It’s Tuesday and here’s what’s going on in tech, both locally and overseas. Have a fab day and don’t forget to tune into the Startup Daily show on ausbiz.com.au at 2pm today.
1. Musk in da Clubhouse
The world’s richest man jumped on Clubhouse for an invitation-only Sunday night session, with more than 10,000 people piling in to hear what the Tesla boss had to say.
TechCrunch has most of the details here. Then came the moment when the conversation turned to the matter everyone wanted to talk about: the Robinhood/GameStop saga. Next thing you know, co-CEO Vlad Tenev joins for his very first time and Musk turns interviewer on what went down. Hope King took copious notes as dot points here, but the short version is: as everyone piled into trades on the commission-free app, regulators intervened, demanding Robinhood drop US$3 billion into a security deposit to back up the trades. Now Musk might call that his petty cash drawer, but Teney was forced to raise $1bn in emergency capital from existing investors and said “We had no choice in this case” but to cut off trades on some fronts, including GameStop and AMC Entertainment, because “we had to conform to our regulatory capital requirements”.
Musk asked if “something maybe shady” happened, which Teney denied, saying the regulator, the NSSC, reduced the cash they had to stump up to $1.4bn, but Robinhood still had to limit trades.
CNBC has more on that conversation here.
2. Databricks raises $1bn
Some of the world’s biggest data and cloud companies, including AWS, and the venture arms of Google parent Alphabet and Salesforce have backed a US$1bn series G raise for data analytics and AI startup Databricks, valuing the California business at US$28 billion.
New investors included Franklin Templeton, Canada Pension Plan Investment Board, Fidelity Management & Research LLC, and Whale Rock, alongside existing investors including Microsoft, Andreessen Horowitz, Alkeon Capital.
Databricks helps companies quickly process large sets of data for analysis, and is believed to be heading for an IPO later this year.
3. Xinja’s plan B
Ex neobank Xinja, which handed back its banking licence last month, having returned more than $250,000 million in deposits to customers, is giving investors the options of winding up the business or pressing on with plans for a US share trading platform to offer wealth management for millennials to Gen Yers.
Shareholders will hold a virtual meeting on February 17 for a non-binding vote on the plans, with founder and CEO Eric Wilson emailing them late last week saying of the latter option that “if shareholders are willing to support it, the business may be able to reset and rebuild shareholder value”. The alternative, an end to the dream would deliver 0-5% on their original investments.
“With your support I would like to try and rebuild our business over the next few years into a wealth platform on app and net,” Wilson said, adding that the company was solvent, has some cash and its IP, having “spent considerable time and effort” developing its personal lending product.
There are also possibilities around white label versions of Xinja’s tech, with Wilson pledging to work for six months without pay if his investors are willing to back them.
4. VC tops $2bn
Australian venture capital funding last last hit a record US$1.6 billion, up from US$1.48 billion in 2019, according to the quarterly KPMG Venture Pulse report.
Fewer investments were made, but at higher levels with 227 VC deals over 2020, down on 2019’s 285. Major deals last year included later stage rounds for established scale-ups such as Brighte, SiteMinder and Safety Culture, which raised over US$70 million across two funding rounds.
5. DesignCrowd raises $10m
Online design company DesignCrowd has raised $10 million in what the company’s flagged as a pre-IPO raise to help drive the growth of its new product and expand its team.
The funds came from five investors: Perennial Value Management, Alium Capital, Ellerston Capital, Regal Funds Management and CVC, following on from previous backers Starfish Ventures and AirTree. The business has now raised $22m.
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