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Lucid Motors strikes SPAC deal to go public with $24 billion valuation

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Lucid Motors reached an agreement to become a publicly traded company through a merger with special-purpose acquisition company Churchill Capital IV Corp, in the largest deal yet between a blank-check company and electric vehicle startup. 

The combined company, in which Saudi Arabia’s sovereign fund will continue to be the largest shareholder, will have a transaction equity value of $11.75 billion. Private investment in the public equity deal is priced at $15 a share, putting the implied the pro-forma equity value at $24 billion. The announcement comes more than a week after Bloomberg, citing unnamed sources, reported a deal was close to being finalized.

Lucid follows a string of other, albeit smaller valued, SPAC mergers with electric vehicle startups that have been announced this year, including Arrival, Canoo, Fisker and Lordstown Motors. Several EV infrastructure companies including EVgo and ChargePoint have also become public companies via SPAC mergers.

Lucid might have been the most anticipated. The hype and speculation that has been rampant for weeks drove up the stock price of Churchill Capital IV Corp from its opening price of $10 a share more than 470% since January 2021. The skyrocketing share price, plummeted more than 30% after the details of the deal were announced.

The private investment and cash from Churchill will provide roughly $4.4 billion in total funding to Lucid. That capital will be put to work to speed up and expand Lucid’s plans. The company plans to begin production and deliveries of the Lucid Air in North America in the second half of this year. The Air will come to Europe in 2022, followed by China in 2023. The Gravity performance luxury SUV is expected to come to market in North America in 2023. The vehicles will be produced at its new factory in Casa Grande, Arizona. 

The funding will be used to bring those two vehicles to market as well as to expand its factory in Arizona, Lucid CEO and CTO Peter Rawlinson said Monday. The company plans to expand the factory over another three phases in the coming years to have the capacity to produce 365,000 units per year at scale. The initial phase of the $700 million factory was completed late last year and will have the capacity to produce 30,000 vehicles a year.

Lucid Motors air EV

Image Credits: Lucid Motors

The deal will also help Lucid realize its vision to supply electric vehicle technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial and utility segments, Rawlinson said.

Scaling an electric vehicle company is not cheap or easy. Lucid narrowly missed imploding several years ago as it struggled to find an investor that would provide the capital it needed to bring its ultra-luxe electric Air sedan into production. That investor ended up being Saudi Arabia’s sovereign wealth fund, which agreed in September 2018 to invest $1 billion into Lucid Motors.

Lucid began in 2007 as Atieva, a company founded by former Tesla VP and board member Bernard Tse and entrepreneur Sam Weng that focused on developing electric car battery technology. The early research, development and eventual progress in the components and overall electric architecture would lay the critical ground work for the future Lucid, which emerged at the end of 2016 with new publicly stated purpose to make electric vehicles (although the company had already been working quietly at this for a couple of years). Rawlinson, who left Tesla to join Lucid in 2013 as CTO, was one of the driving forces behind this new mission. He later took on the CEO title and responsibility as well.

While Lucid is often couched as a competitor to Tesla, Rawlinson has told TechCrunch the Air is meant to be a rival of the Mercedes S Class, the internal combustion engine flagship of the German automaker. The investor presentation released Monday echoes Rawlinson’s earlier comments, noting that “Tesla is innovative but not luxury.” Lucid describes itself as “post luxury” and in competition with “established luxury” brands Audi, BMW and Mercedes-Benz.

Lucid is taking a page out of Tesla’s playbook and outlined plans to eventually offer more affordable EVs once it scales production.

Rawlinson will remain as CEO and CTO. The deal is expected to close in the second quarter.

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Google says it won’t adopt new tracking tech after phasing out cookies

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While we’ve written about attempts to build alternatives to cookies that track users across websites, Google says it won’t be going down that route.

The search giant had already announced that it will be phasing out support for third-party cookies in its Chrome browser, but today it went further, with David Temkin (Google’s director of product management for ads privacy and trust) writing in a blog post that “once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products.”

“We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not — like [personally identifiable information] graphs based on people’s email addresses,” Temkin continued. “We don’t believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions, and therefore aren’t a sustainable long term investment.”

This doesn’t mean ads won’t be targeted at all. Instead, he argued that thanks to “advances in aggregation, anonymization, on-device processing and other privacy-preserving technologies,” it’s no longer necessary to “track individual consumers across the web to get the performance benefits of digital advertising.”

As an example, Temkin pointed to a new approach being tested by Google called Federated Learning of Cohorts (FLoC), which allows ads to be targeted at large groups of users based on common interests. He said Google will begin testing FLoCs with advertisers in the second quarter of this year.

It’s worth noting, however, that the Electronic Frontier Foundation has described FLoCs as “the opposite of privacy-preserving technology” and compared them to a “behavioral credit score.”

And while cookies seem to be on the way out across the industry, the U.K.’s Competition and Markets Authority is currently investigating Google’s cookie plan over antitrust concerns, with critics suggesting that Google is using privacy as an excuse to increase its market power. (A similar criticism has been leveled against Apple over upcoming privacy changes in iOS.)

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Yugabyte announces $48M Series C as cloud native database makes enterprise push

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As demand for cloud native applications is growing, Yugabyte, makers of the cloud native, open source YugabyteDB database are seeing a corresponding rise in demand for their products, especially with large enterprise customers. Today, the company announced a $48 million Series C financing round to help build on that momentum.

Lightspeed Venture Partners led the round with participation from Greenspring Associates, Dell Technologies Capital, Wipro Ventures and 8VC. Today’s round comes on the heels of the startup’s $30 million Series B last June, and brings the total raised to $103 million, according to the company.

Kannan Muthukkaruppan, Yugabyte co-founder and president, says the startup saw a marked increase in interest in both the open source and commercial offerings in 2020 as the pandemic pushed many companies to the cloud faster than they might have gone otherwise, something many startup founders have pointed out to me.

“The distributed SQL space is definitely heating up, and if anything over the last six months almost in every vector in terms of enterprise customers — from Fortune 500 companies across financial, retail, ISP or telcos — are putting Yugabyte in production to be the system of record database to meet some of their business critical services needs,” Muthukkaruppan told me.

In addition, he’s seeing a similar rise in the level of interest from the open source version of the product.”Similarly, the groundswell on the community and the open source adoption has been phenomenal. Our Slack [open source] user community quadrupled in 2020,” he said.

That kind of momentum led to the increased investor interest, says co-founder and CTO Karthik Ranganathan. “Some of the primary reasons to go and even ask for funding was that we realized we could accelerate some of this stuff, and we couldn’t do that with the original $30 million we had raised,” he said. The original thinking was to do a secondary raise in the $15-20 million, but multiple investors expressed interest in participating, and it ended up being a $48 million round when all was said and done.

Former Pivotal president Bill Cook came on board as CEO at the same time they were announcing their last funding round in June and brought some enterprise chops to the table. It was his job to figure out how to expand the market opportunity with larger high-value enterprise clients. “And so the last six or seven months has been about that, dealing with enterprise clients on one hand and then this emerging developer led cloud offering as well,” Cook said.

The company has a three tier offering that includes the open source YugabyteDB. Then there is a fully managed cloud version called Yugabyte Cloud, and finally there is a self-managed cloud version of the database called Yugabyte Platform. The latter is especially attractive to large enterprise customers, who want to be in the cloud, but still want to maintain control of their data and infrastructure, and so choose to manage the cloud installation themselves.

The company started last year with 50 employees, doubled that to this point, and now expects to reach 200 by the end of this year. As they add employees, the leadership team is cognizant of the importance of building a diverse and inclusive workforce, while recognizing the challenges in doing so.

“It’s work in progress as always. We’ve added diversity candidates right along the whole spectrum as we’ve grown but from my perspective it’s never sufficient, and we just need to keep pushing on it hard, and I think as a leadership team we recognize that,” Cook said.

The three leaders of the company have been working together remotely now since the announcement in June, and had only met briefly in person prior to the pandemic shutting down offices, but they say that it has gone smoothly. And while they would obviously like to meet in person again when the time is right, the momentum the company is experiencing shows that things are moving in the right direction, regardless of where they are getting their work done.

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$1.3M in grants go towards making the web’s open source infrastructure more equitable

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Open source software is at the core of… well, practically everything online. But while much of it is diligently maintained in some ways, in others it doesn’t receive the kind of scrutiny that something so foundational ought to. $1.3 million worth of grants were announced today, split among 13 projects looking to ensure open source software and development is being done equitably, sustainably, and responsibly.

The research projects will look into a number of questions about the way open source digital infrastructure is being used, maintained, and otherwise affected. For instance, many municipalities rely on and create this sort of infrastructure constantly as the need for government software solutions grows, but what are the processes by which this is done? Which approaches or frameworks succeed, and why?

And what about the private companies that contribute to major open-source projects, often without consulting one another — how do they communicate and share priorities and dependencies? How could that be improved, and with what costs and benefits?

These and other questions aren’t the type that any single organization or local government is likely to take on spontaneously, and of course the costs of such studies aren’t trivial. But they were deemed interesting enough (and possibly likely to generate new approaches and products) by a team of experts who sorted through about 250 applications over the last year.

The grantmaking operation is funded and organized by the Ford Foundation, Alfred P. Sloan Foundation, Open Society Foundations, Omidyar Network, and the Mozilla Open Source Support Program in collaboration with the Open Collective Foundation.

“There’s a dearth of funding for looking at the needs and potential applications of free and open source infrastructure. The public interest issues behind open source have been the missing piece,” said Michael Brennan, who’s leading the grant program at the Ford Foundation.

“The president of the foundation [Darren Walker] once said, ‘a just society relies on a just Internet,’ ” he quoted. “So our question is how do we create that just Internet? How do we create and sustain an equitable Internet that serves everyone equally? We actually have a lot more questions than answers, and few people are funding research into those questions.”

Even finding the right questions is part of the question, of course, but in basic research that’s expected. Early work in a field can seem frustratingly general or inconclusive because it’s as much about establishing the scope and general direction of the work as it is about suggesting actual courses of action.

“The final portfolio wasn’t just about the ‘objectively best’ ones, but how do we find a diversity of approaches and ideas, and tackle different aspects of this work, and also be representative of the diverse and global nature of the project?” Brennan said. “This year we also accepted proposals for both research and implementation. We want to see that the research is informing the building of that equitable and sustainable infrastructure.”

You can read the full research abstracts here, but these are the short versions, with the proposer’s name:

  • How are COVID data infrastructures created and transformed by builders and maintainers from the open source community? – Megan Finn (University of Washington, University of Texas, Northeastern University)
  • How is digital infrastructure a critical response to fight climate change? – Narrira Lemos de Souza
  • How do perceptions of unfairness when contributing to an open source project affect the sustainability of critical open source digital infrastructure projects? – Atul Pokharel (NYU)
  • Supporting projects to implement research-informed best practices at the time of need on governance, sustainability, and inclusion. – Danielle Robinson (Code for Science & Society)
  • Assessing Partnerships for Municipal Digital Infrastructure – Anthony Townsend (Cornell Tech)
  • Implement recommendations for funders of open source infrastructure with guides, programming, and models – Eileen Wagner, Molly Wilson, Julia Kloiber, Elisa Lindinger, and Georgia Bullen (Simply Secure & Superrr)
  • How we can build a “Creative Commons” for API terms of Service, as a contract to automatically read, control and enforce APIs Terms of service between infrastructure and applications? – Mehdi Medjaoui (APIdays, LesMainteneurs, Inno3)
  • Indian case study of governance, implementation, and private sector role of open source infrastructure projects – ​Digital Asia Hub
  • Will cross-company visibility into shared free and open source dependencies lead to cross-company collaboration and efforts to sustain shared dependencies? – ​Duane O’Brien
  • How do open source tools contribute towards creating a multilingual internet? – Anushah Hossain (UC Berkeley)
  • How digital infrastructure projects could embrace cooperatives as a sustainable model for working – ​Jorge Benet (Cooperativa Tierra Común)
  • How do technical decision-makers assess the security ramifications of open source software components before adopting them in their projects and where can systemic interventions to the FOSS ecosystem be targeted to collectively improve its security? – Divyank Katira (Centre for Internet & Society in Bangalore)
  • How can African participation in the development, maintenance, and application of the global open source digital infrastructure be enhanced? – Alex Comninos (Research ICT Africa (RIA) and the University of Cape Town)

The projects will receive their grants soon, and later in the year (or whenever they’re ready) the organizers will coordinate some kind of event at which they can present their results. Brennan made it clear that the funders take no stake in the projects and aren’t retaining or publishing the research themselves; they’re just coordinating and offering support where it makes sense.

$1.3 million is an interesting number. For some, it’s peanuts. A startup might burn through that cash in a month or two. But in an academic context, a hundred grand can be the difference between work getting done or being abandoned. The hope is that small injections at the base layer produce a better environment for the type of support the Ford Foundation and others provide as part of their other philanthropic and grantmaking efforts.

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