fortune--2020-12-07--The global rally stalls out, but Goldman Sachs is doubling down on value stocks

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Good morning, Bull Sheeters. The global rally is on pause this morning as storm clouds—mainly in the form of COVID gloom and Brexit uncertainty— gather. It’s a risk-on morning.
That’s after all three major U.S. indexes closed out last week in record territory. A big thanks to Rey Mashayekhi for taking the keys to shepherd you through that. See, good things happen when Rey is in charge.
Let’s check in on today’s action where I get into Goldman’s bullish call on value stocks for 2021.
Markets update
Asia
The major Asia indexes are mostly lower in afternoon trading with Japan’s Nikkei down 0.8% .
are mostly lower in afternoon trading with Japan’s down . China reported a big jump in November exports , its biggest monthly gain since the pre-COVID days of early 2018 . Less impressive was China’s import growth last month.
reported a big jump in November , its biggest monthly gain since the . Less impressive was China’s import growth last month. Metal movers. The price of copper, aluminum, iron ore, zinc and other raw materials continue to climb, a classic bet by investors that the global economy will bounce back strongly in 2021.
Europe
The European bourses are mostly lower out of the gates with the Stoxx Europe 600 down 0.5% two hours into the trading session.
are mostly lower out of the gates with the down two hours into the trading session. The pound sterling is falling this morning as—stop me if you’ve heard this one—post-Brexit trade talks continue to muddle down to the wire.
is falling this morning as—stop me if you’ve heard this one—post-Brexit trade talks continue to muddle down to the wire. Iconic British retailer Debenhams, which is on the brink of liquidation, could get thrown a lifeline as acquisition talks pick up again. It’s been a brutal Christmas period for the U.K.’s retail sector. Imagine what a no-deal Brexit would mean for Britain’s high street.
U.S.
Elsewhere
Gold is down, trading below $1,840/ounce .
is down, trading below . The dollar is up, but it’s nearing a 6-year low.
is up, but it’s nearing a 6-year low. Crude is down, with Brent futures trading below $49/barrel .
is down, with futures trading below . Bitcoin is flat, trading above $19,300 .
is flat, trading above . And the price of the mighty white truffle, a Bull Sheet favorite, sits at €2,650/kg, according to the trusty Borsa Tartufo di Acqualagna. In an all-cash transaction, I paid €60 for a few loose nuggets this weekend that we ended up shaving over a dish of risotto, a meal that later returned in my dreams.
***
Paying dividends
The S&P 500 closed on Friday at 3,699.12, a whisker below the much-watched Goldman Sachs year-end forecast of 3,700. Clearly, Goldman underestimated all you bulls.
The benchmark index is up an impressive 4% over the past month, helped by the vaccine breakthroughs and the promise we just may begin to beat back this COVID scourge. In that time, value stocks have surged 12%, and, Goldman adds, “dividend futures represent an attractive remaining laggard opportunity.”
That’s because all manner of companies, from Marathon Oil to Estée Lauder, have resumed paying investors dividends. As the chart below shows, there were 67 dividend decreases and/or suspensions between March and August this year, but just one since then and now. And, over the past three months, we’ve seen 72 dividend increases and/or initiations.
That’s the good news. Here’s the not so-good-news.
Goldman writes that the market for dividend contracts for the year ahead implies dividends for S&P 500 companies will actually decline 5% in 2021 and a further 1% in 2022. Further out, the picture doesn’t get much better. “In fact, the dividend yield curve is inverted through the next decade, with every contract through 2029 trading below 2019 levels, implying average annual dividend growth of -1% from 2019-2029.”
Here’s what that looks like (as indicated by the grey dotted “swap market” line).
That view is not just pessimistic, it runs counter to the bullish sentiment around surging equity prices. Investors are pushing up stocks even as earnings take a hit. And, of course, when the bottom line underperforms, companies cut back on dividends, which is what the swap markets line is telling us.
But Goldman sees a glass-half-full here. It projects dividends per share will continue to trend upwards next year and beyond, throughout the decade.
Goldman expects an earnings rebound in 2021, and that “will lead to 5% dividend growth in 2021.”
There’s something to Goldman’s logic. Value stocks are reliable dividend-payers, and investors are flooding into such stocks in droves.
The question is: how long will this “laggard opportunity,” as Goldman calls it, last?
***
Postscript
Last spring, my hornets made the front page of the New York Times. Okay, they weren’t my hornets. But, yeesh, they sure looked like them. Nasty, winged monsters. Visibly large mandibles. And those eyes! The Times called them murder hornets, explaining they’d made the journey all the way from Asia.
I sent the article to Walter, a trusted source on these kind of things. He’s a German beekeeper. He always seems to have a fix on the next eco intruder that’s throwing our natural world out of whack. Walter texted me back. Yep, we’ve had them here in Europe for over a decade, he replied.
In the summer of 2019, a gang of tenacious hornets—calabrone as the Italians call them; killer calabroni, I probably muttered long before the Times headline writers won over the internet—descended on our little hilltop in Amandola, and set up a nest high in the elm tree, a few meters from the house. My kids and wife hounded me to do something, anything. My neighbors suggested I smoke them out. Channeling my inner Solomon, I decided to ignore them—every one of them: my neighbors, my family and the hornets.
And, you know what? We survived. The murder hornets didn’t kill us. (But that didn’t stop my neighbor from lighting a fire at the base of the elm tree a few days after we headed back to Rome. The singed trunk greets us as we pull into the driveway now.)
Fast-forward to this summer. And, this being 2020, the killer calabroni were back. But in larger numbers, and they were now flying into the house, down through the chimney. Clearly, I could no longer ignore them. (I later learned from a reliable source that the 2020 variety were native European hornets, not the Asian killers; this bit of information did little to appease my wife and kids.)
Okay, but there’s no way I’m burning down the trees to get rid of them, I told everyone, just to establish some basic ground rules. I bought traps instead. I filled them with beer and honey, and hung them from tree branches. That worked for a little while—until my neighbor, Simona, got stung in September when she went round the house to check on it.
Bernhard, she grumbled, you have to do something about these calabroni.
So, with some time off last, I went back to Amandola to plot out our defenses for 2021. Technically, lockdown rules prohibit travel between regions—that is, unless it’s an emergency. My wife, kids and Simona chimed in: this is an emergency!
Snow has already fallen up there, and so the hornets are long gone for the season. I lit a big fire in the fireplace and all kinds of little winged cadavers fell into the fire from the chimney above. I opened a bottle of wine, and admired the fire. I grabbed my book, and was just settling into reading… when the doorbell rang.
Simona.
She wanted to know whether I’d figured out how to make our little patch of Amandola a no-fly zone for hornets. My wife texted me, wondering the same.
They want me to get on a ladder and fasten a screen around the top of the chimney so the hornets can no longer enter the house. Pino, my old gardener, thinks this is a bad idea—that it will soot up in no time, asphyxiating the vertebrates below who just want to sit near the fire and read a book.
I have a few months to figure out my next step.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Move over FOMO. Now there's a new markets acronym gaining attention: TINA. As in, there is no alternative. To stocks, or course. The Wall Street Journal's James Mackintosh breaks down what drove this epic year for stocks, and what it means for the year ahead.
Wipeout. You can't turn on the radio or TV here in Europe without getting a report on the super controversial decision to put the 2020-21 ski season on the deep freeze. The continent's ski powers—Italy, France, Austria and Germany—are shutting down the pistes until mid-January (and perhaps longer), crippling Europe's winter sports industry. Switzerland, however, is bucking the trend. They've opened to skiers and snowboarders, and that's causing a huge diplomatic spat between the alpine neighbors. (The idea of a winter with no skiing bums me out to no end. I may need to ask Santa for snow shoes.)
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Quote of the day
There’s a clear economic case for the stimulus, but I think it’s important to remember that the economy has continued to recover, has continued to heal... Another round of stimulus will simply speed up that healing process in a way that could be very powerful for the trajectory of growth once we have the vaccine.
That's Michelle Meyer, head of U.S. economics at Bank of America, one of the economists who spoke to Fortune's Anne Sraders last week to detail what they would like to see come out of the latest round of stimulus talks, and why it's so important for the economy and the markets.


fortune--2020-12-07--Australia’s ‘approachable’ wine won over China’s middle class. Then came the tariffs

Why aren ’ t we in another Great Depression ?

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It’s not often politicians come out and encourage citizens to drink more alcohol, but in a video shared last Tuesday by the Inter-Parliamentary Alliance on China, officials from 11 states across the world did just that as a way to protest China’s “bullying.”
“This December we are asking you all to join us in standing against Xi Jinping’s authoritarian bullying…by drinking a bottle or two of Australian wine and letting the Chinese Communist Party know that we will not be bullied,” Swedish politician Elisabet Lann and Slovakian Member of the European Parliament Miriam Lexmann said in the video.
The video was a call to arms for allies of Australia. The country has barreled headfirst into a major political confrontation with China, its chief trading partner, that could potentially cost Australian wine exporters their single largest market.
Paired with politics
The Sino-Australian brawl—several years in the making—came to a head in April this year when Canberra pushed for an international investigation into the origins of the COVID-19 outbreak in Wuhan, China. Offended or threatened by the assault on its honor, China retaliated with a slew of economic sanctions against Australian imports, including sugar, barley, wheat, copper, and—most recently—wine.
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In November, about three months after launching an antidumping investigation against Australian wine imports, China imposed tariffs of up to 212% on Australia’s wines, torpedoing a trade worth some $830 million a year to Australian wineries. China is the largest market for Australian wine exporters, consuming around 40% of all Aussie wine shipments.
When the tariffs were announced in November, Australia Trade Minister Simon Birmingham said they made China an “unviable” market for the country’s wine exporters. Treasury Wine Estates (TWE)—the Melbourne-based maker of Penfolds, Wolf Blass, and other brands—has already announced plans to find other markets to replace China, which accounts for 30% of the company’s earnings.
After China, the U.S. is the most valuable market for Australia’s wine exporters, buying $326 million worth of wine in the 12 months ended September 2020, according to industry body Wine Australia. The U.K. is third in line, with $319 million spent.
Bottles of Australian wine are displayed at a supermarket on Nov. 27, 2020, in Hangzhou, China. China hit Australian wine with tariffs in November, threatening to shut Aussie winemakers out of the market. Long Wei/VCG via Getty Images
If ranked by volume of exports, however, the order is reversed with the U.K. glugging the most Australian wine in 2020. The disparity between volume sold and money earned points to the high value of the Chinese market for Aussie growers.
“We are extremely disappointed to find our business, our partners’ businesses, and the Australian wine industry in this position,” TWE CEO Tim Ford said in a statement, although he cautioned that TWE isn’t giving up on China entirely.
The winemaker hopes it can stay in the market by sourcing grapes from different countries to skirt China’s tariffs and by potentially exporting more bulk wine, which is cheaper and stored in shipping containers, rather than a premium product packaged in bottles. Australian bulk wine isn’t subject to the new tariffs.
Boom and bust
China is expected to become the world’s second-largest market for wine by 2023, surpassing France and inching closer to No. 1, the U.S., according to industry tracker IWSR. Within the next three years, Chinese wine sales will reach $18 billion, compared with $40 billion in the U.S.
China already overtook France as the world’s largest drinker of red wine in 2013, when Chinese consumers quaffed 1.9 billion bottles of the red stuff. White wine remains a marginal player in China. Red, the theory goes, is an auspicious color. And while the majority of China’s wine is still bottled by domestic makers—led by the Great Wall and Changyu brands—imports account for roughly 40% of the market.
Imported wine gained initial popularity as a prestige item in the mid-2000s; it was ideal for gift giving and toasting at banquets. But Chinese President Xi Jinping’s crackdown on corruption in 2012, which targeted excess government spending and bribery via gift giving, stymied the growth of luxury wine imports, a segment dominated by so-called Old World vineyards, primarily in Europe.
Xi’s crackdown gave a boost to New World wines—think Napa Valley, Chile, and Australia—as China’s image-conscious middle class looked for premium, but unpretentious, bottles.
Bottles of Australian wine are on display at a supermarket in the Nantong Free Trade Zone on Nov. 27, 2020, in Jiangsu Province. Xu Congjun/VCG via Getty Images
According to China Customs data, Australia surpassed France as the leading country of origin for wine imports by value in 2019, shipping in $830 million worth of wine compared with France’s $725 million. By volume, customs data shows, Australian wine makes up roughly a quarter of all China’s wine imports.
Masstige
Australia’s success has come from targeting the casual drinkers in China’s middle class, or the “masstige” market, says Ben Luker, country manager for Australia and New Zealand at industry research firm Wine Intelligence.
“I think Australia was very approachable as a premium wine. The lower price point might have been a little more attractive, compared to luxury labels, and Australian wine—as with New World wine in general—isn’t as rule-bound as the Old World producers when it comes to branding and labeling,” Luker says.
For example, New World wine labels list the type of grape pressed into the bottle, while Old World labels tend to state the region where the grape was grown instead. That latter information, Luker says, is off-putting to a casual drinker, who likely isn’t well versed in the signature profiles of the various Old World terroirs.
Unlike Old World wines, New World labels also include tasting notes, which help drinkers deduce whether a bottle might match their palate. However, traditional flavor profiles used in English-speaking markets don’t translate well into the Chinese world, Luker says, and Australia has been particularly proactive in bridging that gap.
In 2015, the Australian Grape and Wine Authority devised a so-called tasting wheel that translates tasting notes for the Chinese market. Australian exporters might substitute “Chinese hawthorn” for “blackberry,” for instance, or opt for “lychees” over “cherries” when describing a wine’s bouquet.
Toast
Despite Australia’s work in building a market in China, its customer base is unlikely to stomach a post-tariff price hike. A duty of 200% would triple wine’s cost for importers, with some of that increase passed on to consumers. Other New World producers are primed to steal market share from Australia.
Chile ranked third in terms of wine exports to China by value in 2019, with $358 million of sales. Chilean wine is subject to a 0% tariff in China, thanks to a free trade agreement signed in 2005 that gradually reduced tariffs on wine to nothing in 2015. Australian wines, likewise, had tariffs gradually reduced to nothing in 2019—making the sudden hike all the more shocking.
Chile is also among the leading suppliers of China’s bulk wine, which is shipped en masse and bottled by local brands to be sold under their own label. Presumably then, whether they know it or not, Chinese drinkers already have a taste for Chilean wine.


fortune--2020-12-07--Airbnb, DoorDash raise prices ranges ahead of blockbuster week for IPOs

December is set to be the busiest year-end on record for initial public offerings in the U.S., with DoorDash Inc. and Airbnb Inc. ready to start trading this week in long-awaited listings.
The two startups, which are aiming to raise a combined $6.2 billion at the top-end of their price ranges, will propel the month’s IPO volume to all-time high, surpassing the $8.3 billion mark set in December of both 2001 and 2003, according to data compiled by Bloomberg. IPOs on U.S. exchanges have already raised a record $156 billion this year, the data show.
Both listings got an additional boost as the companies headed into the final stretch of marketing their shares. DoorDash upped the price range for its stock in a Friday filing, while Airbnb is planning to follow suit and increase its price range ahead of its IPO, people familiar with the matter said Sunday. The companies are now each expected to raise as much as $3.1 billion, putting them among the top five biggest U.S. IPOs of 2020.
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Private companies that sat out the market chaos in the early days of the COVID-19 pandemic — and were awaiting a final outcome in the U.S. election — are now rushing to go public. Airbnb and DoorDash will quickly be followed by three other mega-listings that could add billions of dollars to the IPO tally.
Also on deck to go public this month are Affirm Holdings Inc., which lets online shoppers pay for purchases such as Peloton bikes in installments, online video-game company Roblox Corp. and ContextLogic Inc., the parent of discount online retailer Wish. Each is likely to attain a valuation of tens of billions of dollars in its listing.
“This group of companies that you have coming out now maybe weren’t thought of initially as benefiting, but they’ve been able to show very strong results despite the coronavirus,” said Karen Snow, head of East Coast listings at Nasdaq Inc.
Airbnb is aiming to be valued at as much as $42 billion in its IPO, while DoorDash could hit a valuation of about $35 billion, based on their updated price ranges. For DoorDash, that’s more than double the private valuation it hit in a June fundraising round, after it seized on the pandemic-fueled boom in demand for meals brought to your door. Airbnb had been valued at $18 billion in April after raising additional debt to shore up its finances. The company, which was initially hit hard by global travel restrictions, has more recently seen a boom in customers seeking longer-term, domestic rentals.
Company Fundraising at Top End IPO Valuation Status DoorDash $3.1 billion $35 billion at top of range Pricing Dec. 8,Trading Dec. 9 Airbnb $3.1 billion $42 billion at top of range Pricing Dec. 9,Trading Dec. 10 C3.ai $527 million $3.29 billion (appx.) Pricing Dec. 8,Trading Dec. 9 Roblox TBD TBD Filed publicly Affirm TBD TBD Filed publicly Wish TBD TBD Filed publicly
Airbnb’s IPO will also be a lucrative event for many of its employees. The company has offered billions of dollars worth of stock compensation to staff, similar to Uber Technologies Inc. and other large venture-backed companies that have gone public. The IPO will make some of its longtime employees millionaires on paper.
Time and Cash
Earlier this year, technology IPOs were dominated by enterprise software companies such as Snowflake Inc., which has soared more than 200% since its listing to a $110 billion public market valuation. This month’s cluster of soon-to-be public entities — all based in the San Francisco Bay Area — cater to consumers stuck at home with extra time and cash on their hands.
Should the listings go well, it could signal investors are optimistic about an economic rebound after the dark days of the pandemic.
“There’s a lot of support and interest from institutional investors for companies that are impacted by COVID because the feeling is that they will recover,” said Neil Kell, Bank of America Corp.’s vice chairman of global equity capital markets.
“The mindset is not that we’re in December of 2020,” he said. “The mindset is how is it going to look a year from now.”
One enterprise software listing is also planned for this week. C3.ai Inc., founded by former Oracle Corp. executive Tom Siebel, is expected to raise as much as $527 million in its IPO.
Gauging Demand
Bankers are using new methods to execute these large share sales, incorporating technology under development for years that was well-timed for use during the pandemic, when potential buyers can’t meet the company executives and advisers in person.
Airbnb, DoorDash and Roblox have asked prospective IPO investors to fill in their deal orders via an online portal, indicating their level of interest at any desired price, according to people with knowledge of the matter, who asked not to be identified because the details are private.
The new process is aimed at helping issuers and their advisers gauge demand, especially for high-growth companies subject to wide differences in valuation among investors, the people said. The final price and share allocation are still determined by the seller.
Representatives for the companies declined to comment.
Unity Software Inc., used the same system in its September IPO. Unity sold its shares for $52 each and ended its first day of trading at $68.35. The shares closed Friday at $150.94 apiece.


fortune--2020-12-07--The IRS effectively canceled the tax break that made PPP loans so valuable

Stimulus update : Everything to know about the bipartisan $ 300 unemployment benefit plan

For the latest information on the ongoing stimulus negotiations, please check out our coverage here
A time bomb is ticking in the Paycheck Protection Program loans that have kept millions of small businesses operating through the pandemic. It’s set to go off early next year unless Congress defuses it soon.
More than 500 national, regional, and state trade associations recently signed a letter pleading with congressional leaders to act. They asked House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, and others to bring a “spirit of urgency and cooperation before the end of this session to prevent an avoidable catastrophe for millions of small businesses.”
Here’s the problem: More than 5 million small businesses received PPP loans, and many of their owners might not know about the nasty surprise that may await them when they do their 2020 taxes.
The main terms of the PPP loans have been widely known since Congress enacted the program as part of the CARES Act in March. Small businesses could borrow money through the Small Business Administration, and the amounts they spent on payroll, mortgage interest, rent, and utilities—all or most of the loan, in many cases—would be forgiven.
Normally when a loan is forgiven, it becomes taxable income in the eyes of the IRS. But in this case, the CARES Act specifies that it isn’t. Small businesses that used the money as it was meant to be used were getting a tax-free lifeline—a crucial provision that hugely enhanced the loans’ attractiveness.
You can’t blame most business owners for missing the nasty surprise when it arrived later, in May, on page six of IRS Notice 2020-32. It states that if PPP loan forgiveness is not taxable, then the employee pay, rent, etc., that small businesses paid so the loans would be forgiven—expenses that would be significant tax deductions in a normal year—would not be deductible. The IRS effectively canceled the tax break that made PPP loans so valuable to small businesses.
But wait, it gets worse. What if a business’s loan hasn’t been forgiven? Then surely those expenses are deductible as usual, right? Well, not necessarily. The IRS ruled in November that if a PPP borrower “reasonably expects to receive forgiveness,” then the borrower “may not deduct those expenses” in the year they were paid.
None of this appears to be what Congress intended when it hurriedly passed the CARES Act. But without a fix, “millions of small businesses…will face a surprising, and, in many cases, insurmountable tax bill next year,” the trade associations say.
Help may be on the way in the $908 billion bipartisan stimulus proposal gaining traction in Washington, but it’s impossible to be sure. The negotiators have released only a vague outline of the proposal, mentioning “deductibility” in connection with PPP. In any case, it’s all subject to change in the inevitable horse-trading going on behind the scenes.
Beside the sledgehammer threat of the PPP tax issue, several other emergency programs for small businesses are scheduled to expire at year-end unless Congress extends them. For many small-business owners, it’s still uncertain just how bad 2020 will be.


fortune--2020-12-07--Uber sells self-driving vehicle unit to Aurora

Uber sold its self-driving car division to Aurora Innovation and took a stake in the startup, creating a larger competitor to the leader in the field, Alphabet’s Waymo.
The deal will value Aurora at $10 billion, according to people familiar with the discussions who asked not to be identified discussing private information. In exchange for investing $400 million in Aurora, Uber will get a 26% ownership stake in the company. That number increases to 40% when counting the stakes held by the employees and investors of Uber’s autonomous driving division. Uber CEO Dara Khosrowshahi and one other yet-to-be-named person representing Uber will join Aurora’s board.
The deal, expected to close during the first quarter, also guarantees that when Aurora releases its self-driving vehicles, they’ll launch on Uber’s network.
By adding Uber’s self-driving car unit, Aurora will gain hundreds of engineers and access to one of the world’s largest ride-hailing networks. For Uber, which has slashed high-profile cash-burning initiatives this year in a push to turn a profit in 2021, the deal will give it a significant stake in one of Silicon Valley’s most promising autonomous driving startups.
Uber’s driverless car unit, Advanced Technologies Group, is a subsidiary, created just before Uber went public last year with its own $7.25 billion valuation. Still, the project’s long time frame and high costs concerned Uber’s investors SoftBank Group Corp., Benchmark and others, who for months have been privately urging Khosrowshahi to reconsider the autonomous driving strategy. During ATG’s short history, it has made progress building and testing autonomous driving systems, but also struggled amid a damaging lawsuit brought by Waymo, a tragic pedestrian fatality caused by one of its autonomous cars and the sector-wide reckoning that even the most basic self-driving vehicles will take significantly more time and money to develop than previously expected.
Announcing the news in a joint statement after market closed Monday, Aurora and Uber said the group will focus on driverless trucking first and later more complicated light vehicles carrying passengers.
“It works well for both of us,” said Aurora CEO Chris Urmson in an interview Monday. “We’re excited to have them team with us, and we’re excited to have Dara join our board.”
Aurora’s co-founders have a deep history in the self-driving industry. Urmson previously led Google’s self-driving team, which became Waymo. Sterling Anderson directed Tesla Inc.’s autopilot efforts, Chief Technology Officer Drew Bagnell, an associate professor at Carnegie Mellon University, was part of the 2015 academic exodus that formed the Uber’s ATG team. Bagnell left ATG to co-found Aurora.
Aurora earlier this summer expanded testing on public roads from California and Pennsylvania to include Texas with an initial focus on completing long-haul, commercial trips instead of the more complicated urban maneuvers where there are more variables and opportunities for failure.
Having raised $765 million from investors including Index Ventures, Sequoia Capital, T. Rowe Price and Hyundai Motor Co., Aurora was valued at more than $3 billion last year, according to research firm PitchBook. Amazon.com Inc., which purchased its own self-driving startup, Zoox, earlier this year, is also an investor.
Aurora has roughly 600 employees, while Uber’s ATG group has about 1,200 employees, many of them based in Pittsburgh, long an epicenter of robotics thanks to Carnegie Mellon University.
Khosrowshahi had sold about 14% of ATG to partners SoftBank, Toyota Motor Corp. and Denso Corp. for $1 billion in 2019, but the unit was burning roughly $500 million a year and was set to exhaust funds by the end of next year, people familiar told Bloomberg this fall.
Even after combining forces, Aurora and ATG face stiff competition from more developed and better funded rivals. Waymo, which has logged millions of miles in more than two dozen cities, announced earlier this year it had raised $2.25 billion from auto manufacturers and private equity groups to expand to new locations.


fortune--2020-12-07--Stimulus update: Everything to know about the bipartisan $300 unemployment benefit plan

For the latest information on the ongoing stimulus negotiations, please check out our coverage here
The more than 19 million Americans still receiving some form of unemployment insurance could soon catch a break: Congress is finally nearing a deal on a second massive stimulus package.
The breakthrough came after a bipartisan group of senators put forward a $908 billion stimulus package last week. That aid package, which includes $180 billion for a $300 weekly enhanced unemployment benefit, was surprisingly endorsed by House Speaker Nancy Pelosi—who had previously been pushing for a much larger $2.2 trillion package.
While the package would still need a sign-off from Senate Majority Leader Mitch McConnell, it’s gaining traction among fiscally conservative Republicans—an indication that a deal is nearing. Both sides are under increased pressure to compromise, as the economic recovery continues to slow.
Here’s everything to know about the $300 enhanced unemployment benefit proposed by the bipartisan group of senators.
How would the additional weekly $300 unemployment benefit work?
The stimulus bill passed in March provided an additional $600 weekly in unemployment insurance benefits to everyone who qualified for a state’s program. But those enhanced payments ran out in late July. After the $600 benefit expired, President Donald Trump signed a memorandum in August to send a $300 enhanced unemployment benefit out to those receiving at least $100 per week in state unemployment benefits. However, in most states, that money ran out months ago.
The $300 enhanced unemployment proposal from the bipartisan senate group appears to be more like the $600 weekly payment from the CARES Act. Meaning it would go out to everyone who qualifies for a state unemployment program or Pandemic Unemployment Assistance (PUA)—regardless of state benefit levels.
If passed, that means once you have been approved by your state for unemployment insurance, you would automatically get the additional $300 weekly federal money. All you would have to do is continue to certify your benefits weekly with your state.
Who would be eligible for the $300 pandemic unemployment benefit?
The CARES Act passed in March expanded who is eligible for unemployment benefits to include jobless part-timers, self-employed workers, freelancers, and independent contractors. These unemployed Americans covered through Pandemic Unemployment Assistance, along with anyone on traditional state unemployment rolls, would automatically get the new federal benefits.
And everyone who qualifies would get an additional $300 weekly, regardless of their previous wages. This is on top of their state unemployment insurance benefit. For example, a worker in New York who gets the maximum state benefit of $504 per week would receive a total of $804 per week.
When would the $300 checks start going out?
Under the bipartisan proposal, the $300 checks would be issued starting the week of Jan. 1. The program would run for 16 weeks, according to reporting by the Washington Post.
Can my unemployment benefits be greater than my income?
The additional weekly $300 in unemployment benefits appears to be available to anyone who qualifies for UI, regardless of income level. That works out to $7.50 per hour on a 40-hour workweek. When combined with state benefits, some low-earning Americans could see a pay jump. However, this would be true for only a very small number of recipients; the added benefit wouldn’t have the impact of the $600 enhanced payment, which gave the majority of unemployed Americans a raise.
If I apply via my state, will I automatically get the $300 federal benefits as part of the stimulus?
Yes. If this proposal is like the CARES Act payment, then once you’ve been approved by your state for unemployment insurance, you’ll automatically get the additional weekly federal money. All you have to do is to continue to certify your benefits weekly with your state.
Will PUA and PEUC get extended?
The bipartisan bill would also extend benefit dates for Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). It’s not yet clear how far into 2021 the programs would go. PUA expands who is eligible for unemployment benefits (for instance, gig workers and self-employed Americans), while PEUC grants 13 weeks of additional unemployment benefits to qualified individuals.
That’s welcome news for the millions of Americans benefiting from these programs, which are set to expire at the end of 2020.


fortune--2020-12-07--A $100 million ‘virtual power plant’ could put an end to California’s power woes

In August, residents of California were tormented by rolling brownouts as the state’s power supply could not meet a surge in demand. The power outages were an inconvenience but also an indignity as Californians pay some of the highest rates for power in the country.
This situation has led SIP, a company whose backers include Google parent Alphabet, to invest $100 million in what SIP calls a “virtual power plant” that could soon make rolling brownouts a thing of the past.
Normally, utility companies meet surging demand by trying to add more power to the grid. The SIP “virtual” plant takes the opposite approach: It removes energy use during peak times by paying consumers to reduce their electricity consumption.
To carry this out, SIP is partnering with a company called OhmConnect to offer subsidized energy devices like smart plugs and connected thermostats. OhmConnect is already operating in California and, during the recent energy crunch, paid out $1 million to 150,000 households as a reward for turning down their power.
In practice, this means participating households receive a notification on an OhmConnect app asking if they are willing to turn down power at various sources in their home. Those who agree receive a credit on their electric bill, which will vary in part on what energy they choose to cut: Turning down power on a thermostat or an electric vehicle charging station will, obviously, earn the consumer more money than turning off a toaster. The app looks like this:
SIP is dedicating $80 million of its investment to expand the number of devices eligible for subsidies, to increase the extent of those subsidies, and also to build out the software that will help the project achieve greater scale. The company is calling this part of the project Resi-Station and says it will cover most regions of California (would-be customers enter their zip code to confirm that they are eligible). SIP is investing the remaining $20 million directly into OhmConnect in the form of a Series C funding round.
SIP stands for Sidewalk Infrastructure Partners, which is a spinoff of Alphabet’s subsidiary, Sidewalk Labs, which sought to transform cities with a series of ambitious projects but has foundered amid privacy controversies. SIP, which raised $400 million from Alphabet and Ontario Teachers’ Pension Plan, is trying a different approach. Instead of building its own projects, it is backing existing ventures—including state-of-the-art recycling plants and a driverless “road of the future” in Michigan—with money and expertise.
According to co-CEO Jonathan Winer, SIP chose to invest in OhmConnect in part because the company has excelled at “gamifying” the mundane field of minding household electrical bills. He says OhmConnect, whose executives include the former CTO of video-game maker Zynga, has made the business of conserving power easy and satisfying.
Winer acknowledges that SIP’s virtual power plant may not single-handedly end California’s energy woes. But he predicts it will have a major impact and could eventually end brownouts once and for all.
While California and its millions of green-conscious consumers lead the country in smart energy use, Winer says other states are quickly following suit. These include New York and Texas, which are exploring how to leverage devices like connected thermostats to better manage their power supply.
More broadly, Winer sees greater shifts in U.S. energy markets as more people install solar panels and as technology like Tesla’s battery plants come online. These new forms of energy, combined with management schemes like the virtual power plant, will ultimately see the country rely on cleaner and more efficient forms of power, he says.
“SIP believes that energy grids must be modernized in order to orchestrate distributed energy resources,” said Winer in a statement.
An earlier version of this story incorrectly stated Sidewalk Labs had closed.


fortune--2020-12-07--California unveils COVID tracing tool co-created by Apple and Google

California is rolling out a voluntary smartphone tool to alert people if they spent time near someone who tests positive for the coronavirus as cases and hospitalizations soar throughout the state, California Gov. Gavin Newsom announced Monday.
The tool doesn’t track people’s identities or locations but uses Bluetooth wireless signals to detect when two phones are within 6 feet (1.8 meters) of each other for at least 15 minutes, officials said. Newsom said it will be ready for use on Thursday.
“The process is private, anonymous and secure, and is one of the many tools in the state’s data-driven approach to help reduce the spread,” Newsom, a Democrat, said in a statement.
Sixteen other states, plus Guam and Washington, D.C., have already made available the system co-created by Apple and Google, though most residents of those places aren’t using it. The tool has been used on a pilot basis on University of California campuses to try to track virus cases.
The announcement came as coronavirus cases are exploding in California and more than 80 percent of the state’s residents are under orders not to leave their homes for at least the next three weeks except for essential purposes.
Newsom’s administration issued the stay-at-home rules shuttering restaurant dining, salons and playgrounds in Southern California and a large swath of the state’s Central Valley agricultural region after more than 85% of beds in intensive care units were occupied in those regions.
Five San Francisco Bay Area counties voluntarily joined the rules, saying they didn’t want to wait until their ICU capacity dropped too low to take action. Those restrictions will last until Jan. 4, a week longer than the state’s timeline.
Ten months into the pandemic, most of the state is now back to where it started with the stay-at-home rules.
But unlike in March, when the pandemic was in its infancy and California was the first state to impose such rules, fewer people are likely to obey them. Several law enforcement agencies have said they have no plans to enforce them and are counting on people to voluntarily wear masks and practice physical distancing.
California on Sunday announced more than 30,000 new coronavirus cases — the most ever in a single day. More than 9,700 people were hospitalized because of COVID-19, including more than 2,200 in intensive care. The state had just over 1,500 ICU beds available as of Sunday.
Californians will be able to activate the tool in their iPhone settings or on Android phones by downloading the CA Notify app from the Google Play store. Many residents will get a notification Thursday inviting them to participate.
The encounters are temporarily logged in a way that doesn’t reveal a person’s identity or geographic location.
If people who have activated the technology test positive for the virus, they get a verification code from the California Department of Public Health and can use that to send an anonymous alert to other participating phone users they might have exposed over the past 14 days.
The recent rise in infections began in October and is being blamed largely on people ignoring safety measures and socializing with others.


fortune--2020-12-07--Meet the seven key economic advisers who will help Joe Biden lead through the COVID crisis

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As the U.S. descends into its ninth month of economic crisis, millions of Americans who have lost their jobs face imminent eviction, the end of a federally backed unemployment extension, and a lack of certainty about where their next meal will come from. Without a comprehensive stimulus package in sight, President-elect Joe Biden and his economic team must now prepare to shoulder an unprecedented burden on top of the COVID-19 health crisis when they enter office in January.
Indicating that economic recovery will be a top priority during his first 100 days in office, Biden has wasted no time in filling out his team, a group of advisers whom he has worked with and has come to trust through his 50 years in public service. But some argue that in an attempt to pull the U.S. out of its pandemic-adjacent slump, the President-elect’s administration has relied too heavily on the old guard, borrowing heavily from the Clinton and Obama administrations, instead of including new and progressive voices on the team that will shape economic policy for at least the next four years.
“I know times are tough, but I want you to know that help is on the way,” Biden said as he announced his team last week. “From the most unequal economic and job crisis in modern history, we can build a new American economy that works for all Americans, not just some.”
A few choices, like former Federal Reserve chair Janet Yellen as Treasury secretary, were both expected and accepted by the dueling factions of the Democratic Party. Other names, however, provoked anger and confusion from progressives.
Center for American Progress president Neera Tanden, Biden’s pick to run the Office of Management and Budget, has long been a staunch critic of Vermont Sen. Bernie Sanders’ economic policy and has proposed (at least passively) cutting Social Security, Medicare, and Medicaid. During a 2012 C-SPAN interview, she explained her opinions: “If we’re going to have a deal to address long-term deficit reduction, we need to put both entitlements on the table, as well as taxes.
“We should have savings on entitlements, and the Center for American Progress has put forward ideas on proposals to reform the beneficiary structure of Social Security. Some of our progressive allies aren’t as excited about that as we are,” she continued.
Still, progressives mostly expressed befuddlement at the pick and not outright ire. “Neera Tanden is not a pick progressives would have chosen, but she’s better than [Biden’s former Chief of Staff] Bruce Reed,” Alexandra Rojas, executive director of Justice Democrats, said in a statement. “Tanden’s on the record over the past several years pushing back against nonsensical worries about the deficit.”
So who will be a part of Biden’s A-Team, and how will they work to end the COVID-adjacent economic dip? Here are the people he’s hoping to nominate, and the roles they’ll take on if approved.
Janet L. Yellen, Treasury secretary
As head of the Treasury, Yellen will have a say in everything from climate change prevention to tax policy to stimulus spending. The increasingly outsize role of Treasury secretary requires both nuance and versatility, but Yellen is well known and trusted among D.C. leaders, thanks to her four years as chair of the Federal Reserve and another 15 serving at the national bank.
Yellen has indicated that a large stimulus package will be her first line of attack against recession. “Lost lives, lost jobs. Small businesses struggling to stay alive are closed for good. So many people struggling to put food on the table and pay bills and rent. It’s an American tragedy,” she said during a recent speech in Delaware. “And it is essential we move with urgency. Inaction will produce a self-reinforcing downturn causing yet more devastation.”
If confirmed by the Senate, Yellen would be the first woman to hold the role of Treasury secretary, and the 74-year-old labor economist has a good chance of making it through a Republican-held Senate. Republicans have praised her qualifications—something that sets her apart from other members of Biden’s economics team.
“I believe that she would get a favorable view,” said Sen. Chuck Grassley. Sen. John Cornyn, who acts as a top adviser to Majority Leader Mitch McConnell, also said he believed she was qualified for the job. “I think she’s fine. I don’t have any problems with her,” said Cornyn. “My attitude is that, absent conflicts of interest or other, you know, lack of temperament and über-partisanship, that beyond those that the Vice President should get the people that he wants.”
Yellen was also able to win the support of almost a dozen GOP senators in 2014 when she was nominated to head the Federal Reserve.
During her confirmation hearing, Yellen will likely face tough questions from the GOP about emergency lending programs that were created during the March COVID stimulus bill, but she is otherwise expected to breeze into her new role.
Wally Adeyemo, deputy Treasury secretary
Adeyemo, a Nigerian-born attorney who served as a senior international economic adviser during the Obama administration and then as president of the Obama Foundation, is Biden’s pick for second in command at the Treasury.
Adeyemo has a long history with and deep institutional knowledge of the U.S. Treasury. He also served there as senior adviser and deputy chief of staff during the Obama administration.
But while Adeyemo appears to be a safe, establishment choice, he also has a history of supporting open trade with China. He helped craft the since rejected Trans-Pacific Partnership proposal—an idea that is no longer as in vogue in Congress as it once was.
Some on the left also have concerns about Adeyemo’s post–Obama administration choice to join BlackRock, the world’s largest asset manager, as a senior adviser and chief of staff to CEO Larry Fink.
Still, Adeyemo has a history of straddling two worlds and merging the different factions of the Democratic Party. He began his career at the Treasury in 2008 working for then-Secretary Timothy F. Geithner and was able to move seamlessly to work under more progressive Sen. Elizabeth Warren at the Consumer Financial Protection Bureau where he served as her chief of staff. Both Warren and Geithner have highly praised the work he did for them.
When introduced by Biden last week, Adeyemo touched on his goals of bolstering America’s middle class and reducing income inequality. “In California’s Inland Empire, where I had grown up in a working-class neighborhood, the Great Recession hit us hard,” he said. “We were one of the foreclosure capitals of the United States. The pain of this was real for me.”
If nominated, Adeyemo will be the first Black American to serve in the role.
Cecilia Rouse, chair of Council of Economic Advisers
Like many of Biden’s economic picks, Rouse has a long history in the White House. The current dean of the Princeton School of Public and International Affairs served on President Bill Clinton’s National Economic Council and then on President Barack Obama’s Council of Economic Advisers, the group she is expected to chair under Biden.
In her acceptance of Biden’s nomination last week, the economist said her focus would be on future of labor and workers, including short-term pandemic-related issues and longer-term economic shifts toward a gig economy.
She’s spent much of the pandemic advocating for workers who she feared might face the same long-term unemployment issues that those in the 2008 Great Recession did. She pushed to institute a new law “that mandates (and perhaps subsidizes) paid sick leave, which has been shown to reduce turnover, increase productivity, and lower overall health care costs for employers.”
Biden has also emphasized Rouse’s background in the economics of education, which is an increasing concern as schools around the country remain closed, disproportionately hurting low-income students.
In Delaware last week, with Biden by her side, Rouse called COVID-19 a “devastating crisis” but said that it also presented “an opportunity to build a better economy in its wake—an economy that works for everyone, brings fulfilling job opportunities, and leaves no one to fall through the cracks.”
If approved by the Senate, Rouse would be the first Black CEA chair. Rouse was previously confirmed to become a member of the CEA in 2009 when Democrats controlled the Senate but has not had to face a hearing in front of a Republican-led body.
Early in his term, President Trump downgraded the CEA chair role from a cabinet position, but Biden said last Tuesday he would reverse that decision.
Heather Boushey and Jared Bernstein, Council of Economic Advisers
Jared Bernstein, known around D.C. for his affable nature, is a longtime economic adviser and friend to Biden. He served during the Obama administration as the former Vice President’s top economic adviser. Since leaving the White House, he’s taken on the role of senior fellow at left-leaning think tank the Center on Budget and Policy Priorities.
He also appeases the more progressive wing of the Democratic Party. He’s pushed for both a wealth tax and a jobs guarantee, two ideas that are far to the left of Biden’s economic policy. “His inclination on many economic issues has been close to agreement with Bernie Sanders’,” Faiz Shakir, Sanders’ 2020 campaign manager, told The Atlantic earlier this year.
Heather Boushey, the president and CEO of the Washington Center for Equitable Growth, also has a long history in the Beltway. She’s worked with and testified before Congress as an economist for the Center for American Progress, the congressional Joint Economic Committee, the Center for Economic and Policy Research, and the Economic Policy Institute. In 2016, it was announced that she would take the role of chief economist on the Clinton-Kaine transition team had Clinton won, and she served as an economic counselor to Biden’s 2020 presidential campaign.
Boushey runs in a small circle with Bernstein, Yellen, and other progressive economists who believe that expanding social safety net programs to help the poor and middle class will improve the economy overall. In her research and work, Boushey has focused on the importance of the family unit and support for working mothers, something that will likely continue in the White House.
Neera Tanden, director of the Office of Management and Budget
Though Tanden is perhaps Biden’s most controversial pick, she’s also well known around the White House and Capitol. And her various controversies haven’t stopped Biden and Vice President–elect Kamala Harris from praising her publicly.
“Like me, [Tanden] was raised by a single mother and knows firsthand the importance of having an economy that treats all people with dignity and respect,” Harris tweeted Friday. “I know with her at the helm of the Office of Management and Budget, our budget will fully reflect our values.”
Tanden’s social media activity, which includes bullying, has also sparked controversy. But Biden has said her tweets should not be disqualifying. “That disqualifies almost every Republican senator and 90% of the [Trump] administration,” Biden said in an interview with the New York Times. “But, by the way, she’s smart as hell. Yeah, I think they’re going to pick a couple of people just to fight [over], no matter what.”
Tanden served as an adviser to Hillary Clinton’s 2016 presidential campaign, and many on the left believe that she was behind the movement to end Sanders’ run that year.
Tanden has spent the past four years at the helm of the left-leaning think tank Center for American Progress, and before that, she worked in the Obama administration on the development of the Affordable Care Act as an adviser to the Department of Health and Human Services.
Josh Holmes, former chief of staff to Mitch McConnell, wrote on Twitter last week that Tanden would be a “sacrifice to the confirmation gods” and stood no chance of being confirmed.
Brian Deese, director of the National Economic Council
Deese is another former Obama economic aide, well known for orchestrating the 2009 bailout of the auto industry. But unlike many of Biden’s other picks, Deese doesn’t have the background of an academic economist and has instead built his career in policymaking.
Under Obama, he served as the acting head of the Office of Management and Budget and the deputy director of the National Economic Council before taking a job at BlackRock as the global head of sustainable investing.
“Brian is among the most tested and accomplished public servants in the country—a trusted voice I can count on to help us end the ongoing economic crisis, build a better economy that deals everybody in, and take on the existential threat of climate change in a way that creates good-paying American jobs,” Biden said.
But once again, the connection to BlackRock has drawn some anger from the more progressive wing of the party.
“BlackRock executives like Brian Deese are responsible for financing environmental devastation while profiteering from Black and Indigenous communities,” Vasudha Desikan, political director of Action Center on Race and the Economy, said in a statement. “There is a deep bench of highly qualified economic policymakers of color who are dedicated public servants without compromised histories in the private sector.”
Still, Biden emphasized Deese’s experience working on environmental issues and said he would focus on reimagining a green economy. Deese has said he’s committed to creating green and “good union” jobs and taking the country further than the Paris Agreement requires.


fortune--2020-12-07--Ikea to stop publishing its iconic catalog after 70 years

Ikea’s legendary telephone book–size catalog is no more.
The Swedish furniture retailer said on Monday that the 2021 catalog it published in October would be its last, putting the kibosh on a central marketing tool Ikea has used to great success for 70 years. Ikea cited declining use of the catalog and the need for a more modern way to showcase its wares to customers.
The first Ikea catalog was released in Swedish in 1951, featuring the MK Wing Chair, and was sent to 285,000 addresses in southern Sweden. At its peak, only four years ago, the Ikea catalog was sent to 200 million homes in 50 markets and in 32 languages. But it only produced 40 million of them this year.
“Turning the page with our beloved catalog is in fact a natural process since media consumption and customer behaviors have changed,” said Konrad Grüss, a managing director at the retailer’s worldwide franchisor, Inter Ikea Systems, in a statement. Grüss called the decision “emotional but rational.”
Ikea said in its announcement that the move simply reflects how shopping has changed, with people browsing online much more than before: In its most recent fiscal year, ended in August, Ikea’s online retail sales increased by 45% worldwide, spurred by 4 billion visits to its website. The current pandemic has fueled that growth as consumers worldwide focus more on their homes.
The company will produce some much smaller print items, including one focused on home furnishings, next year.
Doing away with catalogs can be met with resistance from shoppers who like their traditions. When J.C. Penney did away with its “Big Book” catalog a decade ago, it faced some backlash and a bigger hit to sales than it had expected. Penney brought the Big Book back briefly in 2015 only to abandon it again.
For many consumers, the catalogs remain popular. RH, previously known as Restoration Hardware, continues to issue its mammoth versions: Last year, one of its mailings exceeded 700 pages. Other retailers—notably Nordstrom, Patagonia, and Crate and Barrel—publish them too. Some younger Internet companies are also getting in on the action, including Wayfair and Bonobos.
Still, on the whole, catalogs have lost much of their appeal among marketers: The Atlantic this spring reported that the number of catalogs mailed in America had peaked at 19 billion in 2007, and by 2018 had fallen to about 11.5 billion.


fortune--2020-12-07--Using pandemic recovery funds, Europe moves to build up its semiconductor industry

Half the countries in the European Union, including Germany and France, are joining forces to develop semiconductors for use in self-driving cars, data centers, A.I., and supercomputers.
Europe already has a sizable semiconductor industry with particular strengths in areas such as smart cards and sensors, but it’s still small compared with those in the U.S., South Korea, and Taiwan; European companies hold just a tenth of the $530 billion global semiconductor market.
So in a joint declaration issued Monday, the EU countries said they would set up an industrial alliance to rectify the situation.
Semiconductors are used in everything from cars and smartphones to medical devices and environmental sensors. In their joint statement, the countries warned the components “determine the characteristics of the products into which they are embedded—including security, privacy, energy performance, and safety—shaping how Europe’s green and digital transition will unfold.”
This isn’t the first time the EU’s big countries have pushed for greater tech independence in recent years: Germany and France are also developing a European cloud network.
But Europe’s growing push for “digital sovereignty” isn’t the only issue here. The coronavirus pandemic and current geopolitical tensions have also highlighted the dangers of having to import crucial items. And the EU relies on other parts of the world for most of its data processing and electronic communications chips.
“Europe has all it takes to diversify and reduce critical dependencies, while remaining open,” said Thierry Breton, the EU’s internal market commissioner. “We will therefore need to set ambitious plans, from design of chips to advanced manufacturing progressing towards 2nm nodes, with the aim of differentiating and leading on our most important value chains.”
The money for this joint initiative will partly come from EU and national pandemic recovery funds, a fifth of which are supposed to go toward the continent’s digital transition.
“This opportunity to invest in research, design, and production capability for processors in Europe should not be missed,” the joint declaration read.
It set a target of 2025 for boosting the EU’s semiconductor production capabilities and developing faster, more energy efficient processor chips.
All of the EU’s 27 member states are being invited to sign the joint declaration, but for now the signatories include Germany, France, Greece, Belgium, Estonia, Spain, Italy, Croatia, the Netherlands, Malta, Portugal, Slovenia, Finland, and Romania.


fortune--2020-12-07--The final days of former Zappos CEO Tony Hsieh

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The death of former Zappos CEO Tony Hsieh came as a shock. At just 46, the investor had made an enormous impact on business during his time at the shoe e-commerce company, reshaping customer service and encouraging new company cultures by eschewing hierarchy within his own.
Late last week and on Monday, Forbes and the Wall Street Journal separately published two difficult-to-read yet important pieces on the final days of Hsieh, who died at the end of November due to complications from a Connecticut house fire.
Known for penning the 2010 business book Delivering Happiness: A Path To Profits, Passion and Purpose, Hsieh became beloved for investing some $350 million to help revitalize downtown Las Vegas. And among friends, he was known to be generous: The entrepreneur bought friends houses, apartments, and restaurants, per the WSJ.
But personally, Hsieh struggled with a deep sense of loneliness that he had previously channeled into his work. In the coronavirus pandemic, it had been exacerbated. Hsieh increasingly turned to alcohol, mushrooms, and ecstasy following his retirement earlier this year. He was also known to inhale nitrous oxide cartridges that can induce hypoxia. By August, friends and family were planning an intervention.
Hsieh died after complications related to smoke inhalation. But there are only bits and pieces of the story of the fateful house fire. Some first responders, according to radio recordings at the time, said that a victim was “trapped” in the house, while another said he was “barricaded” inside. Hsieh doesn’t appear to have written a will, and a day before the fire, he had made plans to check into a rehab facility in Hawaii, according to the Journal.
While Hsieh’s family declined to speak on the specifics around the former executive’s death, they told the Journal they plan to “carry on his legacy by spreading the tenets he lived by—finding joy through meaningful life experiences, inspiring and helping others, and most of all, delivering happiness.” Based on the outpouring of grief and sympathy from entertainers, politicians and investors following Hsieh’s death, his legacy will most certainly last. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Catawiki, an Amsterdam-based online marketplace for collectibles, raised €150 million ($182 million). Permira led the round and was joined by investors including Accel.
- Immedis, a Dublin-based payroll solution, raised $50 million in funding. Lead Edge Capital led the round.
- Fetch Rewards, a Madison, Wis.-based savings app, raised $80 million in Series C funding valuing it at $600 million. Iconiq led the round. Read more.
- Moov, a Golden, Colo.-based maker of banking infrastructure, raised $27 million in Series A funding. Andreessen Horowitz led the round.
- GetAccept, a Palo Alto, Calif.-based maker of a sales platform, raised $20 million in Series B funding. Bessemer Venture Partners led the round.
- Neuroglee Therapeutics, a Singapore-based company that creates prescription digital therapeutics for neurodegenerative diseases, raised $2.3 million in pre-seed funding. Eisai Co. led the round.
PRIVATE EQUITY
- American Industrial Partners agreed to take SEACOR Holdings (NYSE:CKH), a Fort Lauderdale, Fla.-based holding company including businesses in domestic and international transportation, private in a deal valuing the firm at $1 billion, including net debt.
- TPG and the Northstar Group will acquire an 80% stake in PT Greenfields Indonesia, the Indonesian dairy unit of Japfa (SING: JAP) for $236 million. Financial terms weren't disclosed.
- CVC Capital Partners is backing a deal to take I.T Ltd.(HK: 999), a Hong Kong-based clothing retailer, private in a deal worth HK$1.3 billion ($168 million). Read more.
- Insight Partners invested £100 million ($133 million) in Exclaimer, a U.K.-based provider of email signature management solutions. Farview Equity Partners and existing investor Livingbridge also participated.
- Baird Capital invested in HSP Group, a company offering services firm for U.S. and European companies to expand globally. Financial terms weren't disclosed.
- HES Facilities, a portfolio company of Nautic Partners, acquired WFF Facility Services and Clean-Tech Company, two building services businesses in the Midwest. Financial terms weren't disclosed.
- Race Rock Group agreed to acquire Structural & Steel Products, a Fort Worth, Tx.-based distributor of products used in the highway construction from Highland Capital Management. Financial terms weren't disclosed.
- Spartech, backed by Nautic Partners, acquired Tufpak, an Ossipee, N.H.-based maker of plastic films for medical industries. Financial terms weren't disclosed.
EXITS
- PAI Partners acquired Apleona Group GmbH, a German-based real estate and facility manager, from EQT for about €1.6 billion ($1.9 billion).
- NortonLifeLock (Nasdaq: NLOK) agreed to acquire Avira, a German cybersecurity company, from Investcorp for approximately $360 million.
OTHER
- A subsidiary of Sino Biopharmaceutical Limited (HK: 1177) invested $515 million in Sinovac Biotech (Nasdaq: SVA), a Chinese-based company with a coronavirus vaccine it is currently distributing.
- Frasers Group is in talks to acquire Debenhams, the U.K.-based department store retailer, in a last-ditch attempt to save the company, per Bloomberg. Read more.
IPOs
- ContextLogic, the company behind discount marketplace Wish, says it plans to raise $1 billion in an offering of 46 million shares priced between $22 to $24 a piece, valuing the company at as high as $14.1 billion on an undiluted basis. Its investors include DST Global, Founders Fund, and Formation8 Partners. Read more.
- Coursera, a Mountain View, Calif.-based online education company, is considering an IPO in 2021 that could value it around $5 billion, per Bloomberg. Its investors include NEA and Kleiner Perkins. Read more.
- Intapp, a Palo Alto-based provider of software to capital markets firms, is preparing for a 2021 IPO. Temasek and Great Hill Partners back the firm. Read more.
- 17 Education & Technology Group, a provider of K-12 tutoring services in China, raised $288 million. It mosted revenue of $118.9 million in the nine months ending September 2020 and a loss of $696.7 million. Shunwei Ventures backs the firm. Read more.
- Upstart Holdings, a San Mateo, Calif.-based consumer lending platform, plans to raise $252 million (25% insider sold). It posted revenue of $144.2 million and income of $5 million in the nine months ending 2020. Third Point Ventures, Stone Ridge, and Khosla Ventures back the firm. Read more.
- Sigilon Therapeutics, a Cambridge, Mass. biotech therapies for hemophilia A and diabetes, raised $126 million. Flagship Pioneering and Eli Lilly back the firm. Read more.
SPAC
- Foley Trasimene Acquisition Corp II, a blank-check acquisition firm backed by Bill Foley, is nearing a deal to merge with Paysafe, a U.K.-based payments company, valuing it at around $9 billion including debt, per Bloomberg. Blackstone Group and CVC Capital Partners back the firm. Read more.
- Stem, a U.S.-based A.I. energy storage company plans to go public via merger with Star Peak Energy Transition Corp, a SPAC, valuing it at about $1.35 billion. Stem’s backers include Activate Capital, Constellation Technology Ventures and RWE Supply & Trading.
- Innoviz Technologies, an Israeli startup focused on lidar in autonomous vehicles, is in talks to go public via merger with Collective Growth Corp., a SPAC. The company could be valued at about $1 billion, per Bloomberg. Read more.
- Highland Transcend Partners I, a SPAC formed by Highland Capital Partners seeking a tech target, raised $275 million. Read more.
- FinTech Acquisition V, a SPAC formed by the management of The Bancorp seeking a fintech business, raised $218 million. Read more.
FFS
- Highland Europe closed its fourth fund, with €700 million.
PEOPLE
- Greycroft promoted Will Szczerbiak to partner and Brentt Baltimore to principal.
- Highland Europe promoted Jean Tardy-Joubert, Gajan Rajanathan and Ronan Shally to partner.
- Welsh, Carson, Anderson & Stowe named Nick O’Leary as a general partner.


fortune--2020-12-07--Is it too late for Barnes & Noble?

Is it too late for Barnes & Noble?

Barnes & Noble has been tagged as either the savior or the destroyer of the book industry in its 100-year history. Lately, it’s the bookstore chain itself that needs saving.
Enter James Daunt, a lifelong bookseller who built his own mini-chain of bookstores and got the credit for turning around Waterstones, the biggest bookseller in Britain. Elliott Management, the hedge fund that took B&N private last year, brought in Daunt to resuscitate Waterstones’ much larger American cousin. Wall Street Journal reporter Jeffrey Trachtenberg, who has been covering the ups and down of B&N for decades, profiled Daunt this weekend and offers a detailed look at the new CEO’s strategy.
Although Daunt (and Trachtenberg) give a few nods to Amazon in the piece, you won’t find any mention of barnesandnoble.com. In fact, there’s barely a mention of Daunt’s strategy for online sales in the entire 2,000 word article:
Mr. Daunt is working to improve Barnes & Noble’s online store, but his focus is mainly on physical stores. “It’s in the stores where you win the loyalty from your customers,” he said. “If you get your stores right, your online sales will follow. If your stores are crap, your online will be as well.“
As the pandemic ravages traditional retail outlets and fuels further growth of online shopping, it’s a curious decision to ignore online selling. The rise of Instagram book influencers and bookshop.org, the new fast-growing online site supporting independent bookstores, are similarly not discussed. And there is absolutely nothing about B&N’s ebook platform, the Nook, despite a surge of ebook reading this year for the first time in ages.
In fact, Daunt’s whole strategy, which relies on localizing the content of chain stores and making books easier to browse, seems right out of the 1990s. It doesn’t seem to take much advantage of B&N’s massive scale in just copying what makes small indie bookstores good. Daunt’s effort could stabilize things for a bit. But it hardly seems like a plan to carry Barnes & Noble through another 100 years.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Reading is FUNdamental. Speaking of books, a book publishers trade group asked Apple to lower its commission on ebooks to 15% from 30% for authors and companies that don't make much money. And Amazon may finally agree to make some of its homegrown line of ebooks available to libraries. The company is in talks with the Digital Public Library of America, one of the small suppliers of ebooks to libraries, to offer titles from Amazon Publishing's self-publishing unit Kindle Direct Publishing, Publishers Weekly reports.
Source of power. Leading electric carmaker Tesla published its first workforce diversity report on Friday. The workforce included 21% women in total and 17% among leadership roles. Black workers made up 10% of the total and 4% of leaders. Also, after Tesla's stock has risen more than sevenfold this year, analysts at Goldman Sachs raised their price target to $780, or about 30% higher than the stock's current price of $599.
You can rely on the old man's money. Wall Street's IPO desks will certainly be popping champagne corks at the end of 2020. It's going to be the busiest December ever for initial public offerings and both DoorDash and Airbnb are looking to raise even more money than expected, $3.1 billion each. They're doing it the traditional way, but Stem, the energy storage company that relies on A.I. management software, will go public by merging with a SPAC called Star Peak Energy Transition.
Mo data, mo problems. A story from Bloomberg reports that Snowflake CEO Frank Slootman's compensation package includes vesting of stock options now worth around $100 million per month. Slootman told me after the company went public that he plans to give away 98% of his wealth via his family foundation.
Who got there first. In a follow up from Friday's essay, Amazon wrote in to note that it offered the first database app in the cloud, SimpleDB, a few years before the formation of Snowflake, which I called the "inventor of the cloud database." You may or may not agree with me that there is a difference between a database program hosted in the cloud and a cloud database program.
FOOD FOR THOUGHT
Algorithms, not people, now make important decisions about extending credit, renting, and even medical care. MIT Technology Review senior reporter Karen Hao takes a look at research showing how the algos can be biased, and what some lawyers plan to do next.
A growing group of civil lawyers are beginning to organize around this issue. Borrowing a playbook from the criminal defense world’s pushback against risk-assessment algorithms, they’re seeking to educate themselves on these systems, build a community, and develop litigation strategies. “Basically every civil lawyer is starting to deal with this stuff, because all of our clients are in some way or another being touched by these systems,” says Michele Gilman, a clinical law professor at the University of Baltimore. “We need to wake up, get training. If we want to be really good holistic lawyers, we need to be aware of that.”
IN CASE YOU MISSED IT
Nearly a third of workers don’t want to ever return to the office By Lance Lambert
Backlash against Google grows over firing of prominent Black A.I. researcher By Jeremy Kahn
5 software acquisitions Salesforce’s Slack deal could spur By Robert Hackett
Why Mastercard is publicly trying to fix its gender and racial pay gaps By Maria Aspan
How Ulta Beauty is using tech to spur in-store shopping during the pandemic By Phil Wahba
The best books of 2020, according to Fortune staff By Rachel King
Europe is missing out on the A.I. revolution—but it isn’t too late to catch up By François Candelon and Rodolphe Charme Di Carlo
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Rapunzel of the famous German fairy tale is named after a type of radish that her mother craved, leading to all the trouble with the witch and so on. Hopefully the astronauts on the International Space Station won't draw the ire of any powerful sorcerers with their latest gardening experiment, in which they grew healthy (and edible) radishes in less than four weeks. Let's power through the week with healthy food, wherever it's grown.


fortune--2020-12-07--Investors are pricing in inflation for 2021. Here’s why it’s likely to be a mirage

The story of U.S. inflation in 2021 could very well amount to this: It’s all a mirage.
Americans are likely to see prices jump across a variety of sectors next year, thanks in part to COVID-19 vaccines that will potentially turbocharge demand for such pandemic casualties as travel and tickets to sporting events.
With prices also climbing for some inputs such as copper and lumber, inflation could very well reach or surpass the Federal Reserve’s 2% target in some months. Financial markets are increasingly pricing in higher inflation in coming years, and debates over whether the central bank should start easing back its record monetary stimulus may intensify.
But one critical ingredient will be missing to sustain higher inflation: a tight labor market.
Many economists discount the odds of a longer-lasting acceleration and note that even if inflation metrics look like they’re rising in coming months, it’s partly a reflection of math. Unemployment is expected to remain elevated throughout the year, and a resurgence in demand for services could be offset by softness in rents and some goods such as used autos.
“We think inflation is going to be muted because unemployment will still be high,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. “There will still be slack in the labor market, which would keep some pressure on wages.”
On Thursday, the Labor Department will issue its consumer price index for November. The median forecast of economists surveyed by Bloomberg calls for a subdued 1.1% year-over-year increase.
Forecasters surveyed by Bloomberg generally expect inflation to temporarily rise above 2% in the second quarter of 2021 before settling back at or slightly below that level.
Investors are betting more and more, though, that inflation won’t stay so muted.
The 10-year breakeven rate — a market-based measure of average inflation rates over the next decade — on Friday reached 1.91%, its highest since May 2019. That key gauge, garnered from inflation-protected securities and standard Treasuries, has surged since touching an 11-year low of 0.47% in March.
This year’s sluggish spending on services will probably give way to a resurgence throughout 2021 as the nation gets vaccinated. That means Americans will be more at ease partaking in activities such as trips to Disney World, attending Major League Baseball games and enjoying indoor dining at their favorite restaurant—developments that may give service providers the wherewithal to raise prices.
Services make up about 60% of the overall consumer price index and 75% of the core measure, which excludes food and energy.
In a Bloomberg Opinion piece last week, former New York Fed President Bill Dudley wrote that a rebound in spending on services suggests “sharp price increases might even be needed to balance demand with the available supply, which the pandemic has undoubtedly diminished.”
The result: Those who see few signs of excess inflation “could be setting themselves up for an unpleasant surprise,” Dudley said.
One issue in the pipeline: so-called base effects will lead to higher inflation. Price indexes early next year will be compared with the sharp retreats experienced in March and April, which may push inflation to, or above, the Fed’s 2% goal.
Gauges of input prices and costs paid by businesses are also perking up as of late, though factories still have plenty of slack in capacity.
Fed officials are seen taking next year’s data in stride. The Fed goal is based on the Commerce Department’s personal consumption expenditures price index, which tends to rise slightly more slowly than CPI on average. Central bankers adopted a new policy framework in August and signaled a willingness to allow PCE inflation to exceed their target for some time.
“In 2019 we had a really perfect storm for higher inflation,” with low unemployment, goods tariffs and a weaker dollar from prior years, said Matthew Luzzetti, chief U.S. economist at Deutsche Bank AG. “And that really only got us not even back to the Fed’s core inflation objective, so achieving above-target inflation is a really difficult thing for the Fed.”
At 6.7% in November, the jobless rate is almost twice as high as it was in the closing months of 2019, when it stood at a five-decade low of 3.5%. Yet worker compensation costs decelerated then.
Another sector that may see higher inflation is medical care, as providers try to recoup some of the revenue lost during the pandemic, said Sarah House, senior economist at Wells Fargo & Co.
Still, the number of apartment vacancies, as well as renters’ lingering financial difficulties, will restrain rents, House said.
Another factor is that “inflation expectations remain well within their historic range,” House said.


fortune--2020-12-07--The Fortune-State Department Global Women’s Mentoring Partnership goes virtual

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! An e-commerce CEO steps down to prioritize his wife’s career, 40% of unemployed women have now been without work for six months or longer, and women business leaders connect across borders and time zones. Have a meaningful Monday.
– Mentoring, 2020-style. In early March, before, well, everything, Fortune was getting ready with the State Department and the nonprofit Vital Voices to bring our annual group of women business leaders from around the world to the U.S. for a three-week mentoring program.
These women—entrepreneurs and mid-career professionals—usually come stateside to shadow Fortune 500 executives and experience corporate America firsthand, applying those lessons to their own businesses when they return home. Of course, the group didn’t end up traveling to the United States this year. But thanks to the creativity of our partners at Vital Voices and the State Department, these women participated over the past several weeks in our first virtual mentoring program.
This year’s mentees—the 15th cohort to participate—took meetings and developed relationships across time zones and without a break from all their usual responsibilities at work and at home, with creative results. Enas Abdelaziz, a nonprofit executive based in Egypt, told her mentors at Accenture that she was having trouble managing her Gen Z employees; in response, the consulting and tech firm set up a panel of six Gen Z Accenture staffers to answer all her questions. Abdelaziz’s mentors, CMO and chief communications officer Amy Fuller and client account lead for North America Cathinka Wahlstrom, also helped counsel her over video chat through the departure of a much-appreciated employee.
Courtesy Vital Voices
Inas Hafez, an Egyptian digital marketing entrepreneur behind the agency GetSircles, was mentored by Julia Paige, the director of social impact at Uber. One of the benefits of working alongside a global company? Uber introduced Hafez to its staff in Cairo so her connection with the company can extend locally beyond the mentorship period, too.
Evelyn Namara, founder of the Ugandan fintech startup Vouch Digital, came out of her mentorship with Match Group chief strategy officer Faye Iosotaluno with advice on everything from how to decide between two payment solution integrators to how to determine the pricing of her company’s new subscription system—and tips for self-care.
Simran Sahni, the cofounder of Keeros Supersnacks in Lucknow, India, considers her time with Johnson & Johnson worldwide VP for environmental health, safety, and sustainability Paulette Frank to be a “mini-MBA.”
Of course, Zoom can only approximate the in-person mentoring experience so much. But we were so glad to be able to facilitate these kinds of relationships across borders while so many other forms of connection remain out of reach.
Read more about the program here. And if you’re interested in learning more or mentoring in the future, please get in touch!
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Google + Gebru. After the news last week of A.I. researcher Timnit Gebru's firing from Google, the MIT Technology Review got a copy of the research paper that led to her departure from the company. Jeff Dean, head of Google A.I., has said the paper "didn't meet our bar for publication." In it, Gebru and her coauthors "lay out the risks of large language models," which, this story notes, are "key to Google's business." MIT Technology Review
- Reason behind the resignation. Rubin Ritter, the CEO of the major German e-commerce company Zalando, announced he would step down from the role after 10 years. He offered this reason for his resignation: the need to allow his wife's professional ambitions to now take priority. Reuters
- Negative outlook. The November 2020 jobs report, released Friday, shows a slowing economy. Last month was the first since economic recovery began when more men than women left the workforce, The 19th* reports. The National Women's Law Center notes that 40% of unemployed women have now been without work for six months or longer.
- Gates' corner. After her call for the Biden administration to appoint a caregiving czar last week, Melinda Gates is back with a new NYT Corner Office interview. The philanthropist reflects on the pandemic and global vaccination efforts—she says that she believes pharma companies making COVID-19 vaccines should only make a small profit—and her own position of privilege amid global suffering. New York Times
MOVERS AND SHAKERS: PayPal promoted Amanda Miller to VP of global corporate communications.
IN CASE YOU MISSED IT
- Going glam. Ulta Beauty, led by CEO Mary Dillon, has relied on technology to change the way customers shop for beauty products during the pandemic. With traditional makeup testing a no-go, Ulta has turned to a virtual try-on tool called GLAMlab and one-on-one remote video consultations. Fortune
- Making history. The Senate Rules Committee last week voted to approve the creation of two new national museums: the National Museum of the American Latino and the American Women’s History Museum. The vote is a key step toward these projects becoming reality. Washington Post
- Millennial mochi. Naomi Hasegawa runs her family's mochi shop in Kyoto—as her ancestors have done for more than 1,000 years. The store, Ichiwa, is one of 19 businesses in Japan that say they've been operating continuously since the first millennium, putting passing the baton to the next generation above all other business priorities. New York Times
ON MY RADAR
Ciara and ex-Lululemon CEO launch new clothing brand with ‘more to it than fashion’ CNBC
And play like a girl she did New York Times
The best books of 2020, according to Fortune staff Fortune
Big Mouth recast one of its leads—and reinvented itself in the process L.A. Times
PARTING WORDS
"Today I am a gynecologist, and I owe it to her."
-Sayeda Amarkhel on Suhaila Siddiq, a surgeon and Afghanistan's first female general, who died from complications of the coronavirus


fortune--2020-12-08--Battery startup backed by Bill Gates claims major breakthrough

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QuantumScape, a battery startup backed by Bill Gates and Volkswagen, said its new technology is on track to be able to power cheap, long-range electric vehicles within four years.
The company’s lithium-metal battery offered greater capacity in testing than similar-size current lithium-ion batteries, could recharge more quickly, and could operate at low temperatures, the company said Tuesday. The battery could also be recharged repeatedly without degrading, avoiding a common problem with batteries.
QuantumScape argued that its technology would be cheaper for car manufacturers and provide cars with power over a longer period of time. If the company can manufacture the new batteries in large numbers, they could displace the lithium-ion batteries currently used by companies like Tesla and Chevrolet.
“That’s really our goal, to build a battery that could help EVs become more mainstream,” CEO Jagdeep Singh told Fortune. “The potential now exists for this technology to make its way into real cars on real roads within the next few years.”
Still, the demonstrations were carried out on a small version of QuantumScape’s battery, about the size of a thick playing card, instead of the hefty battery packs used in cars. The company must still prove that it can manufacture larger batteries and in high quantities.
Volkswagen has agreed to invest up to $300 million in the startup, taken an ownership stake, and also agreed to partner with QuantumScape on a manufacturing joint venture. Volkswagen has said it’s looking to produce car batteries with QuantumScape’s technology in 2025.
For QuantumScape, ramping up production will take time. If all goes as planned, it expects revenue to grow gradually from $39 million in 2025 to $275 million in 2026 to $3.2 billion in 2027.
“We’d love it to be faster than that, but the reality is you can’t,” Singh said. “Where we are today is, we’ve got the materials, we’ve shown they work, and now we need a good team that knows what it’s doing scaling up production and building factories.”
QuantumScape appears to be taking the lead in a crowded field. A number of startups are working to improve batteries as are the big automakers. Tesla said in September that planned modifications to its batteries will lower costs and increase range without requiring new technology. However, Tesla CEO Elon Musk has previously made big promises about batteries and then failed to achieve them.
One of QuantumScape’s key innovations is to replace the liquid in today’s lithium-ion batteries with a strip of metal. That makes the batteries smaller and is supposed to make them safer, since the liquid in today’s batteries is combustible.
In its demonstrations, QuantumScape said it was able to recharge a depleted battery to 80% full in just 15 minutes, about one-third the time required by today’s EV batteries. It also ran the battery at temperatures as low as –30 degrees Celsius. And the company frequently recharged the battery over time to show that it could power a car over hundreds of thousands of miles, just as good as today’s battery technology.
QuantumScape went public last month by merging with a special purpose acquisition company called Kensington Capital Acquisition. That has drawn additional scrutiny, since other companies that have used the technique, like emission-free vehicle builder Nikola, later ran into problems.
But QuantumScape appears to be on firmer ground since it has already been working with Volkswagen for several years and has filed copies of its signed agreements with the major manufacturer with the Securities and Exchange Commission. Nikola did not have a signed deal with General Motors when it announced its partnership, and GM ultimately backed out of investing in the startup.
Also, unlike some other hyped startups that later ran into trouble, outside experts have been able to assess QuantumScape’s new technology.
Stanley Whittingham, a professor at State University of New York, Binghamton, who won the Nobel Prize in chemistry for his work developing lithium-ion batteries, endorsed QuantumScape’s demonstration. Data from the company, he said, backs its claims and is “something that has never before been reported. If QuantumScape can get this technology into mass production, it holds the potential to transform the industry,” Whittingham noted.
Other researchers have been working for decades to develop lithium-metal batteries, but without demonstrating all of the necessary characteristics, said Carnegie Mellon professor Venkat Viswanathan, who has been advising QuantumScape. “Most notable, the fast-charging results are unprecedented for lithium-metal batteries and even for traditional EV batteries,” he told Fortune.
QuantumScape CEO Singh said that Bill Gates, an early investor in the 10-year-old company, has given him advice. “I didn’t honestly think he knew anything about chemistry, and we are all about chemistry,” Singh said. But “when he thinks something is important he can dive really deep and become an expert in that area…He has gotten very deep into this area.”
QuantumScape’s board includes Tesla cofounder and former chief technology officer JB Straubel, well-known Kleiner Perkins venture capitalist John Doerr, and Frank Blome, who oversees battery research at Volkswagen.