countries were engaged in the Covid-19 pandemic response. If you scratch the surface, this shows the vulnerability of countries’ immunisation systems,” said Siddhartha Datta, the World Health Organization’s regional adviser for vaccine-preventable diseases in the European region.

Last month the WHO and Unicef released data showing the largest sustained decline in childhood vaccinations in three decades, with at least 25mn infants missing out on life-saving jabs in 2021. Slightly less than 7mn children missed their third dose of polio vaccine last year when compared to 2019, before the coronavirus pandemic.

New York health officials warned on Friday that hundreds of people may have already contracted the virus following a diagnosis of polio on July 21 in an unvaccinated man who developed paralysis in Rockland county, about 30 miles north-west of New York City.

The suburban county has one of the lowest immunisation rates in the US. Authorities have set up vaccination hubs, distributed leaflets urging people to get jabs and are considering offering polio booster shots to top up people’s immunity.

Dr Mary Leahy, chief executive of Bon Secours Charity Health System, one of the largest hospital groups in Rockland, said the virus had probably infected a lot of people without their knowledge because three-quarters of those with infections do not show any symptoms.

“They have polio, but they’re walking around and do not know that they have it. Only about 25 per cent develop flu-like symptoms . . . less than 1 per cent go on to develop paralysis.”


Genetic studies of the New York case have linked it to the polio viruses in Israel and London, suggesting ties across borders. The detected viruses are examples of vaccine-derived polio, which is a strain related to the weakened live poliovirus contained in the oral polio vaccine. They can cause illness and paralysis if they are allowed to circulate in populations with unvaccinated people for long enough and then mutate.

Rockland county has a vaccination rate of 60 per cent for children at two years of age, well below the statewide average of 78 per cent. The WHO says 95 per cent vaccination coverage is required to provide herd immunity.

Rockland is home to a large and growing Orthodox Jewish population. Dorrit Reiss, professor of law at the University of California, Hastings College of Law, said the Orthodox community in the Rockland area had been actively sought out by national anti-vaccine campaigners, who have held rallies and distributed leaflets raising fears about immunisation.

“There is nothing in Judaism that is against vaccines, but some specific Jewish Orthodox communities have concerns. They live a closed life in multigenerational homes with large numbers of kids, so in a very real sense it is an area that is vulnerable to an outbreak,” she said.

Local tensions over vaccination remain high after a measles outbreak in 2018 and 2019 which infected hundreds of people, centred in Rockland’s ultra-Orthodox community.

New York Jewish Week and other local publications have reported the man who contracted polio in Rockland is Orthodox, although local health officials have not confirmed this due to concerns about stigmatising the community.

A New York state senator last month also identified the infected polio patient as an Orthodox Jew and alleged that some private Jewish schools had a history of non-compliance with vaccination requirements. He later retracted his statement following objections from Jewish groups.

“One thing about this polio case is it’s in Rockland country, which had a massive measles outbreak two years ago — so that suggests there is vaccine hesitancy,” said Dr Marny Eulberg, a retired physician and polio survivor who has studied the disease for decades.

“That’s a problem because these days many young parents haven’t seen polio, it isn’t part of their consciousness. And the reality is once you get polio, the treatment now is no better than it was in the 1950s: so the best response is to get vaccinated.”

Health providers in Rockland say fears about polio are prompting some previously hesitant people to come forward to get vaccinated.

“We have seen one mother who was anti-vax and has not given other vaccinations, that brought her two children in for the polio vaccine, because the paralysis scares her,” said Amanda Salzman, director of communications at Refuah Health in Rockland.

Salzman said the clinic had administered almost 500 polio vaccines so far, out of a total of 2,000 across the county.

Health experts say the latest cases demonstrate the need for vigilance on vaccination efforts and for governments to support global eradication efforts on polio. This programme is seeking $4.6bn in funds to complete vaccination efforts in Afghanistan and Pakistan.

“There is a huge need to identify funding,” said Dr Jay Wenger, who leads a polio eradication programme at the Bill & Melinda Gates Foundation. “The importance of getting that is then we won’t have these episodes of viruses in New York, in London or anywhere.”

FT : Volatility investor warns of false dawn for US equities market

Volatility investor warns of false dawn for US equities market
Capstone’s Paul Britton says ‘nervous investors will start selling’ when companies struggle to refinance debts

Investors heartened by this summer’s recovery in US equity markets should not relax their guard so soon because corporate debt concerns will probably spark another downturn at the end of this year, one of the world’s pre-eminent volatility specialists has predicted.

While sharply falling equity prices in the first half of the year reflected concerns about future earnings due to inflation, investors have not yet reckoned with the effects of higher interest rates on overly indebted companies, Paul Britton, founder of Capstone Investment Advisors, told the Financial Times.

He warned that news of particular companies struggling to refinance their debt at affordable rates would spook the markets again, probably in the fourth quarter or in early 2023.

“We are getting close to the end of phase 1, a repricing of growth. Phase 2 is more interesting to me. It is more of a credit cycle,” Britton said. “People are upset that they’ve lost money, but there is no fear.”

“The headlines in Q4 and Q1 are going to be of people having trouble refinancing, and nervous investors will start selling,” he said. “By Q4 or Q1 it will switch to fear.”

While many companies took advantage of extremely low interest rates in 2020 and 2021 to refinance their debt for very long periods of time, signs of strain are starting to appear in debt markets.

Bankers last month postponed a debt financing for the $16.5bn takeover of software company Citrix by Vista Equity Partners and Elliott Management, after struggling to find willing lenders. When companies have pushed ahead, they have often had to accept more onerous terms than in the previous 18 months. Banks including Bank of America and Goldman Sachs that initially committed to fund such deals have been left nursing losses.

Capstone, which had $9.1bn in assets under management as of July 1, profits from choppy markets. It not only runs one of the world’s largest hedge funds specialising in volatility but also helps institutional and wealthy customers protect their portfolios from extreme risk.

The investment group’s global fund was up 0.8 per cent for the first half and its dispersion fund was 14 per cent higher, according to a person who has seen the results.

Global financial markets swung wildly in first half as the S&P 500 index entered a bear market amid concerns about a looming recession and tighter monetary policy from the Federal Reserve.

But as the equity market has more recently found its footing, gauges of volatility such as the Cboe’s Vix index have calmed; earlier this week the Vix closed below its long-running average of 20 for the first time since April.

A fierce debate has split the market over whether the rebound in US stocks can persist, particularly if the Fed raises interest rates more aggressively or more quickly than investors are wagering.

Britton, a former floor trader who profited from the late 1990s volatility of the Asian and Russian crises but took losses in the 2008 financial crisis, said he did not expect the number of corporate bankruptcies to be higher than in past downturns. Problems are likely to be concentrated among companies rated below investment grade, he added.

“Leveraged loans are the top of my list, and high-yield debt from anyone that doesn’t have cash flow,” he said.

Refinancing woes will have an outsized effect on market sentiment, he said, because investors have become too complacent that central bankers will ride to their rescue with lower rates. This time, he predicted, Fed governors will stick to their inflation-busting mantra and maintain higher rates.

“They don’t want to recreate what they have done today. Any intervention they make to stabilise markets is going to be significantly smaller [than previous efforts] and the market is going to be severely disappointed,” Britton said. “The Fed and other central bankers are going to be incredibly gun-shy.”

Indeed, Mary Daly, president of the San Francisco branch of the Fed, warned this week that it is far too early to “declare victory” in the central bank’s fight against elevated inflation.

Britton said he doubts the Fed can avoid a recession, and that could push the US unemployment rate to 4.5 per cent from its current 3.5 per cent level.

“Ultimately the Fed has got an extraordinarily difficult job. It [the economy] is a very large plane they are trying to land on a very short and very narrow runway. They could stick the landing. I just think it will be hard.”

WWD : Prada Group Seen Nearing Dual Listing

Prada Group Seen Nearing Dual Listing
Co-CEO Patrizio Bertelli had hinted at the possibility to explore a second listing last year, but reports now suggest the company is getting into action.

MILAN — Prada’s already shared plans to explore a second listing in Europe are reportedly getting into action.

The luxury brand’s co-chief executive officer Patrizio Bertelli had hinted at the potential move during Prada’s Capital Market Day last year, as reported by WWD.

“We are satisfied with Hong Kong, it was the right choice,” Bertelli said at the time, admitting, however, that “we could explore a listing in Europe. That said, we don’t feel the need to now, we are OK this way.”

According to a Bloomberg report published Friday, the company, which has been publicly listed on the Hong Kong Stock Exchange since 2011, is moving swiftly to turn those vague plans into action and seeking $1 billion from a second listing in Milan, likely taking place in 2023.

Contacted Friday by WWD, Prada had no comment.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Despite the enormity of the ‘green’ transition, investors will need to be picky.


Cover Story:
-Despite the enormity of the ‘green’ transition, investors will need to be picky. Big, obvious winners are few and far between. Green-energy indexes and funds like the Invesco Solar exchange-traded fund (ticker: TAN) have historically traded based on short-term expectations for government policy or raw materials costs, instead of the longer-term opportunity. And some of the companies involved haven’t shown they can persevere through good times and bad.

Interview:
-This week Barron’s interviewed Virginie Maisonneuve. Ms. Maisonneuve’s fascination with China began when she was 5 years old and living in Paris. She loved listening to stories from a book of tales from China and poring over the delicate drawings that adorned its pages. She went on to earn a degree in Mandarin Chinese and become an investor, working and living all over the world. “I always knew that I would get involved with China,” says Maisonneuve, managing director and global chief investment officer for equity at Allianz Global Investors. She began her career in China as a consultant for the French Ministry of Foreign Affairs in Beijing. Since then, she has held portfolio management and chief investment officer positions at companies such as Pimco, Schroders, and State Street Research, and has pioneered investing in areas from China to environmental, social, and governance, or ESG.

Tech Trader:
-Demand for consumer-focused tech products is sagging, with sales weakening for PCs and peripherals, Android smartphones, and videogames. And there are now signs that slowdown is spreading into other places, including the automotive, industrial, and data center markets, where demand was supposed to be more durable. Over the past week, two key chip companies provided grim updates. On Monday, the graphics chip company Nvidia warned that results for its fiscal second quarter ended July 31 would be dramatically below previous expectations, due to an unexpected decline in demand for graphics chips targeted at videogames but also used for cryptocurrency mining.

The Trader:
-Coinbase trades like a side bet on Bitcoin. Lately, though, shares of the crypto brokerage have added meme-stock volatility to the mix, taking cues from the likes of GameStop and AMC Entertainment. Consider the frenetic trading surrounding Coinbase’s earnings report on Aug. 9. Leading up to the report, the stock nearly doubled from lows around $50 in July, reaching $98 this past week. Along the way, the stock plunged 21% on July 26, only to roar back more than 80% in the ensuing days. After a retreat, the stock closed up 7.7%, at $90.49, on Friday.
The volatility arises from several factors. For one, hordes of investors are betting against it. About 18% of Coinbase stock is sold short. Such high short interest makes a stock vulnerable to a “squeeze,” when traders who had sold borrowed shares—aiming to buy them back later at a lower price—must frantically cover their positions, causing a stock to surge.
-Inflation slowed in July, according to Department of Labor data. The consumer price index rose 8.5% in July from a year ago. That was lower than both the 8.7% increase in prices forecast by economists and the 9.1% reading in June. That news sent the S&P 500 index up 2.1% that day and tipped the tech-weighted NASDAQ Composite into a bull market. The S&P closed the week up 3.3%, while the Dow Jones Industrial Average and the NASDAQ gained 2.9% and 3.1%, respectively.

Features:
-The House of Representatives on Friday passed a broad climate, tax and healthcare bill containing significant measures to lower prescription drug prices within the Medicare program, allowing the government to negotiate drug prices for the first time and capping seniors’ out-of-pocket drug costs at $2,000 annually. The Inflation Reduction Act of 2022, passed in a 220-207 vote along party lines, will now move to President Biden for signing into law. Among other provisions, the bill will allow the government to negotiate prices on select medications, cap seniors’ out-of-pocket spending on drugs at $2,000 a year, penalize drug makers that increase their prices by more than the inflation rate within the Medicare program, and cap the out-of-pocket cost of insulin at $35 a month for Medicare beneficiaries.
-Consumer sentiment rebounded in August as inflation showed signs of cooling off, according to preliminary figures from the University of Michigan. The university’s consumer sentiment index rose to 55.1 in August, early figures showed. This is a 7% monthly increase from last month’s 51.5 reading, and above consensus estimates for 52.3. The figure fell by 21% from a year earlier, when the index was at 70.3.

European Trader:
-The Dow Jones US Retail Index is down 19% this year, and it’s a similar story in Europe. The Stoxx Europe Total Market Retail index is down 28.7%. But JD Sports Fashion has a record of thriving in downturns. The British sportswear retailer—which sells footwear and apparel from brands including Nike, New Balance, The North Face, and Under Armour—could buck the latest trend, with the stock estimated to more than double in price. Shares have tumbled 25.6% to GBP 1.34 ($1.61) in the past six months, but Investec analysts see a 123% rise to £3.

Emerging Markets:
-Poland has proved a critical front-line ally in the West’s struggle to bolster Ukraine against Russian aggression.
The nation of 38M has absorbed at least one million refugees from its southeastern neighbor, while providing logistics for an enormous transfer of NATO armaments.

Poland is also at the sharp end of the West’s economic problems. Inflation is galloping at 16% annually, nearly twice the euro-zone rate. The central bank has hiked interest rates from 0.1% to 6.5% over the past 10 months. That spells calamity in a country where some 90% of mortgage borrowers took out variable-rate loans.

Commodities:
-Orange juice prices could get fizzed up over the next few weeks. The market is already suffering from ultra-low inventory levels, which means the risks of bad weather could potentially drive prices up more than 20% to record levels, say experts. “If you were to get a hurricane in Florida’s citrus belt that delivers a powerful punch, it’s likely we would have quite a panic in the marketplace,” says Shawn Hackett, president of Hackett Financial Advisors. “It’s possible we could test all-time highs.” Other experts also see Brazil, the world’s largest orange juice producer, facing weather problems this year, which could have similar impacts on the market.

Streetwise:
-Jack Hough figured that the tax breaks for nuclear power in the new Inflation Reduction Act are for existing plants only, which is just as well. Apart from a quick skim of the Department of Energy’s Nuclear 101 webpage, I don’t know much about fission—or science of any kind, really. Also, my wife uses that hose for her tomatoes. But if clean-energy tax breaks are usually for stuff the government wants companies or individuals to build or buy, why would this one incentivize something that’s already up and running? That, I might be able to answer.

>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-A list of files taken from former President Trump’s Florida home includes materials marked as top secret and meant to be viewed only in government facilities.
Agents who executed the warrant did so to investigate potential crimes associated with violations of the Espionage Act and an obstruction law.
-Former President Trump claimed he declassified all the documents at Mar-a-Lago. Even if true, it may not matter.
Three criminal statutes show the inquiry goes beyond classified information.
-The House of Representatives has passed a sweeping Climate, Tax and Health Care Package. The passage of the bill, which appeared dead just weeks ago, caps a Democratic effort to deliver on major components of President Biden’s agenda. It was a victory for Biden, and a bet on America’s future.
-President Biden is poised to deliver the latest in a series of legislative victories that will ripple across the country for decades.
-Salman Rushdie is on a ventilator after being stabbed in western New York. The novelist, who has faced death threats since 1989, was attacked in Chautauqua as he prepared to talk on the US as a haven for exiled writers.
-The Southern Baptist Convention says it faces federal investigation for sexual abuse. Church leaders disclosed that multiple Southern Baptist entities were under investigation and said that all would cooperate.
-The Russian economy contracts sharply as war and sanctions take hold. The country’s gross domestic product from April through June declined 4 percent from a year earlier, new government data shows.
-The shelling of Ukraine nuclear plant raises fears and outrage. President Volodymyr Zelensky accused Russia of “nuclear blackmail” as the two sides traded blame.
-Positive economic signs have sent the S&P 500 higher for four consecutive weeks, but some investors worry about how long the rally can last.
-The detection of the polio virus in NY City’s sewage suggests it is circulating there, New York’s health authorities said.

THE FINANCIAL TIMES
-Donald Trump is under investigation for potentially mishandling information related to US national defence in violation of the Espionage Act, along with other possible violations related to the handling of government documents, according to the FBI’s warrant to search the former president’s home.
-After navigating through the mines in and around the Ukrainian Black Sea ports, the Razoni cargo ship never arrived at its originally stated destination, Tripoli in Lebanon. The shipment’s buyer rejected the 26,500 tonne corn cargo on quality grounds and the vessel remained stranded until new buyers were found and 1,500 tonnes of the grain were unloaded in Turkey.
-Spain has said an additional link in a gas pipeline from the Iberian peninsula to France could be ready within nine months after Germany backed the idea of linking the region to central Europe to improve the continent’s energy security.
-Salman Rushdie, the author who has lived under a death threat from Iran for several decades, was stabbed on stage during a literary event in the US on Friday morning. The Booker Prize-winning author was still in surgery on Friday afternoon, police said.
“The news is not good. Salman will likely lose one eye; the nerves in his arm were severed; and his liver was stabbed and damaged,” Rushdie’s agent Andrew Wylie said in a statement to Reuters on Friday evening. Rushdie, 75, was still on a ventilator, he said.
-Russia has said it will not yet allow international inspectors to access Europe’s largest nuclear power plant despite fears over the state of the Ukrainian facility under Moscow’s occupation. Moscow and Kyiv have traded accusations of targeting the Zaporizhzhia plant in southern Ukraine, which has been under Russian control since March following Russia’s full-scale invasion of its neighbor.
-Five Chinese state-owned companies have announced plans to delist voluntarily from Wall Street before the US forces them out in 2024 over an audit dispute, marking an escalation in the financial decoupling of the world’s two largest economies.
-Swedish manufacturer Volvo AB surprised investors this week by borrowing €500M — a rare deal in Europe’s parched corporate bond markets that are pin-drop quiet even by summertime standards.
-Colombia’s first leftist government in modern history has targeted the country’s wealthiest residents and its commodities exports in a tax proposal that represents a significant shift for the traditionally conservative nation.
The proposed tax overhaul “should not be viewed as a punishment or a sacrifice”, Gustavo Petro, the country’s new president, said during his inauguration speech on Sunday, a day before sending the bill to Congress. “It is simply a solidarity payment that someone fortunate makes to a society that has enabled them to generate wealth.”
-In the year to July 2021, more Americans moved to Florida than any other state — 220,890 of them, according to census data. The influx included billionaires and hedge funds unmoored from their Wall Street offices who flocked to South Florida for its low taxes and year-round sunshine.

NY POST
-Reporting on the documents taken from former President Donald Trump’s property — as well as the release of the search warrant by the judge who approved it — has filled in some more outlines of the story, although there is too much we still don’t know. The quagmire underlines what seems, at the very least, the unbelievable imprudence of the search. If an FBI action is going to be so inflammatory that the attorney general of the United States can’t maintain a judicious silence about the matter more than a couple of days before publicly jousting with the target, it’s a pretty good indication it shouldn’t have been taken to begin with.
-Florida’s Agency for Health Care Administration (AHCA) has reportedly finalized rules that prevent health care providers from billing the state’s Medicaid program for gender-affirming medical treatments. The agency reportedly added new language to Medicaid program rules stating that it would not cover services for the treatment of gender dysphoria, including sex reassignment surgery, puberty blockers or hormone therapies. This action comes after the state’s AHCA announced in June that it had determined those services were “not consistent with generally accepted professional medical standards and are experimental and investigational with the potential for harmful long-term effects.”
-Pharmacists are in such high demand that Walgreens is offering a hefty signing bonus of up to $75,000. Due to pandemic-related staffing challenges, the signing bonus can reportedly be up to $75,000 in certain markets across the US – usually their range is half that amount.

TechCrunch : Digital pensions platform Penfold raises $8.5M Series A led by Brid

Penfold, a digital pensions platform, has closed a £7m ($8.49m) Series A funding round led by Bridford Group, an investment group.

Also participating in the round was Jeremy Coller, Chief Investment Officer and Chairman of Coller Capital. Penfold also raised additional funding via a crowdfund amongst its customer base. The cash will be used to expand Penfold’s workplace pension division.

Chris Eastwood, Co-Founder at Penfold, commented (in a statement): “It’s been a big year for Penfold – from launching our workplace pension offering, to reaching £100m AUA.”

Bridford Group, lead investor, commented: “The pensions industry represents a huge market – with £8trn in savings in the UK alone. Despite this, many people remain uninterested and unengaged in their pensions. With so many people not saving enough, there’s a real opportunity for a new provider to step in.”

(CrunchBase) The Week’s 10 Biggest Funding Rounds: CleverTap Raises $105M To Hel

The Week’s 10 Biggest Funding Rounds: CleverTap Raises $105M To Help Companies Retain Customers, Overtime Scores Big

Another slow week on the funding front as far as large rounds go. Only two rounds broke the $100 million mark, and it didn’t take too big of a raise to crack the top 10 this week. Investment was also all over the place, from analytics to sports to smart water coolers. August has been a slow, sleepy month so far in the venture capital world. Perhaps the second half of the month will see an uptick.
1. CleverTap, $105M, analytics: While getting customers can be hard, retaining customers is the key to any sustainable growing business. Investors know that. That’s why investors such as Caisse de Dépôt et Placement du Québec, IIFL AMC’s Tech Fund, Tiger Global and Sequoia India poured $105 million into Mountain View, California-based CleverTap this week. The startup offers cloud-based customer engagement and retention tools that not only help companies keep customers, but also increase their spend. While the company was founded in India, it has steadily moved into the U.S. market, bolstered by its acquisition of San Francisco-based Leanplum in June. The new round values the company at $775 million, TechCrunch reported. Founded in 2013, the company has raised more than $181 million, according to Crunchbase data.

2. Overtime, $100M, sports: Sports fans have a lot of alternatives as to where they get their fix. However, a lot of big backers are putting their cash behind New York-based startup Overtime, which closed a $100 million Series D valuing the company at $500 million. The round was led by Liberty Media Corp. and included participation from Morgan Stanley’s Counterpoint Global, Winslow Capital, Bezos Expeditions, Blackstone and Sapphire Sport. The company is also backed by several pro sports stars, including Kevin Durant and Trae Young. The startup is trying to create a large sports community—mainly focused on Gen Z and millennials—around sports video and highlights on social media channels. The company also has recently started to launch its own sports leagues—Overtime Elite (basketball) and OT7 (football). Overtime says it currently has more than than 65 million followers and its content receives more than 2 billion video views each month. The new cash brings the total amount raised by the 6-year-old company to more than $250 million, per the company.

3. (tied) Boulevard, $70M, software: Keeping track of appointments can be a nightmare for any business. However, that can be especially true for appointment-based personal care businesses, such as spas, salons and barbershops. Many are small, with only a handful of employees, and have to manage appointments and payments on pen and paper. Boulevard is one of a few tech startups that have emerged in recent years to help digitize that market and bring it into the 21st century. The Los Angeles-based startup closed a $70 million Series C led by Point72 to help self-care shops digitize booking appointments, messaging clients and even accepting payments. The company will use the new cash to expand its product and move deeper into the wellness and beauty sector. Founded in 2016, Boulevard has now raised $108 million, per Crunchbase.

3. (tied) Bevi, $70M, food and beverage: The pandemic has forced many to work from home, so the time-honored tradition of gathering around the water cooler has somewhat been lost. However, that didn’t stop Boston-based Bevi from locking up a $70 million Series D from Cowen Sustainable Investments. The company makes smart water coolers that provide filtered, flavored and sparkling water on demand. In addition to the choices it offers, it also is an environmentally sustainable alternative to bottled water. Bevi says it has helped customers save over 300 million single-use bottles and cans to date. Founded in 2013, the company has raised more than $130 million, according to Crunchbase data.

5. Disc Medicine, $53.5M, biotech: Watertown, Massachusetts-based Disc Medicine had a busy week. The clinical-stage biotechnology firm announced it would merge with ​​publicly traded Gemini Therapeutics and start trading on Nasdaq after shareholders approve the deal. However, the company also announced it secured a $53.5 million round led by Access Biotechnology. The company focuses on treatments for serious hematologic diseases. Founded in 2017, Disc Medicine has raised more than $193 million, according to Crunchbase data.

6. Truework, $50M, fintech: San Francisco-based income and employment verification platform Truework raised a $50 million Series C led by G Squared. Founded in 2017, the company has raised nearly $95 million, per Crunchbase.

7. REVA Medical, $45M, medical devices: San Diego-based medical device maker REVA Medical closed a $45 million Series B led by strategic investor BioStar Capital. Founded in 1998, the company has raised more than $146 million, according to Crunchbase.

8. (tied) Injective, $40M, crypto: New York-based smart contract platform Injective raised a $40 million funding round led by Jump Crypto. Founded in 2017, the company has raised nearly $57 million, per Crunchbase.

8. (tied) Nightfall AI, $40M, cloud data services: San Francisco-based cloud data-loss prevention platform Nightfall AI closed a $40 million Series B led by WestBridge Capital. Founded in 2018, the company has raised more than $60 million, per Crunchbase.

10. Superblocks, $37M, software: New York-based Superblocks raised $37 million in a round led by Kleiner Perkins, Greenoaks, Spark and Meritech. Founded last year, the company has created a platform for developers to build custom internal tools. This is the company’s first funding, according to Crunchabse.


Big global deals
With few large rounds going to U.S.-based startups, the largest round went to a Korea-based company this week.
  • Seoul-based cloud optimization startup Megazone Cloud raised more than $345 million in a Series C.

FT : European nations take differing approaches to shield citizens from surge in

European nations take differing approaches to shield citizens from surge in energy bills
From price freezes to cheap public transport, countries are turning to a variety of measures to reduce costs

Soaring energy prices could mean an even colder and darker winter across Europe, with governments racing to find new ways to protect households facing huge utility bills.

Wholesale gas prices are hovering around €200 per megawatt hour — eight times higher than the average level of recent years, wholesale electricity prices have risen sharply in response to generation difficulties in many countries, and the gloom is mounting.

In the UK, where households bills are expected to rise to £4,400 a year in early 2023, around four times the level of the period between 2018 and 2021, the consumer rights campaigner Martin Lewis has described the situation as “a national crisis on the scale that we saw in the pandemic”.

The UK is hard hit because it relies heavily on gas for both home heating and electricity generation, and because it, unlike many European countries, allows wholesale prices to flow straight to consumers — albeit with a delay.

While Rishi Sunak and Liz Truss battle publicly over energy prices in the race to succeed Boris Johnson as the UK’s next prime minister, governments of all stripes are facing the same challenges across the continent.

Germany’s chancellor Olaf Scholz said on Wednesday that his government would “do everything to ensure that the citizens get through this difficult time” of high inflation.

European countries differ in their spending on gas, electricity, coal and road fuels, but almost all have used the power of the state to protect customers from part of the increase in bills.


The IMF estimated in July that the median high income European country had already spent an additional 1 per cent of annual national income on energy price support — a figure it says is almost certainly an underestimate and that is likely to rise. Poorer European countries, where energy is a larger proportion of budget share, had spent 1.7 per cent of their national income already.

Most worrying was that much of the money spent so far has gone on stopping energy companies passing on higher prices to customers — a tactic which the fund said did not “incentivise energy savings”.

In France, the government will this year spend around €22bn to shield its citizens from surging energy costs, with a freeze on gas prices for consumers as well as its four per cent cap on electricity price increases — both of which were introduced in February this year.

Norway’s government pays 90 per cent of households’ electricity bills when wholesale prices exceed prescribed thresholds. But even with its big hydropower capacity, Oslo has faced growing political and public pressure over its inability to curb high prices.

Germany has agreed a €15bn bailout of Uniper, a large gas purchaser, although the higher costs of gas will eventually be passed on to customers.

Most European countries have lowered taxes on petrol and diesel, ranging from a 5p cut per litre in the UK to a temporary lowering of 29.55 cents per litre in France and Germany.

The price of gas canisters, a common way of heating Spanish homes, has been fixed by the government in Madrid until next year.

While these measures have been popular with the public, economists and governments have recognised they also need to offer support that encourages households and businesses to use less energy.

High industrial power prices in the Netherlands led to a 30 per cent reduction in use in the first five months of this year compared to last year. Looking at these results, one government official in The Hague said: “The energy market works.”

Lump sum payments have proliferated in other parts of Europe. All households in the UK will receive a subsidy of £400 towards energy bills this winter. In central and eastern Europe, households spend more on fossil fuels as a proportion of their household budgets because the goods are necessities and incomes are lower. This has led to significantly higher support being offered, mostly in the form of measures that have protected consumers from higher prices.

For the first time since the end of communism, each household in Poland can apply for a one-time subsidy of up to 3000 zlotys (€640) to purchase coal, which still heats many of the country’s households.

Germany has offered lump sum reductions in income tax and raised allowances, while Italy has put in place a €200 “cost of living bonus” for the majority of salaried workers, self-employed workers and pensioners.

As the costs mount, countries are increasingly targeting support for poorer households — a policy which the IMF thinks is a better way to cut overall energy usage.

Italy’s poorest — defined as those earning less than €12,000 a year — have had their household energy bills frozen under the outgoing government of Mario Draghi, who sought to walk a tightrope between providing relief to families and keeping to its declared public deficit target of 5.6 per cent of GDP.

Lower income consumers in the Netherlands will receive an energy allowance of around €1,300, while in the UK, households receiving means-tested support from the government will receive £650.

In Spain, the government has been less generous to poorer working age households, with one-off payments of just €200 to people earning less than €14,000 a year. More generous support has gone to those receiving the lowest state pensions, where payments have been increased by 15 per cent, equivalent to about €60 more a month.

Some governments have also taken to innovation and distraction in a bid to keep households happy amid the energy crisis. The most visible policy, billed as a means to reduce road use, was Germany’s €9 a month public transport pass for June, July and August. The policy has seen huge uptake, with politicians under pressure to extend the scheme, probably with less government subsidy, in some form into the future.

For Oya Celasun, assistant director of the IMF’s European department, governments should focus their efforts on helping lower-income households, which suffer the most from higher energy bills. “Policy should shift from broad-based support to targeted relief,” she said.