Facebook in recent weeks has approached a handful of small venture capital firms to discuss becoming an investor in their funds, according to people familiar with the matter. The VC strategy, which also includes direct investments in startups, aims to give the social network early, valuable insight into a wider swath of companies.
To run the new investing initiative, Facebook recently appointed Sunita Parasuraman, a nine-year veteran of the company who previously ran the treasury for its embattled Libra cryptocurrency project. Former Kleiner Perkins general partner Eric Feng, now a Facebook employee, is helping approach funds, sources say. The moves come as Facebook fends off antitrust scrutiny of its acquisitions and attempts to find new ways to counter growing competitive threats like TikTok.
Health tech venture firm OTV closes new $170 million fund and expands into Asia
OTV (formerly known as Olive Tree Ventures), an Israeli venture capital firm that focuses on digital health tech, announced it has closed a new fund totaling $170 million. The firm also launched a new office in Shanghai, China to spearhead its growth in the Asia Pacific region.
OTV currently has a total of 11 companies in its portfolio. This year, it led rounds in telehealth platforms TytoCare and Lemonaid Health, and its other investments include genomic machine learning platform Emedgene; microscopy imaging startup Scopio; and at-home cardiac and pulmonary monitor Donisi Health. OTV has begun investing in more B and C rounds, with the goal of helping companies that have already validated products deal with regulations and other issues as they expand.
OTV focuses on digital health products that have the potential to work in different countries, make healthcare more affordable, and fill gaps in overwhelmed healthcare systems.
Jose Antonio Urrutia Rivas will serve as OTV’s Head of Asia Pacific, managing its Shanghai office and helping the firm’s portfolio companies expand in China and other Asian countries. This brings OTV’s offices to a total of four, with other locations in New York, Tel Aviv and Montreal. Before joining OTV, Rivas worked at financial firm LarrainVial as its Asian market director.
OTV was founded in 2015 by general partners Mayer Gniwisch, Amir Lahat and Alejandro Weinstein. OTV partner Manor Zemer, who has worked in Asian markets for over 15 years and spent the last five living in Beijing, told TechCrunch that the firm decided it was the right time to expand into Asia because “digital health is already highly well-developed in many Asia-Pacific countries, where digital health products complement in-person healthcare providers, making that region a natural fit for a venture capital firm specializing in the field.”
He added that OTV “wanted to capitalize on how the COVID-19 pandemic has thrust the internationalized and interconnected nature of the world’s healthcare infrastructures into the limelight, even though digital health was a growth area long before the pandemic.”
86 400 partners with data analytics firm
According to Envestnet | Yodlee, the partnership will enable financial data access to over 100 financial institutions across Australia, and the ability for 86 400 customers to have control over their data.
Commenting on the partnership, Envestnet | Yodlee country manager for Australia and New Zealand Tim Poskitt said: “Consumers don’t have to wait for open banking to access and use their own data. Envestnet | Yodlee’s data aggregation enables consumers to link their financial accounts with tools and products that deliver better financial outcomes. That’s what 86 400’s products provide.”
According to Mr Poskitt, Envestnet | Yodlee’s experience with varying degrees of open banking regulation across global markets has highlighted the importance of consumer control of data.
He added that while competitive markets could ultimately benefit consumers, they are dependent on a consumer’s ability to link their financial data from one provider to another.
“Open banking is about providing consumers with real choice to select the products that best support their financial situation,” Mr Poskitt said.
“It’s this choice that ultimately leads to better financial outcomes. 86 400 is ahead of the curve in a market still coming to grips with the Consumer Data Right and open banking. We look forward to continuing to work with 86 400 to supercharge the financial lives of Australian consumers.”
Peppermint Innovation secures $2 million to grow bizmoto & seek requotation on the ASX
Peppermint Innovation Ltd (ASX: PIL) has signed a mandate with Clee Capital to raise $2 million from the issue of shares at $0.01 each.
Funds raised from the $2 million placement will be used to continue bizmoto’s targeted sales and marketing campaign and provide additional working capital to the Company.
Shareholders will be asked to consider and approve the $2 million placement at the Peppermint’s upcoming 2020 AGM.
As lead manager, Clee Capital will receive a fee of 6% of the total amount raised under the placement (up to $120,000), 20,000,000 options exercisable at 1.5 cents per share within 3 years of issue, 20,000,000 options exercisable at 2.5 cents per share within 3 years of issue, and will be paid a monthly fee of $5,000 for six months from the completion of the placement.
With this support Peppermint will seek re-quotation on ASX which is subject to the discretion of the ASX.
Peppermint’s Managing Director and CEO Chris Kain said, “We welcome the support of Clee Capital who recognise that Peppermint is at an exciting stage of growth and want to be involved with us as we gain significant momentum.
“The support shown by our loyal and long-term shareholders, together with the interest shown by our new sophisticated investment networks, has allowed Peppermint to complete and lodge our 2020 Annual Report with an unqualified audit opinion, thereby allowing us to seek re-quotation on the ASX.
“Peppermint’s focus is to continue to build and grow our proven micro enterprise mobile technology platform to empower the next cohort of Filipino entrepreneurs to deliver social good and financial inclusion to the people of the Philippines and the attached use of funds table explains how we will apply the funds raised to do that.”
Self Managed or Self Mangled SMSF?
By Tim Fuller, Head of Advice at Nucleus Wealth.
The allure of having complete control over your financial future is very compelling, and becomes even more so in turbulent market periods, like the one we have seen in 2020. So it is understandable that 2020’s volatile markets combined with the opaqueness of many large super funds could have left you wondering if you should be opening your own self managed super fund (SMSF).
It has been an interesting time for SMSF’s: the number of new accounts opened each year has been falling for the past decade. In 2018 new accounts equalled closed accounts. It’s clear the repealing of the ‘accountants exemption’ in July 2016 has been partly responsible for this. It stopped accountants without an appropriate advice license from recommending SMSFs to their clients. Post 2018, a marked decrease in closures has seen net new accounts increase again.
There has been an explosion of online SMSF accountant alternatives recently. These can cheaply and quickly establish a fund – but without advice. So, it is easier than ever to setup a fund.
For many, this might be an appropriate move in the long run, providing they have the time and skills to manage the structure and internal investments properly. However, many don’t. This year at Nucleus Wealth, we have had the most SMSF windups so far, with most opting to just roll across into our personal super side. A lack of time was the most often cited reason.
Can SMSFs be run with smaller balances?
In addition, there was some interesting research out last week regarding the ‘cost effectiveness’ of Self Managed Super Funds. With the disclaimer that Rice Warner was commissioned by the SMSF Association, so it is not what we would consider independent..
The report (summary info graphic here) goes to some length to combat the commonly held view that account balances need to be above $500,000 to be cost effective. The fixed administration and accounting costs mean that higher balances are usually needed to justify an SMSF.. To a degree Rice Warner are right, especially given the surge in low cost, online accountancy and audit providers that have flourished in the last 5 years. However, the devil is in the details. Both fees and management matter. Avoiding fees but failing the investment side can leave investors penny wise but pound foolish.
Young and free
In the latest SMSF quarterly statistical report, an interesting stat to watch is the one relating to the age of new establishments, in which nearly 43% of new establishments in the June quarter were by people between 25 and 44 years old.
Often this is the busiest time of an individual’s life, raising a family, buying/building/renovating a house, creating a career. Do all of these people also have enough time to be a fund manager?. Adding to this, nearly 50% of the new funders reported an annual income of between $0 and $80,000.
The old adage, with great power comes great responsibility is apt. Inexperienced investors seeking big returns start with small, seemingly innocuous forays into investments and asset classes not normally the domain of long term positioning. Areas like microcap stocks, forex trading and cryptocurrency (direct firey responses here please) promise (and in truth rarely deliver) large potential returns that can. However, if unsuccessful or not managed carefully, these assets can set back retirement plans for years at the other end. A decade of mandatory saving can be undone in a heartbeat.
Low fees for freedom?
The cost of ‘running’ a fund does not always stop at the low prices offered by the online accountants. If anything, that is just the start, as it really just leaves you with a pile of cash in a bank account. You then need to decide what to do with it. Chances are that if someone has bothered to set one up, there are already a few ideas in mind. That’s great, but loading your life savings into a couple of tips from HotCopper or Reddit could be viewed as walking into a casino.
Taking control personally is great as aside from some brokerage costs, your management costs are next to nil which sounds like a great deal right? But here’s a hot tip, you need to remember to put a value on your time. Even with an unquenchable interest in the investing world, you will probably find yourself spending more time on the management of your portfolio than you expected. Especially if things start to go wrong.
Is an SMSF that much cheaper?
In my experience, once you have added in the cost of your time, probably not. Our personal super accounts carry an additional trustee cost of 0.1% and an annual admin fee of $144 over the SMSF account types, meaning that unless the flexibility of an SMSF is worth paying extra for, your balance needs to be substantial (and your accounting cheap) to warrant the saving.
Alternatives to doing it (all) on your own.
There are plenty of options out there for competent investment management if it either all starts to get too hard or you start to feel the pinch timewise as family and work begin to take over.
A core and satellite approach is a common structure. It allocates a core to a diversified and liquid manager (or basket of ETF’s) for the nucleus of your portfolio and then satellite holdings to higher risk or more exotic assets is a good place to start. Particularly if you have some experience or insights into the satellite holdings.. If you succeed and realise terrific gains, well done, and use the opportunity to rebalance some back into your core holding and keep your retirement on track. If it does not work out so well, take solace in the fact that at least it was not the lot!
With little doubt the global pandemic, its ensuring effects on markets and perceived investment opportunities have pushed the thought of SMSF into the minds of many Australians in 2020. I just hope upon reflection in 20 years, the only impacts that remain are higher levels of cleanliness and an aversion to bat soup, and not blown up retirement plans for those who decided to self drive such an important component of Australian life.
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