Vol. 7

July 17, 2023

Happy Monday,

Get a snapshot of: Elon Musk's most recent investment activity, a resurging IPO market, and a fairly calm week for M&A deals

Elon Musk launches AI startup and warns of a ‘Terminator future

Elon Musk has launched an artificial intelligence startup that will be “pro-humanity”, as he said the world needed to worry about the prospect of a “Terminator future” in order to avoid the most apocalyptic AI scenarios.
The world’s wealthiest person was one of the signatories to a letter this year that called for a pause in building large AI models such as ChatGPT, the chatbot built by the US firm OpenAI. There are growing fears that development of AI technology will race beyond human control.
Musk said a pause no longer seemed realistic and he hoped xAI would provide an alternative path.

Risk-sensitive Rand hits 3-month peak as slowing U.S. inflation hurts dollar

The South African Rand gained strongly on Thursday, touching its highest in more than three months and extending the previous day's rally as cooling U.S. inflation further dented the dollar.
The risk-sensitive rand traded as strong as 17.9125 to the dollar by 1510 GMT, its firmest since April 5.
The Dollar continued to slump on global markets in the wake of a slower-than-expected U.S. inflation reading on Wednesday that raised hopes the Federal Reserve will hit the pause button on interest rate hikes after this month.

Wellington in talks to invest in Kim Kardashian's Skims at $4 billion valuation in Pre-IPO Round

Investment firm Wellington Management is in talks to lead a new funding round for Skims, which could value the underwear clothing company owned by Kim Kardashian at about $4 billion, according to people familiar with the matter.
The sources said Skims raked in $500 million in revenue in 2022, and is profitable. The company raised $240 million last year at a $3.2 billion valuation, led by hedge fund Lone Pine Capital. Other investors included D1 Capital Partners, as well as existing investors Thrive Capital, Imaginary Ventures and Alliance Consumer Growth.

ABSA CIB Invests $8m in Moove

Absa Corporate and Investment Banking (CIB), has invested $8m in Moove, an African-born, global mobility fintech, bringing its total funding to-date from the bank to $28m.
This follows Moove’s $20m financing facility from Absa for its South Africa operations announced in June 2022.
Moove was founded in 2020 by Ladi Delano and Jide Odunsi and to-date, over 21 million trips have been completed in Moove-financed vehicles worldwide. The startup is also Uber’s largest fleet vehicle supply partner in EMEA.

Egyptian FinTech Menthum raises pre-seed funding from A15, Acasia, and prominent angels

Egyptian venture capital firms A15, Acasia Ventures, and prominent angels have completed an investment in Cairo-based digital savings platform Menthum, joining a pre-seed round.
Menthum is a B2B and B2C digital savings platform that provides individuals and companies an innovative way to invest in safe treasury bills (T-bills) through a money market fund1. Licensed and regulated by Egypt’s Financial Regulatory Authority (FRA), Menthum has launched the first digital money market fund in the country, partnering with a leading investment manager.

State-owned Nigerian National Petroleum has Tinubu's backing for IPO, CEO says

Nigeria's NNPC will launch an initial public offering (IPO) "soon", its group CEO said on Tuesday after securing the backing of Nigerian President Bola Tinubu.
Last July, it said it would be ready for an IPO by mid-2023, as it seeks to sell shares to the public.
NNPC, which became a commercial company in July last year, no longer has recourse to state funds and will have to raise funding independently.

The Next Chipotle? Cava shares soar in stellar debut

Cava Group priced its IPO at $22 per share in June, above the expected range of $19 to $20. The company sold 14.4 million shares, raising nearly $318 million and initially valuing the restaurant chain at roughly $2.45 billion
Cava continues to surge reaching a fresh all-time high, making the burgeoning Mediterranean fast-casual chain one of the most valuable restaurant groups in the world and drumming up dreams that it could follow Chipotle’s growth trajectory
Cava, which brought in $449 million of revenue last year, actually lost $59 million in 2022, but it's already a hit on Wall Street, as analysts compare the company to Chipotle, whose stock has soared almost 5,000% from its 2006 IPO, growing from below 600 to more than 3,000 locations during that period
In a note initiating coverage of Cava with a buy rating, Jefferies analyst Andy Barish said Cava’s “blue-sky scenario” would be to match Chipotle’s goal and eventually open 7,000 restaurants in North America – a roughly 2,500% expansion
Investors seem to be warming up to IPOs this year after a volatility-fueled 2022 curbed appetite for new listings and fueled a risk-off sentiment.

"An error doesn’t become a mistake until you refuse to correct it"

Orlando A B

Goldman Sachs offloads $1 billion of Marcus loans to Varde

Goldman Sachs Group has sold $1 billion of personal loans from its consumer unit, Marcus, to alternative investment firm Varde Partners, a source familiar with the matter said on Thursday.
This was the second tranche of unsecured loans offloaded by Goldman after it disclosed earlier it had sold about $1 billion from the $4.5 billion loan portfolio in the first quarter.
The Wall Street giant booked a $470 million loss on the sale of some Marcus loans in the first quarter, which dragged down its earnings.

Disney wants to keep ESPN, could offload some traditional TV assets

Walt Disney wants to keep ESPN and will look for strategic partners to form a joint venture or buy a stake in the sports network to help take it directly to consumers, CEO Robert Iger said on Thursday in an interview to CNBC.
Iger also hinted that the company could sell some of its traditional TV assets that have struggled for years due to the rise of streaming services.

Thanks for reading!

All the best,

Hlumelo Lujiva💙