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Equinix, the data center company, has the distinction of recently recording its 69th straight positive quarter. One way that it has achieved that kind of revenue consistency is through strategic acquisitions. Today, the company announced that it’s purchasing 13 data centers from Bell Canada for $ 750 million, greatly expanding its footing in the country.

The deal is financially detailed by Equinix across two axes, including how much the data centers cost in terms of revenue, and adjusted profit. Regarding revenue, Equinix notes that it is paying $ 750 million for what it estimates to be $ 105 million in “annualized revenue,” calculated using the most recent quarter’s results multiplied by four. This gives the purchase a revenue multiple of a little over 7x.

Equinix also provided an adjusted profit multiple, saying that the 13 data center locations “[represent] a purchase multiple of approximately 15x EV / adjusted EBITDA.” Unpacking that, the company is saying that the asset’s enterprise value (similar to market capitalization, a popular valuation metric for public companies) is worth about 15 times its earnings before interest, taxes, deprecation and amortization (EBITDA). This seems a healthy price, but not one that is outrageous.

Global reach of Equinix including expanded Canadian operations shown in left panel. Image: Equinix

The acquisition not only gives the company that additional revenue and a stronger foothold in the 10th largest economy in the world, it also gains 600 customers using the Bell data centers, of which 500 are net new.

As much of the world is attempting to digitally transform in the midst of the pandemic and current economic crisis, Equinix sees this as an opportunity to help more Canadian customers go digital more quickly.

“Equinix has been serving the Canadian market in Toronto for more than a decade. This expansion and scale gives the Canadian market a clear and rapid migration path to digital transformation. We’re looking forward to deepening our relationships with our existing Canada-based customers and helping new companies throughout the country position themselves for digital success,” Jon Lin, Equinix President, Americas told TechCrunch.

This is not the first time that Equinix has taken a bunch of data centers off of the hands of a telco. In fact, three years ago, the company bought 29 centers from Verizon (which is the owner of TechCrunch) for $ 3.6 billion.

As telcos move away from the data center business, companies like Equinix are able to come in and expand into new markets and increase revenue. It’s one of the ways it continues to generate positive revenue year after year.

Today’s deal is just part of that strategy to keep expanding into new markets and finding new ways to generate additional revenue as more companies use their services. Equinix rents space in its data centers and provides all the services that companies need without having to run their own. That would include things like heating, cooling, racks and wiring.

Even though public cloud companies like Amazon, Microsoft and Google are generating headlines with growing revenues, plenty of companies still want to run their own equipment without going to the expense of actually owning the building where the equipment resides.

Today’s deal is expected to close in the second half of the year, assuming it clears all of the regulatory scrutiny required in a purchase like this one.


TechCrunch

An eighth Amazon employee has died of COVID-19. The news comes as the company is under scrutiny for failing to be more transparent about the wider number of infections among its warehouse workers.

A spokesperson confirmed the reports of the death, telling TechCrunch, “We are saddened by the loss of an associate who had worked at our site in Randall, Ohio. “Her family and loved ones are in our thoughts, and we are supporting her fellow colleagues.”

According to the company, the worker in North Randall, a village outside of Cleveland, was sent home from work on April 30. She received a positive test a little over a week later, on May 8. Amazon says it notified fellow employees of the death and has provided counseling to colleagues.

The overall number of Amazon workers who have tested positive for the virus remains a mystery. The company stands by its decision not to disclose such information. “We don’t think that number is super valuable,” it has said previously. In a statement provided to TechCrunch, it added: 

Our rates of infection are at or below the rates of the communities where we operate. We see that in our quarantine rates as well. Quarantine rates are a critical part to understanding what’s happening in the workplace – it shows that our hard work around social distancing is paying off. Unlike others who hide beyond HIPAA, we alert every person at the site anytime there is a confirmed diagnosis. This alert to employees is a direct text message noting when the person with the confirmed diagnosis was last in the building.

The lack of transparency is one of a number of sources of criticism surrounding Amazon’s COVID-19 response.

While the company has repeatedly maintained that it has done all it can to protect the employees in its fulfillment centers, potential exposure to the virus among warehouse workers is difficult to avoid, even with the proper PPE. Earlier this month, a letter from 13 state attorneys general demanded that Amazon disclose the number of workers who have been impacted by the virus.

“We have requested but not received information on how many of the Companies’ workers have been infected with COVID-19, and how many have died from it,” the letter reads. “Please provide a state-by-state breakdown for each Company with this information.”

Earlier this week, The New York Times noted one particularly hard hit warehouse in northeastern Pennsylvania, where more than 100 workers have apparently tested positive for the virus. The exact figure is unknown, as Amazon will not disclose it. Yesterday, the Milwaukee Journal Sentinel noted that at least 30 workers at the nearby Kenosha warehouse have tested positive for the virus.

As more housebound Americans rely on Amazon for deliveries, workers have largely fallen under the “essential services” guidelines issued by many states. In mid-May, the company extended its $ 2 an hour “hazard pay bonuses” through the end of the month. Amazon confirmed that it will return to standard salaries, come June, stating: 

To thank employees and help meet increased demand, we’ve paid our team and partners nearly $ 800 million extra since COVID-19 started while continuing to offer full benefits from day one of employment. With demand stabilized, next month we’ll return to our industry-leading starting wage of $ 15 an hour.

The company has been subject to additional scrutiny over the firing of several employees that have raised public concerns over its treatment of workers during the crisis. While Amazon has repeatedly denied the firings were retaliation, the reports were enough to warrant another letter, this time from a number of high-profile senators, including Elizabeth Warren and Bernie Sanders.


TechCrunch

In the same week that Facebook announced a redoubled effort to make a bigger mark in e-commerce, one of its long-time partners has closed a large round of funding. Ecwid, the startup that sells e-commerce tools directly and via third parties like Square and Wix, letting businesses build e-commerce experiences on their own websites and apps, as well as via Facebook, Instagram, Amazon, Google, and more, has raised $ 42 million from Morgan Stanley and PeakSpan Capital.

Notably, now San Diego-based Ecwid had only raised about $ 6.5 million since 2009, the year it was founded in Russia as a spinout of X-Cart, a previous company founded by the founder and CEO Ruslan Fazylev; and it’s already profitable. So rather than being used to operate, Fazylev said the funding enabled earlier outside investors — Russia’s Runa Capital, iTech from Latvia and the IT-park business incubator from Kazan — cash out, and gives Ecwid funds that it can use both for acquisitions and to continue expanding its platform organically.

Ecwid is in the stable of e-commerce companies that include the likes of Shopify, BigCommerce and WooCommerce, which have seized on the growth of online shopping over the last decade and helped companies that are not digital by nature — specifically small and medium brick-and-mortar businesses — become a part of that digital economy. And to underscore that low barrier to entry, its pricing starts at free to enable shopping on a website covering 10 or fewer products. (Further priced tiers include the ability to integrate with Facebook and other sites, as well as sell more items, apply more analytics and so on.)

That mandate and opportunity to provide analogue SMBs a route to the next generation of shopping has taken on a new dimension in the last few months. Authorities in many jurisdictions have closed down brick-and-mortar establishments and offices, and restricted day-to-day movement and contact between people in an attempt to slow down the spread of the COVID-19 pandemic.

In other words, if e-commerce has been a long-term growth opportunity with upside for those that cared to invest in it, overnight it became a must-have for any small business that wanted to continue to operate through and after this health crisis.

Just as we’ve seen that trend play out for Shopify (whose share price has been on a roll), Fazylev said that Ecwid, too, has had a big boost. Ironically all that activity started after it closed the round (which was raised before COVID-19 really hit).

“The moment we signed the term sheet, things started to go really crazy,” he said. “Overnight, demand tripled because SMBs were under immense pressure to transition to online ordering. We at Ecwid are not worried about the Walmarts of the world but about the small guys and making it super easy for them. And so demand went through the roof.” Transaction volume between March and April grew by 50% and to meet demand.

Even before that, Ecwid was an under-the-radar success, which is why PeakSpan and Morgan Stanley came knocking.  Even if it’s not the 300% growth of the last couple of months, 2019 saw sign-ups double on the platform with a Net Promoter Score of above 60. (Fazylev said Ecwid lives and dies by its Net Promoter Score so he’s especially proud of this above-average figure.)

And in addition to its direct-to-SMB offering, it white labels through a number of popular channels like Wix, GoDaddy and Square. Together, there are some 1.5 million SMBs across 175 countries (and 54 languages) using its e-commerce rails. This might actually have been one reason why it wasn’t a part of the Facebook Shops news: it’s quietly enabling an army of competitors. But to be very clear, when I asked about the omission, Fazylev said he was stumped by it himself.

PeakSpan Capital Co-Founder and Managing Partner Phil Dur, and Pete Chung, Managing Director and Head of Morgan Stanley Expansion Capital, are both joining the board as part of this round.

“Covid-19 is reinforcing what we already knew: e-commerce is vital, and it’s available to even the smallest of merchants now with Ecwid’s free tools that even novice Internet users can adopt quickly,” said Dur, in a statement. “We have been watching Ecwid for many years.The company’s impressive capital efficiency and very strong long-term market opportunity made it an easy decision for us to partner with them during this next phase of growth.”

“Ecwid is truly helping its customers make the most of e-commerce enablement at a time when their traditional retail businesses have been disrupted so dramatically,” said Chung, in a statement. “Ruslan is an e-commerce visionary who has built a team and beloved solution that allows any mom-and-pop shop to embrace the online world,  dramatically expanding their revenue and market potential.”


TechCrunch

In the first decade of the twentieth century two German chemists, Fritz Haber and Carl Bosch, invented fertilizer — the nitrogen compound which ushered in modern agriculture and saved the world from potential starvation.

Now, over a century later, a new group of scientists backed by government-owned international investment funds and some of the world’s wealthiest men and women is trying to save the world from their invention.

In the hundred years since companies began manufacturing fertilizer at an industrial scale, the chemical has become one of the main sources of the pollution that’s choking the planet and putting millions of the lives its use has helped to feed at risk from severe droughts, fires, floods, and storms caused by climate change.

That’s why investors including Breakthrough Energy Ventures (the investment fund backed by Mukesh Ambani, Jeff Bezos, Bill Gates and Masayoshi Son) and the Singapore-owned investment fund Temasek along with DCVC; Prelude Ventures; Spruce Capital Partners; Codon Capital; Bunge Ventures; Continental Grain Company; Tekfen Ventures; Pavilion Capital; and individual investors Alan Cohen and Roger Underwood have backed Pivot Bio with a new $ 100 million investment.

Pivot uses genetically edited microbes to replicate the work that naturally occurring bacteria had done for millions of years to fix nitrogen in the soil, where it could be absorbed through plants’ root structures.

Crops like peas, beans, and soybeans have developed a symbiotic relationship with bacteria in the soil that take nitrogen from the air and convert it into a form that the plants can use. But grains like corn and wheat don’t have a link with any nitrogen-fixing bacteria, so they’re not able to grow as robustly. Some farmers rotate crops between plants that have nitrogen fixing bacteria and those that don’t so the soil can remain nutrient rich.

Using the company’s products, Pivot Bio estimates that farmers can improve yields and remove one gigaton of carbon dioxide-equivalent emissions from the atmosphere. The company also said that it can reduce approximately $ 4.1. billion in spending on water purification across the U.S. Spending which can be traced back to the water pollution associated with industrial farming and its use of synthetic fertilizers.

Over time, the run off of excess fertilizer from farms can lead to environmental degradation and the poisoning of local and regional water supplies.

Farmers are already using Pivot Bio’s microbes to improve crop yields and reduce fertilizer use for corn crops — with typically gains of 5.8 bushels per acre on fields that used the company’s treatments compared to fields using only synthetic nitrogen, the company said.

“Growers and our planet deserve a better fertilizer – one that balances on-farm economics with the farmer’s commitment to leave the land better for the next generation, and Pivot Bio’s technology helps them do just that,” said Karsten Temme, CEO and co-founder of Pivot Bio.

Pivot will use the money from the new round to expand internationally into Latin America and Canada and begin marketing a new product that it’s introducing into the U.S. market for wheat crops, the company said.

“Pivot Bio’s microbial nitrogen fertilizers are revolutionizing how farmers apply nitrogen to their crops, and we’re excited to continue our investment to support this important mission,” said Carmichael Roberts of Breakthrough Energy Ventures, in a statement. “The company is leading the charge on truly sustainable farming techniques, and we’re confident that they’ll continue to innovate their product offerings to solve this critical climate and societal challenge.”

As Temme notes, the thesis around using microbes in agriculture dates back at least fifty years. However DNA sequencing, machine learning, and gene editing made possible by advances like CRISPR all equate to new abilities for researchers to develop products that can fulfill the promise that microbial soil enrichment promised.

For Pivot Bio, the proof is in the sales. Even as the economic downturn caused by the COVID-19 epidemic continues to wreak its havoc on a range of industries, Temme said that Pivot’s sales remain consistent.

Typically when farmers face tough times, they go back to basics and don’t experiment with new, relatively unproven products, Temme said. However, Pivot’s product is already sold out for the season.

“Pivot Bio is addressing one of the most difficult challenges facing agriculture in the 21st century – reducing dependence on damaging synthetic fertilizer while increasing crop yields and creating better outcomes for farmers,” said Matt Ocko, Managing Partner, DCVC, in a statement.

Pivot may be the company that’s managed to get to market first, but they’re far from the only company looking at replacing fertilizer with microbes. In Boston, a joint venture between Gingko Bioworks and Bayer, called Joyn Bio, is developing a microbial-based nitrogen fixing technology of its own.

However, its product has yet to come to market and the company’s planned trials have been delayed by the COVID-19 outbreak, the company said.

“We are following the strict guidelines of our facilities in Boston and Woodland that dramatically reduces the number of employees in our labs and greenhouses, while the remainder of our staff are continuing our efforts from home,” the company wrote in a statement on its website. “We are currently focused on preparing for our 2020 field and greenhouse trials as best we can under these new conditions.”

Meanwhile, Pivot Bio continues to sell.

“Farmer acceptance of our technology and support of our vision is far beyond our expectations,” said Temme, in a statement. “They understand the economics and efficiencies our product offers – more consistent yields, 100 percent nitrogen efficiency with the crop, and a lighter environmental footprint. It’s a triple bottom line for them and our planet.”


TechCrunch

While some U.S. investors might have taken comfort from China’s rebound, we still find ourselves in the early innings of this period of uncertainty.

Some epidemiologists have estimated that COVID-19 cases will peak in April, but PitchBook reports that dealmaking was down -26% in March, compared to February’s weekly average. The decline is likely to continue in coming weeks — many of the deals that closed last month were initiated before the pandemic, and there is a lag between when deals are made and when they are announced.

However, there’s still hope. A recent report concluded that because valuations are lower and there’s less competition for deals, “the best-performing vintages tend to be those that invest at the nadir of a downturn and into the early stage of recovery.” There are countless examples from the 2008 recession, including many highly valued VC-backed businesses such as WhatsApp, Venmo, Groupon, Uber, Slack and Square. Other early-stage VCs seem to have arrived at a similar conclusion.

Also, early-stage investing seems more resilient. During the last recession, angel and seed activity increased 34% as interest in the stage boomed during a period of prolonged growth.

Furthermore, there is still capital to be deployed in categories that interested investors before the pandemic, which may set the new order in a post-COVID-19 world. According to data provider Preqin Ltd., VC dry powder rose for a seventh consecutive year to roughly $ 276 billion in 2019, and another $ 21 billion were raised last quarter. And looking at the deals on the early-stage side that were made year to date, especially in March, the vertical categories that garnered the most funding were enterprise SaaS, fintech, life sciences, healthcare IT, edtech and cybersecurity.

Image Credits: PitchBook

That said, if VCs have the capital to deploy and are able to overcome the obstacle of “having never met in person,” here are six investment trends that could emerge when the pandemic is over.

1. Future of work: promoting intimacy and trust


TechCrunch

Despite what companies have said about providing personal protective equipment to gig workers, some workers say they are struggling to get masks, gloves and other items from companies like Target-owned Shipt, Uber, Lyft and Instacart.

“PPE is still a huge issue for us,” Shipt shopper and organizer Willy Solis told TechCrunch. “We have dozens of reports across the country where shoppers have gone to pick up their equipment to be told it’s only for employees. On top of that, Target’s Twitter account essentially said that much.”

Earlier this month, Shipt workers staged a walk-off in protest of Shipt’s treatment of workers amid the COVID-19 pandemic. Around that time, Shipt said it would provide all shoppers with gloves and a mask within the next two weeks. Those shoppers, Shipt said, would be able to pick them up at their nearest Target stores. Shipt said it also would allow its most active shoppers to claim a free kit that included gloves and hand sanitizer. But some shoppers report struggling to pick up the PPE at Target and through the Shipt app.

Shipt declined to comment for this story but pointed us to both Shipt’s and Target’s respective announcements.

Over in Los Angeles, some Uber and Lyft drivers say the rideshare companies have yet to provide them with face masks and other protective equipment. This is in light of LA Mayor Eric Garcetti’s Worker Protection Order, which requires companies to provide essential workers with PPE.

“As an Uber driver, I’m incredibly vulnerable to infection,” Uber driver Deborah Garcia said in a statement. “I transport dozens of passengers every day, and many are the doctors and nurses dealing with coronavirus cases up close. Uber and Lyft love to talk about drivers as heroes on the frontlines, but what does it say about these companies that they’d rather brainstorm clever hashtags than use even a small slice of their billions to keep drivers like me safe? It’s infuriating, and it’s time for our elected officials to take action.”

Uber says it’s begun distributing masks to active drivers and delivery workers throughout the nation, initially focused on New York City and Los Angeles. Active drivers and delivery people in Los Angeles who have requested masks should receive them in the mail by the end of this week, according to Uber.

“This is a long term commitment,” an Uber spokesperson told TechCrunch. “We have ordered tens of millions of masks for drivers around the world and expect another major shipment to the US very soon.”

Uber says it has also started shipping around 30,000 bottles of disinfectant. Lyft, in response to claims that the company is not providing PPE, says what drivers are saying is not true.

“In light of the latest CDC guidance on cloth face coverings, we’ve ordered face masks for drivers at no cost to them,” a Lyft spokesperson told TechCrunch. “We have been making them available to drivers, prioritizing regions where additional guidance about face coverings has been given. This includes LA, where we’ve already begun handing out thousands of face coverings to drivers.”

Lyft began distributing masks last Saturday, and distributed some more this past Monday and Wednesday. Lyft plans to distribute more on Friday. So far, Lyft says it has been able to hand out thousands of masks.

There are also reports that Instacart shoppers are having difficulty obtaining hand sanitizer and reusable face masks, according to The Hill. Instacart says it has been providing shoppers with hand sanitizer since last week and began shipping thousands of kits with face masks, sanitizer and thermometers this past Monday.

Nationwide, there is an understanding that gig workers delivering food and groceries, and providing rides to people during the pandemic are essential. As more cities begin to implement rules requiring people to wear masks upon entering grocery stores, companies will be forced to step up their production and delivery of personal protective equipment to workers.


TechCrunch

Microsoft is pulling out of an investment in an Israeli facial recognition technology developer as part of a broader policy shift to halt any minority investments in facial recognition startups, the company announced late last week.

The decision to withdraw its investment from AnyVision, an Israeli company developing facial recognition software, came as a result of an investigation into reports that AnyVision’s technology was being used by the Israeli government to surveil residents in the West Bank.

The investigation, conducted by former U.S. Attorney General Eric Holder and his team at Covington & Burling, confirmed that AnyVision’s technology was used to monitor border crossings between the West Bank and Israel, but did not “power a mass surveillance program in the West Bank.”

Microsoft’s venture capital arm, M12 Ventures, backed AnyVision as part of the company’s $ 74 million financing round which closed in June 2019. Investors who continue to back the company include DFJ Growth and OG Technology Partners, LightSpeed Venture Partners, Robert Bosch GmbH, Qualcomm Ventures, and Eldridge Industries.

Microsoft first staked out its position on how the company would approach facial recognition technologies in 2018, when President Brad Smith issued a statement calling on government to come up with clear regulations around facial recognition in the U.S.

Smith’s calls for more regulation and oversight became more strident by the end of the year, when Microsoft issued a statement on its approach to facial recognition.

Smith wrote:

We and other tech companies need to start creating safeguards to address facial recognition technology. We believe this technology can serve our customers in important and broad ways, and increasingly we’re not just encouraged, but inspired by many of the facial recognition applications our customers are deploying. But more than with many other technologies, this technology needs to be developed and used carefully. After substantial discussion and review, we have decided to adopt six principles to manage these issues at Microsoft. We are sharing these principles now, with a commitment and plans to implement them by the end of the first quarter in 2019.

The principles that Microsoft laid out included privileging: fairness, transparency, accountability, non-discrimination, notice and consent, and lawful surveillance.

Critics took the company to task for its investment in AnyVision, saying that the decision to back a company working with the Israeli government on wide-scale surveillance ran counter to the principles it had set out for itself.

Now, after determining that controlling how facial recognition technologies are deployed by its minority investments is too difficult, the company is suspending its outside investments in the technology.

“For Microsoft, the audit process reinforced the challenges of being a minority investor in a company that sells sensitive technology, since such investments do not generally allow for the level of oversight or control that Microsoft exercises over the use of its own technology,” the company wrote in a statement on its M12 Ventures website. “Microsoft’s focus has shifted to commercial relationships that afford Microsoft greater oversight and control over the use of sensitive technologies.”

 

 


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