Big Business

Updated Centers for Disease Control and Prevention guidelines for fully vaccinated people from July 27 have prompted Walmart to revise its policy regarding wearing face coverings in its stores. The largest retailer in the world has again made it mandatory for all of its employees to wear masks in stores, clubs, and distribution centers in areas with substantial or high COVID-19 infection rates and where there are state or local face-covering mandates. In May, the retailer announced that immunized employees were allowed to work without masks. On July 30, this decision was reversed. The move came as US health officials said that even Americans who have been fully vaccinated against the coronavirus should go back to wearing face coverings in indoor public places in counties where the virus is spreading rapidly. Walmart’s memo also indicated that the company’s retail workers would post signage at its stores asking customers to wear masks, practice social distancing, and make payments using their debit or credit cards rather than cash. Furthermore, Walmarts has announced that all of its workers will receive a $150 incentive for getting inoculated against COVID-19. This is double the amount the retailer has previously been offering, and those who have already received $75 will get the rest in their August paychecks. The memo also states it has been made a part of store managers’ job to regularly check the CDC website for potential changes to public health recommendations and mask guidance in their locations. Doug McMillon, the company’s CEO, told corporate staff and managers they must be vaccinated by October 4. “We want to get to a place where we can use our offices and be together safely. It’s important for our business, our culture, our speed, and our innovation,” McMillon said. Publix, another supermarket chain, has also made it mandatory for all employees to wear masks, regardless of their vaccination status. Florida-based retailer The Lakeland is also urging all shoppers to use face coverings, even though they aren’t required to do so in all US counties.

By Julija A. August 06,2021

Mutual funds, hedge funds, sovereign-wealth groups, and pension funds are overtaking the tech startup investing landscape, leading to higher valuations and more leverage for business founders in 2021. Large money-management companies took over Silicon Valley in the second quarter, dwarfing venture capitalists in a once-niche business and putting 2021 on the right path to potentially double 2020’s record in startup financing. Non-traditional venture investors were more active in the Q2 of 2021 than ever before, participating in 42% of startup financing deals. Furthermore, those deals constituted more than three-quarters of the total capital invested. Startup funding in the United States reached the $150-billion mark in the first half of 2021, eclipsing the full-year total investment of every year before 2020. There are a few aspects that make large asset firms more appealing to startup founders and could explain the dizzying deal-making pace we’re now witnessing. Big money-management companies have huge capital pools, move quickly, and aren’t likely to request board seats or ask to get involved in the company’s decision-making process in any other way. It’s true that big money-managers have been allocating a small percentage of their portfolios to invest in companies that typically draw the attention of traditional venture-capital funding providers for a long time. However, many began investing directly about 10 years ago in a near-zero-interest-rate economy, hoping to make the most of excellent returns from tech companies that were remaining private longer. Throughout the last decade, traditional venture capitalists considered them tourist investors who lacked a certain skill set needed for startup investing. Nevertheless, large asset firms stuck around. Nowadays, non-traditional VC investors such as Tiger Global Management and Fidelity Investments Inc. are among the top 10 US investors in startups by dollar amount. Additionally, according to the information provided by research firm PitchBook, the number of startup funding rounds that include zero venture-capital firms and other non-traditional venture capital investors has doubled throughout the last decade. It’s interesting to mention that despite these changes, many startups still need to turn to alternative funding resources such as crowdfunding, particularly if they are just starting out.

By Julija A. August 05,2021

The Singapore-based Nium Pte became a rare fintech unicorn in the city-state after raising more than $200 million in a funding round led by California-based Riverwood Capital LLC. The payments startup serving businesses announced that its value exceeded $1 billion after a Series D round. In addition to Riverwood Capital LLC, other backers included Temasek Holdings Pte, Visa Inc., Rocket Capital, Vertex Ventures, and Beacon Venture Capital. Singapore’s sovereign wealth fund GIC Pte also joined the round. Prajit Nanu, Nium’s CEO and founder, said the company plans to use the funds to expand operations in the United States and Latin America before pursuing an initial public offering in the US in approximately 18 to 24 months. Nanu also added that Nium may even pursue a secondary listing in Singapore at a later date. Earlier this year, the startup bought London-based Ixaris and Wirecard Forex India Pvt. According to Nanu, it will remain on the lookout for additional acquisition opportunities in the UK, Indian, and Australian markets. Nium reaching unicorn status marks a true milestone in Singapore, an affluent island city with a population of about 5.7 million. Aiming to position itself as a fintech hub, Singapore is home to more than 1,000 fintech startups that mainly focus on providing payment, personal finance, investment, and business lending services. Founded in 2014, Nium now has a network of over 200 clients, including Singapore Telecommunications Ltd. and Thailand’s Kasikornbank Pcl, among more than 200 clients. Similar to Stripe Inc., which became the most valuable US startup in March 2021, Nium offers software solutions that make it easier to accept online payments. It also allows its clients to send money and issue physical and virtual credit cards. Nium processes $8 billion in payments annually and issued over 30 million virtual cards so far.

By Milja August 04,2021

As organized crime continues to be a massive problem in the retail sector, the Retail Industry Leaders Association (RILA), a US trade organization, called on online marketplaces to make a greater effort to prevent thieves from using them as their virtual storefront. Lisa LaBruno, RILA’s senior executive vice president of retail operations and innovation, said that online marketplaces are the primary selling point for shoplifted items and that Amazon, eBay, and Facebook aren’t doing enough to end this trend. “We can’t arrest and prosecute ourselves out of this problem. The retailers are carrying their weight. They’re doing their level best to address this problem. Law enforcement is doing its best to address this problem. The other key stakeholder in this is the online marketplaces,” LaBruno added. According to her, shoplifters “hide behind their computer screen name with essential anonymity,” which results in a “very low-risk, high-reward crime for them.” In response, a Facebook spokesperson said: “We don't allow people to sell stolen goods, we require sellers to adhere to local laws, and we make certain to respond to requests from law enforcement about stolen goods on our platform.” Similarly, an Amazon spokesperson insisted that “Amazon is always innovating to improve and protect our customer experience. We have selling policies that all sellers agree to before selling on Amazon, and we take action against those that violate them and threaten our customer experience. Policy violations can result in cancellation of listings, removal of selling privileges, withholding of funds, and legal action, depending on its severity.” In a pandemic-stricken world, more consumers are shopping online and new digital marketplaces are popping up every day. Many credit card issuers are offering special incentives to card members who choose to shop online instead of swiping their plastic in brick-and-mortar stores. This in itself is a challenge for the physical retailer market, and the worrying rise in stolen good trafficking has only served to exacerbate the issue.

By Milja August 04,2021

A Salesforce study released Tuesday, July 20, predicts that retailers in the US will spend $223 billion - or 62% - more in the second half of 2021 than in the corresponding period of 2020. The total sum can be broken down into $163 billion more in logistic costs, an additional $48 billion in wage expenses, and an extra $12 billion spent with suppliers. Salesforce’s research analyzed over one billion transactions worldwide at online and brick-and-mortar retailers. It is likely that this will result in higher prices of goods, although consumers will not be the only ones taking the burden of the increased costs. “What we have found through the first half of the year though, even with inflation and the increase in the cost of goods sold, partly being pushed off to the consumer, we are all willing participants. We’re willing to spend a little more. I think there’s enough momentum and positivity among people that they are willing to absorb the additional cost all the way through the holiday,” said Salesforce VP and GM of retail Rob Garf for CNBC. Another forecast from Salesforce’s study concerns the labor shortage US retailers have been struggling with for some time now. Retailers can expect approximately 350,000 fewer workers later this year during the holiday shopping period, which is bound to push wages as much as 46% higher compared to the holiday shopping peak in 2020. At the same time, retailers will probably have higher expectations from their workers, who will be required to fulfill deliveries through e-commerce platforms, click-and-collect, or BOPIS (buy online, pick up in store) services, and perform inventory management tasks. As Garf explained: “Retailers are saving on fulfillment because, for all intents and purposes, they’re outsourcing the last mile to the consumer and the consumers are willing participants because we all experienced wanting to buy a product and it not being available, or us getting it two, three, four weeks after the date that it showed when we got our confirmation email.”

By Julija A. August 03,2021

Tailor Brands, a branding platform and AI-powered logo-design company, has raised $50 million in Series C funding, as announced on Thursday, July 22. The company, headquartered in Tel Aviv and New York, aims to use the funds to create a one-stop SaaS Platform that will provide design, marketing, and branding services for small businesses. The platform will come bundled with everything aspiring entrepreneurs need to kick-start their business. “Users are looking for us to provide them with everything, so we are starting to incorporate more products with the goal of creating an ecosystem, like WeChat, where you don’t need to leave the platform at all to manage your business,” Yali Saar, co-founder and CEO of Tailor Brands, said. The investment round was led by web-hosting giant GoDaddy and backed up by investor firm Our Crowd, along with existing investors Armat Group, Disruptive VC, Mangrove Capital Partners, Pitango Growth, and Whip Media founder Richard Rosenblatt. Tailor Brands raised $15.5 million in Series B, which brings the Israeli company’s funding total to $70 million in the seven years since its 2014 launch. “GoDaddy is empowering everyday entrepreneurs around the world by providing all of the help and tools to succeed online. We are excited to invest in Tailor Brands — and its team — as we believe in their vision. Their platform truly helps entrepreneurs start their business quickly and easily with AI-powered logo design and branding services,” said Andrew Morbitzer, vice president of corporate development at GoDaddy. Small businesses are often in need of cost-effective solutions to start their entrepreneurial endeavors. Online services often prove to be less costly than brick-and-mortar counterparts, and Tailor Brands is a prime example of this. However, an online logo-builder that provides a unique brand identity is only the first step. Small businesses often need to seek online legal services to help them out with administration, online bookkeeping and accounting services, as well as an insurance provider. Because of all that, having a one-stop shop for marketing and branding such as Tailor Brands might make that journey to commercial success that much easier.

By Julija A. July 27,2021

Starting a small business today looks more accessible than ever before, thanks to Internet development and online communications. However, many entrepreneurs face the same problem - how to find the money necessary to start a business. While opting for a business loan might be the fastest way to get funds, there are other things that you can do. And, what is more important, they will be less obstructive to your budget. CrowdfundingIf you have an original idea for your small business, you only need to find people who will support you. The best way to do that is via crowdfunding sites. In the last decade, crowdfunding became one of the most popular methods for getting funds to start a business. If you choose this option, make sure that your ideas are distributed through a reliable crowdfunding platform. Angel investorsYou might be surprised, but many people are ready to support people with good ideas. For example, Angel investors are also business people, so they know to recognize projects that are worth their money. They will support your business and give you funds in return for the shares of your company. Although it is not always easy to find an investor who will support your startup, don’t give up. Be ready to pitch your business confidently when the right opportunity comes. Friends and familyBorrowing money from family members and friends is a last-ditch solution for some business owners, but it definitely has its benefits. If you are not afraid that it can jeopardize your relationship, taking the money from a friend is a smart decision. Your friends and family will offer you better repayment terms, likely without any interest. For businesses that just entered the market, this is a more affordable option than getting a loan from a bank or a lender. Credit CardsCredit cards are another way to fund your business. With hundreds of options available on the market, you should choose your credit card issuers wisely. Top credit card providers should offer you affordable rates and 0% APR in the first year and additional benefits, like sign-up bonuses, rewards, and points. LoansIf none of the aforementioned funding solutions are available to you, traditional business loans are always an option. Luckily, some banks offer loans for small and mid-sized businesses, so shopping for the right loan shouldn’t be too much of a headache. 

By Julija A. July 23,2021

The future is in your neighborhood: face-recognition technology is coming to retail stores if it’s not already there. Since the pandemic started, facial recognition tech has been utilized in retail shops to scan workers’ and employees’ faces. The purpose of using face recognition is to prevent fraud, measure foot traffic, and offer contactless payments to customers. The usage of the technology was met with disapproval by the advocacy groups that launched a campaign in order to stop stores from using facial recognition. "Facial recognition vendors are taking advantage of the pandemic to promote the technology to offer hands-free payments or monitor the distance between people, and stores are promoting them as features for safety and convenience," said Caitlin Seeley George, Fight for the Future’s campaign director. Many major retailers make ample use of this technology, including Apple Stores, Albertson’s, and Macy’s. According to the companies’ policies, the tech is used for security reasons and to prevent fraud. That being said, there are some big names on the advocacy group’s list that won’t use facial recognition tech. These include industry giants such as Walmart, CVS, and Verizon, for example. Like identity theft products, facial recognition is primarily used for security reasons, without connecting faces to personal information, said Brenda Leong, Senior Counsel and Director for Artificial Intelligence and Ethics at the Future of Privacy Foundation. Still, retailers found the tech beneficial for many reasons, such as faster identification of people who spend a lot of money at the store so that they can get easier and quicker access to loyalty perks. The advanced tech also enabled JD and Alibaba to open stores where automated carts follow customers while payments are made with facial recognition support. The idea is to improve customers’ experience, retailers say, not to use the system to capture and store photos to identify them. However, in some states, biometric information, including that obtained through facial recognition, is protected by privacy laws. Portland, Oregon, is the first American city that banned the usage of facial recognition by the police, government, and retailers. The technology is better accepted in places like amusement parks and stadiums, where it is used for detecting problematic guests, for example. In places like these, visitors can easily see the benefits of face recognition, so they are more likely to accept it. In retail stores, however, things are different, and Brenda Leong is definitely not convinced: "If someone walks into a drug store and they can intuit that they are anxious or worried, are they going to try to market them a sleep aid?" she asks, adding that "some retailer could take advantage of someone’s emotional state without that person's knowledge”. According to her, this imbalance of power is the real problem behind the facial recognition tech.

By Julija A. July 23,2021

Oregon-based small business owners are feeling more optimistic about the future of their companies than they have been at any point since the COVID-19 outbreak began. According to the latest weekly report by the U.S. Census Bureau, almost 75% of Oregon’s company owners expect they’ll be back to the pre-pandemic state of operations in six months or sooner. That’s twice as many as a similar poll reported in August 2020. Around 20% of businesses say they have already returned to normal operations. The percentage of those who think it’ll take over half a year to go back to working at full capacity is declining each month. The data provided in the Census Bureau’s Small Business Pulse Survey is just another indicator that the economy of the state of Oregon is well on the road to recovery from the recession that came along with the health crisis. According to the survey, Oregon-based companies are now slightly more upbeat than the national average. The state business owners had been slightly more pessimistic throughout most of the recession. Shutdowns and restrictive measures the COVID-19 pandemic brought on were particularly rough on smaller-sized companies which can hardly afford the reserves that larger enterprises often have. The global health crisis wiped out dozens of popular Oregon restaurants and bars, along with entertainment attractions such as ice rinks and bowling alleys. Still, thanks to the federal aid through small business loans, grants, and stimulus payments, many other businesses managed to stay afloat. Relatively few companies failed, according to state data. The percentage of bankruptcies also decreased last year. With more and more people getting vaccinated against COVID-19 and the virus seemingly fading, the state of Oregon formally reopened on June 30. Considering most restrictions have now been lifted, businesses are looking forward to operating as they did before the pandemic. Still, the damage from a turbulent 15 months cannot disappear right away. The experience of living amidst a pandemic will continue to take its toll on businesses as long as consumers remain in fear of the disease. Nevertheless, rising optimism among businesses highlights that the deepest downturn in Oregon’s history wasn’t as bad as economists initially thought it would be.

By Ivana V. July 22,2021