South Africa has an untouched $10M fund for internet accessibility

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A new report has revealed that South Africa has $ 10 million sitting unspent in Universal Service and Access Funds meant to for the provisioning of Internet access in the country. The report, Universal Service and Access Funds: An Untapped Resource to Close the Gender Digital Divide, Furthermore, the report (published by the Web Foundation, the Alliance for Affordable Internet, and UN Women) states that many governments in Afrika are failing to take action to connect women and other offline populations — despite the existence of funds earmarked for this purpose. This at a time when affordability is a major barrier to women being able to access…

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China looked at investing in SoftBank’s $100 billion tech fund

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The Vision Fund has ratcheted back some of its ambitions in China due to political considerations.

The Chinese government had talks about possibly financing the world’s most ambitious investment project, SoftBank’s $ 100 billion bet on the future of technology known as the Vision Fund.

China’s largest sovereign wealth fund, the China Investment Corporation, last year spoke with the Vision Fund about making an investment, according to five people with knowledge of or briefed on the conversations. A contribution from CIC, which has $ 800 billion to invest, would have been very politically controversial, but it would also supply the Vision Fund, led by CEO Masayoshi Son, with a steady spring of capital for future versions of SoftBank’s project.

Sources differ on how serious the talks became, but a contribution has yet to materialize, leading many to believe that the chance of an investment at this point in this fund is unlikely. China could still strike a deal that would allow SoftBank to invest alongside it, these sources say, though SoftBank is said to be discouraged by the political and regulatory risks that would come with accepting Chinese investors into their fund.

SoftBank declined to comment. CIC spokespeople did not respond to repeated requests for comment.

SoftBank’s Vision Fund is also serious enough about China that it had been scouting last year for a new local partner to lead its investing in Chinese companies, two people familiar with the conversations tell Recode. The aim was to bolster SoftBank’s on-the-ground connections. The fund had deep recruiting conversations with at least one senior China candidate, the people said.

The moves shed light on the challenges for SoftBank in China, as well as China’s ambitions outside its borders. A deal would appeal to both sides for a few reasons, at least on paper.

To begin with, SoftBank, for all its riches, has been slow to do a final close on the Vision Fund, which currently stands at $ 92 billion, short of its $ 100 billion target. The firm originally said the fund would close by the end of 2017 but now says it will reach its financing target by this June. SoftBank has, of course, been pitching almost all the top sovereign funds as it works to close the fund.

A deal with China would also give Son a powerful ally in Beijing, where he has had at times a rocky relationship, and where he made his name with a landmark bet on Alibaba in 1999.

SoftBank failed to make headway in China when it first entered the market 18 years ago. Son made a play to invest in the country through the creation of a fund focused on early-stage investments there. But ties between SoftBank and the fund weakened as Son grew more interested in later-stage deals; the fund still exists but now has outside investors beyond SoftBank.

China could still be attractive for future Vision Funds. Saudi Arabia, which, like China, has eagerly sought to diversify its assets and invest overseas, has been expected globally to help finance SoftBank’s investments in part through the $ 1.5 trillion initial public offering of Aramco, the kingdom’s state-owned oil company.

But delays of the IPO, plus the general political upheaval in the nation, could mean that the Vision Fund needs to more aggressively court other sources of money.

What would a deal have offered the Chinese? The CIC needs places to park its cash, and there is no bigger repository than the Vision Fund. While the CIC has long been a limited partner in some of Silicon Valley’s top growth and private equity funds, the CIC’s budget means it does not have time for smaller placements of capital into smaller investment pools, like standard venture capital funds.

China’s CIC is also trying to become a big player in U.S. technology. It plans to open an office in San Francisco in order to more easily make direct investments into Silicon Valley. It is also staffing up in New York City.

But its track record in U.S. technology is considered by almost all veteran tech investors to be quite poor, mostly because it cannot get access to the best companies. That means the investments that it does make are generally in less-desirable startups. Decisionmaking within the sovereign wealth fund is also described as slow and bureaucratic.

Putting its money into SoftBank would give it access to the tech players it might not otherwise be able to reach.

Another reason why the CIC may want to work through the Vision Fund — politics. The U.S. government closely scrutinizes Chinese deals in the U.S. through the Committee on Foreign Investment in the United States (CFIUS). The CIC has criticized the Trump administration for what it sees as a tough, opaque crackdown, and running the deals under a SoftBank banner might solve the regulatory problem.

But the Vision Fund, according a source familiar with the fund, has ratcheted back some of its ambitions in China exactly due to CFIUS considerations. Chinese investment through a fund could still trigger government scrutiny.

The Trump administration, for instance, recently blocked the takeover bid of U.S company Qualcomm by the Singapore-based Broadcom, on national security grounds. Broadcom had already maneuvered to re-domicile in the U.S., potentially making a CFIUS review moot, but that didn’t sway the Trump administration from moving to block the deal.

These latest developments now suggest it may be too late for CIC to strike a deal with SoftBank. The Trump Administration’s tough stance toward China has scared Chinese investors trying to deploy cash in the U.S., sources say.

There is another option on the table, according to sources with knowledge of the talks. China and SoftBank could enter into what’s known as a “co-investing” relationship. Under that kind of understanding — formal or informal — CIC would be introduced to some of the best technology deals outside of China without having to pay management fees to the Vision Fund. And CIC could correspondingly help the Vision Fund hear about the best opportunities in China, where it similarly wants to do more.

CIC is said to be impressed with the prestige of the Vision Fund, according to multiple people who have spoken with the sovereign fund recently, and is attracted to the chance to tie its brand to Son much like the CIC did to Goldman Sachs. Last year, the two entities entered into a partnership for a $ 5 billion fund to invest in U.S. manufacturing. CIC also recently pulled out of an investment deal with Blackstone.

SoftBank has also been more aggressively chasing deals in China, sources say. The Vision Fund is planning to put money into at least two separate Chinese startups. Both those investments were part of the same funding rounds in which CIC also participated. It’s not known which companies received the funding, though the Vision Fund reportedly is considering an investment in Manbang Group.

Those deals drew notice because — with some notable exceptions — the Vision Fund and CIC have not historically invested in the same round of a startup, close observers of the relationship say. Going ahead with the investments is a sign of SoftBank’s renewed push into China.


Recode – All

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SoftBank is trying to poach young venture capitalists for its $100 billion Vision Fund

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That’s SoftBank’s Son on the right.

“Who hasn’t been offered a job at SoftBank?” some people joke at venture firms.

SoftBank’s Vision Fund over the last two months has been aggressively trying to poach rising-star venture capitalists, a flurry of attempts that has ruffled feathers among some of the people it is trying to recruit.

The recruitment would equip the $ 100 billion Vision Fund, mostly led so far by former bankers, with more startup experience.

The Vision Fund has retained the search firm Russell Reynolds to try and bolster its stable of vice presidents and directors, according to multiple people who have been approached by the fund. The recruiting effort has centered on younger venture capitalists at top-tier firms — think people in their late 20s or early 30s who are not general partners but rather rank a seniority level lower, such as principals or just plain old partners.

It’s the latest way in which the Vision Fund is competing with traditional technology investors in Silicon Valley: A battle for talent.

But there have been some hiccups. The firm has used impersonal methods, like LinkedIn messaging, to reach out to potential hires, which has rubbed some people the wrong way. The messages and tenacious recruiting effort have been a source of curiosity and even some ribbing in their offices, sources at three venture capital firms tell Recode, with some folks joking internally: “Who hasn’t been offered a job at SoftBank?”

To be fair, recruiting firms are always hustling for top talent, though some people say they wish the pitches had been more personal.

Venture capitalists are buzzing about the outreach in part because the recruiting experience at VC firms tends to be more organic and relationship-driven — courting younger talent gradually over lunches, through mutual friends and, for more senior roles, a sometimes years-long dialogue about the job. It isn’t uncommon for search firms to be involved at identifying possible hires, but the actual contact tends to come from firm leadership.

The Vision Fund and Russell Reynolds declined to comment.

The scouting does, though, make a lot of sense. The Vision Fund over the last year has hired about 100 full-time people — in London, in Japan and here in Silicon Valley — but the pace at which they’re deploying the capital calls for more manpower to help find and execute technology deals across the globe.

A hundred people may sound like a lot, but compare it to a big firm like Andreessen Horowitz, which has 130 people to manage $ 6 billion, while the Vision Fund has 100 people to manage a fund that’s more than 15 times larger.

It’s safe to say folks there are working long nights and could use the hand.

SoftBank or its Vision Fund is as of now hiring for at least 14 different positions at its headquarteres in San Carlos, according to posted job listings, ranging from its two-year investment associate program to several open vice president positions.

The Fund is looking now for people with some operational experience, according to a source familiar with its thinking, hopefully landing people with both some investment experience and some technical background in a particular field.

Plus, the Vision Fund’s leadership up till now has been primarily led by former bankers, who are a natural fit at executing later-stage deals but do not have as much experience serving on boards of startups, for instance. They do, though, have more background in negotiating.

While the firm does have some veteran operators as managing directors — like former LinkedIn exec Deep Nishar — its leadership hasn’t come from blue-chip venture capital firms.

Early last year, the Vision Fund raided the technology banking sector’s top talent, landing bigwigs like Michael Ronen of Goldman Sachs and Colin Fan from Deutsche Bank — presumably for a lot of cash.

This year, it appears the technology fund is preparing to nab talent from the traditional venture community as well.


Recode – All

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The 22X Fund and Democratizing Startup Investment

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22X Fund

Tradition leads you to believe: start a company in a garage or basement, find a few people to tell you it’s a good idea, raise a small bit of money from your friends & family, move to Silicon Valley, raise more money from a well known VC and become a technology rockstar.  

Well those of us that are living and breathing this perceived narrative know that it is mostly untrue.  As the founder of Trueface.ai a face recognition startup, I am overwhelmed with how often people just assume ‘the valley’ is throwing money at any face recognition or artificial intelligence (A.I.) company.  It’s just not the case as the venture world has shifted their risk profile to focus more on growth investing.  

The history of raising money has always positioned the venture capitalist in the position of power, dictating to the market which companies have a higher chance of success.  But how investors make the decision to invest is unpredictable and not always backed by real expertise in building companies.  

Now that’s changing. New types of funding like ICOs and equity crowdfunding, accelerators and corporate venture arms are giving startups more options to raise funds. The newest and most exciting of these new investment vehicles are “security tokens.”

Security tokens are backed by real-world assets such as equity in a company. Like “utility tokens” they are tradable on exchanges. They allow many investors globally to buy into a promising project whether that’s investing a group of startups or a real estate project.

The game has now changed for investors thanks to tokens and how they can allow for someone to instantly diversify.  I can remember back to a finance class in college; we learned all about modern portfolio theory and diversification to reduce unsystematic risk.  We’ve been taught, broadly speaking, to invest in the minimum number of companies necessary to drive your exposure to unsystematic risk to near zero.  The number of which is accepted is 30 companies in multiple industries and different levels of risk associated.  

This theory is what has me incredibly excited about securitized tokens and specifically 22X Fund. The 22X Fund is the first security token of its kind – a founder-organized initiative of 30 companies from the most recent batch of 500 Startups (Batch 22), one of the best technology accelerators in the world. The startup founders of 22X joined forces to revolutionize the way we think about fundraising. The securitized token represents up to 10% equity interest in each company, providing investors with access to Silicon Valley’s best and brightest with one single investment. The batch of 30 companies was vetted by the 500 Startups organization and had previously raised over US$ 22,000,000 in capital to get to the stages they are at today.

Investors within the 22X Fund gain access to 30 high growth companies with one investment and can reduce their overall risk while having access to liquidity by trading the token as they see fit.

There are incredible benefits to both sides here – the founders of the companies have access to global capital ranging from smaller private investors overseas, to family offices to traditional institutional funds.  The 22X Fund empowers its founders to spend less time raising money and more time focusing on how to grow their business and be successful.  Although I still believe the venture capitalists play a critical role in the ecosystem, it reduces their power to be the final say about who has an opportunity to be successful. It democratizes startup investment.   

The long-term implications for the relationship between traditional venture capital and founders are still up in the air, but I think for the community this is an incredible step forward.  Silicon Valley is known for its forward-thinking, risk-taking and against the grain mentality. This new type of fundraising is precisely what should be expected from incredibly driven, determined and bright founders who are willing to take risks.

 

Editors Note & Disclaimer: TrueFace.ai & its parent company Chui are alumni of the ReadWrite Labs accelerator program. 

The post The 22X Fund and Democratizing Startup Investment appeared first on ReadWrite.

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The maker of Schlage locks creates $50 million fund for IoT

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Allegion, the $ 2.4 billion company that makes Schlage branded locks, has created a $ 50 million fund to invest in the internet of things. This is Allegion’s first foray into corporate investing as a formal fund, although it has made investments prior to the fund’s creation.

Rob Martens, a futurist at Allegion and president of Allegion Ventures, will lead the three-member investment team. He says the goal of the fund is to find and assist startups trying to develop technology for access and for security and safety. This could be in the home or in office and industrial settings. He’s not exactly excited for startups trying to enter the consumer IoT space at the moment given the pressures they face to support their products over a long period of time and the pressures that can put on profitability.

However, he says many cool technologies aimed at the consumer market might be suited for industrial or enterprise environments. In those cases Allegion could be the right partner to help a startup break into those new markets. “The lion’s share of our business is not on the residential side, it’s on the commercial side,” Martens says. “With our assistance and our experience in the space we might help [a startup] accelerate their product into those commercial markets.”

Historically, corporate venture firms invest at later stages once a product and strategy is fairly clear for a startup. Allegion plans to invest earlier.  Martens is interested in seed, A and perhaps B stages of funding. Martens says he expects to stay involved in investments for five to seven years, noting that Allegion may also choose to expand the fund at such time if it’s needed.  Like many corporate venture funds, Allegion is treating this as way to advance technology it’s interested in seeing, as opposed to focusing solely on returns.

So far the internet of things has proved fertile for corporate-backed venture funds, with Amazon investing in nine companies through its Alexa Fund and insurer American Family Ventures putting money in five startups as of the middle of 2017. Corporate venture firms are also active on the industrial side. Back in 2016, CB Insights noted that five of the top 12 IoT investors were corporate venture funds, including Intel Capital, Qualcomm Ventures and Cisco Ventures.

Many of those corporate investors become buyers of new industrial or smart home technology.  So it’s possible that as Allegion invests in startups helping secure our world or improve the economics of the internet of things, it will find an idea that’s too good to pass up.

For more, check out Martens’  interview on this week’s Internet of Things Podcast.

 

Stacey on IoT | Internet of Things news and analysis

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Uber founder Travis Kalanick started his own fund to invest in companies that focus on ‘large-scale job creation’

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He will be making investments in real estate, e-commerce, and innovation in China and India.

Travis Kalanick announced on Wednesday that he is starting his own investment fund. The former CEO of Uber, who only recently resurfaced publicly since his June 2017 ouster, wrote that he has been working on what his next move will be over the last few months.

To that end, he’s been making personal investments in both for-profit and not-for-profit companies, and is creating this new fund to manage those ventures. Kalanick wrote that the fund, called 10100, would focus on “large-scale job creation” with investments in e-commerce, real estate and emerging tech in China and India.

In other words, Kalanick will be keeping himself busy by financing and sitting on the boards of companies, at least until he finds his next full-time job. Fresh off selling almost a third of his Uber shares to SoftBank Capital, Kalanick certainly has cash to spare. That transaction netted Kalanick almost $ 1.4 billion.

The notoriously pugnacious former Uber executive already sits on at least two boards, including Uber’s and, most recently, Kareo, a medical startup he was an angel investor in.

Many have questioned whether Kalanick would be able to take a step back from his role at Uber following his departure, or if he would attempt to continue to run the company from his board seat. But, the SoftBank transaction also came with governance changes that whittled his voting power and that of other board members. Now the number of shares directly correlate to the amount of decision-making power.

Kalanick did not respond to requests for more information at the time of publication.

This is developing …


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Former Uber CEO Travis Kalanick forms investment fund

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Uber's controversial ex-chief has created an investment fund called 10100 to oversee both his for-profit and non-profit projects. Travis Kalanick has announced 101000 (pronounced "ten-one-hundred") on Twitter and talked about how he's made investment…
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Former Uber CEO Travis Kalanick announces new investment fund focused on job creation

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Former Uber CEO and co-founder Travis Kalanick today announced a new investment fund he’s calling 10100, pronounced “ten-one-hundred,” that will focus on his “passions, investments, ideas, and big bets.” The theme of the fund, he says, will be large-scale job creation with a focus on real estate, e-commerce, and innovations from countries like China and India. “Our non-profit efforts will initially focus on education and the future of cities,” Kalanick writes. The announcement was made on Twitter this afternoon with a prefaced note from Kalanick that read simply, “Some news…”

Since Kalanick stepped down from Uber in July of last year, he’s remained an outsized influence in the day-to-day operations at the ride-hailing giant thanks to…

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Mark Zuckerberg is increasing his stock sales to fund the Chan Zuckerberg Initiative

Zuckerberg could sell as much as $ 13 billion over the next 13 months.

Facebook CEO Mark Zuckerberg has started to accelerate his funding of the Chan Zuckerberg Initiative, the philanthropic investment vehicle he set up with his wife, Priscilla Chan, in late 2015.

Zuckerberg sold $ 69.5 million worth of Facebook stock earlier this week, according to documents filed with the Securities and Exchange Commission on Wednesday. Zuckerberg has been selling stock regularly through a prearranged sales plan for almost two years, and this sale is not exceptionally large.

But the sale does have some special significance: A spokesperson for CZI confirmed that it marks the beginning of a sales process Zuckerberg outlined in September, when he announced plans to “accelerate” his stock sales over an 18-month period in order to “fully fund” CZI.

“These sales are the next step in a process Mark laid out in September to fund the Chan Zuckerberg Initiative’s work in science, education and issues related to justice and opportunity,” a CZI spokesperson told Recode. “The funds will go to support a range of CZI’s philanthropic activities and operations for many years to come.”

When CZI launched in 2015 at the same time Chan and Zuckerberg had their first daughter, Zuckerberg said he planed to “sell or gift no more than $ 1 billion of Facebook stock each year for the next three years.”

In two years, Zuckerberg has sold about $ 1.6 billion of Facebook stock to fund CZI.

But last September, Zuckerberg changed the plan: He would now sell between 35 million and 75 million shares of stock “in the next 18 months,” he wrote.

Wednesday’s sale is the first to count toward that new commitment, which means that if Zuckerberg stays to true to that plan, he could sell as much as $ 13.3 billion of stock in the next 13 months, given Facebook’s current stock price.

The revised sales plan came about after Zuckerberg and Facebook’s board tried and failed to split Facebook’s stock — an attempt to issue a new class of nonvoting shares into the market that would help Zuckerberg sell his own shares without losing voting control over Facebook in the process. As of last April, Zuckerberg controlled 59.7 percent of Facebook’s voting power.

Investors sued Facebook over the plan, and the company’s board dropped the stock split just a few days before Zuckerberg was set to testify publicly in court.

“Facebook’s business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more,” he wrote at the time.

Zuckerberg has not said anything publicly about his plans to sell Facebook stock after this accelerated plan is done sometime early next year. But he and Chan have pledged to give away 99 percent of their Facebook shares over their lifetime. Zuckerberg’s net worth is more than $ 72 billion.

Of course, even this plan could change. Zuckerberg’s plans are not binding in any way — they’re mostly guidelines to keep investors abreast of the fact that the CEO is offloading billions of dollars in stock.


Recode – All

First Look: Calldorado Announces $12 Million App Growth Fund

Ahead of the weekend, Copenhagen-based ad tech company Calldorado announced a substantial fund of $ 12 million to help talented mobile app developers and publishers by financially supporting their apps’ growth and success in the competitive Android app market.

“The Calldorado App Growth Fund is intended for publishers using the Calldorado Software Development Kit (SDK). It is designed to support the growth of existing apps by providing the funds for user acquisition to help grow and develop the user base for the app to ensure its longevity,” says Claudia Dreier-Poepperl, CEO and Founder of Calldorado, in a provided statement. “One of the key benefits is Calldorado’s unique funding model which, unlike other global investment companies, doesn’t require equity or ownership but instead is based on marketing budget in exchange for revenue share. Therefore, there is no financial risk to the publisher who still maintains full ownership, and rights to the app. This is a quick and easy way of securing capital to drive exponential growth.”

Along with the investment, publishers will benefit from Calldorado’s dedicated in-house team of specialists in user acquisition, asset creation and monetization. They will support the publisher to ensure long term sustainability of the app by expanding the user base to maximize revenue. They will also ensure that the app is fully compliant with relevant policies.

To find out more about the Calldorado App Growth Fund and how to apply, check out www.calldorado.com.

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