Joe Lonsdale’s 8VC partners with Morgan Stanley-backed company to double down on transportation and logistics investments

Published

3 years ago

July 15, 2021

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8VC, the Austin, Texas-based venture capital firm run by Palantir co-founder Joe Lonsdale, is partnering with Morgan Stanley-backed Lineage Logistics, a company known for its global network of temperature-controlled cold storage facilities, to double down on investments in the transportation and logistics sector.

8VC co-founder and partner Jake Medwell is joining Lineage in an advisory role, while Lineage’s chief information officer Sudarsan Thattai is joining 8VC in an advisory role as well, as part of the formalized alliance between companies.

“I admire what Lineage Logistics has built over the last decade and am very excited to officially be partnered,” Medwell told CNBC. “They think about technology as a core pillar of business and it fits hand in hand with what I spend my time on at 8VC.”

The pandemic exposed the fragility of the global supply chain. With facilities in China and elsewhere shuttered, stores experienced dramatic shortages of apparel, car parts and packaging materials.

Still, supply chain software and warehousing technology attracted record venture backing in 2020, with North American and European investors funneling roughly $12.6 billion into more than 550 start-up deals, according to PitchBook data. The growing demand for warehousing space and supply chain solutions, coupled with high levels of VC funding, are giving rise to companies like Lineage, which ranked No. 17 on this year’s CNBC Disruptor 50 list.

Founded with the acquisition of a single warehouse in Seattle in 2008, the company offers a global network of temperature-controlled cold-storage facilities for proteins, bakery products, dairy, and fruits and vegetables. It also manages processing facilities and automated, port-based and custom warehousing.

Lineage is among the most recent innovators in cold storage, applying the latest in data science and vision technology to what is essentially a square-footage challenge.

It “blast freezes” cold air at temperatures as low as -25 to -35 Fahrenheit on up to 5 million pounds of product a day at a single facility, and using only 40%-50% of the time required in traditional blast freeze operations. That proprietary solution, combining shelf space with calculus, received one of its multiple awards from the Department of Energy — and a patent for the company, which has many more, some still in the application process.

It uses LIDAR and stereoscopic cameras to map facilities to sub-millimeter accuracy, “effectively playing Tetris in the physical world … to design warehouse racks that store product as efficiently as physically possible,” the company explains.

“At Lineage, we develop and deploy industry-leading technology and applied sciences to increase distribution efficiency, advance sustainability, reduce environmental impact, minimize supply chain waste, and, most importantly, help to feed the world,” Thattai told CNBC.

“This partnership with 8VC is a strong testament to our commitment to build lasting technology platforms and create long-term economic and societal value. I’m excited for what the future holds for the next-generation of supply chain and logistics technologies.”

Among 8VC’s better-known investments to date are Palmer Luckey’s start-up, Anduril, which is building a virtual border wall, and Dustin Moskovitz’s software company, Asana, which went public in September. The firm has also put a lot of money into health-care companies like insurance provider Oscar Health and men’s health company Hims.

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Technology

Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Published

1 hour ago

November 21, 2024

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

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Alphabet shares slid 6% Thursday, following news that the Department of Justice is calling for Google to divest its Chrome browser to put an end to its search monopoly.

The proposed break-up would, according to the DOJ in its Wednesday filing, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”

This development is the latest in a years-long, bipartisan antitrust case that found in an August ruling that the search giant held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act.

The potential break-up would include preventing Google from entering into exclusionary agreements with competitors like Apple and Samsung, part of a set of remedies that would last 10 years.

CNBC’s Jennifer Elias contributed to this report.

Technology

Nvidia shares slump 3% in premarket as quarterly revenue growth slows

Published

9 hours ago

November 21, 2024

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Nvidia shares slump 3% in premarket as quarterly revenue growth slows

POLAND – 2024/11/13: In this photo illustration, the NVIDIA company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)

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Nvidia shares dropped in U.S. premarket trading Thursday after the tech giant’s third-quarter earnings failed to impress investors.

Shares of the chipmaker slumped 3.21% at around 5:03 a.m. ET, following the Wednesday release of Nvidia’s quarterly results, which beat on both the top and bottom lines.

Revenue came in at $35.08 billion, up 94% year-on-year and exceeding the $33.16 billion forecast by LSEG analysts. Earnings per share was 81 cents adjusted, also above analyst expectations.

Other chipmakers fell on the back of the market reaction to Nvidia’s third-quarter results. Shares of Intel, Qualcomm and Micron Technology all lost 1% or more in value, while AMD declined 0.6%.

The slump in Nvidia also had a knock-on effect on European semiconductor firms. ASML, a key chip equipment supplier, dropped 0.9%, while compatriot Dutch chip firm ASMI fell 0.5%. Chipmakers BE Semiconductor, STMicroelectronics and Infineon slipped 0.8%, 0.7 and 0.6%, respectively.

Several notable chip names were also in negative territory in Asia. TSMC, which makes Nvidia’s high-performance graphics processing units, eased as much as 1.5%. Contract electronics manufacturer Foxconn dropped 1.9%.

Why are Nvidia shares falling?

Nvidia has largely cornered the market for the high-powered chips powering the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.

Despite nearly doubling sales year-on-year, Nvidia’s third-quarter results showed a slowdown from previous quarters. Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter, and 265% in the fourth quarter of 2023.

Derren Nathan, head of equity research at Hargreaves Lansdown, said in emailed comments Wednesday that the dip in Nvidia’s share price “suggests even outstanding isn’t enough for some investors,” adding that he expects the stock to bounce back once markets open.

“NVIDIA’s generated stellar gains for shareholders over many years now, and right now it’s pretty hard to see any major holes in the investment case,” Nathan added.

Analysts are looking ahead to the much-anticipated launch of Nvidia’s next-generation chip called Blackwell. On the firm’s earnings call, CEO Jensen Huang said that demand for the chip is exceeding supply.

– CNBC’s Kif Leswing contributed to this report

Technology

British regulators will soon announce competition remedies for the multibillion-pound cloud industry

Published

12 hours ago

November 21, 2024

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British regulators will soon announce competition remedies for the multibillion-pound cloud industry

Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.

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LONDON — Britain’s competition regulator is preparing remedies aimed at solving competition issues in the multibillion-pound cloud computing industry.

The Competition and Markets Authority is set to unveil its provisional decision detailing “behavioral” remedies addressing anti-competitive practices in the sector following a months-long investigation into the market, two sources familiar with the matter told CNBC.

The sources, who preferred to remain anonymous given the investigation’s sensitive nature, said that the cloud market remedies could be announced within the next two weeks. The regulator previously set itself a deadline of November to December 2024 to publish its provisional decision.

A CMA spokesperson declined to comment on the timing of its provisional decision when asked by CNBC.

Plural co-founder on whether Nvidia's dominance can be shaken

Cloud infrastructure services is a market that’s dominated by U.S. technology giants Amazon and Microsoft. Amazon is the largest player in the market, offering cloud services via its Amazon Web Services (AWS) arm. Microsoft is the second-largest provider, selling cloud products under its Microsoft Azure unit.

The CMA probe traces its history back to 2022, when U.K. telecoms regulator Ofcom kicked off a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom subsequently referred its cloud review to the CMA to address competition issues in the market.

Why is the CMA concerned?

Among the key issues the CMA is expected to address with recommended behavioral remedies, are so-called “egress” fees charging companies for transferring data from one cloud to another, licensing fees viewed as unfair, volume discounts, and interoperability issues that make it harder to switch vendor.

According to one of the sources, there’s a chance Google may be excluded from the scope of the competition remedies given it is smaller in size compared to market leaders AWS and Microsoft Azure.

Amazon and Microsoft declined to comment on this story when contacted by CNBC. Google did not immediately return a request for comment.

What could the remedies look like?

The CMA has said previously in June that it was more minded toward considering behavioral remedies to resolve its concerns as opposed to “structural” remedies, such as ordering divestments or operational separations.

The watchdog said in a working paper in June that it was “at an early stage” of considering potential remedies.

Solutions floated at the time included imposing price controls restricting the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements encouraging firms to commit more spend in return for discounts.

One contentious measure the regulator said it was considering was requiring Microsoft to apply the same pricing for its productivity software products regardless of which cloud they’re hosted on — a move that would have a significant impact on Microsoft’s pricing structures.

CMA Chief Executive Sarah Cardell is set to hold a speech on Thursday at Chatham House, a U.K. policy institute. In an interview with the Financial Times, she defended the regulator’s track record on competition enforcement amid criticisms from Prime Minister Keir Starmer that the agency was holding back growth.

She is expected to outline plans for a review in 2025 into whether the CMA should more frequently use behavioral remedies when approving deals, the FT reported.