Investment companies Prosperity Holdings and RK Properties led a $43.5 million funding round for Ucommune, a Chinese co-working space startup that competes with WeWork China. The round gave Ucommune a $1.8 billion post-money valuation.
Magnolia Neurosciences, a startup that plans to develop therapies for nervous system disorders, has opened its doors with an investment of $31 million from several companies, including AbbVie and Eli Lily. Magnolia will build on discoveries made by scientists at the University of Texas MD Anderson Cancer Center.
It's easy for a founder to see an offer of a large investment by a major company on favorable terms as being too good to pass up, but entrepreneurs should think long and hard before going on a "whale hunt," says David Frankel, a managing partner at Founder Collective. "[O]ften, it results in a startup spending a year and a large chunk of its capital on a high-risk business development deal that more often fails to pan out," he writes.
The news that the government of Saudi Arabia may back a deal to take Tesla private is evidence of Saudi Arabia's growing influence in Silicon Valley, Theodore Schleifer says. The Saudis "are showing muscle and projecting strength that makes them more and more indistinguishable from Silicon Valley's other homegrown power players," he writes.
Investors have been willing to pay a premium to diversify away from the offerings of State Street, Vanguard and BlackRock. This means an opportunity for smaller issuers.
Ten investment banks and broker-dealers received fines from regulators due to misleading investors during the dot-com bubble. Conflicts of interest and conduct risk have followed banks through the financial crisis and beyond.
Risky lending used to fund private equity deals increasingly relies on complex vehicles, a situation similar to the most recent debt bubble, Paul Davies writes. Collateralized loan obligations are not part of the structured-finance chain the same way they were in 2008, Davies writes, but they are at risk of falling from favor as central banks end bond buying.