Today in the best of tech news, we are featuring the most important tech highlights that happened last week. We look at the UK regulator starting a Facebook investigation, the new buzz in the digital-asset world, Non-Fungible Tokens (NFT), U.S. Commerce Department subpoenaing Chinese communications companies, Pakistan launching two pilot cryptocurrency mining farms, several Chinese companies eyeing possible lawsuits after Xiaomi’s blacklisting was suspended last week. We will also talk about some of the most interesting founding rounds we experienced last week, and the governments working on curbing the big tech.
On Friday, it was reported that the British antitrust regulator will begin its investigation into Facebook after it has already started such a process against Google and Apple earlier this year.
The UK’s Competition and Markets Authority will focus on the use of customer data against Facebook’s competition in social media and advertising. It will also look at Facebook’s role as the gatekeeper for data collection as a way to strengthen its competitive advantage.
Facebook did not comment on the news as of yet.
There is a new buzz in the digital asset world and it is the non-fungible tokens (NFT), a block-chain authenticated type of asset. It has become particularly demanded during the pandemic as artworks and other luxury items that are digital-only became highly popular. Subsequently, the interest in companies connected to NFT has grown.
To illustrate, on Thursday, Sino-Global, a logistics and shipping company, announced that it will create an exchange for NFTs. Following the announcement, the shares of the company rose by 33%. With a market cap of approximately $123.4 million, Sino-Global has had a total raise (in terms of shares) of more than 300% this year. The company recently announced it will start accepting bitcoin as payment and since the beginning of the year, they have made several announcements showing their will to integrate cryptocurrencies into the operations of their company.
Similarly, ZK International Group, an international pipe maker, has observed a 20% rise in its shares on Thursday. The reason for that is the announcement about launching an NFT marketplace where customers can buy, sell and create assets with NFTs in an easy and transparent way.
“Buying the companies offering NFT would be like buying companies that have some sort of dealings with bitcoin in the early days,” Kim Forrest, CIO at Bokeh Capital Partners in Pittsburgh said.
While Forrest believes that the interests in NFT may be partly driven by those who think they missed bitcoin, she is skeptical about the long-term growth prospects.
“This is the electronic version of a Beanie Baby – remember that craze?”
The cybersecurity company SecurityScorecard announced on Thursday that it managed to close its late-stage funding round with $180 million raised. This brings the total funding to $290 million
SecurityScorecard monitors and assesses the cybersecurity practices of companies, highlighting the strengths and weaknesses both. With Covid-19 increasing the need for efficient cybersecurity soared up. Currently, SecurityScorecard helps almost two million companies and it forecasts more than 20 million companies by the end of 2021.
After the investment round led by Silver Lake Waterman and including the new investors T Rowe Price Associates Inc, Kayne Anderson Rudnick, and Fitch Ventures, the valuation of SecurityScorecard has reached almost $1 billion. Other investors included Google Ventures, Evolution Equity Partners, Accomplice, Intel Capital, AXA Venture Partners, and others who have already participated in earlier funding rounds.
“With the increasing number of breaches, cybersecurity ratings are a must-have for organizations to make critical business decisions,” said Aleksandr Yampolskiy, CEO and co-founder of the company.
The new funding will be used for the global expansion of the company.
On Wednesday, the U.S. Commerce Department revealed it has subpoenaed several Chinese communication companies that provide their services in the United States, on the x grounds of investigating the national security risk.
“Beijing has engaged in conduct that blunts our technological edge and threatens our alliances,” Commerce Secretary Gina Raimondo said. She added that the subpoenas aim is gathering information to “allow us to make a determination for possible action that best protects the security of American companies, American workers, and U.S. national security.”
The statement did not specify which companies are involved.
China responded to the news by urging the United States to “stop overstretching the concept of national security to politicize economic issues,” and claiming that China will take appropriate actions that will protect the rights and interests of the Chinese companies.
On Wednesday, the new government crypto policy in Pakistan informed that one of the provinces, Khyber Pakhtunkhwa will build two pilots “mining farms” that are hydroelectric-powered and will give Pakistan a chance to capitalize on the cryptocurrency market.
Recently, as some countries such as the neighbor of Pakistan, India, plan to ban cryptocurrencies fully, others try to find broader capitalization possibilities. Pakistan has created a new federal committee to form an official crypto policy. No cost estimation for launching the mining farms has been made official as of yet.
Zia Ullah Bangash, the science and technology advisor to the Khyber Pakhtunkhwa government, said “People have already been approaching us for investment, and we want them to come to Khyber Pakhtunkhwa, earn some money and have the province earn from that as well,”
Currently, mining and trading in cryptocurrencies in Pakistan is a grey legal area and while the practice is thriving in Pakistan, the government will now face a challenge to regulate that part of the market effectively.
“It’s really just our government that is not participating right now, people all over Pakistan are already working on this, either mining or trading in cryptocurrencies and they are earning an income from it,” Bangash said. “We are hoping to bring this to a government level so things can be controlled and online fraud or other scams can be prevented.”
More of the Chinese companies that were blacklisted in the United States after the investment ban established by the Trump administration are considering legal actions. On Friday, Xiaomi won in court as the federal judge decided to suspend the blacklisting on the smartphone maker.
Now, lawyers of other companies are also looking at the possibility to sue the U.S government. However, they refuse to disclose the companies who have reached out for legal help in the matter.
“Companies are reaching out to lawyers to challenge the listings and the grounds for the listings,” said Wendy Wysong, managing partner of the Hong Kong office of Steptoe & Johnson.
“The facts that led to Xiaomi’s designation are almost laughable, and I think it absolutely is going to lead to additional companies seeking relief,” said Washington lawyer Brian.
After the decision of the judge reversing the ban on Xiaomi, the U.S government said they are still considering an “appropriate path forward” regarding the Chinese company.
Another cybersecurity startup, Coalition Inc, announced on Wednesday that they closed their latest funding round with a $175 million investment, bumping the company’s overall value to $1.75 billion.
The round was led by Index Ventures, a venture capital firm based in San Francisco and London.
Coalition provides cyber insurance and uses its software to assess the cyber risk of their customers. It also monitors for any potential problems to prevent breaches. It currently operates in the United States and Canada, providing up to $15 million and C$20 million in insurance respectively.
Squarespace has also had a great week, raising approximately $300 million in their recently completed funding round. The company is now valued at $10 billion and it is looking at the U.S stock market listing.
The investors included General Atlantic and Accel that were earlier investors, as well as some newcomers such as Dragoneer, Tiger Global, and D1 Capital Partners.
Chime Eyes Stock Market Flotation
Chime has had first talks with investment banks about creating a stock market flotation that could bump its value to more than $30 billion.
Chime has been one of the most dynamically growing fintech platforms in the United States. The startup was founded in 2012 by the Visa executive Chris Bratt and Comcast Corp Ryan King. The company’s business model is earning a fee from payment processors like Visa when a user makes a payment with the Chime debit card. Since then, the company has created its own credit card. They also provide a wide range of financial services through their cooperation with traditional banks.
“People don’t really want to touch ATMs anymore. People don’t want to handle cash as much as they used to. And people are getting more and more comfortable with paying for things through apps, managing their accounts through apps,” Britt said.
In September, Bratt announced that Chime would be looking at an IPO in the next 12 months.
“When we get closer to make the decision to actually go public, we will evaluate all of the potential paths to do so, including direct listings, traditional (IPOs), and SPACs,” he said then, adding that Chime had “every intention of being a large, independent public company”.
David Cicilline, the chairman of the House Judiciary Committee’s antitrust panel is planning to come out with at least 10 new bills that curb the Big Tech.
Back in October of 2020, the subcommittee under Cicilline’s leadership, released a report of almost 500 pages, outlining the market abuse by the big tech giants such as Apple, Amazon, Alphabet’s Google, and Facebook.
The aim of creating several smaller pieces of legislation is to decrease the opposition from the big tech giants.
Cicilline’s office refused to comment on the new proposed legislation.
The humanoid robot, Sophia, created her first digital artwork that will go up for auction on Wednesday. The artwork in the form of Non-Fungible Token (NFT) will be the first sale of such a piece created with AI.
“I hope the people like my work, and the humans and I can collaborate in new and exciting ways going forward,” Sophia said.
The work goes by the title “Sophia Instantiation” and is a 12-second MP4 file that shows how Bonaceto’s original paintings are being transformed into Sophia’s painting. It goes together with the physical artwork of Sophia who will add a final stroke to it after studying and interacting with the successful bidder at the end of the auction.
The humanoid robot Sophia appeared in 2016. She produced the artwork in cooperation with the Italian digital artist, Andrea Bonaceto. Sophia combined Bonaceto’s work with her own drawings and paintings, and art history.
“We use transformer networks and genetic algorithms in my art, and other kinds of computational creativity,” Sophia added. “My algorithms output unique patterns that never existed in the world before. So I think the machines can be creative.”
Sophia’s art could be “a very, very important historical piece,” said Pablo Fraile, an art collector based in Miami adding that it will encourage further AI innovations in the art space. “It’s the first time these ideas are put together.”
Sophia will be represented by the U.S IV Gallery.
“Sophia has that unlimited freedom, like a five-year-old has, and no restrictions to what she can do,” said gallery director Vincent Harrison. “It’s fascinating to see this new way to create.”
On Friday, Visa informed the public that The Justice Department is looking at their debit practices.
“The U.S. Department of Justice has informed Visa of its plans to open an investigation into Visa’s U.S. debit practices,” the company said, “We have received a notice to preserve relevant documents related to the investigation.”
The investigation concerns possible anti-competitive practices in the debit card-market and whether Visa is limiting possibilities of the merchants to rout debit-bard transactions over card networks. Such a practice is usually less expensive.
“We believe Visa’s U.S. debit practices are in compliance with applicable laws,” the company said. “Visa is cooperating with the Department of Justice.”
“The MPC has been concerned about these practices to limit debit routing for years and it’s great to see the Department of Justice looking into it,” said Craig Shearman, a spokesman for the Merchants Payments Coalition that fights the so-called swipe fees.
On Friday, Visa’s shares declined by 6.2% and closed at $206.90
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