Tuesday Morning Alternative Investments Newsletter

Good morning,

The attached brief is designed to keep readers informed of the key headlines impacting the startup space. Please let me know if you have any comments or suggestions.

Highlights:
SoFi’s Mike Cagney Quits Amid Allegations of Misconduct and Sexual Harassment
Airbnb sees 80 percent jump in visitors to Britain
SoftBank and Uber’s deal talks have advanced under Uber’s new CEO
Uber Advanced Technologies Group hires Oculus product lead, Jon Thomason
Hyperloop may have competition from a maglev train with $28M in gov't funding
General Motors is starting to build cars that can eventually drive without a human
Amazon's Whole Foods Price Cuts Brought 25% Jump in Shoppers
Matrimony IPO going strong subscribed 75% on Day 2

▶ Following allegations of sexual misconduct and fraudulent actions by managers, SoFi CEO Mike Cagney announced in a memo to employees at the country's biggest online lender that he would be stepping down by the end of the year. He explained that the distraction of the lawsuit was hindering the growth of SoFi. The company is one of the most highly valued private financial technology startups in the U.S. with the aim of giving graduates the opportunity to fund loans to undergraduates. The company quickly diversified, becoming an online lender for other products, such as mortgages and consumer loans, and by 2016, SoFi was funding billions of dollars of loans each quarter.

▶Airbnb has seen an 80% jump in visitors to Britain in the last year, the home rental firm said on Monday, as travelers pour into the country to take advantage of the weaker pound. The company said the growth in inbound visitors to the United Kingdom using its platform was 81% between July 2016 and July 2017, taking visitor numbers to 5.9M and generating $4.6bn for the economy. Airbnb said the country was its fifth largest home-sharing community in terms of numbers of listings. Britain received the highest number of foreign visitors ever in the second quarter, while Heathrow, Europe’s largest airport, on Monday reported a record August.

▶ The attempt by SoftBank to acquire a massive ownership position in Uber has entered a new stage — the ride-hailing company is soon to formally offer some of its shares to investors in exchange for billions of dollars from SoftBank. The green light comes as a 30-day due diligence process that began in mid-August draws to a close, as Uber’s shareholders will now begin the “tender offer” process. A sale from one of Uber’s largest investors to SoftBank, led by its idiosyncratic CEO, Masayoshi Son, could reshape the governance of one of Silicon Valley’s most controversial companies. Dara Khosrowshahi, Uber’s new chief, is under the microscope for his thoughts on the proposed deal, which some worry could empower Kalanick and undermine Khosrowshahi’s leadership.

▶ In other Uber-related news, Uber’s Advanced Technology Group has hired Jon Thomason, who most recently acted as Head of Mobile and Product at Facebook’s Oculus virtual reality company. Thomason joined Oculus in 2016 as Head of Software, taking responsibility for its mobile VR products in December when Oculus CEO Brendan Iribe moved to a role overseeing PC-based VR and leaving the CEO position. Prior to that, Thomason was VP of Mobile Shopping at Amazon, and VP of Engineering at Qualcomm before that.

▶ Elon Musk's Boring Company has ambitious plans to revolutionize transportation by building a Hyperloop between New York and Washington D.C. But it may have competition from a private company that has already made some progress with the US government: The Northeast Maglev (TNEM), a private company, was founded in 2011 with the goal of building a high-speed rail between New York and the country's capital. TNEM wants to first build the route between Washington D.C. and Baltimore before eventually extending it to New York. The secret lies in bringing Japan's maglev technology to the Northeast Corridor, which will allos trains to magnetically levitate above a track, allowing them to achieve higher speeds than traditional rail lines. A maglev train built by Central Japan Railway set a world speed record of 375 mph in 2015. The maglev will eventually connect Tokyo and Nagoya, but won't open to the public until 2027.

▶ Amazon’s takeover of Whole Foods, complete with deep price cuts, did more than bring a surge of publicity to the chain: It boosted customer traffic by 25%. That’s the finding of Foursquare Labs, which compiled location information during the first two days after Amazon completed its acquisition of the grocer. The data, culled from shoppers’ mobile devices, was compared with the same period a week earlier. Amazon acquired the upscale chain last month for $13.7bn, a move that has brought turmoil to the supermarket industry and sent shares of grocery rivals tumbling. The same day it completed the acquisition, the e-commerce giant cut prices by as much as 43% on a range of items. The traffic data is an optimistic sign that Amazon can succeed in the brick-and-mortar world. In some areas, the jump in customers was dramatic: At stores in Chicago, 35% more shoppers visited Whole Foods stores, Foursquare found.

▶ General Motors and its self-driving subsidiary Cruise have started to build Chevy Bolt electric vehicles that are being produced with fully autonomous hardware. In other words, once the software is ready — perhaps within months — these third-generation Bolt EVs will be able to operate themselves completely without a driver. GM is hardly the only company trying to build self-driving electric cars. But what sets it apart is its production capability to manufacture them at scale — something Tesla, say, currently lacks. This is a significant moment: Though the cars are still being produced in small numbers, it could give Cruise and GM a big advantage over its competitors. Many self-driving startups are just beginning to partner with automakers and have not yet made any public announcements about immediate plans to begin manufacturing fully integrated and production-ready self-driving cars.

▶ The initial public offering (IPO) of Matrimony.com, which owned online match making portal BharatMatrimony, got 75% subscription on Day 2 of bidding process, with 10 anchor investors including Goldman Sachs, HDFC Trustee company and Baring Private Equity India AIF. Experts are mixed on the IPO with some brokerages recommending subscribe on the issue, as they see healthy listing gains, others are not that sanguine. For them, it is a clear 'avoid'. Focused expansion of its marriage services business through cross selling and assisted services could also help the company move up the value chain, the company has said.

Links
SoFi’s Mike Cagney Quits Amid Allegations of Misconduct and Sexual Harassment
http://fortune.com/2017/09/12/sofi-ceo-mike-cagney-resigns/

Airbnb sees 80 percent jump in visitors to Britain
https://www.reuters.com/article/us-britain-airbnb/airbnb-sees-80-percent-jump-in-visitors-to-britain-idUSKCN1BM222

SoftBank and Uber’s deal talks have advanced under Uber’s new CEO
https://www.recode.net/2017/9/11/16288098/softbank-uber-deal-new-ceo

Uber Advanced Technologies Group hires Oculus product lead Jon Thomason
https://techcrunch.com/2017/09/11/uber-advanced-technologies-group-hires-oculus-product-lead-jon-thomason/

Elon Musk's Hyperloop may have competition from a maglev train with $28 million in government funding
http://www.businessinsider.com/tnem-maglev-challenge-elon-musk-hyperloop-2017-9

General Motors is starting to build cars that can eventually drive without a human
https://www.recode.net/2017/9/11/16289966/general-motors-cruise-self-driving-cars-autonomous-chevy-bolt-electric-vehicle

Amazon's Whole Foods Price Cuts Brought 25% Jump in Shoppers
https://www.bloomberg.com/news/articles/2017-09-11/amazon-s-whole-foods-price-cuts-brought-25-jump-in-customers

Matrimony IPO going strong, subscribed 75% on Day 2
http://economictimes.indiatimes.com/markets/stocks/news/matrimony-ipo-going-strong-subscribed-75-on-day-2/articleshow/60474188.cms