This Week in 30 Minutes
October 17th, 2020
Hi there! We are two economists-to-be + one Business & Law major sharing with you, every Saturday, what we believe are the most relevant and interesting news of the week. The newsletter will be divided between all of our LinkedIn profiles. Please share, like, and comment all your thoughts and suggestions. Enjoy!
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Legal news
Boris Johnson throws down ‘no deal’ gauntlet to EU
Boris Johnson on Friday broke off trade talks with the EU, bringing to a crisis point months of negotiations and throwing down the gauntlet to Brussels to adopt “a fundamental change of approach”.Downing Street told Michel Barnier, EU trade negotiator, not to come to London for further talks next week unless he was ready to make a new offer that respected the UK as “an independent country”. The UK prime minister’s threat to end the transition period on January 1 without a trade deal was seen by some as a theatrical gesture, a necessary moment of “crisis” before both sides finally made concessions to reach a deal. Read more here.
Judge denies Epic’s request to force Apple to bring Fortnite back to App Store
The California judge in the legal skirmish between Epic Games and Apple has denied Epic’s request that Apple be forced to reinstate Fortnite in the App Store, but did affirm that Apple cannot take action against the Epic Games developer accounts used to bring Unreal Engine developers access to Apple devices. The court’s decision re-affirmed its proclamation from late August in a court hearing where Epic Games’ lawyers sought to obtain a temporary restraining order after Apple informed the Fortnite developer that they would be kicking the company off the App Store and terminating all of their company accounts. This confirms that Fortnite will not return to the App Store before the trial begins; a court filing this week signaled that the two companies will go to trial on May 3, 2021. Read more here.
LVMH to win EU antitrust approval for Tiffany deal: sources
French luxury goods group LVMH LVMH.PA is set to gain EU antitrust approval for its acquisition of U.S. jeweller Tiffany TIF.N, people familiar with the matter said. The EU decision comes amid a legal battle between LVMH and Tiffany, with the latter suing the Louis Vuitton owner in a Delaware court, alleging that the French company has deliberately been stalling the completion of the deal. Tiffany has alleged that LVMH has improperly tried to renegotiate the deal, which was agreed in November last year before the COVID-19 pandemic emerged and hit countries and companies worldwide. LVMH has countersued Tiffany, alleging that the U.S. company has been mismanaged during the COVID-19 pandemic. The European Commission, which is scheduled to decide on the deal by Oct. 26, declined to comment. LVMH and Tiffany did not immediately respond to a request for comment. Read more here.
U.S. court agrees to expedite government TikTok app store ban appeal
A U.S. appeals court on Wednesday agreed to fast-track a Justice Department appeal of a ruling blocking the government from banning new TikTok downloads from U.S. app stores. U.S. District Judge Carl Nichols in Washington issued a preliminary injunction on Sept. 27 that barred the U.S. Commerce Department from ordering Apple Inc and Alphabet Inc’s Google app stores to remove the Chinese-owned short video-sharing app for download by new users. On Wednesday, TikTok sought a preliminary injunction to block those restrictions, disclosing that U.S. TikTok users on average send 80 million direct messages and share 46 million videos a day on the app. Read more here.
Trump’s latest immigration restrictions are bad news for American workers
President Trump added immigration restrictions that require U.S. companies to offer jobs to U.S. citizens first and narrowing the list of qualifications to make one eligible for the H-1B visa, is designed to keep out of the country. In tightening the qualifications for H-1B admittances, along with the L visas used by multinationals and the J visas used by some students, the Trump administration is closing the door to economic growth. Study after study shows that the H-1B skilled-worker program creates jobs and drives up earnings for American college grads. In fact, economists say that if we increased H-1B admittances, instead of suspending them, we’d create 1.3 million new jobs and boost GDP by $158 billion by 2045. Read more here.
EU antitrust regulators may narrow Amazon investigation - sources
EU antitrust regulators may narrow the scope of their year-long investigation into Amazon to speed up the case against the U.S. online retail giant. Splitting up the Amazon case could address complaints by rivals that antitrust enforcers take too long to address harm done to them through anti-competitive practices and that rulings fail to keep pace with evolving markets. EU regulators adopted a similar tactic against Alphabet Inc’s Google by first addressing complaints about its price comparison shopping service and then opening investigations into other areas of its business. The European Commission started an investigation into Amazon in July 2019, focusing on whether its dual role as a marketplace for merchants and also as a competitor selling the same products might give it an unfair advantage. Read more here.
Bankrupt car rental firm Hertz secures $1.65 billion in financing, shares soar
Bankrupt car rental company Hertz Global Holdings Inc said on Friday it had lined up $1.65 billion in debtor-in-possession financing, sending its shares soaring. Hertz plans to invest up to $1 billion in vehicle acquisitions in the United States and Canada, and up to $800 million for working capital and general corporate purposes. The financing will be provided by some of the company’s creditors, Hertz said. It has filed a motion for approval of the financing by the U.S. Bankruptcy Court for the District of Delaware. The more than a century old company’s shares jumped 96% to $2.02 in premarket trading. Hertz filed for bankruptcy protection on May 22 after its business was decimated during the coronavirus pandemic and talks with creditors failed to result in much-needed relief. Read more here.
Start-up & Tech news
Thailand’s logistics startup Flash Express raises $200 million
Flash Express, a two-year-old logistics startup that works with e-commerce firms in Thailand, said on Monday it has raised $200 million in a new financing round as it looks to double down on a rapidly growing market spurred by demand due to the coronavirus pandemic. Flash Express, which operates door-to-door pickup and delivery service, claims to be the second largest private player to operate in this space. The startup, which also counts Alibaba as an investor, entered the market with delivery fees as low as 60 cents per parcel, a move that allowed it to quickly win a significant market share. The startup has also expanded aggressively in the past year. Flash Express had about 1,100 delivery points during this time last year. Now it has over 5,000, exceeding those of 138-year-old Thailand Post. Read more here.
India’s Razorpay becomes unicorn after new $100 million funding round
Bangalore-headquartered Razorpay, one of the handful of Indian fintech startups that has demonstrated accelerated growth in recent years, has joined the coveted unicorn club after raising $100 million in a new financing round, the payments processing startup said on Monday. The new financing round, a Series D, was co-led by Singapore’s sovereign wealth fund GIC and Sequoia India, the six-year-old Indian startup said. The new round valued the startup at “a little more than $1 billion,” co-founder and chief executive Harshil Mathur. Existing investors Ribbit Capital, Tiger Global, Y Combinator, and Matrix Partners also participated in the round, which brings Razorpay’s total to-date raise to $206.5 million. Razorpay accepts, processes, and disburses money online for small businesses and enterprises. In recent years, the startup has expanded its offerings to provide loans to businesses and also launched a neo-banking platform to issue corporate credit cards, among other products. Read more here.
Getaround raises a $140 million Series E amid rebound in short-distance travel
Amid a rebound in short-distance travel, Getaround, a Silicon Valley car rental startup, has raised some new money to meet demand. The startup, which allows customers to instantly rent cars near them in over 100 cities, announced today that it has raised $140 million in a Series E deal, bringing its total known venture funding to $600 million. The money comes after the car-sharing service faced its own set of hurdles before and during the coronavirus pandemic. In January, the startup reportedly laid off 150 employees, reducing field operations and the size of numerous global teams. In March, bookings dropped 75%, according to CEO Sam Zaid. Getaround laid off 100 employees. Zaid pointed to struggles within SoftBank, which did a $300 million Series D round in the company in mid-2018, as part of the reason. Read more here.
Merging Airbnb and the traditional hotel model, Mexico City’s Casai raises $23 million to grow in Latin America
With travel and tourism rising across Latin America, Casai, a startup combining Airbnb single unit rentals with hotel room amenities, has raised $23 million to expand its business across Latin America. The company, which initially was as hit hard by regional responses to the COVID-19 pandemic as other businesses in the hospitality industry has recovered to reach nearly 90 percent of total capacity on the 200 units it manages around Mexico City. The company was co-founded by chief executive Nico Barawid, a former head of international expansion at Nova Credit and consultant with BCG, and chief operating officer María del Carmen Herrerías Salazar, who previously worked at one of Mexico’s largest hotel operators, Grupo Presidente. The two met two years ago at a barbecue in Mexico City and began speaking about ways to update the hospitality industry taking the best of Airbnb’s short term rental model of individual units and pairing it with the quality control and standards that guests expect from a hotel chain. Read more here.
Dutch telecom KPN picks Ericsson over Huawei for 5G network
KPN KPN.AS has chosen Sweden's Ericsson ERICb.ST to build core elements of its new 5G mobile network following a decision last year not to select China's Huawei, the Dutch telecoms company said on Thursday. Huawei is effectively banned in the United States and Washington had expressed fears that if KPN’s 5G backbone contained Huawei equipment it would be vulnerable to spying by the Chinese state. Huawei, the world’s biggest telecoms equipment and smartphone vendor, has denied U.S. allegations that it is ultimately answerable to the Chinese government and is therefore a security risk. Read more here.
- For Economics, Finance, & Corporate news click ;
- For Global News and Politics click here.
See you next week!