Europe’s Order-to-Cash Leader Sidetrade Acquires Major Order-to-Cash Player in North America, Amalto

Company

● An accretive acquisition for $16m.

● The acquisition will provide a perfect synergy with Sidetrade’s Order-to-Cash offer and gives Sidetrade a decisive growth gas pedal in North America.

 

Sidetrade – publisher of an AI powered platform, dedicated to the management of the Order-to-Cash (O2C) cycle – has announced today conclusion of a firm acquisition agreement covering 100% of the capital and the voting rights of Amalto, one of the main players in the dematerialisation of inter-company financial transactions in North America, for an amount of $16m. With this deal, Sidetrade enriches its O2C offering, and accelerates its penetration of the North American market.

Sidetrade’s offer is at $16m in cash for 100% of Amalto’s equity. In addition, the directors could receive an earn-out at the end of 2024 depending on the growth of Amalto’s revenues at that date. Two months after the launch of its Fusion 100 plan aiming for revenue of $100m by 2025, acquiring Amalto allows Sidetrade to reach an important milestone in the execution of its plan with a cumulative revenue that could approach $43m in 2021, including $7m in North America.

Sidetrade plans to finance the operation through bank debt in order to preserve cash for other possible acquisitions. The current cash position is €24m ($28.6m), including treasury stock.

Amalto has offices in Houston (USA), Calgary (Canada) and Paris (France), and is the North American integration specialist for the exchange and automation of O2C documents in the Oil and Gas industry. The business helps companies in a variety of industries where companies face a very high Day Sales Outstanding (DSO); and Environmental, where vertical markets present different business processes. Amalto does 90 percent of its business sales in North America and employs 21 people, including 15 in North America. 

Each year, millions of transactions, representing billions of dollars, are made via Amalto cloud technology. Amalto’s customers include multinational giants such as Chevron, General Electric, and Schlumberger. The company has been able to build sustainable partnerships with its customers who renew their trust over the long term with an attrition rate below 2.5%. It has been rated by global IT advisory firm Gartner as one of three ‘Cool Vendors of Platform and Integration Middleware’.

In 2020 Amalto had revenues of $4.3m and recorded high growth and profitability with EBITDA above 20%. As of 31st December 2020, Amalto had a net cash position of over $1.2m.

Olivier Novasque, Founder, Chairman and CEO of Sidetrade, comments:

“The Amalto deal is a powerful gas pedal for Sidetrade’s international business growth. Amalto’s innovative solutions will enrich our B2B AI platform, and the intention is this will be rapidly available to all Sidetrade customers. Sidetrade’s Cloud has recorded more than $2.4 trillion in business-to-business transactions over the past three years. Combining the technologies and talents of Sidetrade and Amalto will support our mission to be positioned as a true world-class leader in the O2C market.”

“We have been incredibly impressed by Amalto’s expertise in the dematerialisation of financial flows. Their solution has a considerable technological lead, with a unique capacity to automatically integrate invoices in the main accounting systems and purchasing portals. Amalto is a champion of electronic B2B document exchange, with a unique position, focused on management of the entire O2C cycle. Amalto’s experienced teams in Houston and Calgary, and their loyal US and Canadian customer base, made up of large industrial and business service groups, will give Sidetrade great leverage in the North American market.”

Amalto’s shareholder-directors are fully supportive of this operation and expect to pursue the adventure with Sidetrade until at least 2024. To facilitate synergy and carry out the strategic plan, Sidetrade intends to set up a new organisation from day one, resulting in:

  • Emmanuel Thiriez, Co-Founder and CEO of the Amalto group, joining the Sidetrade Executive committee as Chief Customer Officer, and being fully involved in the implementation of the Fusion 100 strategic plan
  • Bryan Pederson, CEO of Amalto Corp, becoming AVP Customer Success, responsible for customer loyalty in North America and reporting to Emmanuel Thiriez
  • The Amalto sales team immediately joining Sidetrade’s US salesforce
  • Sidetrade establishing their US headquarters at Amalto’s Houston office
  • Sidetrade expanding their Canadian business, and setting up their third Tech Hub in Calgary (after those in Birmingham, UK and Boulogne-Billancourt, France)
  • Sidetrade counting on Amalto’s current senior management team to ensure the continuity of product development and customer service.

Amalto shareholder-directors can expect an earn-out by the end of 2024, based on revenue growth of Amalto solutions.

Emmanuel Thiriez, Co-Founder and CEO of Amalto, adds:

“We are very pleased with the prospect of pursuing our adventure with Sidetrade. Being part of the Sidetrade family will allow us to realise our ambition of integrating the best of AI in our solutions and reaching the greatest numbers of businesses. By joining forces, we will strongly accelerate sales development in a buoyant market.”

“Sidetrade presents an impressive value proposition, built on innovation, customer value and growth. Our two firms are perfectly complementary in terms of solutions and geographic coverage. Our clients and products will benefit from synergy very easily due to seamless integration. Together, we will develop innovative solutions to meet the needs of businesses across the globe.”

Digital transformation is gaining momentum in global businesses. The number of organisations looking to invest in O2C platforms and paperless transactions has been growing exponentially, and yet, only 5% of businesses have already found the solution they need. The market is ripe, and the potential for international sales is enormous. The acquisition of Amalto permits Sidetrade to expand its footprint in a booming global market and fits perfectly with its Fusion 100 strategic plan in three ways:

 

1. Innovation

Sidetrade will enrich its augmented cash platform for the entire O2C cycle, with two new, high valued added modules:

  • Augmented Order dematerialises all incoming customer orders and automatically integrates them into information systems, regardless of format (e.g. PDF, XML, EDIFACT). This significantly saves time, and increases reliability in revenue management
  • Augmented Invoicing dematerialises, manages and strengthens the reliability of all customer invoices, automatically integrating them into accounting and purchasing systems. The solution enhances customer relations and ensures that billing fully conforms with the customer’s requirements to avoid payment disputes and reduce DSO.

The market launch of these two new modules in Sidetrade’s Augmented Cash platform will give Sidetrade a real competitive edge, with a multitude of new sales opportunities throughout their customer base.

 

2. Regulatory environment

A growing number of countries are expected to make e-invoicing mandatory, as is now the case in the EU, where member countries must adapt their legislation to Directives 2010/45/EU and 2014/55/EU, which seek to facilitate cross-border business transactions through common invoicing standards. Several EU countries have already been e-invoicing obligatory in public sector transactions to simplify tax compliance and cut costs. 

 

3. Geographic expansion

Sidetrade already has a toehold in North America, working with big-name firms such as Expedia, Tech Data, Hearst Magazines and Talend. Now it is time for their North American business to really take off! For Sidetrade, conquering the North American market is fundamental to their ambitious development plan, called Fusion 100. The kick-off operations on North American soil, with sales management recruitment starting in February 2021, is the first step in this plan. Onboarding the members of Amalto’s Houston and Calgary teams is a tremendous opportunity. The Houston operation is a chance for both to raise Sidetrade’s position in the US, and to promote other Sidetrade solutions to Amalto customers. The American market for O2C platforms is estimated at $5bn, which represents 50 percent of the global market, according to Midcap Partners.

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Bank of America and Wells Fargo Most Impersonated in Phishing Cyberattacks

Bank of America
  • Bank of America received 70 complaints of phishing impersonations last year, Wells Fargo received 68
  • Financial services in top 5 most target sectors by phishing attacks

Phishing is a type of cyberattack that uses email, SMS, phone, or social media to entice a victim to share personal information – such as passwords or account numbers – or to download a malicious file that will install viruses onto their device. 

In short, attackers “fish” for a victim by setting a hook and waiting for someone to take the bait. The financial sector is a lucrative target for phishing scammers as users can be more easily persuaded to give up sensitive personal information. 

But which financial organization is the most impersonated in the U.S and what does the public need to be most cautious of?  

To find out, the CrowdStrike data science team submitted an FOIA request to the Federal Trade Commission and asked for the number of phishing scams reported for the largest 50 brands and all U.S. federal agencies.   

According to the CrowdStrike study, Bank of America, one of the world’s leading financial institutions, received 70 complaints for phishing impersonations last year.  

This was closely followed by Wells Fargo, who received 68 complaints last year.

This is particularly concerning, given that Bank of America and Wells Fargo have over 66 million and 70 million customers respectively – these customers rely on their bank for discrete and secure service.  

Elsewhere, retail is the most targeted sector overall (1,335 incidents). Amazon was a big contributor to this and was the most impersonated organization across all sectors (1,262 incidents).  

This comes off the back of Amazon sales soaring as consumers switched to online shopping to protect their personal safety or for convenience while their local stores were forced shut.  

Phishing, as an attack method, is nothing new – it goes back to the mid-1990s when criminals first began stealing passwords from an early online-services website America Online, now known as AOL.  

But the scale of the phishing phenomenon is new. Recently released FBI data shows phishing is now the most popular attack method used by cyber criminals in the U.S., totaling 241,342 victims in 2020 alone. That’s 814 percent more victims than in 2018. 

The 2021 CrowdStrike Global Threat Report put this down to, in part, COVID-19 which has given cyber criminals a unique opportunity to use social engineering techniques to exploit our basic human emotions like greed, curiosity, fear and the desire to help. All of which have been heightened during the pandemic. 

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World Leaders To Meet On Strengthening financial Measures To Boost Efforts To Cope with COVID-19 Fallout

Covid global impact

With many countries continuing to struggle to overcome the human and economic devastation from COVID-19, UN Secretary-General António Guterres has convened a meeting of world leaders on Monday, 29 March from 10 a.m. to 1:00 p.m. EDT to urge the international community to take additional and urgent action to ensure a robust recovery.

The high-level virtual meeting organized by the Secretary-General together with the Prime Minister of Canada Justin Trudeau and the Prime Minister of Jamaica Andrew Holness aims to underscore the urgency of the need for bolder and concrete action to provide liquidity and address debt vulnerability in developing countries.

The meeting followed up on a series of meetings and roundtables held last year to mobilize action to assist the economic recovery from the pandemic that resulted in a series of measures by the international community, but still not sufficient to meet the continuing and deepening crisis that many countries face.

“We are on the verge of a debt crisis. Six countries have already defaulted. One-third of emerging market economies are at high risk of fiscal crisis. And the situation is even worse for least-developed and low-income countries,” said United Nations Secretary-General António Guterres.

“We need now, to allocate new special drawing rights and encourage countries with strong reserve positions to reallocate unused SDRs to countries that need it; extend the G20’s Debt Service Suspension Initiative into 2022; and expand it to include all highly indebted, vulnerable middle-income countries affected by the crisis. We also need to expand the Common Framework for Debt Treatment to other vulnerable countries and provide additional, targeted debt relief and to tackle long-standing weaknesses in the international debt architecture. Otherwise, we risk spiralling deeper into the worst recession since the Great Depression.”

Prime Minister of Jamaica, the Most Honourable Andrew Holness, said, “It has now been over a year since the COVID-19 global health crisis began and it has wreaked tremendous havoc on lives, livelihoods, and the global economy.”

“The COVID-19-induced contraction in economic activity,” he said, “is severely impacting debt sustainability, particularly in low and middle-income countries. In addition to providing critical debt relief and liquidity support, we must create a new international debt architecture that ensures sustainability and encourages the private sector to integrate sustainability into its investment decisions to ensure a faster, stronger and more resilient recovery.”

Prime Minister Holness added, “With the availability of vaccines, we are now able to see a path towards global recovery even as we note that all countries must have sufficient amounts and capacity to vaccinate their populations if we are to achieve inclusive recovery. Let us continue through robust cooperation and coordination to take deliberate actions to reverse the devastating economic effects of the pandemic as we prepare for a future of sustainable growth and development.”

“The world must come together to protect people, save lives, and defeat COVID-19,” said Prime Minister Justin Trudeau. “Our progress has been remarkable, but we know we can’t defeat this virus and build back better at home unless all countries have the resources to respond to and recover from this global challenge. Only through a coordinated global response, can we address the impacts of the pandemic and create jobs, economic growth, and new opportunity for our people and businesses.”

 

New United Nations policy brief on debt crisis

In a new policy brief issued today, “Preventing Debt Crises in the Era of COVID-19 and Beyond: The Time to Act is Now,” the Secretary-General says that while many steps taken to date have been significant, they have not been sufficient to help restore economic health. Risks remain high for more countries to tip into a debt crisis, especially if the COVID-19 shock is more protracted and deeper than forecast.

The COVID-19 pandemic, which has resulted in more than 2.7 million deaths and more than 125 million confirmed cases worldwide, has gone beyond a health and humanitarian crisis to also become an unprecedented global development emergency.

More than a year into the pandemic, the Secretary-General says the fiscal impacts of the crisis are triggering debt distress in a growing number of countries and is severely limiting the ability of many countries to invest in recovery and the Sustainable Development Goals, including urgently needed climate action.

He said, “Unless we take decisive action on debt and liquidity, we risk another ‘lost decade’ for many developing countries, putting the SDGs definitively out of reach.”

 

COVID-19 highlights increasingly unequal world

The current economic situation has highlighted growing inequalities between and within countries that pose significant threats to global efforts to build back better.

COVID-19-related economic shocks have already led credit rating agencies to downgrade the credit worthiness of 42 countries since the start of the pandemic, including six developed countries, 27 emerging market economies, and nine least developed and low-income countries.

Unprecedented health, social and economic measures over the last year have helped control the spread of the deadly virus, save lives, and mitigate the socioeconomic impacts of the pandemic. These emergency policies succeeded in flattening the curve of contagion and saved lives, but they also resulted the first increase in extreme poverty since 1998, a 4.3% drop in global GDP and the loss of an equivalent of 144 million jobs in 2020 alone.

Many countries responded with extraordinary fiscal support measures, taking advantage of low borrowing costs, with developed countries accounting for the overwhelming share, around US $18 trillion. The international community has mobilized a strong response including emergency financing from international financial institutions, support for humanitarian partners, and access to medical countermeasures such as vaccines. Many developing countries, and least developed countries, in particular, which suffered from high debt levels before the pandemic, seeing their fiscal and external financing position further deteriorate in the course of 2020, have not been able to provide much needed stimulus support in adequate measure.

While some middle-income countries have returned to international bond markets since April 2020, only two countries in Sub-Saharan Africa have been able to access markets; and some countries, including least developed countries with very high refinancing needs in 2021, will not have access to financial markets at affordable rates. In addition, many of these countries have already seen access to foreign currency curtailed through non-resident capital flight, and contractions in trade, tourism, remittances and foreign direct investment.

The rapid growth of financing needs and the collapse in revenues and GDP growth associated with the pandemic have exacerbated debt burden risks across the globe. More than half of the least developed and low-income countries that use the IMF World Bank Debt Sustainability Framework are now assessed at a high risk of debt distress or in debt distress and, according to some estimates, more than a third of emerging market economies are at high risk of fiscal crises.

 

Need for debt relief

Debt relief will be needed to create space for investments in recovery and for achieving the SDGs, including climate action. Even in cases of elevated debt, new borrowing can lead to improved creditworthiness if it finances productive investments. Debt relief can also free up resources, create conditions under which countries can return to voluntary market access, and may lower a country’s overall borrowing costs, with positive impacts across the whole economy.

 

Call for action on ODA, new financing and liquidity

The Secretary-General, in the new UN policy brief, calls on governments to provide fresh concessional financing for developing countries, especially LDCs and SIDS, recapitalize multilateral development banks and accelerate the timetable for replenishing the funds, meet ODA commitments and provide long-term financing to developing countries for investment in long-term growth and development.

In support of recent endorsements from the G7, the brief also calls for a new general allocation of special drawing rights (SDRs) reiterating the need to combine a voluntary reallocation of SDRs from developed to developing countries.

And the brief calls on the G20 to extend the World Bank’s Debt Service Suspension Initiative (DSSI) until the end of June 2022 and include middle-income countries, notably small island developing states that have been gravely affected by the crisis.

The policy brief also calls on the G20 to extend the eligibility to debt relief under the Common Framework for Debt Treatment Beyond the DSSI to other vulnerable countries on a case-by-case basis; and consider other mechanisms that would allow countries to access the Common Framework without creating a stigma or compromising the credit rating of the beneficiaries, including funds and other instruments within existing institutions.  Finally, the brief calls on countries and the international financial institutions to seize the moment to address long-standing weaknesses in the international debt architecture.

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Don’t Call Green A Trend: Why environmentally responsible building methods will become the standard in construction

sustainable building

By John Fitzgerald, Project Director, Linesight

Before the pandemic, environmentally responsible building was a rising trend. This increased focus on more sustainable approaches in construction reflects the fact that in 2019, residential and commercial sectors accounted for a combined 39 percent of total U.S. energy consumption in buildings. Now, with ongoing COVID health concerns and the new U.S. administration rejoining the Paris Agreement, green building methods are now true differentiators that can be a deciding factor for would-be occupants. They’re also critical in enabling the construction industry to respond to today’s pressing environmental challenges. For building owners and contractors grappling with a COVID-induced downturn, sustainable building practices can also provide a clear path forward.

 

The impact of the Paris Agreement

Everyone knew that an incoming Biden administration would mean significant change for the United States, but many were still surprised at how quickly those changes started to take shape. One of the biggest about-faces comes in the rejoining of the Paris Agreement, a global treaty on combating climate change.

The Paris Agreement calls for countries to limit their greenhouse gas emissions and meet other green initiatives, with an overall goal of limiting global warming. Now that the U.S. is back on board, energy-efficient construction and sustainability goals will be supported by federal policies. It’s still unclear exactly what sort of green certifications will be required, or what the new emissions standards will be, but it’s safe to say that greener regulations will be implemented. Bolstered by the federal government, environmentally responsible building practices will be further strengthened and enforced as the new norm.

 

Reducing operating costs and increasing value

The incoming U.S. administration’s new regulations will likely manifest as updates to current LEED and WELL certifications.  The economic benefits of these certifications have been well-documented. Most notable among those benefits is the fact that initial investments in green building improve the value of properties, with owners reporting an increase of 10 percent or more in asset value. As for operational costs, LEED certified buildings have demonstrated maintenance costs that are nearly 20 percent lower than other commercial buildings, while green retrofits have been shown to reduce operating costs by almost 10 percent per year.

Adhering to LEED and WELL will put building owners in favorable standing when new policies are established as a result of the re-entry into the Paris Agreement. And with an estimated 6.5 percent contraction in the US GDP, almost every organization across all industries is looking for ways to cut expenses and recoup costs. Combine that with the nearly year-long work-from-home situation that has many organizations looking to reduce their physical office space permanently, and it’s clear that budgets for commercial properties in 2021 and beyond will be smaller than they have been in the past. The construction industry should be ready to meet this demand for smaller, more cost-effective office spaces with green initiatives.

 

Calculating the hidden costs of carbon

One of the biggest misconceptions in the construction industry today is how much of an impact embodied carbon has on the environment, and the positive impact that can be made to greenhouse gas emissions by managing them. Embodied carbon is the carbon released into the atmosphere during the production and transportation of concrete, glass, steel, and other construction materials. It’s a “sunk cost” in that it’s already been incurred by the time the material makes it to the build site. And the cost is a substantial one: 11 percent of total energy-related CO2 emissions come from embodied carbon. The building sector as a whole accounts for 39 percent of total energy-related CO2 emissions, with the other 28 percent coming from operational carbon. Clearly, embodied carbon has a significant impact on the environment and needs to be taken as seriously as operational carbon, which is why major multinational firms are using the embodied carbon in construction calculator (EC3) to report and reduce emissions on projects.

 

Improved air quality and HVAC systems

The COVID crisis reminded the world of the importance of adequate ventilation and air filtration, and has significantly impacted building requirements as a result. Because HVAC considerations are one of the primary focuses for both LEED and WELL certifications, builders already have a strong foundation of knowledge to work from when addressing these COVID-related concerns.

These certifications also emphasize adequate insulation, natural lighting and other elements that affect quality of life. In the post-COVID world, these attributes can be critical deciding factors in building designs. Imagine being able to market a new build with cost-cutting and emissions-reducing insulation, along with a HVAC system with virus-fighting filtration and UV sanitation. These features might have been little more than footnotes to owners pre-pandemic. Now, they are exactly the sort of additions that set one commercial space apart from another in attracting occupants. While these aren’t revolutionary technologies, they represent existing solutions for creating a greener office space that address COVID-19 health concerns by ensuring proper ventilation and air filtration. 

 

An emphasis on quality of life

In the past, the focus of LEED and WELL certifications was to create spaces that were environmentally sustainable, as well as providing plenty of natural light, fresh air, and personal space for their occupants. These conditions aimed to improve the overall environmental quality inside the building, and the coronavirus has demonstrated just how important that can be moving forward. Expect to see stricter regulations around maximum occupancy, ventilation, and other ’quality of life’ categories, as policymakers take actions to slow future outbreaks. Meeting stricter quality of life certifications now will prevent the need to retrofit buildings later, should regulations change as expected. But being adept at such upgrades could also prove to be a valuable income stream, as offices look to improve their floor plans, HVAC systems and filtration units.

 

The growing role of AI in sustainability

Now that the Paris Agreement codifies America’s intent to mitigate climate change, expect to see artificial intelligence play a larger role in sustainability practices. Neural network AI has already proven useful in monitoring emissions at Xcel Energy’s coal plants, making real-time recommendations for reducing harmful emissions and keeping the plant at optimal efficiency. As advances in AI lower the price of entry and make more targeted applications possible, we could see similar neural networks working to improve indoor air quality, water filtration and usage, overall power consumption, and other important factors in sustainable buildings. In all of these cases, improved sustainability practices mean improved profitability through lower operating costs.

 

Supporting ongoing recovery efforts

The construction industry is feeling the economic effects of this virus, with nearly 40 percent of construction firms experiencing layoffs over the past year. A green building initiative can help spur recovery by reducing operational costs and increasing the value of assets. There is also an opportunity to promote these building practices as being not only good for the environment, but crucial in preventing and slowing future viral outbreaks.

It should come as no surprise that recovery in the construction industry will take some time, but building green now will put owners and contractors in the best position to meet the needs of both businesses and individuals. As the Paris Agreement rolls out requirements on sustainable building practices, going green may no longer be a choice, but a business imperative that will positively impact revenues, and more importantly, human health.

 

John Fitzgerald is a Project Director at Linesight, specializing in project and cost management. John has extensive experience supporting design and construction projects in both Europe and North America, for a multitude of sectors. His current focus is leading a team of project controls specialists on one of the largest commercial projects in North America.

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Hobby Lobby Exposed 138GB of Data

Data leak

Hobby Lobby, the American arts and crafts giant that also happened to purchase thousands of ancient artifacts looted from modern-day Iraq, exposed a large amount of data online, including customer names, phone numbers, physical and email addresses, and the last four digits of their payment card, as well as source code for the company’s app, according to a security researcher.

The data was as recent as 2020, impacted more than 300,000 users, and totaled at around 138GB in size, the independent and pseudonymous security researcher known as “boogeyman” who discovered the leak, told Motherboard in an online chat.

Boogeyman provided multiple screenshots of the data to Motherboard for verification purposes. Those images indicate the information was hosted on an open AWS bucket, a common source for inadvertently exposed data. The data also included Hobby Lobby employee names and email addresses, Boogeyman added.

“We identified the access control involved and have taken steps to secure the system,” Hobby Lobby told Motherboard in an email. Boogeyman said they previously tried to warn Hobby Lobby of the issue but received no response.

It is unclear whether Hobby Lobby is going to notify impact users.

Hobby Lobby was the driving force behind a 2014 Supreme Court ruling which found that the government cannot force employers to provide insurance coverage for birth control if that would run against the employer’s religious beliefs, radically changing how women can obtain the pill or other contraception. Hobby Lobby’s owners founded the Museum of the Bible in Washington, DC.

Hobby Lobby is suing auction house Christie’s for selling an antique that authorities later said was looted.

Commenting on the news is Javvad Malik, security awareness advocate at KnowBe4: “Many organisations are taking advantage of cloud storage offerings such as AWS buckets. However, security always remains the users responsibility, regardless of what measures the cloud provider puts in place. This includes ensuring settings are applied correctly so that private information is not inadvertently exposed.

Fixing these issues doesn’t require a great deal of technical knowledge, because the features are built into the platforms. What it does need is a culture of security where processes are put in place to ensure people can correctly identify which data needs to be secured, put in place the right controls, and validate they are working as expected.”

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Coalition Raises $175M to Build the Future of Commercial Insurance

Business insurance

Coalition, the leading cyber insurance and security company, today announced it has raised $175 million to accelerate its rapid growth and global expansion. Index Ventures led the funding with participation from General Atlantic and the company’s existing investors, valuing Coalition at $1.75 billion.

“We founded Coalition four years ago with a mission to solve cyber risk, introducing a technology-led approach to risk management and insurance underwriting, pricing, and distribution,” said Joshua Motta, CEO and co-founder of Coalition. “Our ambitions now extend beyond cyber insurance. Nearly one in ten Fortune 500 companies is an insurance company, yet most were founded before World War II. With this funding, we plan to bring our technology-driven approach to other lines of commercial insurance as we seek to build the digital insurance company of the future.”

With this funding, Coalition plans to invest in three key areas:

Build the digital insurance company of the future. “The future of insurance will be defined by technology, and we will continue to invest in building a leading technology company focused on innovation across all aspects of the insurance value chain,” said Motta.

Expand to new product lines. Following its explosive growth in cyber and technology insurance, Coalition plans to imminently launch new insurance products to address a range of risks facing the modern enterprise — many of which are not well covered by standard business insurance policies.

International expansion. Following its expansion into Canada in 2020, Coalition plans to expand its offerings into multiple new international markets.

“Coalition is the clear leader in this space and we’re excited to support their vision to reimagine commercial insurance,” said Shardul Shah, Partner at Index Ventures. “Not only does Coalition provide peace of mind after a loss, but also peace from mind: their risk management platform, predictive analytics, and incident response services help organizations decisively and affirmatively remain resilient to risk.”

“Despite a surge in cyber attacks and ransomware, Coalition has delivered industry-leading loss performance by leveraging differentiated technology across the policy lifecycle,” said Paul Stamas, Managing Director and Global Co-Head of Financial Services at General Atlantic. “We’re excited by the innovation that Coalition is driving in cyber insurance.”

Coalition has raised $300 million in equity funding from leading global technology investors, including Index Ventures, General Atlantic, Ribbit Capital, Vy Capital, Hillhouse Capital, and Valor Equity Partners, among others. Founded in 2017 by Joshua Motta and John Hering, Coalition is one of the largest cyber insurance and security providers in the United States and Canada. Today, Coalition serves over 42,000 customers, providing no-cost cybersecurity tools to prevent losses, security and incident response services to contain them, and comprehensive insurance to help organizations recover from failures and breaches. The investment follows long-term capacity commitments from leading global insurers Swiss Re and Arch Insurance.

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Stop the STOP Act From Blocking US Parcels

Delivery parcels

The US STOP Act, designed to slash the number of illegal drugs entering America, is due to come into full force on 15 March. The US delivery specialist ParcelHero says significant disruption and delays are likely to affect US parcels using traditional postal services.

America’s new anti-narcotics STOP Act is expected to take full effect on 15 March. It’s likely to lead to delays and thousands of returned parcels, warns the USA delivery specialist ParcelHero.

ParcelHero is urging individuals and companies currently sending packages to the US by traditional mail to minimise the impact of STOP by switching to an international courier service to avoid a potential parcels logjam.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says several hundred million parcels are likely to be rejected and returned to their sender when the new Synthetics Trafficking & Overdose Prevention (STOP) Act comes into full effect.

‘The United States Postal Service (USPS) was supposed to start refusing any package shipped to the United States that lacks identifying data, such as shipper and recipient, from 1 January this year. However, due to the coronavirus pandemic, the full introduction of regulations was postponed until 15 March.

‘On 4 March, the new Homeland Security Secretary, Alejandro Mayorkas, formally signed off the regulations enabling US Customs and Border Protection (CBP) to implement the new Act. This seems to clear the way for full implementation of the strict new checks.

‘The US Government says drug traffickers have been exploiting vulnerabilities in its international mail system to easily ship synthetic drugs, such as fentanyl from China, through the USPS. The STOP Act closes this loophole by requiring advance electronic data on all inbound international packages.

‘Traditional parcel services that use the USPS, such as many Post Office shipments from the UK, will be impacted. However, international courier services – such as express services booked through ParcelHero – are not affected by the changes.

‘Senders using USPS-linked mailings now have to provide complete and valid data on all inbound mail into the US. That means hundreds of millions of packets and parcels face delays or returns due to incomplete data, which is likely to create a bottleneck for some time.

‘International couriers have well-established procedures for supplying advance electronic Customs data. This has not been the case for most mail using the USPS. Due to the volume of mail, US Customs and Border Protection (CBP) was unable to manually scan these packages and stop illicit goods from entering America. 

‘The new STOP Act now requires overseas mailers using the USPS system to provide electronic advance data — such as who and where a parcel is coming from, who it’s going to, where it is going and what’s in it — before it enters the United States.  

‘The US Government claims that having this information in advance will enable CBP to better target potential illegal packages and keep dangerous drugs from ending up in the hands of dealers.

‘The new STOP Act was passed in 2018 and has had a protracted introduction. It has literally been Stop-start and Senators have accused the CBP of dragging its feet. However, it now looks like the grace period is finally at an end. Our advice is that anyone planning to send a parcel to the USA this month uses an express courier, rather than any type of postal service that uses the USPS for final delivery. The new electronic data requirement might go smoothly but, equally, it may very well result in severe delays or, worse still, parcels winging their way right back to the sender.

‘It’s not only the US that is introducing new data requirements. There’s more upheaval facing shipments to the Continent. On the same day STOP starts, the EU is set to launch the first phase of a similar scheme. It is implementing a new Customs pre-arrival security and safety programme, underpinned by an advance cargo information system known as Import Control System 2 (ICS2). 

‘Unlike the new US system, which only applies to traditional mail operations, phase one of the new ICS2 scheme will require all express parcel companies to provide an electronic Entry Summary Declaration (ENS) for all goods consignments they are responsible for bringing into the EU.

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Gov. Authorises Expanded Business Loan Program, Tax Relief For Businesses and $600 Rebate For Individuals

Business loan

Gov. Michelle Lujan Grisham on Wednesday (3rd of March 2021) signed Senate Bill 1 and Senate Bill 3 into law, a pair of economic measures that earned broad bipartisan support in the Legislature and will deliver additional stimulus and relief for businesses and individuals across New Mexico.

In addition to legislation the governor has already signed into law that will provide for $200 million in small business grants, the economic relief measures signed Wednesday will deliver a $600 personal income tax rebate to hundreds of thousands of front-line and low-wage workers, provide for a four-month tax holiday for food and beverage businesses hit especially hard by the economic effects of the pandemic, and make up to $500 million available to New Mexico small businesses seeking loans at a discounted borrowing rate.

“Dollar for dollar, I would put New Mexico’s direct stimulus efforts up against any other state in the country,” said Gov. Lujan Grisham. “We have provided hundreds of millions in unemployment support; small business grants, loans, tax holidays; and now direct rebates for the front-line workers who have continued to show up to support themselves and their families, and who deserve all the support that their government can provide. This pandemic has been devastating for everyone, but the pain has been spread unequally. My hope is these economic relief efforts reach those who need them most, and my commitment is New Mexico will continue to step up and support those who need it now and in the future as we build out a successful and sustainable recovery.”

“Small businesses have fought long and hard to keep their doors open and people employed throughout this pandemic,” said Rob Black, president and CEO of the New Mexico Chamber of Commerce. “Paired with the recently enacted $200 million in LEDA grants of HB 11, these measures provide a crucial suite of tools for economic recovery.”

Senate Bill 1 grants a personal income tax rebate of $600 to families and individuals claiming the Working Families Tax Credit – individuals who earn $31,200 or less; and heads of household, surviving spouses or those married filing jointly who earn up to $39,000. Roughly 200,000 New Mexicans claimed the Working Families Tax Credit in 2019, according to the Taxation and Revenue Department.

Taxpayers who believe they are eligible for the Working Families Tax Credit and the new income tax rebate are urged to file their 2020 Personal Income Tax returns as early as possible. The state Taxation and Revenue Department urges all taxpayers to file electronically, which expedites processing and puts refunds and rebates into taxpayers’ hands more quickly.

“We know many New Mexicans have been hit hard this past year, so we will get this money out to taxpayers as quickly as possible,” said Taxation and Revenue Secretary Stephanie Schardin Clarke.

Senate Bill 1 also provides for a four-month gross receipts tax holiday for food and beverage establishments, including restaurants, bars, food trucks, small breweries, wineries and craft distilleries, which have been financially impacted by the pandemic. The Taxation and Revenue Department will soon issue instructions to businesses on how to claim this credit. The bill holds local governments harmless by creating a distribution equal to the amount of revenues that would have otherwise been due.

Senate Bill 1 was sponsored by Senate Majority Leader Peter Wirth, Sen. Siah Correa Hemphill, Sen. Jacob Candelaria and Rep. Javier Martinez. It was approved by the Senate unanimously and by the House of Representatives 66-1.

Senate Bill 3 will allow more businesses to tap into what is now a $500 million pool of loan money at a discounted borrowing rate. The bill extends the Small Business Recovery Loan Fund created by the Legislature last year and makes funds available from the Severance Tax Permanent Fund. The new bill substantially eases eligibility standards so more businesses can connect with the financial assistance they need. Under the previous program approved by legislators in special session last year, 890 businesses received $40.5 million in loans.

The New Mexico Finance Authority will manage the SB3 loan fund and an announcement will be made when the application is available.

New Mexico Finance Authority CEO Marquita Russel said the loan requirements for revenue losses and documentation have been eased, and the changes in SB3 will allow more of the 160,000 small businesses in the state access to the low-interest lending.

“The Small Business Recovery Loan Fund has already supported more than 5,000 jobs in the state. It has been a lifeline for many small businesses and now many more will be able to participate,” Russel said.

Senate Bill 3 was sponsored by Rep. Marian Matthews and Sen. Jacob Candelaria. It was approved by the Senate 35-3 and by the House of Representatives 51-17.

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TikTok User Spending Shot Up By Nearly 400% in January 2021 to $128 Million

Tik tok

Despite having a bleak outlook in 2020, TikTok ended the year on a high note and has embarked on an upward trajectory in 2021.

According to the research data analyzed and published by Comprar Acciones, it was the top grossing non-game mobile app globally in January 2021. During the month, it raked in $128 million in user spending, marking an increase of 380% from its January 2020 revenue.

Around 82% of the revenue came from China through the app’s domestic version, Douyin. The US contributed an 8% share while Turkey held 2% of the global total.

Piccoma was the second highest grossing app during the month, generating more than $96 million, up by 690% year-over-year (YoY). YouTube came in third while Tinder and Tencent video took fourth and fifth spot respectively.

TikTok also excelled in terms of mobile downloads, ranking second on the list of the most installed non-game apps in January 2021. It had a total of 62 million installs across the two major app stores. China accounted for 17% of the total number of downloads via Douyin, while the US was second with 10%.

Telegram was in the lead with 63 million downloads across the two app stores. Signal took third place, Facebook got the fourth spot and WhatsApp was fifth.

TikTok’s mobile app stunning performance started last year. For the full year 2020, it was the top grossing and most downloaded app worldwide. According to the annual report from Sensor Tower, its revenue on the App Store shot up by over 600% to $1.2 billion.

Based on data from Apptopia, there was a total of 89 million installs of the TikTok app in the US alone in 2020. That was way ahead of second-placed Instagram, which had 62 million. Facebook followed with 53 million and Snapchat with 51 million.

 

US Advertisers on TikTok Surged by 500% in 2020

TikTok has also experienced a remarkable upsurge in its advertising business. According to a Reuters report, the platform posted a 500% increase in the number of advertisers carrying out campaigns from the US in 2020.

The trend is likely to extend through 2021 as TikTok signed up a number of major brands since late 2020. These include Chobani, Bose, McDonalds and Kate Spade, as well as non-profits such as St. Jude Children’s Research Hospital. Between September 2020 and mid-February 2021, St. Jude has raised funding worth around $50,000 through a TikTok donation button.

In 2021, TikTok is planning to offer ad packages designed around events and holidays. For instance, it plans to celebrate Black History Month with a virtual event featuring 500 Black creators. According to Reuters, it aims to raise $750,000 from brands sponsoring the event. It also plans to raise $1.5 million from brands to sponsor a live finale for the event on February 26, 2021.

According to The Influencer Marketing Factory, there has been a five-fold increase in the number of requests from brands wishing to work with TikTok influencers since November 2020.

Considering the level of success TikTok has had in the ad market, major companies are clamoring for a piece of the pie.

Additionally, Google is launching a rival platform, YouTube Shorts. Just like the TikTok experience, Shorts plans to offer videos running for 15 seconds or less. The Indian version of the new platform now enjoys over 3.5 billion views every day.

 

TikTok US User Penetration to Rise from 31% in 2020 to 39% by 2024

TikTok’s Chinese sister app Douyin is the biggest short-form video app in China. However, it faces stiff competition from a worthwhile rival in China.

Tencent-backed Kuaishou is currently ranked as the second biggest short-form video platform in China. It recently went public raising $5.4 billion in Hong Kong, becoming the world’s largest IPO in over one year. Following the IPO, its shares almost tripled from its original price, driving its market value from $61 billion to more than $160 billion. From the IPO price of HK$115 ($14.80), the share price shot up to HK$320.20.

Meanwhile, ByteDance had 426.2 million average daily active users (DAUs) from Q1 to Q3 2020. Each of the users spent on average 92.2 minutes every day on the platform. Comparatively, Kuaishou had 275.9 million average DAUs in the same period, each spending 88.3 minutes daily.

According to eMarketer, TikTok user penetration in the US increased from 17.3% in 2019 to 31.1% in 2020. It is projected to rise to 34.2% in 2021 going as high as 39.3% by 2024.

By that time, it is expected to be as popular as rival Snapchat, whose growth is forecast to stagnate. Instagram, on the other hand, is expected to increase its user penetration from 53.9% in 2020 to 54.9% in 2021. By 2024, it is set to reach 57.5%.

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U.S. Chamber Releases In-Depth Analysis of U.S.-China Economic Relationship

US & China

The U.S. Chamber of Commerce’s China Center, in partnership with Rhodium Group, released a new analysis today examining the complexity of the U.S.-China economic relationship. A first-of-its-kind study, “Understanding U.S.-China Decoupling: Macro Trends and Industry Impacts” seeks to better understand the degree to which the U.S. and Chinese economies are intertwined and dependent on each other for stability and growth.

By analyzing the economic impact of complete disengagement in four key sectors, the analysis helps quantify the extent to which our two economies are interconnected, ultimately helping policymakers, businesses, and other stakeholders make better informed decisions as the administration seeks to bolster America’s national security and confront China’s rising Statism.

“China is perhaps the most difficult foreign policy challenge confronting President Biden. We cannot ignore the economic challenges posed by China’s rising Statism, nor the growing national security concerns. Yet, given the interconnectedness of our two economies and importance of the Chinese market for U.S. companies, large and small, it is critical that policy decisions are informed by the best data,” said U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant. “That’s why, for more than 25 years, the U.S. Chamber has studied and promoted commercial opportunities and worked to address China’s unfair trade and regulatory practices.”

RECOMMENDATIONS FOR POLICYMAKERS

As U.S. policymakers debate the next phase of U.S.-China engagement, the U.S. Chamber’s China Center and Rhodium Group have outlined four important takeaways that should be taken into consideration: 

  • Data analysis is critical to policymaking. China policy requires economic impact assessment, cost-benefit analysis, and a process of public debate and discovery.
  • The costs of complete disengagement (full decoupling) are uncomfortably high. Policies that reduce the costs to the U.S. economy while protecting our security—mitigation, diversification, even simple transparency with Beijing—deserve careful consideration.
  • Addressing the China challenge requires a broader spectrum of U.S. policies. Promoting domestic innovation and technology, and preserving the rules-based, open market order among like-minded economies are key to U.S. success.  Government has a greater role to play, but one that must have guardrails and ensure the continued vitality of our market-based system.
  • Washington must renew its value proposition to our international partners. No nation can address the China challenge alone, especially when it comes to sustaining technology leadership. A plurilateral approach is essential to reducing U.S. economic costs and preventing the erosion of U.S. comparative advantage that would occur if decoupling policies are implemented unilaterally.

KEY ECONOMIC FINDINGS

The analysis identifies the potential costs of a U.S.-China decoupling from two perspectives: the aggregate costs for the U.S. economy across four key channels (trade, investment, people, and ideas) and the industry-level costs in four areas of national importance (civil aviation, semiconductors, chemicals, and medical devices).

The report generally uses a full decoupling scenario—defined as bilateral flows going to zero—because it provides the most complete look at the potential impact of the current trajectory of the U.S.-China economic relationship. 

Rhodium’s Daniel Rosen, principal author of the report, said, “U.S.-China engagement was always contingent on shared liberal economic goals. As Beijing diverges back toward greater state planning, a less permissive stance is necessary. But our self-interest lies in purposeful decoupling, not a gratuitous pulling apart. This study is a step toward re-sizing our engagement rationally.”

Aggregate Costs: If the U.S. and China were to fully decouple, American businesses and our economy would be significantly impacted, resulting in hundreds of billions in foregone GDP and capital gains losses while undermining U.S. productivity and innovation.

  • Trade: $190 billion annually in foregone U.S. GDP by 2025 if 25% tariffs are placed on all two-way trade.
  • Investment: $25 billion annually in lost capital gains and one-time GDP losses of up to $500 billion if U.S. companies reduce cumulative FDI in China by 50%.
  • People: $30 billion annually in lost U.S. services trade exports if Chinese students and tourists coming to the U.S. drop by 100%.
  • Ideas: Billions in reduced R&D spending in the U.S.; diminished access to Chinese talent and science; and greater competition with China for global innovators.

“Fully decoupling the U.S. from China would undermine America’s leadership in semiconductors,” said John Neuffer, president and CEO of the Semiconductor Industry Association. “While we need to have smart and targeted restrictions to protect national security, the long-term answer to competition from China is to turbocharge U.S. innovation through robust federal and private investments in research and technology – that’s how we are going to stay on top, keep our economy strong, and power job growth.”

Industry Costs: Full decoupling would lead to tremendous U.S. output losses for strategic U.S. industries, weakening their ability to sustain U.S. jobs, R&D, and global technology leadership.

  • U.S. aviation industry: Depending on the extent of decoupling, a loss of access to China’s market for U.S. aircraft and commercial aviation services would create U.S. output losses ranging from $38 billion to $51 billion and cause the U.S. civil aviation manufacturing industry to shed 167,000 to 225,000 jobs. Cumulatively, lost U.S. market share impacts would add up to $875 billion by 2038. 
  • U.S. semiconductor industry: Depending on the extent of decoupling, a loss of access to Chinese customers for the U.S. semiconductor industry would cause $54 billion to $124 billion in lost U.S. output, risking more than 100,000 U.S. jobs, $12 billion in R&D spending, and $13 billion in capital spending. 
  • U.S. chemicals industry: From the imposition of tariffs alone, the potential cost ranges from $10.2 billion in U.S. payroll and output reductions and 26,000 lost jobs, to $38 billion in output losses and nearly 100,000 lost jobs. 
  • U.S. medical devices industry: U.S. lost market share is valued at $23.6 billion in annual revenue, which would compound to cumulative lost revenue exceeding $479 billion over a decade or approximately $48 billion annually. Lost revenue would lead to job losses and translate into a $33.5 billion reduction in R&D spending over the next decade.

“U.S. chemical manufacturers have announced more than $200 billion in new investments over the past decade, accounting for more than 50 percent of U.S. manufacturing plant construction,” said Chris Jahn, president and CEO, American Chemistry Council. “China is one of our largest exporting destinations as well as a key source of inputs. Limiting access to growth markets like China would have a comparatively more adverse effect on U.S. manufacturing than it would on China.”

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