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Silicon Valley’s most prominent VC firm had a banner week: $9 billion in IPO shares while helping TikTok negotiations

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Sequoia Capital Global Managing Partner Doug Leone speaks onstage during Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018 in San Francisco, California.

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Even by Sequoia’s standards, this was a crazy week. 

The 48-year-old venture capital firm, long the envy of its Silicon Valley peers because of early bets on Apple, Cisco, Google, LinkedIn, WhatsApp and Zoom, just wrapped up a five-day stretch that, for many rivals, would mark a strong five-year run.

Sequoia has an 8.4% stake in Snowflake, which had the biggest software IPO ever, and is the largest owner of gaming company Unity. It also owns shares in Sumo Logic, which debuted on Thursday.

Sequoia’s holdings in those three companies are worth about $9 billion as of Friday’s close.

And then there’s TikTok. The social media app owned by China’s ByteDance is under pressure by the Trump administration and facing a potential U.S. ban this weekend. Sequoia, which launched a China operation in 2005, is an investor in ByteDance and has been helping the company navigate its options.

Sequoia partners surely wouldn’t have predicted this level of activity six months ago, when the firm sent around a memo to portfolio companies warning them of the potential financial impact of the coronavirus. Sequoia urged start-ups at the time to pay close attention to their cash positions, warned them that financing activity could “soften significantly,” suggested that customer spending may drop and said it was time to examine whether they could “do more with less” when considering headcount. 

The New York Stock Exchange welcomes Unity Software Inc. (NYSE: U) Friday, September 18, 2020, as they officially begin trading today.

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The memo wasn’t completely off target. Covid-19 has ravaged much of the U.S. economy, and many start-ups reliant on travel, hospitality and entertainment have been forced to shutter or downsize dramatically. Two of Sequoia’s big bets, room-sharing site Airbnb and scooter company Bird, made major job cuts as demand plunged.

But the historic week Sequoia just closed out provides a glimpse into the kinds of businesses that are surging during this era of forced remote work, even with unemployment hovering near double digits. It also underscores Sequoia’s ability to more than offset challenges in its portfolio with multibillion-dollar wins.

‘Exceptional investors’

Many firms have their day in the spotlight, hitting on a couple big exits in a year followed by a lull. Not Sequoia. Anand Sanwal, CEO of tech industry research firm CB Insights, pointed to a survey his company performed in 2016, asking VCs which venture fund they would invest in, other than their own, if given the opportunity. 

“The #1 firm by a significant margin was Sequoia,” Sanwal said in an email. “Their wins with Unity, Snowflake, Sumo Logic serve as more evidence of them being exceptional investors.”

Sequoia invests at all stages with different funds, sometimes getting in on the ground floor and other times pouring in growth capital ahead of an IPO.

Snowflake was a later-stage deal from the growth fund, but still accounts for the firm’s biggest windfall among the three IPOs this week. The company more than doubled in value in its debut on Wednesday and closed the week with a market cap of $66.4 billion, valuing Sequoia’s stake at almost $5 billion. 

Sequoia first backed Snowflake in 2018, and over a two-year period invested a total over $271 million. Carl Eschenbach, a partner at Sequoia, said in a press release at the time of its initial investment that the company had “truly disrupted the data warehouse market” and called it a “key enterprise solution for the public cloud.” Revenue increased more than 130% in the first half of the year, as more big customers came to rely on cloud data tools instead of those tied to machines in their data centers.

The firm’s relationship with Unity is very different, but the video game software maker is another example of a business that’s powering through the coronavirus epidemic. Consumers stuck at home are playing more games, and Unity benefits from having software that lets developers build for all platforms through a single set of code. The company said in its prospectus that it’s seeing “higher levels of end-user engagement as a result of COVID-19 shelter-in-place orders.”

Sequoia led the first venture round in 2009, when the company was five years old and had just recently moved into mobile game development. Led by Roelof Botha, Sequoia first invested out of its main venture fund and continued putting in capital over the next decade, with later money coming from its growth funds.

By the time of Unity’s IPO, Sequoia had amassed a 24% stake and remained the largest shareholder. After Unity’s shares jumped 31% in their first day of trading on Friday, Sequoia’s 57.5 million shares were worth $3.9 billion.

In an interview on Friday, Unity CEO John Riccitiello said that Botha is “one of the first calls I make when I’m vexed with something and facing a challenging decision.” 

“There’s no surprise that they’re in the middle of everything that’s important,” Riccitiello said of Sequoia, adding that Botha’s birthday is this weekend and he plans on giving him a call.

In between Snowflake and Unity was the Thursday debut of Sumo Logic, a cloud data analysis company, which closed the week with a market cap of $2.5 billion. Sequoia led a $30 million round in 2014, headed by Pat Grady.

Relative to some other bets, Sumo Logic is a small one for Sequoia. The firm’s name isn’t in the prospectus, meaning it owns less than 5% of the shares. Still, the stock price is up about five-fold from what Sequoia paid. 

Silicon Valley, China and the beltway

Heading into this week’s IPO bonanza, Doug Leone, Sequoia’s lead managing partner and a 32-year veteran of the firm, was dealing with a completely separate matter involving the tense standoff between Washington, D.C., and Beijing. 

In early August, President Trump issued an executive order banning U.S. transactions with TikTok in 45 days, amid concern about Chinese government’s access to the app’s data on American consumers. The Commerce Department announced Friday morning that it will impose the ban on Sunday, though a deal to keep it running could happen before then.

Sequoia has a significant financial interest in a positive outcome. The firm invested in ByteDance in 2014 at a $500 million valuation. The company is now reportedly worth over $100 billion, and TikTok is a big reason why. It’s a top five app on iOS and the Google Play store, with more than 100 million people in the U.S. using it to create and watch short videos. 

Over the past six weeks, Leone and a team at Sequoia, along with some of ByteDance’s other U.S. investors, have acted as liaisons between the company and the U.S. government and have helped explore potential solutions to avoid a shutdown, according to a person familiar with the matter who asked not to be named because the discussions were confidential. The Washington Post and Wall Street Journal previously reported on Sequoia’s involvement in the process. 

The drama has pulled in some of the biggest U.S. companies. Microsoft, Google, Walmart and Oracle all emerged as potential buyers of TikTok so that the operation would be based in the U.S. More recently, Oracle had planned to become a technology partner for TikTok, hosting the data on its cloud, while taking a stake in the company. To address ownership concerns, ByteDance would spin off TikTok through an IPO on a U.S. stock exchange, according to people familiar with the matter.

Whatever happens with TikTok, Sequoia is generating plenty of money for its limited partners to justify the more than $7 billion it raised earlier this summer for funds in the U.S., China and India.

Meanwhile, one of its key competitors in the late-stage financing market has retrenched. SoftBank’s Vision Fund racked up massive losses because of the near-collapse of WeWork late last year and struggles at companies like Indian hotel chain Oyo and construction start-up Katerra.

The Vision Fund has bounced back in recent months with the recovery in the broader market, helping SoftBank swing to a profit in the latest quarter. Still, the turmoil from 2019 has forced SoftBank to pull back from writing big checks even as Sequoia remains as active as ever.

Sequoia didn’t make any partners available for this story.

WATCH: How the White House’s actions against TikTok crystallizes globalization of social media

Source: https://www.cnbc.com/2020/09/18/sequoia-had-a-9-billion-week-from-three-ipos-and-helped-on-tiktok.html

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eBay makes a dedicated portal for officially refurbished gear

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eBay launches a Certified Refurbished site for used goods
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eBay is taking on Amazon Warehouse with a new destination called Certified Refurbished, selling used goods from brands like Lenovo, Microsoft and Makita. The idea is that you can buy second-hand products at significant discounts over new, but still get a two-year warranty (from Allstate), a money-back guarantee and 30-day “hassle-free” returns, along with new accessories, manuals and manufacturer-sealed packaging.

eBay’s Certified Refurbished has five priority categories: laptops, portable audio,power tools, small kitchen appliances and vacuums. It offers several brand exclusives, including De’Longhi, Dirt Devil, Hoover, Makita and Philips, along with inventory exclusives from Dewalt, iRobot and Skullcandy. It’s also selling products from participating brands including Dell, Acer, Bissel, Black & Decker, Cuisinart, KitchenAid, Lenovo, Microsoft, Miele and Sennheiser.

To make the cut, manufacturers must offer items in “pristine, like-new condition that has been professionally inspected, cleaned, and refurbished by the manufacturer, or a manufacturer-approved vendor,” according to eBay. It also must be in new packaging with original or new accessories.

For an example of the savings, the site is offering Dell’s best-equipped 2020 XPS 15 9500 for $1,950, or $650 off the current price at Dell. Samsung’s Powerbot R7040 robot vacum is $199 rather than $399, and if you’re looking for a drill, Dewalt’s 20V combo tool kit used costs $235, while a new version runs $399 on Amazon.

eBay Certified Refurbished doesn’t have as many categories or brands as Amazon Warehouse or Amazon Renewed, but it seems to offer free shipping on most items, along with the guarantee and other perks. It’s now available to users in the US, and eBay said that applications are now open to retailers in Australia.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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The Morning After: GMC’s Hummer EV, AOC on Twitch and iPhone 12 reviews

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The 5G iPhones are almost here. This time around, Apple is offering four models in its iPhone 12 lineup and while we haven’t tested all of them (the 12 mini and the 12 Pro Max are coming later), we’ve given the other two devices our full scrutiny. And we kind of had to — the iPhone 12 and 12 Pro are remarkably similar phones in so many ways.

iPhone 12 and iPhone 12 Pro

No, seriously, if you didn’t spot the third camera (the telephoto one that does zoom), you’d struggle to tell them apart by eyesight alone. You can take this two ways: The Pro phones don’t warrant the extra money this time around, or the iPhone 12 is a well-priced phone where you make barely any compromises. Our full review combines both phones for these very reasons. 

If you’re looking for an even cheaper iPhone, wait for that iPhone 12 mini, perhaps. And if you want the very best imaging in an iPhone, wait for the iPhone 12 Pro Max, which has even better cameras than the smaller Pro model. Yes, it’s easy to get confused. Oh and the iPhone 11 is still on sale, too!

— Mat

GMC’s 1000HP Hummer EV is an ‘all-electric supertruck’

After a series of teasers dating back to the Super Bowl, GMC finally revealed the new Hummer. 

The GMC HUMMER EV is driven by next-generation EV propulsion technology that enables unprecedented off-road capability, extraordinary on-road performance and an immersive driving experience.

The four-door crew cab boasts AWD, 1,000 HP and 11,500 ft/lb of torque generated by three motors run from the vehicle’s Ultium battery pack. That’s enough oomph to reportedly propel it from standing to 60MPH in just three seconds, the same timing as the Rivian R1, and an announced range of 350 miles.

Ultium batteries come in sizes as large as 200kWh — double what you’d find in a Model S and 80kWh bigger than what the massive Bollinger B1 uses — however, GMC has not confirmed what the Hummer EV is sporting. Using the higher throughput recharge options and the fact that the Hummer EV utilizes an 800V power architecture, GMC estimates the Hummer EV will fill 100 miles worth of power in just ten minutes using DC at 350kWh.

The Hummer will also have something called Crab Mode, where the front and rear wheels rotate at the same tilt angle, so the vehicle moves diagonally — you know, like a crab. According to GMC, the Hummer EV will be able to scale “18-inch verticals and [drive] through water that is more than two feet deep,” and its open-air Infinity Roof consists of removable, transparent “sky panels.”

The 2021 Hummer EV Edition 1 is slated for release in fall 2021. It will have a starting MSRP of $112,595. The model year 2022 Hummer EV is expected to retail for $99,995, the 2023 should start at $89,995 and the 2024 model (which will not include a third motor) will start at $79,995.
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AOC’s ‘Among Us’ Twitch stream peaked at over 435,000 viewers

The stream encouraged viewers to make a plan to vote on or before Election Day.

AOC's 'Among Us' Twitch stream

Last year, Donald Trump joined Twitch — before enduring a two-week ban over hateful content — and now US Representative Alexandria Ocasio-Cortez has joined the service. Her first broadcast featured games of Among Us played with fellow Rep. Ilhan Omar and a few popular streamers. 

That proved to be a good strategy, as Twitch reports the concurrent viewer count peaked at 435,000. That’s the third highest count we’ve heard of, behind the Ninja/Drake stream in 2018 that topped 600k and Shroud’s return stream that crossed 500k.
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NASA’s OSIRIS-REx successfully collected bits of an orbiting asteroid

After over a decade of planning, the $800 million mission achieved a major milestone.

OSIRIS-REx

NASA made history on Tuesday afternoon as its OSIRIS-REx spacecraft successfully “tagged” the asteroid 101955 Bennu, and in doing so collected a small sample of regolith from the passing celestial body’s surface. This marks the first time a NASA mission has managed to intercept, interact with and collect samples from an asteroid.

Collecting those samples involved a never-before-tried technique dubbed the touch-and-go (TAG). Before beginning its approach, the OSIRIS unfolded and deployed its Touch-And-Go Sample Acquisition Mechanism (TAGSAM) while pulling its solar panels back into a Y-shape so that if the TAGSAM arm did accidentally overshoot and crunch into Bennu, the rest of the spacecraft would still have the necessary power to function. 

To ensure it has a sufficiently large sample, OSIRIS will first take a picture of the collector head to confirm the presence of regolith, and then on Saturday, will extend its TAGSAM arm and spin on its axis like a centrifuge to measure the mass of rock and dust in the collection bin. If all goes well, the collection capsule will return to Earth at the Utah Test and Training Range in 2023.
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The Department of Justice sues Google over antitrust concerns

This is arguably the biggest antitrust move since the government sued Microsoft in 1998.

On Tuesday, the US government’s Department of Justice filed an antitrust lawsuit against Google. The company, which is a part of Alphabet, is accused of having an unfair monopoly over search and search-related advertising. In addition, the department disagrees with the terms around Android, the most widely used mobile operating system, that forces phone manufacturers to pre-load Google applications and set Google as the default search engine. 

Rebutting the charges, Google’s chief legal officer Kent Walker wrote that “People use Google because they choose to, not because they’re forced to or because they can’t find alternatives.”
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Sony plans to optimize the PS5’s fan speed using game data

What a cool idea. Who’s a fan?

PS5 teardown

Sony will be monitoring the system and collecting data on individual games, so if a game really taxes the PS5, the fans could kick in at higher (and noisier) speeds to keep things running smoothly. These currently theoretical fan optimizations would presumably be delivered via software updates. PlayStation owners are used to firmware patches that change or add new features to their system. But an update that changes the physical performance of the hardware? That’s unusual.
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But wait, there’s more…

Windows 10’s October 2020 update is rolling out with a refreshed Start menu

Quibi chairman reportedly looked into selling its content library

Impossible Foods is working on plant-based milk that tastes like the real thing

DJI’s Pocket 2 handheld promises higher quality and mods

Photoshop’s new AI features include neural filters and sky replacement

‘Fortnite’ will host a Halloween ‘cross reality’ concert with singer J Balvin

Adobe’s tool to identify edited images comes to Photoshop

Cyberpunk 2077’s dialogue was lip-synced by AI

Novation and Aphex Twin’s limited-edition Bass Station II embraces the weird

In this article: themorningafter, newsletter, gear
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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Vivo phones are coming to Europe

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Vivo has expanded its reach and announced its entry into the UK, France, Germany, Italy, Poland and Spain. The Chinese tech manufacturer has also presented its first European line-up at an online media briefing broadcast from Dusseldorf, Germany, revealing that it’s hoping to win new fans in the region with the Vivo X51 5G. As Trusted Reviews notes, the flagship phone’s specs are almost identical to the X50 Pro with its micro gimbal camera that can keep videos stable. The main difference between the two is that the X51 5G has software modified for the European market.

Aside from the new flagship, Vivo is making its European debut with a series of mid—range smartphones: the Y70, Y20s and Y11s. It’s also releasing two Google Assistant-capable wireless earphone models in the region. First is the True Wireless Stereo Earphone Neo, which features AI noise canceling, while the other is Vivo’s Wireless Sport Earphone. The latter was designed for outdoor activities and hence boasts strong battery performance.

In its announcement, Vivo says its European launch followed extensive preparations, including research and interviews with 9,000 people across the continent. Vivo has a pretty decent share of the global smartphone market and is the sixth leading manufacturer in the world, according to Counterpoint Research. Like other Chinese OEMs venturing into Europe, though, it may see the continent as a market that promises even more growth, in part due to an opening left by Huawei after it was placed in the US entity list. The move prevents the manufacturer from offering Google’s services on its devices and from working with other US companies. Huawei used to be pretty popular in Europe until 2019, when it saw its sales drop in the region. The company was only able to prevent its numbers from slipping too much this year by re-releasing older devices, which can still use Google’s services, in the continent.

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