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A New Round of EV/Autonomous-driving Financing

Tesla is the leader in the electric vehicle market obviously, but it may not be the only winner. As technology matures and become more advanced, it will become more of a business competition (assuming design & production generally won’t be a problem in the next decade).

And another round of fresh financing in this field is showing us the future to come, probably with a few leaders in different sub-segments of EV market.

And the self-driving is still a combating ground for companies. Because of its complexity, lots of collaborations and alliances are expected. (e.g. Toyota to invest $500 million in Uber for self-driving cars)

Led by Amazon, the $700 million investments in Rivian, announced on February 15, is the latest move. As the leader in electric pickup and SUV, Rivian will help Amazon to build the next generation logistics network. After all, although amazon is in e-commerce (and other) business, it is also a logistics company (so does Walmart). In the next 15-30 years will have its own (delivery) network & infrastructure, independent of USPS, UPS, FedEx, etc., comprised of (autonomous) airliner, trucks, delivery robots, etc… Yes, Amazon may become similar to the US postal system in the 19th century.

R1T Electric Truck (updated in Jan 2021; previous link broken) | Source: Rivian

R1T Truck expected spec | Source: Rivian

The R1T and R1S will be produced at Rivian’s manufacturing plant in Normal, Illinois, with customer deliveries expected to start in late 2020.

Just before that, on February 7, Aurora has raised more than $530 million in Series B financing for its self-driving technology, led by Sequoia Capital and includes “significant investment” from Amazon. [Techcrunch]

The investment was reported in early January [recode] and not a good news for companies like Tesla. The team is led by 3 industry leaders: CEO Chris Urmson, who was the CTO for Waymo, CPO (chief product officer) Sterling Anderson, Tesla’s former head of Autopilot, and CTO Drew Bagnellone, one of the founding members of Uber’s autonomous efforts. Aurora is now valued at more than $2.5 billion.

Meanwhile, Tesla Semi is probably still the most ready and earliest e-truck with auto-pilot. First unveiled in November 2017, Tesla Semi has its prototype traveled by itself (without any escort or accompanying vehicles) for a week to arrive at the J. B. Hunt headquarters in Arkansas on August 24, 2018.

What’s cool is that it was driven across the country alone (no escort or any accompanying vehicles), using the existing Tesla Supercharger network and an extension cord

— Elon Musk (@elonmusk) August 25, 2018

Other self-driving companies have started to explore use cases.

Cruise Automation, the self-driving unit of General Motors, is teaming up with DoorDash to test a food delivery service in San Francisco using autonomous vehicles. The pilot will commence in “early 2019.” [Verge]

Nuro, which raised $940 million from Softbank Vision Fund in Februry, is focusing on self-driving bots and has a (pilot) partnership with Kroger.

And Waymo has launched/tested its self-driving ride service in Arizona in December 2018.

And Ford and Volkswagen might join together to bet on Argo AI, valued at about $4 billion, as Bloomberg reported on February 14.

And Daimler and BMW may go into an extensive cooperation in autonomous driving.

First half of 2019 might be the last chance to get into this game if winning the future of cars is expected.

On President’s Day, California Attorney General With a 16-state Coalition Filed Lawsuit Against President Trump

California Governor Gavin and Attorney General Xavier Becerra today filed a lawsuit in the U.S. District Court for the Northern District of California challenging President Trump’s declaration of a national emergency and his attempt to divert funding appropriated by Congress for other purposes.

Joining Attorney General Becerra in filing the lawsuit are the attorneys general of Colorado, Connecticut, Delaware, Hawai’i, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Virginia.

Trump anticipated lawsuits – “We will have a national emergency, and we will then be sued. And they will sue us in the Ninth Circuit, even though it shouldn’t be there,” the president said, referring to the nation’s largest circuit court whose area encompasses California. “And we’ll possibly get a bad ruling and then we’ll get another bad ruling and then we’ll end up the Supreme Court, and then hopefully we’ll get a fair shake and we’ll win in the Supreme Court, just like the ban.”

Attachment

「Podcast of the Week」a16z Podcast on Consumer Packaged Goods (CPG) and Direct-to-Consumer (DTC) brands

long-tail exposure and DTC brands
jump in acquisition cost
Instacart and future of (virtual) grocery shopping
data in CPG

Airbus A380 to Stop Production… Officially

The European aerospace group said it had made the “painful” decision to stop making A380 after Emirates, the biggest customer, reduced an outstanding order for 53 planes to only 14. [The Guardian]

Airbus announcement on February 14 – capital market liked it.

A History

A380 is the world’s largest passenger airliner, a wide-body aircraft manufactured by Airbus. The project was announced in 1990 to challenge the dominance of the Boeing 747.

Boeing’s 747 project had its origin in a US Air Force requirement for a large heavy-lift transport carrying up to 750 troops over long distances. Losing that contract, however, made Boeing to pursue it in high-capacity commercial jet transportation. [Air Force One, the presidential aircraft version of the 747 will be modified based on 747-8; Boeing received the contract in July 2018 – a $3.9 billion contract to build two, due to be delivered by December 2024]

Boeing’s board of directors decided to launch the 747 in March 1966, making its decision public in April, along with an announcement that Pan Am had placed its first order for 25 at $20 million each. First flown commercially in 1970 with Pan American Airways, the 747 held the passenger capacity record for 37 years.

Conceived as a response to the Boeing 747, the Airbus A380 development program was officially launched in June 1994. It is the largest jet airliner ever built and is the world’s first double-deck passenger aircraft. First flight took place from Toulouse, France on 27 April 2005, A380 completed its first commercial with Singapore Airlines on October 25th 2007 with 471 passengers on board (breaking 747’s record).

Commercial Success?

A380 took the realm and record in terms of manufacturing and engineering, but is often considered an unsuccessful commercial product. As of January, Airbus had received 313 firm orders for the passenger version of the plane, of which 234 had been delivered.

A380 O&D as of Jan 2019| Source: wikipedia

But its target was to sell 700 in total. The whole programme is thought to have cost $25bn (£19.4bn). [BBC]

Consumers like A380 but not airlines do not

The average price of Boeing’s 747-8 as of January 2018 is at $402.9 million and $403.6 million for the passenger and freighter version respectively. The current list price is up 4% at $418-419 million.

The average list price of the Airbus A380 is 10% more expansive, based on its 2018 average list price of $445.6 million.

Common concerns and considerations…

too large, hard to fill and thus inefficient
high fuel prices, high operating cost and environmental concerns
airlines looking at Boeing’s new family of 777s

Now, the world’s largest passenger airliner will not be produced after 2021.

The Economics

The rising global demand in the 21st century is the underlying theme, especially the rapidly rising number of air travelers in the Asia and Middle East market.

The center of Airbus’ pitch for the A380 in the early 2000s was the notion that the core of the long haul business model would be so-called hub-to-hub flights. [AirwaysMag]

On the other hand, Boeing is pursing the point-to-point (more accurately hub-to-spoke) thesis.

Boeing’s 777X, specifically the larger 777-9X variant, offers similar performance (the A380 can fly slightly further) to the A380. And pretty much every other carrier with a hub network large enough to support an A380 has ordered either the Boeing 777X or the Airbus A350. [AirwaysMag]

The airline industry is planned and started as fragmented. Then comes bankruptcy and consolidation.

And airlines are also sharing world hubs or exploring second/third tier cities. (it’s not common for a single airline to secure the majority share of an international traffic hub – which would make A380 a wise choice/investment)

Airbus may have bet that countries like China and India will have large demand centered around one or two cities. But the reality is the opposite. They have planned ahead to spread out and made several international hubs.

First tier airports/cities in terms of size will add new members to its list. That’s how the predicted increase in demand mostly absorbed.

「Video of the Week」Talk with Boeing CEO Dennis Muilenburg

The David Rubenstein Show in August 2018, when Boeing’s share price is ~$350.

https://www.bloomberg.com/news/videos/2018-08-08/the-david-rubenstein-show-dennis-muilenburg-video

JPM Coin…

So JP Morgan has created its coin… JPM Coin

Three early applications:

Cross-border payments. The cryptocurrency will enable Chase to settle international payments between clients in real-time, and at any time of day (which does not happen today).
Securities transactions. Rather than relying on wires to buy a debt issuance–which would create a time gap between when a transaction settles and when investors get paid–institutional investors can use the token to generate instant settlements.
Transaction consolidation. Clients of J.P Morgan’s treasury services business will be able to replace the dollars they hold in subsidiaries across the world, enabling them to move money to subsidiaries around the world with greater fluidity.

“The JPM Coin will be issued on Quorum Blockchain and subsequently extended to other platforms. JPM Coin will be operable on all standard Blockchain networks.” — JPM

Here is what others are saying/reporting…

“In trials set to start in a few months, a tiny fraction of that will happen over something called “JPM Coin,” the digital token created by engineers at the New York-based bank to instantly settle payments between clients.” — CNBC

“For years, Chase–by itself and with the other big banks–has invested in reducing its reliance on legacy payments networks. Coin, like previous endeavors such as clearXchange, appears to be another example of that strategy to directly control the manner and method by which payments activities flow. If successful, Coin and the Chase Quorum blockchain could find many other uses.” — Charles Potts, Managing Director, First Performance

“It’s a competitive approach by Jamie Dimon to compete directly with Western Union in the $600 billion remittance market where Chase holds the #2 spot and Bank of America is on their heels. Ripple has done all the hard work by paving the way for a blockchain coin network. Our US payment systems are proprietary and not interoperable–the only way to seriously compete is a syndicate like Early Warning with Zelle and The Clearinghouse.” — Travis Dulaney, CEO, PayFi

“It’s an ecosystem play pure and simple. It’s about reducing costs and securing market share.” — Bradley Leimer, Co-Founder, Unconventional Ventures

“It really isn’t an ‘end run’–it’s more like creating a whole new playing field. It’s an acceleration of the continuing erosion of money fiefdoms. Due to margin pressures, money movement will eventually become a free utility. What the JPM Coin starts to enable is the elimination of the payment rails–which is really just a connection of ledgers–because with blockchain, there’s just one ledger. Once you have that shared ledger, the applications go beyond institutional payments to any payment type like remittances.” — James Wester, Research Director, Worldwide Blockchain Strategies, IDC

“The bank is also running a blockchain payments trial launched in conjunction with Australia’s ANZ and the Royal Bank of Canada. As reported, the three banks set up the project in October 2017, aiming to slash both the time and costs required for interbank payments using traditional methods. Called the Interbank Information Network (IIN), the platform is also built on Quorum – which itself may eventually be spun off into its own enterprise.” — CoinDesk

A data/IT system named with “coin”

Think about Gold and US Dollar in the history – Congress acted on Hamilton’s recommendations in the Coinage Act of 1792, which established the dollar as the basic unit of account for the United States; 1900, with the passage of the Gold Standard Act, US government guaranteed the dollar as convertible to gold

Semiconductor Comparables

Smart Building (2): IoT Startups Roundup

To start with, Siemens made 2 acquisitions in 2018 – Enlightened Inc. and J2 Innovations – before acquiring Comfy, mentioned in the previous post.

Enlightened – Iot: lightening sensors and more

Three main applications: lightening, HVAC system (heating, a ventilation, and air-conditioning), space utilization.

For example the lightening system, built on IoT architecture, consists of a network of LED lights and their patented sensors connected together to form a sensor and analytics platform. Data is collected 65 times/second to detect environmental and occupancy changes and take action on lighting needs in real-time.

J2 Innovations – iot: framework

Created FIN (Fluid INtegration) Framework, an open framework for building automation and IoT applications. It is used as an integration layer and itself doesn’t design/manufacture IoT devices.

According to its website, it employs an applications server technology with tagging and data modeling. FIN is a HTML5 browser based unified toolset optimized for efficient workflows.

View – iot: glass

A dynamic glass company, View raised $1.1 billion from SoftBank Vision Fund in November 2018.

With touch displays available..

Source: view.com/assets/pdfs/wall-interface-brochure.pdf

Yes, it is the Age of Glass…

Kinestral – IOT: Glass

In the same space, we have another company Kinestral raising $100 million Series D in Jan 2019 (two weeks ago).

Latch – IoT: Door

Famous for its early-stage collaboration with UPS – delivery indoor while occupants are out, Latch raised $70 million in August 2018.

Latch + UPS is competing with Amazon Key (then with its $1 billion acquisition of Ring in Feb 2018) in the same field.

Before Amazon’s move, in Oct 2017, Assa Abloy, the $23 billion Swedish lock giant that owns Yale and many other brands — announced that it is buying US-based smart lock maker August Home to double down on new technology. (TechCrunch)

Sigfox – IoT: Platform

Based in Europe, Sigfox is designing a Low Power Wide Area network (Ultra Narrow Band radio operating in the unlicensed bands) for IoT connectivity.

And of course the products to centralize data from big tech companies with Amazon and Google the most aggressive ones.

Smart Building (1): Data + Management Startups Roundup

Smart building is a hot topic and will be at the center of future real estate, a $217 trillion giant industry.

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So what is the core segments of smart building? This blog will provide a roundup of startups in the data + management space.

Comfy (developed by Building Robotics)

Probably most famous for its collaboration with WeWork in 2016, Comfy is an app that lets users to adjust the temperature, lights etc. in the office from smartphones.

Euclid

Euclid is a leading spatial-analytics platform based in San Francisco. With fundings from NEA, Benchmark and other investors, It has built a proprietary analytic offering that uses WiFi signals to understand how space is used without the installation of any additional hardware. It can track the identity and behavior of people in the physical world.

A retailer application of Eculid’s technology | Source: marketingland.com

In Feb 2019 (a few days ago), Euclid was acquired by WeWork (“The We Company”). The blog post from The We Company.

Teem

A maker of office management software, Teem was acquired by WeWork in Sep 2018 for around $100 million. Teem has grown from a conference room management tool to include office space management, (office) room display, visitor management, etc.

BuildingIQ

An energy-efficiency focused startup, BuildingIQ listed on Australian Securities Exchang and raised A$20 million in 2015, with an IPO marketcap of A$85 million.

Back in 2013, it raised $9 million from Aster Capital (backed by Schneider
Electric, Alstom and Solvay), the Venture Capital unit of Siemens Financial Services (SFS VC) and Paladin Capital.

BuildingIQ Mobile App | Source: buildingiq.com/app

Flywheel

Formerly known as SCIenergy, Flywheel is a maintenance (task) & energy management startup based in Dallas. Invested by DFJ, Flywheel raised its latest round in 2014 by a group of energy focused funds, led by Braemar Energy Ventures and joined by the Westly Group and others.