Weekly Tech Update: The Clean-Tech Boom
Welcome to The Macro Mail’s Tech Newsletter. Every week we highlight stories from three technology subsectors and provide insights into their implications. Today’s focus is on Energy, E-Commerce and M&A.
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ENERGY: The Clean-Tech Boom
Clean-tech firms have maintained their momentum into 2021. A new round of fundraising for Breakthrough Energy Ventures, which finances 45 clean-energy firms, has raised $1 billion for a second round of investments.
Breakthrough Energy is a venture capital firm founded in 2015 by Bill Gates, with the mission to “accelerate an energy transition across every sector of the economy.”
Since 2015, venture capital investment clean teach has more than doubled to reach $15bn in 2019
One success story in the clean-tech industry is Fuelcell Energy Inc. Despite failing to report a profit since 1996, the manufacturer of biogas fuel cells has seen its shares rise by over 500% in the past 6 months to a valuation of over $5bn, driven by a wider confidence in the growth of green energy markets
Three other clean-tech stocks have reached a billion dollar valuation in 2021: Blink, which operates and sells electric car charging stations; Romeo Power, a battery pack developer, and EOS Energy, a zinc battery manufacturer. All three companies have struggled to make consistent profits.
“A relatively small portion of these gains have come from actual increases in earnings or cash flow,” according to an analyst at wealth management firm Raymond James. As global warming accelerates and the need for clean technology becomes more pressing, investors will hope that breakthroughs spearheaded by battery developement, electric vehicles and and alternate fuel cells can continue to drive the rapid growth of this sector.
E-COMMERCE: Jack Ma Resurfaces
Jack Ma, the Chinese billionaire who co-founded tech conglomerate Alibaba Group, has been seen on a live video for the first time in three months. His appearance has assuaged fears for his personal safety after the Chinese government scuttled the IPO of Ant Group, an Alibaba affiliate company, in October 2020.
The brief video shows Ma speaking to rural teachers in his hometown, Hangzhou. He didn’t mention Ant Group, but said that he would spend more time on philanthropy and espoused his responsibility for “rural revitalization and common prosperity.”
Ma is estimated to have lost $12bn since Beijing’s crackdown on his digital empire. Ant Group, which operates the world's largest mobile and online payments platform, was expected to be valued at $313bn. Foreign investors have been left with $10bn in illiquid holdings, as it remains unclear whether Ant Group will ever be allowed to go public
An anti-trust investigation against Alibaba was launch in December 2020. Details of the rationale were vague, and it was likely designed by the Chinese authorities to coincide with the suspension of Ant Group’s IPO.
This week, the Chinese central bank has announced new plans to launch anti-trust probes against non-banks with large portions of the online payments market. The Communist Party has always maintained tight control on the economy, and the crackdown on Jack Ma’s tech consortium demonstrates their resolution to maintain that power despite the explosive growth of Chinese tech firms.
M&A: Tech Companies Driving Deals
A Mergers and Acquisitions survey has found that tech companies make up nearly a quarter of M&A watchlists.
The survey, conducted by Bloomberg, surveyed “a dozen event-driven traders, analysts, strategists, bankers and fund managers” to gauge outlook towards potential mergers and acquisitions
The results found a bullish growth outlook for M&A, with particular focus on tech and software to drive innovation and economic growth
Companies highlighted for takeover include education technology company 2U Inc, internet provider Boingo Wireless, software platform provider Cloudera, and wealth management technology developer Envestnet.
Concerns raised include “corporate tax rates [and] antitrust scrutiny” under the Democrat government, and “relations with China”.
An optimistic M&A outlook indicates belief in economic expansion, and the focus on technology suggests that the innovations driven by software and IT companies will continue to turn profits. The range of services provided by the companies highlighted serves to demonstrate the ever-growing importance of technological innovation in every business sector.
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