fortune--2020-06-22--Apple’s chip transition will be a non-event for consumers

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There is something reassuring about Apple holding its annual developers conference this week, even if it will be held online only. The conference is 95% nerdfest—legit technical sessions on how Apple’s hardware and software work—with a smidge of major or not-so-major product announcements sprinkled in. The main events are like fish food heaped into the aquarium for the many species that feed off the Apple ecosystem. The balance constitutes red meat for the public and its enabler, the news media.
As Aaron has summarized, one of the expected news events at WWDC is Apple’s intention to dump Intel, the supplier for 15 years of semiconductors for its Macintosh computers. This is tremendously important for the tech world and an almost non-event for consumers. It was a similarly big deal a decade and a half ago, when Apple cut loose an IBM-Motorola consortium in favor of Intel. Then, however, the iPhone didn’t exist, and Macs were Apple’s main business. Today, laptops and desktops comprise just under 10% of Apple sales. What’s under the hood is a bit of snooze if you’re not in the chip business.
That said, computers are still a product line for Apple. Last year it experienced modest growth, compared with a 14% decline in iPhone sales. Apple’s plan to make computer chips of its own design will help it strengthen a slow-growth, cash-cow product.
***
Two funny descriptions of Big Tech from my weekend reading:
In a marvelous, funny, trenchant, shows-why-we-miss-him-badly interview, Jon Stewart calls the YouTube and Facebook approach to media “an information-laundering perpetual-radicalization machine.”
Kevin Roose, writing in the New York Times, on the irony of the leaders of Facebook, YouTube, and Twitter voicing support for the Black Lives Matter movement while their platforms host racist filth that undermines the cause: “It’s as if the heads of McDonald’s, Burger King, and Taco Bell all got together to fight obesity by donating to a vegan food co-op, rather than by lowering their calorie counts.”
***
If you were to assemble the people who could help you truly understand health care and how it’s affected businesses today, who would you pick? Here are a few on Fortune’s list:
The CEOs and presidents of health-care giants Johnson & Johnson, Moderna, Novartis, Aetna
Johnson & Johnson, Moderna, Novartis, Aetna Co-discoverer of CRISPR-Cas9 Dr. Jennifer Doudna
Dr. Jennifer Doudna Dean of Stanford Medicine Dr. Lloyd Minor
Dr. Lloyd Minor Chief medical officers from IBM, Verily, Google Health
from IBM, Verily, Google Health Healthcare venture capitalists like Sue Siegel
like Sue Siegel Thrive Global CEO Arianna Huffington
Arianna Huffington CEO of REFORM Alliance Van Jones
Van Jones NBA Commissioner Adam Silver
Hear from them and more at Fortune Brainstorm Health, our virtual health-care conference on July 7-8. As a newsletter subscriber, you’re invited to use this code—BSH20GUEST—and get half off.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Just when I thought I was out, they pull me back in. With the muddled U.S. handling of the COVID-19 pandemic, Apple is re-closing its stores in Arizona, Florida, North Carolina, and South Carolina that it just re-opened a month ago. Meanwhile, usually accurate Apple analyst Ming-Chi Kuo says Apple's first non-Intel computers will be a 13-inch MacBook Pro notebook and a new 24-inch iMac, to be released at the end of the year or early in 2021.
Team work makes the dream work. Was President Trump's Tulsa rally hacked, in a manner? Hundreds of TikTok users and K-pop fans say they signed up online for tickets for the rally, falsely inflating attendance expectations. Trump campaign chairman Brad Parscale said the bragging teenagers "don’t know what they’re talking about or how our rallies work.”
Voting with their dollars. A one-month boycott of advertising on Facebook is growing. Outdoor gear retailers The North Face and Recreational Equipment Inc, or REI, said on Friday that they would not advertise on Facebook in July. Last week, six civil rights groups including the NAACP and the Anti-Defamation League called for the boycott to pressure the social network to better police racist and hateful messages carried on the platform.
Here I come to save the day. In one of those is-it-a-Bond-movie-plot-or-high-tech-CEO-dream stories, Google co-founder Sergey Brin has created a disaster rapid response team called Global Support and Development, or GSD, The Daily Beast reports. The story has a deep dive into the mega-yachts, drones, and hydrogen-powered dirigibles that the group uses to get aid to victims of hurricanes, cyclones, and other natural disasters.
It keeps going and going and going. Speaking of billionaire tech founders and their dreams, Tesla CEO Elon Musk said on Sunday that he will unveil the company's new record-breaking battery technology at an event on Sept. 15. Dubbed the "million mile" battery, the breakthrough could allow Tesla to sell much cheaper cars and leap ahead on range. Stay tuned.
FOOD FOR THOUGHT
One of the fastest growing tech hubs in North America is in Toronto. Writer Brian Barth for the MIT Technology Review criss-crosses Canada's largest city to find out what's going on and how it differs from Silicon Valley.
Yung Wu is the CEO of the MaRS Discovery District, a block-size campus in downtown Toronto where firms can rent space, mingle in a massive central atrium, and tap into services designed to help startups and “scale-ups” grow. He has seen the revenue of its 1,500 companies almost triple in the past two years, but he insists that Canadian tech is on a qualitatively different path from its U.S. counterpart. “I don’t think the bro culture would have really developed in the same way over here, for instance,” he says. Canadian values may play a role in that, but demographic differences are also part of the equation—Toronto is considered one of the most diverse cities on earth, and more than 50% of its residents were born in another country. Likewise, at MaRS, which bills itself as the “largest urban innovation hub” in North America, more than half of all company founders were born abroad.
IN CASE YOU MISSED IT
Apple chip contract would help Taiwan Semiconductors fill a Huawei-shaped hole By Eamon Barrett
11 deals for $15 billion in 10 weeks: Why India’s Jio Platforms is on an investment spree By Grady McGregor
This was the most out-of-stock product on websites in May By Lance Lambert and Nicolas Rapp
Marketing strategies during the pandemic should be focused on building relationships By Radhika Marya
Wirecard’s disappearing $2.1 billion By Lucinda Shen
The founder of paint supply startup Clare on how to use your brand as a social platform By Rachel King
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
If you're in need of a bit of music and a bit of cuteness today, check out the latest NPR Tiny Desk (at home) Concert. Singer/songwriter Hamilton Leithauser performs a few of his recent tunes backed up by his two young daughters and two nieces. It's all smiles and dancing on top of hay bales.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-06-22--How K-pop fans are wielding their organizing power against Donald Trump

Legal protections for LGBTQ people at work are crucial , but it ’ s on employers to create a welcoming @

The fan base of Korean pop music, or K-pop, now seems fully enmeshed in U.S. politics.
K-pop fans claim they played a part in tricking President Donald Trump’s reelection campaign into overestimating the expected crowd size at the President’s Saturday rally in Tulsa, his first in months.
Campaign manager Brad Parscale said last Monday that over 1 million people had registered for tickets to the rally. When the event got underway at the Bank of Oklahoma Center on Saturday, some 6,200 attendees showed up, filling roughly a third of the stadium’s 19,000 seats. The smaller-than-expected crowd forced the campaign to cancel the President’s planned appearance at a second, outdoor site that was intended to handle stadium overflow. The low turnout reportedly angered the President, who cares deeply about optics.
Meanwhile, K-pop fans, alongside users of social media platform TikTok, were elated. They say they followed a strategy crafted by a Democratic activist in Iowa, also known as TikTok Grandma. In a viral post on June 11, she called on users to go to Trump’s campaign website, register for two free rally tickets using a phone number, and then not show up on Saturday.
“I’m dead serious when I say this. The teens of America have struck a savage blow against @realDonaldTrump,” Steve Schmidt, a longtime Republican strategist who left the party in 2018, tweeted on Sunday. “All across America teens ordered tickets to this event.”
Parscale denied the fans’ assertion, accusing the groups of not understanding “how our rallies work.”
“Phony ticket requests never factor into our thinking,” he said.
Regardless of K-pop fans’ actual role in the turnout at Trump’s rally, the massive community wields enormous online clout, and, increasingly, it’s directing it at progressive causes in the U.S.
Recent actions
The faux ticket-buying campaign is only the most recent example of K-pop fans deploying their online power for activism.
In late May, just as protests against police brutality spread across the country in the wake of George Floyd’s death in Minneapolis, the Dallas Police Department tweeted out a call for videos that showcased illegal acts occurring during Dallas protests. The request prompted “K-pop stans” to flood the police department’s Twitter feed and app with fancams, or short performance videos, unrelated to the protests. A day later, the Dallas Police Department shut down its app due to “technical difficulties.”
On June 3, when K-pop fans spotted anti-protest hashtags like #bluelivesmatter trending on Twitter, they again deployed fancams en masse, seeking to drown out the often racist posts associated with the hashtags.
On June 4, K-pop fans received a more formal call to action when the genre’s most popular band, BTS, tweeted support of protests against racial inequality in the U.S. “We stand against racial discrimination. We condemn violence. You, I and we all have the right to be respected. We will stand together. #BlackLivesMatter,” the group wrote to its 26 million followers.
Two days later, BTS announced a $1 million donation to the Black Lives Matter Global Network Foundation, which seeks to “eradicate white supremacy and build local power to intervene in violence inflicted on Black communities.” Within hours of BTS’s announcement, the group’s fan base—known as ARMY—had raised an additional $1 million to match the boy band’s donation.
In the wake of the donations, a group of fans called One in an ARMY said that the link between BTS fans and the Black Lives Matter movement is “unsurprising” given the diversity of BTS’s ARMY and its “strong desire to help others.” The group of fans says it organizes monthly, grass-roots fundraising campaigns for nonprofits worldwide under the philosophy that “many people giving small amounts can create a substantial impact when we work together.”
The strength of the ARMY
K-pop fans’ recent string of flashy online activism and fundraising amid the U.S.’s reckoning with racism fits into the community’s long history of online organizing for social justice causes, industry observers say.
In recent years, K-pop fans—who number in the tens of millions, if artists’ social media followings are any indication—have organized to fund projects ranging from supporting LGBTQ+ youth centers in South Korea, to raising money to build wells in Cambodia, to soliciting financial support for major international nonprofits like Feed the Children.
Last December, K-pop fans even drew the ire of Chilean government officials, who claimed the community stoked anti-government unrest. But beyond supportive social media posts, there is little evidence K-pop fans played any role in organizing physical protests. K-pop fans, however, did respond to the allegations with mocking memes.
K-pop’s targeting of Trump’s rally on Saturday rally was likely related to Trump’s opposition to the George Floyd protests and the Black Lives Matter movement, causes the community has supported in recent weeks.
Ultimately, the fans’ ability to organize rapidly may be rooted in their fandom itself. They’ve deployed similar skills—tracking down tickets, rigging top-played music charts, connecting with like-minded devotees on social media—in support of their favorite bands and artists. The techniques translate well to online activism and organizing, Hong Seok-kyeong, a communications professor at Seoul National University, told the Voice of America.
“These groups of fans have accumulated a lot of [organizing] experience while supporting their idols,” Hong said. “It requires a great deal of logic and strategy.”


fortune--2020-06-22--The unemployment rate has fallen in 35 states

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After states issued stay-at-home orders in March, mass layoffs ensued at a pace never seen before in this nation. Since that time, 44 states have set record-high unemployment rates, dating back to 1976 when the U.S. Bureau of Labor Statistics (BLS) started making regional calculations.
But things are starting to swing back. As states ease those lockdowns, hiring is restarting, and, since May, the unemployment rate is falling in 35 states, according to data released Friday by the BLS. The rate was flat in three states, and rose slightly in 12 more.
This calculus helps explain why the national unemployment rate has fallen from 14.7% in April to 13.3% in May, pointing to an economy moving from contraction to modest recovery.
The damage to U.S. tourism is so great that Nevada still leads the entire nation with a 25.3% unemployment rate in May. That, however, is down from Nevada’s 28.2% jobless rate in April—a figure that is greater than the 25.6% peak U.S. jobless rate during the Great Depression.
The second highest rate is tourist-dependent Hawaii, at 22.6%. It was followed by Michigan (21.2%), Rhode Island (16.3%), Massachusetts (16.3%), and California (16.3%).
Despite being at the epicenter of the worst coronavirus outbreaks, New York (14.5%) and New Jersey (15.2%) had unemployment rates closer to the national rate. Both states are reopening at a slower pace, which explains why the New York rate was unchanged in May, and only fell 0.1% in New Jersey.
At 5.2%, Nebraska had the lowest jobless rate in May, down from 8.3% in April.
But as regional economies improve, cases of the deadly virus are increasing throughout the South and West. New cases of COVID-19 are climbing quickly in Florida and Texas—by more than 1,000 new cases per day from the tallies registered two weeks prior.


fortune--2020-06-22--Everything to know about New York City’s phase two reopening today

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New York City takes another step forward in reopening on Monday, and with it, come a few simple pleasures that many in the city have longed for: restaurants, haircuts and in-store shopping.
Still, things won’t quite be back to normal, despite the fact that many New Yorkers have already started to bend the rules. Shoppers should be prepared to wear face masks and maintain at least 6 feet of distance from other people. Restaurants are allowed to offer only outdoor seating. And at barbershops, beard trims are still a no-no.
“It’s time to say to everyone getting ready for Phase Two: Get on our mark, get set, cause here we go on Monday,” Mayor Bill de Blasio said last week.
The second stage of New York’s reopening, when some 150,000 to 300,000 workers are expected to come back, will breathe a little more life into a city devastated by the coronavirus pandemic.
Here’s what you need to know:
What does ‘Phase Two’ reopening mean?
It’s the second of a four-step process that will ease restrictions gradually on business activity and people’s ability to move around and socialize in the state of New York. Progress depends on infection rates, hospital capacity and the state’s ability to test and trace people who may have contracted the virus. Regardless, each phase will last at least two weeks.
New York City entered ‘Phase One’ on June 8 — the last region to do so.
What’s still closed?
Indoor service at bars and restaurants, movie theaters and other large venues for culture and entertainment.
If offices are reopening, does that mean I will go back soon?
Each company is taking a different approach, and many have said they don’t plan on staff returning right away. For those that do open, things will be different. Maximum occupancy will be capped at 50%, workers must stay 6 feet apart and masks are required. Nonessential common areas including locker rooms and gyms must remain closed.
Do I have to get my temperature checked?
The state requires only that employers conduct some kind of screening process for employees entering office buildings. That could mean you’ll need a temperature check upon entry, but it could also mean you’ll have to fill out a questionnaire. Questions could include whether you’ve had any Covid-19 symptoms in the past 14 days or if you’ve been in close contact with someone with a confirmed case.
There seems to be some confusion over bars and restaurants. Can I go to them yet?
Yes, some establishments have been flouting the rules. But as of Monday, bars and restaurants are allowed to offer outdoor seating. It still comes with restrictions: There’s a maximum of 10 people per table and all must be members of the same party. Everyone must be seated — restaurants and bars cannot serve people who are standing in outdoor areas. You won’t be allowed to wait for a table either.
Restaurants that intend to place outdoor seating on the sidewalk or the street must apply with the city’s Department of Transport through its Open Restaurants program. There’s no need to apply if the seating is on private property.
Can I get my hair cut?
Yes, finally. But again, occupancy will be limited to 50% capacity. You should call ahead and make an appointment. While walk-in service is allowed, you won’t be permitted to wait if all of the hairdressers or barbers are busy. And hair cutters aren’t allowed to perform services that require the removal of a customer’s face mask — like a beard trim.
Is it safe to get on the subway?
City officials have acknowledged it may be difficult to keep proper 6-foot distancing while on subways and buses as ridership picks up. But one thing is clear: The subway has never been cleaner than it is right now. Each of the city’s more than 6,000 cars is scrubbed thoroughly every day by a crew of more than 3,000 people, using virus-killing solution and an electrostatic spray. And every station is cleaned twice daily.
Who’s responsible for making sure that people and businesses follow the rules?
Individual businesses must enforce the state’s rules for face masks, distancing and capacity on their premises. But for public places — like the sidewalk outside a bar — it’s up to each person to follow the rules.
What will shopping be like?
Stores are allowed to open for in-store shopping, but, again, there will be rules and you should maintain 6 feet of space from other customers and store employees. Fitting rooms will have cleaning supplies and hand-sanitizer stations. And stores won’t be allowed to offer amenities such as self-service bars or sample stations.
You’ll also soon be able to go to dealerships in the city for car shopping. If you plan to take a test drive, though, the dealer must sit in the seat furthest from the driver.
Why is my favorite store in SoHo still not open?
Just because stores are allowed to reopen doesn’t mean they will. Many retailers delayed plans to reopen because of the vandalism that followed the recent protests. And some business owners may hold off if they decide the costs tied to reopening outweigh the revenue they might generate.
What’s going on with malls?
Customers still can’t access indoor malls with 100,000 or more square feet of retail space. That includes places like Hudson Yards, where some retailers offer curbside pickup. Stores with separate entrances and exits can be open, while the others will be allowed to deal only with pick-up orders.
Can I finally take my kids to the playground?
De Blasio said he will open playgrounds, a welcome relief for parents who have been cooped up with kids for months. Still, team sports such as basketball, football, softball and soccer won’t be permitted. Social-distancing ambassadors will roam the city to monitor crowding and encourage hygiene at the parks.


fortune--2020-06-22--That missing $2.1 billion in Wirecard’s accounts? It probably ‘does not exist,’ the company now says

Wirecard AG was left fighting for survival after acknowledging that 1.9 billion euros ($2.1 billion) that it had reported as assets probably don’t exist, deepening an accounting scandal that has rattled Germany’s financial industry.
The payments processor said it’s in discussions with creditors and considering a full-scale restructuring after pulling its financial results for fiscal 2019 and the first quarter of 2020. Previous descriptions of its business with third parties, which process transactions on Wirecard’s behalf, were “not correct.”
Even before the early Monday statement, the unfolding scandal had seen Wirecard’s shares and bonds collapse, its chief executive depart, and left the company renegotiating debt terms with its lenders. In less than a week, the fintech once hyped as the future of German finance has lost almost 90% of its market value, with the shares slumping for a third trading day on Monday.
“It’s a complete disaster we’re looking at,” said Felix Hufeld, head of BaFin, Germany’s top financial regulator, at a panel discussion Monday. “It’s a shame that something like that happened.”
Wirecard said it was in “constructive discussions” with its lending banks, including the extension of lines coming due at the end of June. It is working with investment bank Houlihan Lokey on a sustainable financing strategy. Also under consideration are cost reductions, a restructuring, and disposal or termination of business units and product segments, according to the statement.
“There is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion euros do not exist,” Wirecard said. The firm had repeatedly delayed announcing its financial statements, and last week warned that loans of as much as 2 billion euros could be terminated if its audited annual report wasn’t published by June 19.
Moody’s Investors Service decided on Monday to withdraw Wirecard’s credit ratings because it “believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings.” It had already cut the ratings six levels on Friday, putting it one step from the lowest tier of junk.
Read more on how Wirecard became an embarrassment for Germany
Wirecard fell as much as 50% and traded 38% lower at 12:35 p.m. in Frankfurt. The stock has lost 85% since Wednesday, the day before it revealed that the funds were missing.
Wirecard’s lenders are demanding more clarity from the company in return for the extension of almost $2 billion in financing after it breached terms on the loan, people familiar with the matter said earlier. At least 15 commercial lenders, including Commerzbank AG and ABN Amro, are in hectic negotiations about the steps to take, they said.
The missing cash “could trigger an event of default and allow creditors to withdraw lines of credit,” said Justin Tang, head of Asian research at United First Partners in Singapore.
Wirecard has an outstanding revolving credit facility of 1.75 billion euros, according to data compiled by Bloomberg. About 90% of the RCF has been drawn by the company, according to people familiar with the matter and a list detailing the facility’s participation that was seen by Bloomberg:
Lenders Nominal exposure(in million euros) ABN Amro, Commerzbank, ING, LBBW 200 Barclays, Credit Agricole, DZ Bank, Lloyds 120 Bank of China, Citi, Deutsche Bank, MUFG 80 Raiffeisen International* 70 Raiffeisen Niederösterreich 60 Agricultural Bank of China 55 Raiffeisen Oberösterreich 45 *Austria’s Raiffeisen Bank International says it has no credit exposure
It’s unclear how the latest admissions will affect discussions with the banks. Most are leaning toward an extension of the repayment obligation in order to better assess the potential impact of a default on their balance sheets, one of the people said. However, a prolonged extension could be seen as delaying an insolvency, which is illegal under German law.
The scandal has prompted the resignation of Markus Braun’s after almost two decades as CEO. He was replaced on an interim basis by James Freis. Braun is unwinding a large portion of the shares he owns in the company, a stake he financed by borrowing against the stock’s value, Bloomberg has reported.
Read more on how Braun has to unwind pledged shares
The deepening mystery over the lost money centered on two Philippine lenders, after Wirecard said a couple of unnamed Asian banks had been unable to find accounts with the cash.
Both the Bank of the Philippine Islands and BDO Unibank Inc. said Wirecard wasn’t a client and they hadn’t seen the money. None of the missing cash entered the Philippine financial system, according to the nation’s central bank, which is conducting its own investigation.
A document purporting to show a link between Wirecard and BPI was “bogus” and may be part of an attempted fraud, the bank’s President Cezar Consing said Friday. BDO Unibank CEO Nestor Tan said it was a matter of “document fraud which was subsequently clarified by the bank as spurious.”
Wirecard is continuing to investigate the matter and can’t rule out potential effects on the financial accounts of previous years, it said in Monday’s statement.


fortune--2020-06-22--These black women are leading the way in business, politics, and economics

Good morning, Broadsheet readers! The Southern District of New York gets a new leader in dramatic fashion, the Black Lives Matter movement is growing in France, and black women share their expertise across industries in Fortune. Have a productive Monday.
– Monday morning opinions. In recent weeks, black women across business, politics, and economics have shared their expertise with Fortune. This Monday morning, I’d like to highlight some of their work.
First, we have Crystal Ashby, interim president and CEO of the Executive Leadership Council, an organization that supports the development of black executives. Ashby, who also joined us earlier this month for a roundtable on racism and allyship, in this piece counters a longstanding, flawed argument in white corporate America. The lack of black leaders in Fortune 500 companies and beyond (there are five black CEOs in the Fortune 500, none of whom are women) is not due to a dearth of talent, she says. Instead, what black executives and potential executives lack are opportunities for advancement.
“We are proud to help our own,” Ashby writes of her work with the Executive Leadership Council, “but we need willing partners to create more opportunities for black talent in corporate America.” Read her full op-ed here.
On Friday—the first Juneteenth to be widely celebrated by American companies—Rep. Marcia Fudge wrote for Fortune about how the U.S. education system has failed to teach black history as what it is: American history. Fudge in May introduced the Black History Is American History Act, which would require the only national test administered to all students to include black history and would provide grants to teachers and students.
Fudge chooses a poignant example: the way Oklahoma has changed how it teaches the history of Tulsa’s once-booming Greenwood neighborhood, also known as Black Wall Street, and how that community was destroyed in the Tulsa Massacre. The state for decades buried that history, but now includes the truth of the city’s past in its textbooks.
Read Fudge’s full piece here.
Finally, Fanta Traore, founder of the Sadie Collective, which addresses the underrepresentation of black women in economics, published this story highlighting 19 black economists to celebrate and know. Learn about the work of scholars Dana Francis, Jhacova Williams, Kristen Broady, and more.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Strauss's SDNY. The dramatic shakeup at the Southern District of New York on Friday–President Trump fired U.S. attorney Geoffrey S. Berman, who had investigated Trump associates in New York—has left Audrey Strauss in charge. Berman agreed to leave the position after Strauss, his deputy, was named his replacement rather than Trump's choice. Strauss has a long career as both a federal prosecutor and in the private sector, and she will serve in the role until the Senate confirms a new U.S. attorney. Bloomberg
- Veepstakes. Sen. Amy Klobuchar publicly took herself out of the running for Joe Biden's ticket on Thursday and urged the presumptive Democratic nominee to choose a woman of color as his vice president. Klobuchar had been a strong contender for the ticket, but protests over racial injustice in her home state of Minnesota, where she served as a prosecutor, now make her an unlikely choice. Her comment was seen by some as a blow for Sen. Elizabeth Warren. Politico
- Gym rat. CrossFit CEO Greg Glassman resigned this month after he made offensive and racist comments about the death of George Floyd. His attitude and beliefs reflected widespread problems at the company behind the fitness phenomenon, including allegedly rampant sexual harassment. You can read the details in this investigation (Glassman denied the allegations): New York Times
MOVERS AND SHAKERS: Chief people officer Melissa Kersey is leaving McDonald's; she will be succeeded in the role by VP and global chief talent officer Melanie Steinbach. Senior director, Center HR Shammara Howell will succeed Steinbach in her position.
Correction: Last week, we included the hiring of Rebecca Wooters by Signet Jewelers; she is the company's new chief digital officer, not chief data officer. We apologize for the error!
IN CASE YOU MISSED IT
- Justice pour Adama. The fight for black lives in France has been led by Assa Traoré, an activist who lost her brother, Adama Traoré, to police violence in 2016. The French version of Black Lives Matter fights for an end to systemic racism against black and Arab citizens. The New Yorker
- Abortion decision. New York Times editorial board member Lauren Kelley reflects on the Supreme Court's oral arguments for June Medical Services v. Russo, the landmark abortion case the Court is expected to issue a ruling on soon. The arguments were some of the last the Court heard in person in March. Kelley wonders what might happen if the Court rules against abortion rights, and the world, exhausted by crises, "shrugs." New York Times
- Journey to Juneteenth. Nicole Beharie is the star of the new movie Miss Juneteenth. Six years ago, she was a lead on the CW TV show Sleepy Hollow; she became seriously ill and struggled to secure appropriate accommodations at work. In the years that followed, she said that she was labeled "difficult" and again struggled to get work. She reflects on her career and the meaning of her new film: New York Times
- All around. Netflix this week will premiere Athlete A, a new documentary about the gymnasts abused by doctor Larry Nassar. In other gymnastics news, Simone Biles debuted the triple-double dismount, a move that's never been seen before. And 17-year-old gymnast Sunisa Lee was on the verge of taking the Tokyo Olympics by storm; now, she's waiting for her moment.
ON MY RADAR
'She loved who she was becoming': Breonna Taylor and a family’s fight for justice The Ringer
'Who will protect you from rape without police?' Here's my answer to that question Guardian
Vice Media launches probe into Refinery29's toxic work environment CNN
PARTING WORDS
"I don’t know what’s ahead. For now, it will be Netflix, reading, and sleep."
-Malala Yousafzai on graduating from Oxford University


fortune--2020-06-23--Bill Cosby granted an appeal in Pennsylvania sexual assault case

How the struggle to get a flight refund helped grow this buzzy ‘ robot lawyer ’

In a stunning decision that could test the legal framework of #MeToo cases, comedian Bill Cosby has won the right to fight his 2018 sexual assault conviction in the Pennsylvania Supreme Court.
The 82-year-old Cosby has been imprisoned in suburban Philadelphia for nearly two years after a jury convicted him of drugging and sexually assaulting a woman at his home in 2004. He’s serving a three- to 10-year sentence.
The Supreme Court has agreed to review two aspects of the case, including the judge’s decision to let prosecutors call five other accusers to testify about long-ago encounters with the once-powerful actor and comedian. Cosby’s lawyers have long challenged that testimony as remote and unreliable. The court will also consider, as it weighs the scope of the testimony allowed, whether the jury should have heard evidence that Cosby had given quaaludes to women in the past.
Secondly, the court will examine Cosby’s argument that he had an agreement with a former prosecutor that he would never be charged in the case. Cosby has said he relied on that agreement before agreeing to testify in the trial accuser’s civil lawsuit.
Those issues have been at the heart of the case since Cosby was charged in December 2015, days before the 12-year state of limitations expired. Prosecutors in Montgomery County had reopened the case that year after The Associated Press fought to unseal portions of Cosby’s decade-old deposition testimony in accuser Andrea Constand’s sex assault and defamation lawsuit against Cosby, which he had settled in 2006.
Dozens of other accusers had come forward since then to accuse Cosby, long beloved as “America’s Dad” because of his hit 1980s sitcom, of similar misconduct. Montgomery County Judge Stephen O’Neill allowed just one of them to testify at Cosby’s first trial in 2017, which ended with an acquittal.
But a year later, after the #MeToo movement exploded in the wake of reporting on Hollywood mogul Harvey Weinstein, the judge allowed five other accusers to testify at the retrial. The jury convicted Cosby on all three felony sex-assault counts.
Lawyer Brian W. Perry argued in the appeal that letting other accusers testify “flips constitutional jurisprudence on its head, and the ‘presumption of guilt,’ rather than the presumption of innocence, becomes the premise.”
Spokesman Andrew Wyatt said Cosby was “extremely thankful” the court would hear the case. He said the decision comes as demonstrators across the nation protest the death of Black people at the hands of police and expose the “corruption that lies within the criminal justice system.”
“As we have all stated, the false conviction of Bill Cosby is so much bigger than him — it’s about the destruction of ALL Black people and people of color in America,” Wyatt said in a statement.
Cosby’s lawyers also challenged his classification as a sexually violent predator subject to lifetime supervision. The actor, who insists he had a consensual encounter with accuser Constand, has said he would never express remorse to the parole board.
The Associated Press typically does not name people who say they have been victims of sexual assault without their permission, which Constand has granted.


fortune--2020-06-23--When cities go bankrupt, it’s Black lives at risk

Each week as the unemployment numbers roll and the economic slide deepens, it becomes clearer that without significant funds from the federal government, cities and states are likely to face massive shortfalls, some even failing to make payroll and pay bills or defaulting on debt.
Everyone will be affected by the economic fallout of the COVID-19 crisis. But history tells us that Black Americans will feel the pain more deeply and for a much longer period.
When state revenues plummet, we can expect to see immediate cuts to essential programs like public education, senior services, transportation, and food assistance. And because cities don’t have the same taxing authority or tax base as states, to make up the budget shortfall municipalities are highly likely to increase fines and fees for routine services such as parking, loitering, and traffic violations.
I saw this firsthand in Ferguson, Mo., in 2014 after a police officer killed Michael Brown. Protests following the shooting were not only calling for justice to stop police brutality, but also to stop police targeting of the Black community in Ferguson to collect fees to fund the city’s budget. As organizers working with the group Communities Creating Opportunity, my colleagues and I went door-to-door hearing from Black folks who were fined for missing court because they couldn’t miss a day of work, or fined for driving with expired tags because people had to choose between paying for the renewal or making rent. We even met one Black mother who was fined for having a flat tire on a car parked in her driveway.
In fact, Ferguson had only 21,000 residents but raised $2 million per year in fines, earning the city the dubious ranking among the top municipalities in the St. Louis metro area for raising revenue. On almost every fine, Ferguson had higher rates than all surrounding municipalities. For example, an adjacent town charged $5 for a tall-grass violation, while Ferguson charged $77 for the same “offense.” Without fail, Black residents were systematically targeted and fined. When they could not pay, warrants were issued for their arrest, resulting in an even higher financial burden.
A civil rights investigation by the Justice Department found that in order to fund the city government, the Ferguson police department was pressured to write as many citations as possible, charging excessive fees that would lead to jail time if they could not be paid. It showed that in 2015, Ferguson budgeted 23% of its revenue from fines and fees. It also found that from 2012 to 2014, 85% of those stopped, 90% of those who received a citation, and 93% of those arrested were Black, even though Black people make up 67% of Ferguson’s population.
Ferguson is hardly an outlier when it comes to cities trying to raise revenue by exploiting poor Black residents. In fact, the jurisdictions that try to fill state budget gaps by raising fines and fees have Black populations five times greater than the national average. A 2017 study of 9,000 cities in the U.S. found that even after controlling for differences in income, education, and crime levels, cities with larger African-American populations collected an average of $12 to $19 more per person per year than those with the smallest number of Black residents.
In addition to the economic hardship this puts on already struggling families, it is the increased interactions with police issuing these citations that most concerns me. When police pile on fees that people cannot afford to pay and then seek them out to be detained, they create countless opportunities for confrontation.
In the last few weeks, we have had to confront the reality that our community is disproportionately impacted by the coronavirus while at the same time reeling from images of Black women and men being viciously killed at the hands of the police and white vigilantes.
Breonna Taylor. Ahmaud Arbery. George Floyd. And countless others.
States are already struggling and will continue to struggle to fill the massive hole in their budgets brought on by a pandemic-induced economic downturn. Following the killing of George Floyd, for which one police officer now faces charges of murder and three more face charges for aiding and abetting murder, representatives in the House and Senate are starting to realize that the problem with policing in Black communities is tied to systemic racism. But is also connected to historic economic disparities. If they are serious about justice in policing, they must pass immediate economic relief for states and cities and funnel funds directly into Black and Brown communities who bear the brunt of the impact.
The House has passed the HEROES Act—a $3 trillion investment that protects the workers and families who were previously excluded from COVID assistance and would help bolster state budgets, including $375 billion for localities. But Senate Majority Leader Mitch McConnell is blocking any path that legislation might have in the Senate. Instead, he’s openly welcomed states to go bankrupt and is focused on corporate immunity in any relief bills.
If state budgets continue to plummet and cities go bankrupt, the impact on Black communities will be immediate and long-lasting. If Congress wants to show that they truly care for Black lives, they must pass this relief package before it is too late.
Seft Hunter is the director of Black-led organizing and power building at Community Change, a social justice organization that builds the power of low-income people, especially low-income people of color.


fortune--2020-06-23--Tesla, Google, and Chamber of Commerce CEOs among business leaders slamming Trump’s visa ban

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President Trump’s executive order on Monday temporarily suspending many new work visas until the end of 2020 and preventing hundreds of thousands of foreign workers from seeking U.S. jobs was met with consternation by many business leaders, particularly in the tech industry.
Tesla and SpaceX founder and CEO Elon Musk, originally from South Africa and someone Trump has openly admired, took to Twitter on Monday night to lament the administration’s move, saying, “Very much disagree with this action. In my experience, these skillsets are net job creators. Visa reform makes sense, but this is too broad.”
The order takes aim at a number of work permits, including the H-1B visa, which allows skilled workers such as computer programmers to work in the U.S. for a renewable three-year stint that can serve as a springboard to permanent residency.
In a statement, Trump said that the ban stems from the government’s “moral duty to create an immigration system that protects the lives and jobs of our citizens.” But tech luminaries, many of whom are immigrants or children of immigrants themselves, disagreed, arguing that foreign workers are key to American prosperity.
Microsoft president Brad Smith tweeted, “Now is not the time to cut our nation off from the world’s talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country’s critical infrastructure. They are contributing to this country at a time when we need them most.”
This is not the first time Microsoft—whose CEO, Satya Nadella, is an immigrant from India—has dealt with limits in bringing in qualified workers to the U.S. In 2007, the company opened a massive new facility in Vancouver, two hours north of its headquarters near Seattle, to take advantage of Canada’s more favorable immigration laws for skilled workers.
On Tuesday morning, Shopify CEO Tobi Lütke, a German immigrant to Canada, tweeted out an invitation to tech workers wanting to immigrate to the U.S. to think about Canada instead, where the e-commerce powerhouse is based.
If this affects your plans consider coming to Canada 🇨🇦 instead. Shopify is hiring all over the world and we have lots of experience helping with relocation. Let us know at https://t.co/dmzfp4EwB9 https://t.co/yUUjoEt9gp — Tobi Lutke 🌳🌲🛒🕹 (@tobi) June 23, 2020
Some CEOs spoke in personal terms. Susan Wojcicki, chief of Alphabet’s YouTube division, said on Twitter: “Immigration is central to America’s story, and it’s central to my own family’s story. My family escaped danger and found a new home in America…At YouTube, we join Google in standing with immigrants and working to expand opportunity for all.”
Other large companies to lament the order include Amazon, Twitter, Google, and Box.
Amazon argued that the order hurts the U.S. at a time when there is global competition for talent and many jobs are going unfilled. “Preventing high-skilled professionals from entering the country and contributing to America’s economic recovery puts America’s global competitiveness at risk,” Amazon tweeted from its Amazon Public Policy account.
The broader business community also expressed its reservations. “Putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses, and other workers won’t help our country, it will hold us back,” said U.S. Chamber of Commerce CEO Thomas Donohue.
The order, which also targets seasonal workers in the hospitality industry, students on work/study summer programs, and au pairs, could affect hundreds of thousands of people. It would also hinder multinational companies from transferring employees to the U.S. even for temporary assignments.
This is also not the first immigration issue on which the Trump administration and Big Business have disagreed recently. Last week, when the Supreme Court ruled against the Trump administration’s challenge to the DACA program, which allowed noncitizens brought to this country illegally as children to apply for protection from deportation, Walmart praised the decision, saying such people “are an important part of our team and help make us a better, stronger company.”


fortune--2020-06-23--Why the C-Suite is now overseeing corporate A.I. projects

Top executives now oversee most artificial intelligence projects, underscoring the importance C-suite managers place on A.I. for their companies.
In a survey of companies released Tuesday about the state of A.I. in business, 71% of respondents said that their company’s A.I. projects were “owned” by C-level executives, which include the likes of CEOs, chief financial officers, and chief technology officers. It’s a big jump from last year’s survey, conducted by the data training and annotation firm Appen, that found that the C-suite oversaw 39% of A.I. projects.
Appen CTO Wilson Pang told Fortune that the findings, based on responses from nearly 370 companies, highlight a “pretty significant change” for businesses that are pursuing machine-learning projects for tasks like forecasting sales and developing more powerful products.
Pang said that top-level executives are increasingly spearheading A.I. projects because these undertakings are so encompassing, involving numerous corporate departments like finance and data analysis to work together. It’s typically the C-suite leaders who have the clout and resources to create the so-called “cross-functional teams” that can “map the business problems to an A.I. project,” Pang said.
Dell Technologies CTO John Roese, who was not involved with the Appen survey, told Fortune that, anecdotally over the past year-and-a-half, he’s noticed that more C-level executives are leading corporate A.I. projects instead of lower-level management or lone IT departments. As machine learning has becoming more prominent at businesses, Roese has also seen that executives are becoming increasingly familiar with A.I. jargon and obscure A.I. lingo.
Roese credits the Google-created TensorFlow software, used in deep learning projects, as helping popularize A.I. to the executive world. While TensorFlow was once perceived as “mad science,” it’s “no longer some weird thing,” Roese said.
But just because corporate executives know what the words “natural-language processing” refers to (it means computers that understand language, in case you were wondering), that doesn’t mean they know how A.I. systems actually work or how they fail.
Appen’s survey, for instance, also revealed that executives and technologists differ in what they consider to be the biggest bottlenecks to their A.I. projects. Although technologists and executives both agree that lack of talent is the top hurdle, the survey showed that technologists are more likely to perceive low-quality data and poor information management techniques as hurting A.I. projects.
Technologists, it appears, are more familiar with the adage, “garbage in, garbage out,” referring to the notion that good analysis requires good data. Pang said that many corporate executives believe that once they train their machine learning models, “they think it’s done.”
“In reality, most A.I. models are never done,” Pang said. “Data is never enough there.”
Jonathan Vanian
@JonathanVanian
jonathan.vanian@fortune.com
A.I. IN THE NEWS
What comes next? While Microsoft and Amazon have temporarily halted their practice of selling facial recognition technologies to law enforcement, there are still many facets of the controversial technology that the companies are not addressing, Bloomberg News reported. The article details the companies’ lack of transparency regarding definitions of “law enforcement,” which could mean local or federal enforcement agencies, how they can ensure that police departments don’t use their facial-recognition services through existing municipal government contracts, and other technologies besides facial recognition that can “enable police surveillance,” like Amazon’s Ring security products. Ring, Bloomberg reports, “runs a program that lets police departments and other law enforcement agencies—some 1,300 and counting—request footage from users.”
Facebook A.I. leader on facial recognition. Facebook vice president and chief A.I. scientist Yann LeCun wrote about facial recognition technology in the aftermath of companies like Amazon and IBM altering their policies of selling the technology to law enforcement as protests against police bias take place across the world after the killing of black Minneapolis resident George Floyd by a white police officer while in custody. “I applaud Amazon and IBM for stopping to offer face recognition in their cloud services,” LeCun wrote. “I applaud Google even more for having decided against it in the first place. Large-scale facerec should not be made available to everyone.”
LeCun said that he did not realize until 2014 that the deep learning technology of convolutional neural networks “could be used effectively for face detection.” He said that while the technology could be used to “save lives,” it's also used by some authoritarian governments to spy on their people and to control protest movements.” He added: “Sadly, it's also used by less-authoritarian government under the pretext of crime prevention.”
Facebook goes big on maps. Facebook bought the mapping tech startup Mapillary, but did not disclose how much it paid for. Mapillary CEO wrote in a blog post Jan Erik Solem that his startup will be part of the social networking giant’s “open mapping efforts.” “As some of you know, Facebook is building tools and technology to improve maps through a combination of machine learning, satellite imagery and partnerships with mapping communities, as part of their mission to bring the world closer together,” Solem wrote. Mapillary was involved with some self-driving car technology projects, and while it was one a promising European tech startup, it’s now part of a U.S. tech giant.
The Pentagon wants to bulk up on A.I. Lawmakers including senator Rob Portman from Ohio have introduced the Artificial Intelligence for the Armed Forces Act, intended to boost the number of Pentagon A.I. experts, among other measures, Nextgov reported. “This bipartisan legislation builds on the Commission’s efforts to strengthen the AI capabilities of our military by enabling the increased hiring of AI and cyber professionals,” Portman said in a statement.
Leading A.I. event, now online. The Neural Information Processing Systems Foundation Board said its upcoming NeurIPS 2020 conference will be an entirely virtual event, highlighting how many in-person conferences are moving online due to the coronavirus pandemic. NeurIPS is one of the most popular A.I. conferences where leading researchers present their most impactful A.I. papers and many businesses try to recruit data scientists. Eye on A.I.’s Jeremy Kahn previously reported about CognitionX, which hosts “one of the world’s largest annual gatherings devoted to the impact of artificial intelligence,” going totally virtual.
EYE ON A.I. TALENT
Databricks hired Swee Lim to be the data specialist’s vice president of architecture, Databricks CEO Ali Ghodsi told Fortune during an interview. Lim was previously a vice president at LinkedIn, where he was also the professional networking service’s “only distinguished engineer,” Ghodsi said. Lim will play a major role in spearheading Databricks’s technology initiatives and he will report to Ghodsi.
Ghodsi said that LinkedIn executives like former CEO Jeff Weiner hired Lim when a lot of LinkedIn’s internal technology was powered by pretty much “one data center.” Lim was also the chief architect of Yahoo! search technology and a distinguished engineer at Sun Microsystems.
In 2013, University of California, Berkeley computer scientists including Ghodsi created Databricks to make a business around their creation, the open-source Spark data processing service. Since then, Databricks, has expanded from Spark, and now works on various data management, analytics, and machine learning services.
‘EARLY DAYS’ FOR A.I. ON THE EDGE
Despite heavy marketing from tech companies about the benefits of using machine learning for so-called edge computing, generally referring to processing data where the data is generated versus in a data center, many hurdles still remain. In a webinar hosted by former Fortune editor Stacey Higginbotham and her Internet-of-things news site, Shell’s general manager of data science Dan Jeavons explained the numerous challenges of using machine learning techniques at the “edge.” Jeavons said:
“Just being able to manage thousands of models is a real logistical headache. And it’s something that we’ve been trying to figure out,” he said. “If you add to that thousands of models running in thousands of edge devices where latency may be a problem, how do you manage those sorts of logistics? And how do you maintain that at scale?”
EYE ON A.I. RESEARCH
Some A.I. research isn't as game-changing as it claims. Peer-reviewed academic journal Science published a post that’s a helpful overview of some of the problems in current A.I. research, such as many technologists making profound claims that can’t be verified. As Science explains, many researchers are merely making “tweaks” to various deep-learning systems rather than producing game-changing technologies. Massachusetts Institute of Technology computer scientist professor John Gutta explains in Science:
Guttag says there’s also a disincentive for inventors of an algorithm to thoroughly compare its performance with others—only to find that their breakthrough is not what they thought it was. “There’s a risk to comparing too carefully.” It’s also hard work: AI researchers use different data sets, tuning methods, performance metrics, and baselines. “It’s just not really feasible to do all the apples-to-apples comparisons.”
A.I. still doesn't know what to do with nonwhite people in images. A paper published by researchers from Duke University about using neural networks to upsample and improve low-resolution photos has inadvertently started new conversations within the A.I. community about bias in deep learning systems. When the deep learning system attempts to upscale photos of people of color, including former president Barack Obama and U.S. representative Alexandria Ocasio-Cortez, it converts their faces into visages that resemble Caucasians, underscoring the likelihood that the datasets used to train the system weren't diverse, among other potential issues.
FORTUNE ON A.I.
Honeywell claims to have created the world’s most powerful quantum computer—By Robert Hackett
How Google and Facebook’s 8,000-mile undersea data cable got caught in U.S.-China feud—By Naomi Xu Elegant
The insurance case that helped end the slave trade—By Jeremy Kahn
Apple debuts Translate app at WWDC2020—By Jonathan Vanian
BRAIN FOOD
Intelligenza artificiale. The Brookings Institution think tank is producing a series of articles covering A.I. governance and policy. In one recently published piece from the series, Brookings experts examine the A.I. policies and plans of several countries and found Italy to have "the most comprehensive plan," followed by France, Germany, New Zealand, and the United States.
From the piece:
As we reviewed the contents of the plans, it was striking to see that the most common elements covered data management, capacity-building programs, and governance dilemmas. The need to address privacy and data-usage regulations regarding the design, deployment, and utilization of AI systems was a common theme.
Governments recognized that they have an important role to play in building platforms and programs that support data sharing between the public sector and external stakeholders to speed up AI innovation.
Bye, Baidu. Wired published an article about Chinese search giant Baidu leaving the tech consortium Partnership on A.I. (PAI), underscoring political tensions between the U.S. and China about A.I.
Baidu was the lone Chinese tech company involved with the PAI, which includes members like Apple, Google, Microsoft, and IBM. While both Baidu and PAI downplayed the significance of Baidu’s departure in public statements,Wired noted that “the withdrawal coincides with increasing criticism of Chinese AI companies, and a more hostile attitude in Washington."


fortune--2020-06-23--How the struggle to get a flight refund helped grow this buzzy ‘robot lawyer’

Why the C-Suite is now overseeing corporate A.I .
projects

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Tried to cancel a flight in the past couple of months? The customer service was no doubt a nightmare.
Look to your right. Now look to your virtual left. Yours is an experience shared by many, if not most, as the pandemic has upended routines and left a spate of unwanted gym memberships, boarding passes, and concert tickets in its wake.
The struggle of getting a full refund has translated into growth for DoNotPay, the buzzy “robot lawyer” that, for a $3 a month subscription, helps customers parse through legalese to win refunds for cancelled flights or break up with their nearest sports club.
DoNotPay announced today that investors led by Coatue Management closed on a $12 million Series A round in a mere two weeks over Zoom. Other investors including Andreessen Horowitz, Founders Fund, Felicis Ventures, and Day One Ventures participated, valuing the startup at about $80 million.
At its core, DoNotPay uses bots, hinging on the standardization of terms and conditions as well as laws, to send emails and letters to companies or government bureaus on behalf of the consumer, allowing it to expand into data privacy, robocallers, and even medical bills. The company has seen its user base surge several fold, from 10,000 to 20,000 subscribers before the coronavirus to over 50,000, says CEO and founder Joshua Browder.
As I wrote in my report on its Series A round, DoNotPay arbitrages the disconnect between what consumers know about their legal rights (often very little), and what companies tell them (sometimes even less). One example: Airline travelers complained early on about receiving vouchers instead of full refunds when the pandemic grounded flights indefinitely. Citing rules from the Department of Transportation that require airlines to issue refunds on nonrefundable fares, even in the event of a delay, DoNotPay sends messages via bots directly to the airline calling for full repayments.
Investors are betting the company’s fortunes will last beyond the pandemic: “There will always be consumer problems in the world for DoNotPay to solve,” says Matt Mazzeo, partner at Coatue. Read my full story here.
A SPAC whale: Hedge fund titan Bill Ackman is raising the largest SPAC, or special acquisition purpose company, ever. As a reminder, so-called SPACs raise proceeds through an IPO to acquire another company, with the amount raised representing a fraction of the actual value of the acquired company. Ackman’s Pershing Square Tontine Holdings could raise as much as $6.5 billion, according to a filing with the Securities and Exchange Commission.
Which… leaves a pretty small universe of companies it could try to take public. The company’s filing cites some potential candidates. Specifically, it points to “large, high-quality, private family-owned companies” and “private equity portfolio companies” whose cash flows have been negatively impacted by the coronavirus. Perhaps the most interesting of all is that the filing also cites “mature unicorns” as a potential target. Ackman is known for investing in profitable companies. This also isn’t his first blank check rodeo: Pershing Square a co-sponsor of Justice Holdings, a SPAC that acquired Burger King for $1.4 billion in cash in 2012.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Indigo Ag, a Boston-based agtech startup, raised $300 million in Series F funding, per Axios. Investors include Riverstone Holdings,Flagship Pioneering, and Alaska Permanent Fund. Read more.
- Cedar, a New York-based patient engagement and financial technology company, raised $77 million in Series C funding. Andreessen Horowitz led the round. JP Morgan also provided $25 million in debt. Read more.
- Swile, a French-based employee rewards and benefits company, raised €70 million in Series C funding. Index Ventures led the round and was joined by investors including Bpifrance and Idinvest.
- Somatus, a McLean, Va.-based kidney care company, raised $64 million in Series C funding. Longitude Capital led the round and was joined by investors including Optum Ventures, Deerfield Management Company, Blue Venture Fund, Flare Capital, and Town Hall Ventures.
- Canva, a Sydney-based design platform, raised $60 million in funding valuing it at $6 billion. Investors included Bond, General Catalyst, Sequoia Capital China, Felicis Ventures and Blackbird Ventures .
- Immuta, a Maryland-based data privacy startup, raised $40 million in Series C funding. Intel Capital led the round. Read more.
- BrightInsight, a San Jose, Calif.-based provider of a digital health platform for biopharma and medtech, raised $40 million in Series B funding. Insight Partners led the round and was joined by investors including New Leaf Venture Partners and Eclipse Ventures.
- Cazoo, a U.K.-based used car platform, raised £25 million in funding, valuing the firm at over $1 billion. Investors include Draper Esprit, DMG Ventures, and General Catalyst.
- Rasa Technologies, a San Francisco and Berlin-based maker of an infrastructure layer for conversational AI, raised $26 million in Series B funding. Andreessen Horowitz led the round and was joined by investors including the firm’s Cultural Leadership Fund, Accel, 468 Capital, Basis Set Ventures, and Mango Capital.
- Nylas, a San Francisco-based provider of communications APIs for developers, raised $25 million in Series B funding. 8VC and Round13 Capital led the round and was joined by investors including Spark Capital, ScaleUP, and Slack Fund.
- EasyKnock, a New York-based residential sale-leaseback company, raised $20 million in funding. Blumberg Capital and QED Investors co-led the round and were joined by investors including FJ Labs, Correlation, Moderne, 7BC and Interplay.
- Foldax, a Salt Lake City, Ut.-based heart valve maker, raised $20 million in Series D funding.
MemorialCare Innovation Fund led the round, with Angel Physicians Fund and Sayan Bioventures joining as new investors.
- Third Wave Automation, a Union City, Calif.-based machine learning and robotics company, raised $15 million in Series A funding. Innovation Endeavors led the round and was joined by investors including Eclipse Ventures, Homebrew VC, Toyota AI Ventures, and Heartland VC.
- Urjanet, an Atlanta-based utility account aggregator, raised $14.7 million in Series D funding. Investors include Equifax, Oak HC/FT, Pete Kight, Grotech Ventures and Correlation Ventures.
- Celsius Network, London-based interest earning platform, raised $10 million in funding from Tether.
- Quidnet Energy, a Houston-based company storing water beneath ground under pressure, raised $10 million in Series B funding. Investors include Breakthrough Energy Ventures, Evok Innovations, Trafigura, and The Jeremy and Hannelore Grantham Environmental Trust.
- Armored Things, a Boston-based crowd intelligence software company, raised $7 million in additional seed funding. Will Ventures led the round and was joined by investors including Splunk, Glasswing Ventures, iNovia, and MassVentures.
- optimize.health, a Seattle-based healthcare platform for provider reimbursements, raised $3.5 million in seed funding from Bonfire Ventures.
- Todyl, a Denver, Colo.-based security, networking and compliance company for distributed workforces, raised $2.3 million in seed funding. Investors include TechOperators and Blu Venture Investors.
- Heka, a London-based employee benefits provider formerly known as GoSweat, raised £1 million ($1.3 million) in pre-seed funding. Playfair Capital led the round.
- Barion Payment, a Budapest-based payments firm, raised €2 million ($2.3 million). Financial Services Capital invested.
PRIVATE EQUITY
- Varsity Brands, a Dallas-based sports retailer backed by Bain Capital, raised $185 million from new and existing investors.
- MHC Software, backed by Strattam Capital, acquired Ecrion Software, a Rockville, Maryland-based customer automation platform. Financial terms weren't disclosed.
- Intermediate Capital Group took a minority stake in Workhuman, a Framingham, Mass. and Dublin-based social recognition and performance management platform. The transaction values Workhuman at $1.2 billion.
- Appfire, backed by SilverSmith Capital, acquired Botron Software, a Bulgaria-based provider of tools for configuration management within Jira. Financial terms weren't disclosed.
- PDFTron Systems, backed by Silversmith Capital, acquired ActivePDF, a California-based provider of server-side PDF automation components. Financial terms weren't disclosed.
- Redwire, backed by AE Industrial Partners, acquired Made In Space, a Jacksonville, Fla.-based provider of space manufacturing technologies. Financial terms weren't disclosed.
OTHERS
- Invitae (NYSE: NVTA) acquired and ArcherDX, a Boulder, Colo.-based genomics analysis company for up to $1.4 billion. ArcherDX previously filed for an IPO.
- SoftBank Group is unloading part of its stake in T-Mobile U.S., the wireless carrier, in a $21 billion deal. Read more.
IPOS
- nCino, a Wilmington, Mass.-based cloud-based software for financial institutions, filed to raise $100 million. It posted revenue of $138.2 million in the year ending Jan. 2020, and a loss of $27.6 million. Investors include Insight Partners (46.6% pre-offering), Salesforce (13.2%), and Wellington Management (9.5%). It plans to list on the Nasdaq as “NCNO.” Read more.
- F45 Training, a provider of group fitness classes backed by Mark Wahlberg, is in talks to go public by merging with SPAC Crescent Acquisition Corp., per Bloomberg. The company is expected to be valued at under $1 billion. Read more.
- Allegro, a Polish online auction site, is preparing for an IPO later this year that could value the business at about 10 billion euros ($11.2 billion), per Bloomberg. Cinven, Permira, and Mid Europa Partners back the firm. Read more.
EXITS
- Microsoft (MSFT: NASDAQ), acquired CyberX, a Boston, Mass.-based IoT security company. CyberX investors included Norwest Venture Partners and Qualcomm Ventures. Financial terms weren't disclosed.
- ServiceNow (NYSE: NOW) agreed to acquire Sweagle, a Belgium‑based configuration data management company. Sweagle investors included xAnge Private Equity. Financial terms weren't disclosed.
- Lightyear Capital agreed to acquire an indirect controlling stake in Health Plan One, an online marketplace for Medicare insurance. from Peloton Equity and other individual investors. Financial terms weren't disclosed.
F+FS
- Omega Venture Partners plans to raise $100 million for its first fund. Read more.


fortune--2020-06-23--‘Everything is expensive’ rally drives stocks to record valuations

Three months to the day after the sharpest selloff in history, Wall Street is freaking out about valuations once more.
Bank of America Corp. clients are sounding the alarm on stock prices like never before, even as they sink cash into the market in droves. Bears are finding new reasons to bristle at soaring price-to-earnings ratios, while vanishing credit premiums belie default risk in the grip of the economic downturn.
“Everything is expensive,” wrote Chris Watling, chief market strategist at Longview Economics, in a recent note. “80% of the markets we track have a valuation in the upper quartile relative to the market’s history — the greatest percentage on record using data since the mid-1990s.”
Bulls can hit back with more reasonable interpretations of multiples, often relative to other asset classes.
Yet while renewed signs of global growth could push multiples even higher, strategists at Goldman Sachs Group Inc. including Christian Mueller-Glissmann concede that “elevated valuations will likely become a speed limit for returns again.” The question is, just when will fundamental thresholds get breached?
Here are some of the measures investors are debating.
Dotcom Deja Vu
After a more than 40% climb in stocks from the trough of the coronavirus-driven slump in March, global equity valuations have surged to their highest since the dotcom bubble of the new millennium.
The MSCI AC World Index is trading close to a commanding 20 times forward estimates for the next year, according to data compiled by Bloomberg.
U.S. Premium
While valuation concerns are not limited to the world’s biggest stock market, multiples in the U.S. are getting the bulk of the attention.
For good reason. If you slice and dice equal-weight gauges of the S&P 500 and MSCI World Indexes, the premium for an “average” U.S. share surged to the highest in at least a decade after the peak of the coronavirus outbreak. It has yet to come back to its historical range.
History Lesson
There’s no need to reignite old arguments over the use of Yale professor Robert Shiller’s cyclically adjusted price-to-earnings ratio — the newer debate is over how to interpret it. Bears would point to the gauge of U.S. stock prices relative to 10-year average earnings as being at levels synonymous with the dotcom bubble and roaring ‘20s. Bulls would note the measure is well off peak levels from 20 years ago.
Money Supply
Given the truly unprecedented level of monetary policy support fueling financial markets, some commentators have suggested traders should heed different measures to value equities to incorporate central bank largesse. Tom McClellan, editor of the McClellan Market Report, chooses to look at U.S. stocks relative to the level of money supply — M2. Broadening this approach to include the increase of such a measure in Europe and Japan shows global stock valuations are bang on their average of the last 18 years.
Versus Bonds
This year’s risk-asset sell-off and rush to havens saw a surge in the spread of global dividend yields to benchmark Treasuries, a closely watched gauge for income investors. But that was before a spate of dividend cuts as companies sought to bolster their balance sheets to deal with the impact of the pandemic. Now that analysts have had time to adjust their dividend expectations, the measure of attractiveness of global equities over Treasuries has fallen back, but remains at levels favorable to stock bulls.
Versus Credit
Comparing the world’s stocks to their credit cousins suggests valuations are more or less back to normal. The spread between the yield-to-worst on the Bloomberg Barclays Global High Yield Index and the dividend yield on the MSCI AC World Index, which soared at the height of the crisis, has retreated to just above its average of the last ten years.
(Adds credit market context in second paragraph)


fortune--2020-06-23--The top tech stock during the pandemic isn’t the one you think it is

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Some of the most interesting new products arise when a popular solution hits a wall. When early search engines stumbled trying to order millions of results, Google’s PageRank leapfrogged ahead. When the web got too big and too complicated to curate by hand, algorithm-driven search engines took over.
Now the same type of pattern may be playing out in how web sites distribute content, especially when that content is lively and changing.
About 10 years ago, Artur Bergman was a typical web developer with a problem. He worked at Wikia, a company that helped customers set up Wikipedia-like pages that could be edited from anywhere. But when lots of people tried to edit a page at the same time, the site could bog down, or worse, serve people different versions of the same page. He asked existing services for a solution, but they all told him that distributing the kind of interactive pages he had was “impossible.”
Bergman likes a challenge (he once said that the limits of the speed of light pissed him off). He crafted his own solution and started a company called Fastly, where he currently serves as the chief architect after stepping down as CEO earlier this year.
Fastly offers a new type of content distribution system that is more dynamic and programable. It’s attracted the likes of the New York Times, Spotify, and Ticketmaster as customers. It’s also working for huge e-commerce sites like Wayfair and Shopify and a certain messaging app we all use called Slack. (And the company gives away its services to open-source software projects and other nonprofits.)
Which bring us to today’s headline. Fastly’s next-generation Internet plumbing system is just what the Internet needed during the COVID-19 pandemic. And with a 15% gain in its stock price on Monday, Fastly surpassed Zoom to become the best performing tech stock during the pandemic, with a cumulative gain of 222%. Lowly old Zoom is up a mere 159%. Valued at almost $8 billion with expected sales this year of under $300 million, Fastly is no bargain, but it’s also at the forefront of a gigantic opportunity as the web grows.
Also on Monday, Apple pulled off a jam-packed WWDC keynote filled with new features coming to all its popular devices. Much of the headline news, like the shift off of Intel chips, had been leaked in advance, but there were a few surprises:
Frankly, I’m just glad that, after five years, we’re finally getting a choice of alarm sounds on the Apple Watch. Finally, it was noteworthy that some prior priorities didn’t get much or any airtime, like augmented reality, Apple Pay, and SwiftUI. Maybe next year?
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Fintech prison blues. The next twist in the saga of German payments company Wirecard's missing $2 billion: former CEO Markus Braun was arrested in Munich. As one lawyer told Bloomberg about Braun, who resigned last week, "You should know what happened to 1.9 billion euros of assets you have listed in your books.”
Reverse brain drain. Tech companies including Facebook, Amazon, and Microsoft protested President Trump's move on Monday to suspend granting work visas for the rest of the year. The freeze includes the H1-B program that tech companies rely on for filling high-skilled positions. Apple CEO Tim Cook tweeted his opposition today. In other political developments, Google workers have started a petition asking the company to stop working with law enforcement agencies.
Cancel culture. It's easy to say you're going to take on Amazon but it's not so easy to do so. Microsoft threw in the towel on Monday, closing its video game streaming service Mixer that competed against Amazon's popular Twitch service. "We weren’t achieving the scale goals that we had on our own,” Xbox boss Phil Spencer said.
Some cabbage to save the planet. Speaking of Jeff Bezos' world, the CEO says his company is starting a new $2 billion effort dubbed The Climate Pledge Fund to back innovative technologies that can help the environment. The goal is to help Amazon and others reach a "net zero" carbon footprint by 2040.
Gordon's alive. There's a new king of the supercomputer standings, though the crown may not rest on it for too long. The Fugaku computer at Japan's RIKEN Center for Computational Science can calculate almost 416 petaflops, or quadrillion floating point operations per second, knocking the IBM-built Summit computer at the Oak Ridge National Laboratory to second place. Fugaku was built with ARM chips from Fujitsu. But several exaflop computers, which will exceed one quintillion operations per second, are already under construction that rely on chips from AMD and Intel.
FOOD FOR THOUGHT
Tracy Young co-founded PlanGrid, a construction software startup, in 2011 and was CEO until selling to Autodesk in 2018. She's written a must-read post this week about her experience of being a female founder and startup CEO, including what it was like being pregnant at the helm.
I went into labor the same night of our first user conference. The weeks leading up to the conference, watching our whole company burn late night candles in preparation for our new product unveiling, I wondered how many male CEOs would skip their conference for the birth of their child? I assume most would. I kept reasoning with myself that if I wasn’t pregnant, there would be no question whether I’d be there or not, so I must be there. Forcing myself to parade my 9-month pregnancy, deliver the keynote, support our team, and work the halls as the host, was my way of feeling like a superwoman, which was mostly about rubbing my own ego. I arrived home around 8pm that evening, and my water broke immediately. I would hear my son’s first cry 32-hours later.
ON THE MOVE
With T-Mobile's longtime CFO Braxton Carter retiring, the wireless carrier named Peter Osvaldik as his replacement. Osvaldik joined T-Mobile in 2016 after a decade at PricewaterhouseCoopers and several other stops...Apple’s head of diversity and inclusion, Christie Smith, is leaving the company. No replacement has been named yet...Twitter hired former FBI general counsel James Baker as deputy general counsel...Fiona Carter, AT&T’s chief brand and advertising officer, is leaving the company at the end of the week after five years in the role.
IN CASE YOU MISSED IT
Google’s annual ad sales are expected to decline for first time in 16 years By Danielle Abril
Apple debuts Translate app at WWDC 2020 By Jonathan Vanian
Peloton stock races higher on bullish calls of ‘holiday-like’ demand By Anne Sraders
The Coronavirus Economy: The beauty app connecting salons and barbershops with independent stylists By Rachel King
Trump told Treasury secretary, ‘Go after Bitcoin,’ according to John Bolton’s new book By Jeff John Roberts
He ran Google’s advertising arm. Now he’s building a search engine that cuts out ads By Lucinda Shen
How Ben & Jerry’s activist history allows it to call out white supremacy and police brutality By Beth Kowitt
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
If you're in need of a little bit of visual or mental inspiration, may I suggest the Messy Nessy web site, which bills itself as a "cabinet of chic curiosities"? Yesterday's post of the daily "13 Things I found on the Internet today" feature included some mind-bending architecture images, story quilts by artist Faith Ringgold, and the typeface that's everywhere.


fortune--2020-06-23--Intel Capital leads $40M investment in data privacy startup Immuta

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Privacy is a growing concern for consumers and lawmakers around the world. It is also a growing headache for businesses of all sizes that must comply with a raft of new data rules, including Europe’s GDPR regime and California’s new CCPA law, or face stiff fines.
The mounting privacy challenge has spawned a cottage industry for lawyers and consultants—but also a niche for data startups looking to disrupt those high-priced professionals by automating the process. One of those startups is Immuta, a Maryland company that on Tuesday announced a $40 million Series C funding round led by Intel Capital to expand its privacy and data governance services.
In an interview with Fortune, CEO Matthew Carroll said he launched Immuta as a way to automate the law—a process he says has failed to keep up with huge technological advances in cloud computing in recent years.
He cited the example of trucking companies that obtain a wealth of data in recruiting drivers, including sensitive health and safety information. Immuta’s platform, says Carroll, is able to identify and sequester these various streams of data, and make sure that only authorized individuals can access them.
Carroll notes that Immuta doesn’t just ensure compliance with newer privacy regimes like GDPR and CCPA, but older laws like HIPAA and COPPA, which regulate data concerning health records and children’s online activity.
Immuta’s current customers include major banks and a growing number of midsize health care service providers. For these companies and others, automated data services represent an attractive third option apart from spending heavily to monitor data compliance, or risking fines that can climb to millions or even billions of dollars.
Carroll says he is confident enough in Immuta’s machine-learning abilities that the company will soon offer a legal indemnity to its customers—a guarantee that its software will be able to organize their data in a way that doesn’t expose them to penalties. The company has also partnered with cloud giants like Amazon Web Services and Snowflake to integrate its service.
In Carroll’s view, the cloud-computing industry is entering a new era as companies compete to not just store data but process it as well.
“A whole new cloud war is coming,” he said, adding this competition has only increased as a result of the pandemic, which has triggered a rush to do tasks remotely.
In coming months, Carroll says Immuta plans to explore new legal fields where it can apply its software, and he predicts that data visualization services like Tableau will seek to integrate compliance tools.
Immuta is just one of several companies that has recently raised money to build what could be described as “privacy tech.” Others include Ethyca, which raised $13 million this month to expand a service that automates consumer privacy requests, and DoNotPay, which offers a “robot lawyer” to sue companies that don’t comply with data requests.
In addition to Intel Capital, investors in Immuta’s Series C round include Ten Eleven Ventures (1011VC), DFJ Growth, Dell Technologies Capital, Greycroft, Drive Capital, and Citi Ventures.


fortune--2020-06-23--DoNotPay raises $12 million as the business of helping consumers get refunds soars

Stay-at-home orders in the wake of the coronavirus pandemic has left consumers with a flurry of unwanted gym memberships, concert tickets, and airline boarding passes. But getting any money back has been a headache.
Those customer service hassles and legal paperwork nightmares have translated into growth and additional funding for “robot lawyer” DoNotPay, says CEO and founder Joshua Browder, who started the company as a 19-year-old at Stanford University seeking a better way to fight parking tickets.
The startup, which charges $3 a month for a subscription, helps consumers parse through legalese to win refunds for canceled flights or to break up with their nearest sports club. At its core, DoNotPay uses bots to send emails and letters to companies or government bureaus on behalf of the consumer, allowing it to expand into data privacy, robocallers, and even medical bills. The company has seen its user base surge several times over, from 10,000 to 20,000 subscribers before the coronavirus to over 50,000, says Browder.
Seeing its growth, investors led by Coatue Management closed on a $12 million Series A round in a mere two weeks over Zoom. Other investors including Andreessen Horowitz, Founders Fund, Felicis Ventures, and Day One Ventures also participated, valuing the startup at about $80 million.
“I think everyone is struggling, especially some of these big companies are passing on their struggle to consumers. Airlines are not giving refunds to avoid bankruptcy,” he says. “But consumers need the money more than even the companies. Some of these categories, like gym cancellations, were up 30 times [during the pandemic].”
DoNotPay arbitrages the disconnect between what consumers know about their legal rights (often very little), and what companies tell them (sometimes even less). One example: Airline travelers complained early on about receiving vouchers instead of full refunds when the pandemic grounded flights indefinitely. But citing rules from the U.S. Department of Transportation that requires airlines to issue refunds on nonrefundable fares, even in the event of a delay, DoNotPay sends messages via bots directly to the airline calling for full repayments.
As some states prevented landlords from collecting late fees and from evicting tenants, DoNotPay has also jumped in, pressuring landlords with the relevant laws and executive orders to defer payments. In the case of gym memberships, sports clubs are somewhat notorious for making canceling difficult—and now some are facing bankruptcy. Most clubs require a printed letter of cancellation, which DoNotPay handles by sending one straight to the club’s legal department using bots to automate the process.
Backstop
Fallout from the coronavirus also led DoNotPay to add another feature to its app: credit and debit card chargebacks.
That’s been especially relevant as most live events have been canceled, leading to reports of consumers struggling to get refunds from ticketing companies like Ticketmaster or StubHub. So DoNotPay sought a different path: While government laws may not protect consumers in this case, says Browder, debit and credit card company bylaws are far friendlier if a service is not delivered.
Inspired by those complaints, DoNotPay says it is now able to try to stop unwarranted charges by linking up with, say, a Visa or American Express if a company refuses to comply with initial requests through the customer service channels. As a final resort, DoNotPay will go to small-claims court, says Browder.
Its investors are betting DoNotPay’s growth is no temporary boost.
“In good times, the company was doing well fighting robocallers and canceling free trials,” says Matt Mazzeo, the partner at Coatue who led the DoNotPay investment, said in a statement. “Since March, they have been focused on refunds and customer service. There will always be consumer problems in the world for DoNotPay to solve.”
Next steps
When asked about profitability, Browder said the company was previously at breakeven but reentered the research and development phase with the new round of funding. “Going forward,” he says, “we’re trying to release a product every three weeks, and we’re trying to go faster than we were going up until now.”
That includes a raft of other consumer-related legal products, including one that allows homeowners to renegotiate their property taxes, an issue particularly relevant as the coronavirus tanks home values in some areas.
“What we’ve discovered is all of these issues share the same infrastructure,” says Browder. “So it doesn’t really matter if it’s a matter of getting you out of a parking ticket or gym membership, as long as DoNotPay is good at generating the correct letter, it can solve the whole fleet of problems.”


fortune--2020-06-23--Exclusive: Yieldstreet launches new private credit investment platform

Alternative investment manager Yieldstreet—which allows individuals to invest in loans backed by real estate, art, shipping vessels, and other asset classes—is launching a new platform dedicated to private business credit, Fortune has learned.
Yieldstreet’s base of accredited investors will now have access to private business loans backed by collateral including inventory, equipment, accounts receivable, and other assets. The firm effectively crowdfunds its investors’ contributions—which start at a minimum investment of $10,000—to provide them access to fixed-income products that are usually reserved for the likes of hedge funds and institutional investors.
The private credit platform will target short- to medium-term secured loans typically ranging from $3 million to $30 million in value. It is Yieldstreet’s fifth asset class, following verticals dedicated to the real estate, legal, marine, and art financing sectors.
Yieldstreet CEO Milind Mehere told Fortune that he believes the current market environment is ripe for the platform’s launch. He noted the prevalence of “small and medium-size businesses” now revving back up in the wake of the coronavirus lockdown, many of them in need of fresh liquidity to finance their operations.
“For us, the timing feels right. We feel that in the next 12 to 24 months, a lot of businesses will be looking for new capital that’s time- and cost-effective,” Mehere said. “As there was a market correction and a tightening in lending, we feel you’ll get access to better borrowers, better deal flow, and good-quality paper.”
With the private business credit sphere valued at an estimated $1 trillion annually, Mehere said he expects the platform to deploy hundreds of millions of dollars in capital over the next 12 months. Yieldstreet has brought in credit industry veterans Larry Curran and Barbara Anderson to lead the vertical, with the pair serving as managing director and senior director & head of underwriting, respectively.
“All of our transactions will have several common themes,” Anderson told Fortune. She said Yieldstreet will be looking to finance “high-growth” companies with “experienced management teams, good technology, and access to capital to support that growth in addition to the leverage that we bring to the table.”
As far as the assets that the platform will be investing in, Anderson added that Yieldstreet is “less concerned about what [the asset] is, and more about the underlying aspects of each borrower”—with the goal of helping companies grow their businesses and improve their credit profiles over time.
While Yieldstreet will be originating some of the debt on its own, the firm will also partner with banks and other outside lenders to provide additional capital to their deals. For now, the platform will exclusively focus on primary, direct issuance deals ranging from short-term loans, to a targeted “sweet spot” of 12- to-36-month terms, to some 60-month terms, Anderson said.
“The pandemic has brought about some need for shorter-term credit facilities—people who are looking for a bridge, or an injection of liquidity to get by,” she noted. The private credit platform currently has more than $50 million in transactions in the pipeline, Anderson added, and hopes to close its first deals “in the next month or so.”
The new vertical comes in the wake of challenges encountered by some of Yieldstreet’s other platforms in recent months. In April, the Wall Street Journal reported that investors had expressed their dismay about underperforming maritime loans—including some backed by disappearing collateral that had forced Yieldstreet to take borrowers to court. Separately, BlackRock, the world’s largest asset manager, pulled out of plans to manage a fund alongside Yieldstreet, the WSJ also reported.
“In the unusual event that an investment fails to perform, Yieldstreet acts to protect its investors and keeps them informed of its progress,” a company spokesperson told Fortune. “Nothing is more important to Yieldstreet than its investors.”
To date, Yieldstreet has funded more than $1 billion in investments and returned $600 million to its investors, according to the firm.


fortune--2020-06-23--How 2 startup cofounders are dealing with 3 compounding crises

Good morning, Broadsheet readers! Canva is valued at $6 billion, Michelle Obama talks voting with Shonda Rhimes, and a startup with four female founders grapples a triple-whammy of crises. Have a peaceful Tuesday.
– The Coven in crisis. “Then almost everything went awry” is not a line you want written about your company. But it’s what The Coven is up against at this point in its young history.
The Minneapolis-based women’s coworking startup “aims to be an inclusive, middle-America rival to The Wing,” Maria Aspan reports for a Fortune series on startups’ first years. And it seemed to be on a roll, opening its first space for women and nonbinary and trans people in 2018 and its second in St. Paul early this year. But the pandemic forced those two locations to close and put expansion plans on hold. What’s more, the George Floyd protests upended The Coven’s hometown of Minneapolis, and scandals at The Wing and WeWork have called the coworking model into question.
Where does that leave The Coven and its four female founders?
CEO Alex West Steinman and her fellow cofounders pivoted to digital memberships and events amid the coronavirus shutdown; the new offerings have found an audience but are not as lucrative as the original business model. And The Coven’s shuttered Minneapolis space is now collecting food and other donations for those in need because of the protests and police violence.
Faced with compounding crises, Steinman doesn’t bother with sugarcoating: “We’re still in the middle, and it looks really messy.” Neither does Liz Giel, fellow cofounder and chief growth officer: “It’s a painful time here,” she said of Minneapolis.
Maria’s interview with Giel and Steinman is worth reading not just for their candor—How have the crises affected The Coven financially? “Badly,” Giel says—but also to learn about how they’ve spotted opportunities in the mayhem; opportunities to rethink their options, to amplify voices, to be “held accountable” and then to show action.
Check it out here.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Designing success. The Australian design startup Canva, led by cofounder and CEO Melanie Perkins raised $60 million at a $6 billion valuation—doubling its valuation from October and cementing the app's status as one of the highest-valued female-founded companies in the world. CNBC
- Gender gap. The gender gap between President Trump and Joe Biden, according to recent polling, is reaching historic proportions. Biden has a 23-point lead over Trump with all women voters—compared to Hillary Clinton's 14-point edge in 2016. Washington Post
- On call. Nurses have, of course, been on the front lines of the coronavirus pandemic. Now, some are running for office—and promising to tackle health care policy. Phara Souffrant Forrest is a maternal child health nurse running for state assembly in Brooklyn; Lori Feagan is a nurse practitioner running for state legislature in Washington State. Elle
- One-on-one. Need some motivation to send in your ballot soon? Michelle Obama has an in-depth conversation with Shonda Rhimes about the importance of voting—and how "women have always led" even before they ran for office in record numbers. Harper's Bazaar
MOVERS AND SHAKERS: Cathay Pacific appointed Patricia Hwang director of people; her promotion marks the first time two women will hold senior management positions at the airline. Providence hired Peabody Energy Corp.'s A. Verona Dorch as EVP and chief legal officer. VUniverse named 20th Century Fox Film's Julie Rieger CEO.
IN CASE YOU MISSED IT
- Brandless is back. The SoftBank-backed e-commerce venture co-founded by Tina Sharkey, which shut down four months ago, will return in a new form. Clarke Capital Partners bought Brandless' assets and plans to expand from direct-to-consumer to wholesale. AdAge
- Lam's leadership. Is Carrie Lam "the leader who killed her city"? This piece argues that the Hong Kong chief executive, in the role as the city has faced efforts by mainland China to enforce greater oversight, is both "the most unpopular and calamitous leader in Hong Kong’s modern history" and "a convenient shield for those actually in charge, and so despised by her people that most have entirely given up on her." The Atlantic
- Russian meddling. How did Fiona Hill end up inside—and then outside—the White House? This profile explores the Russia expert's anti-partisan approach to accepting the position and how she wound up enmeshed in President Trump's impeachment proceedings. The New Yorker
ON MY RADAR
The end of the Girlboss is here Gen
Corina Newsome and the black birders' movement The New Yorker
Meet West Virginia’s first out trans lawmaker: Rosemary Ketchum Rewire.News
I May Destroy You is about more than consent Slate
PARTING WORDS
"You know, we did a lot, but you can always do more."
—Janet Napolitano, out-going president of the University of California system, on her tenure and what's next