Good morning, Times of E readers! This is your weekly news roundup. Every Friday, we’ll give you the rundown on the latest news in the entrepreneurship world so you can stay in touch with promotions, recent studies, pitching opportunities and more.
If you have a piece of news, please send it to Skyler Rossi, [email protected].
A Lawsuit and $1 Billion For Robinhood
At what point does a startup become an institution? Robinhood, the Menlo Park, California-based investment app — or should we call it a “giant” — made headlines this week after it blocked trading on surging stocks fueled by the WallStreetBets group on Reddit, such as GameStop and AMC Theatres. It’s now facing a class action lawsuit for its actions. It has since reopened trading of these stocks, as of Friday. The restrictions, similar to those employed by investment companies Interactive Brokers and TDAmeritrade, drew bipartisan criticism from politicians such as Rep. Alexandria Ocasio-Cortez (D-N.Y.), who called the block “unacceptable” on Twitter this week.
Overnight, Robinhood raised $1 billion from its investors to build liquidity so that it could restart trading, a move that its CEO Vlad Tenev told CNBC was “proactive.” Robinhood is celebrated as and portrays itself as entrepreneurial, as it outlined last year. But Robinhood’s actions, from the block on trades, against its own clients’ demands, and its fast-tap of a huge sum of capital, look institutional. The startup label and an entrepreneurial veneer are great for brand-building. But in the case of some fast-growing tech companies, maybe that’s all they are.
Names to Know
Jessica Looze was named the director of Knowledge Creation and Research this week at the Ewing Marion Kauffman Foundation, according to its newsletter. Formerly, she was an assistant director of research and evaluation at the Center for Public Partnerships and Research at the University of Kansas. Sameeksha Desai, who held the position since 2018, will return to Indiana University as a professor of entrepreneurship and economic development policy in March. Until then, she’ll serve as the director of special projects and advisory.
Peter Hong will be the new director of the Pappajohn Center for Entrepreneurship’s Startup Factory at Iowa State University starting Feb. 1, according to a news release. He’ll also run the new Iowa Go-to-Market Accelerator, which is part of a $1.29 million university program funded by the U.S. Economic Development Administration. Hong has been the COO and CTO for New Tech Ceramics, a company that manufactures sturdy industrial parts, and a principal advisor for the Larta Institute, a Los Angeles-based incubator, since 2009.
SoftBank Group announced Thursday it will invest $100 million in startups based in Miami or that plan to move there. The initiative is led by the company’s CEO Marcelo Claure and the money comes from across its funds. The Tokyo-based conglomerate already has its $5 billion Latin America Fund housed in the city. Entrepreneurs can apply to the fund here.
Jackson-Wyoming-based Prime Movers Lab announced Wednesday that it raised $245 million for its second early-stage investment fund. The investor is looking to invest in early-stage companies reinventing human augmentation, energy, transportation, infrastructure, manufacturing and agriculture, according to the news release.
Citi Impact Fund
Citibank announced Monday that its next round of investments of this $200 million fund it launched last year went to many women and minority founders, according to a news release. Some of those companies:
- San Francisco-based Clerkie, a debt management service
- Malpita, California-based KETOS, a company making water quality testing faster and more reliable
- Memphis-based MedHaul, a healthcare transportation service
- Los Angeles-based Perch, a credit-building app
- San Francisco-based Shift, a company that connects active and former military members with jobs
- Cambridge, Massachusetts-based Superpedestrian, a company that develops technologies for rental scooters to avoid malfunctions
- Troy, New York-based VyV, which produces lights that kill common bacteria and fungi
$200M Firm With A Sustainability Focus
Newday Financial Technologies, a San Francisco-based investment firm, announced its acquisition of Magni Global Asset Management, a governance research and asset management company based in Minneapolis, this week. Newday began working with Mangi last fall to address inclusion and racial justice, Newday’s CEO Doug Heske said in an email. The firm will launch a new financial education and investing program in St. Paul, Minnesota, for members of underserved communities, which reduces minimum investment levels and expenses. It will also launch a sustainable Municipal fund in April, Heske said. Newday has about $200 million assets under management, almost half of that coming from the acquisition.
Pot Does Not Make You Think Better
A new study out of Washington State University shows that cannabis-using entrepreneurs come up with ideas that are more original, but also impractical, according to a WSU news release. The study, led by WSU professor Benjamin Warnick, concluded that the marijuana use may be helpful in brainstorming steps, but it may not be practical for getting a business off the ground. Warnick and his team split 254 entrepreneurs into two groups: users of cannabis, who reported using it nearly 20 times in the past month, and non-users. The group completed a new venture ideation activity, coming up with as many new business ideas as possible, which were then scored by experts on their originality and feasibility. Marijuana-users were still classified as such whether or not they reported being high during the experiment.
Tweet of the Week
That’s Eloho Omame, managing director of accelerator Endeavor Nigeria, who launched FirstCheck Africa on Monday. The fund, which is also run by Odunayo Eweniyi, founder of Nigeria-based investment app PiggyVest, is investing in women in African tech, according to the group’s launch announcement. They’re investing “ridiculously early” in six startups this year, and they will invest up to $25,000 in each.
This startup out of Dartmouth made the tough call to change direction toward the current pandemic crisis after consulting with mentors and industry leaders. Read the full Q&A by Shirly Piperno: After Nanopath Pivoted to COVID-19 Diagnostics, Doors Opened.