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Darktrace plans to go public in London despite Deliveroo IPO flop

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A Darktrace cybersecurity software demonstration shows how a global problem can start with just one employee’s work station.

Michael S. Williamson | The Washington Post | Getty Images

LONDON — British cybersecurity start-up Darktrace said Monday that it plans to go public in London, defying fears that Deliveroo’s disappointing IPO could put other tech firms off listing in the city.

The London-based firm’s platform uses artificial intelligence technology to detect and respond to cyber threats in a business’ IT systems. It says its self-learning AI can monitor threats in real time and come up with ways to strike back.

Darktrace, founded in 2013 by a group of former intelligence experts and mathematicians, said it intends to float at least 20% of issued share capital in an initial public offering on the London Stock Exchange’s premium market. This would make it eligible for inclusion in benchmark indexes like the FTSE 100.

“Our intention to list on the London Stock Exchange marks a major milestone in Darktrace’s history of rapid growth, and a historic day for the U.K.’s thriving technology sector,” said Poppy Gustafsson, Darktrace’s CEO and co-founder.

“We are proud to be part of that tradition of British innovation, as the U.K. becomes a leading global centre for the development of AI,” she added.

Darktrace’s IPO announcement comes despite concerns over the lackluster market debut of Deliveroo, the Amazon-backed food delivery company. Deliveroo shares plunged as much as 30% on its first day of trading, making it one of the worst London IPOs for a large company.

Deliveroo’s IPO flop also threatened to embarrass U.K. officials, who threw their weight behind the company as it announced plans to go public in the city. London is looking to relax its listings requirements in a bid to attract more high-growth tech companies.

But some analysts said Deliveroo’s woes may be limited to the company, which has been dogged by employment rights concerns, rather than a broader indication of trouble for London tech listings. Deliveroo said it’s “just starting life as a public company” and is “confident” in its ability to deliver long-term returns for shareholders.

Darktrace reported revenue of $199.1 million for the year ended June. 30, 2020, up 45% from $137 million in the same period a year earlier. Losses totalled $28.7 million, though this was down from the $34.7 million Darktrace lost in its 2019 fiscal year.

Darktrace’s biggest investor is Invoke Capital, the venture fund of U.K. entrepreneur Mike Lynch. Lynch currently faces the threat of potential extradition to the U.S. over fraud charges related to the sale of Autonomy — the software firm he founded — to Hewlett-Packard in 2011 for $11 billion. Lynch denies any wrongdoing.

Gustafsson and Chief Strategy Officer Nicole Eagan both used to work at Autonomy. Darktrace shares the same office building as Invoke in London, but says that Lynch has no direct involvement with the day-to-day running of the company.

The firm, which was last valued at $1.65 billion in its last private financing round, has tapped Jefferies, Berenberg, KKR Capital Markets to lead the IPO if it goes ahead, with Needham & Company and Piper Sandler acting as joint bookrunners. It’ll use funds raised from the float to develop new products and strengthen its balance sheet.

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India’s worsening Covid crisis could spiral into a problem for the world

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A woman wearing mask as a precaution against Covid-19 stands in a crowded area near India Gate, in New Delhi on March 19, 2021 as coronavirus cases continue to increase across India.

Money Sharma | AFP | Getty Images

India’s Covid-19 cases spiked in April to daily record highs, and experts warn the country’s worsening health crisis could scuttle efforts to end the global pandemic.

The South Asian country — home to around 1.4 billion people or 18% of the world’s population — accounted for 46% of new Covid cases globally, the World Health Organization said Wednesday. One in every four deaths in the past week came from India, the UN health agency said.

India has reported more than 300,000 new cases daily in the last two weeks, and overtook Brazil in April to become the second-worst infected country in the world. Cumulatively, coronavirus infections in India reached around 20.67 million with more than 226,000 deaths, according to health ministry data on Wednesday. Several studies of India’s data, however, found that cases were likely severely underreported.

There are already signs that India’s outbreak is spilling over to other countries. Its neighbors Nepal and Sri Lanka have also reported increases in infections, while other regional economies including Hong Kong and Singapore have seen imported Covid cases from India.

Here’s how India’s coronavirus crisis could spiral into a wider global problem.

Potential new Covid variants

WHO has classified the B.1.617 as a variant of interest, which suggests the mutated strain could be more contagious, more deadly, as well as more resistant to current vaccines and treatments. The organization said more studies are needed to understand the significance of the variant.

Global vaccine supply at risk

India is a major vaccine manufacturer, but the health crisis at home has led authorities to halt exports of Covid-19 vaccines as the country prioritizes its domestic needs.

The Serum Institute of India (SII) — the country’s main producer — has the rights to produce the Covid vaccine co-developed by AstraZeneca and the University of Oxford. Some of its production is slated for Covax, the global initiative to supply poor countries with Covid vaccines.   

Developing countries are lagging advanced nations in securing vaccine supplies in what the WHO has described as a “shocking imbalance” in distribution.

A delay in vaccine exports by India could therefore leave lower-income countries vulnerable to fresh outbreaks of the coronavirus.

Threat to global economy

India is the world’s sixth largest economy and a major contributor to global growth.

Some economists have downgraded their growth forecasts for India. But they remained optimistic about the economy’s outlook for the year given that restrictions to curb the virus spread have been more targeted compared to the strict nationwide lockdown last year.

The International Monetary Fund last month said it expects India’s economy to grow 12.5% in the fiscal year ending March 2022, after shrinking 8% in the prior fiscal year.

Still, the renewed outbreak in India has led several countries to tighten travel restrictions — and that’s bad news for airlines, airports as well as other businesses that depend on the travel industry, said Uma Kambhampati, an economics professor at the University of Reading in the U.K.

Meanwhile, the U.S. Chamber of Commerce has warned that the health crisis in India could drag down the U.S. economy, reported Reuters. That’s because many U.S. companies hire millions of Indian workers to run their back-office operations, according to the report.

“Given all these issues, and the humanitarian crisis unfolding, it has become imperative for the world to act quickly to help India – whether such help is requested or not,” Kambhampati said in a report published on The Conversation, a not-for-profit website that carries commentaries by academics and researchers.

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Bitcoin is coming to hundreds of US banks, says crypto firm NYDIG

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Bitcoin may be taking another step toward mainstream adoption, CNBC has learned.

For the first time, customers of some U.S. banks will soon be able to buy, hold and sell bitcoin through their existing accounts, according to crypto custody firm NYDIG.

The company, a subsidiary of $10 billion New York-based asset manager Stone Ridge, has partnered with fintech giant Fidelity National Information Services to enable U.S. banks to offer bitcoin in coming months, according to the two firms.

Hundreds of banks are already enrolled in the program, according to Patrick Sells, head of bank solutions at NYDIG. While the firm is in discussions with some of the biggest U.S. banks, many of the lenders that have agreed to participate are smaller institutions like Suncrest, a California-based community bank with seven branches.

“What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationships,” Sells said. “If I’m using my mobile application to do all of my banking, now I have the ability to buy, sell and hold bitcoin.”

Until now, bitcoin adopters have relied on apps from a new generation of fintech players like free trading brokerage Robinhood, payments giants PayPal and Square, or crypto-centric firms like Coinbase. Banks, on the other hand, have steered clear of bitcoin for retail customers, only recently announcing plans to allow rich wealth management clients to be able to wager on the cryptocurrency.

But banks are now asking for bitcoin because they can see their customers sending dollars to Coinbase, Kraken and other crypto exchanges, according to Yan Zhao, president of NYDIG.

“This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,'” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”

Peer pressure

As hundreds of smaller banks sign on, giants like JPMorgan Chase and Bank of America could face pressure to offer crypto to their retail banking customers, according to Rob Lee, head of digital banking at Fidelity National Information.

In March, Morgan Stanley was first among banks to offer bitcoin funds to its clients, CNBC reported last month. Goldman Sachs quickly followed with an announcement of its own, and JPMorgan is reportedly looking at its own product in conjunction with NYDIG.

But in those cases, banks have relegated bitcoin to ultra-high net worth individuals and family offices with tens of millions of dollars.

“Most people can’t invest in things that institutional investors get to invest in,” Zhao said. “With bitcoin available through your bank to be purchased with as little as $1, now you have an attractive asset that’s available to be owned by anyone in any amount. We think that’s huge for economic empowerment.”

Yan Zhao of crypto custody firm NYDIG

Source: NYDIG

While Fidelity National Information, which is a vendor to banks with nearly 300 million checking accounts, will handle the link to lenders, NYDIG will take care of bitcoin custody and trade execution. Disclosures will make it clear that it is NYDIG, and not the banks, that handles the bitcoin, and the cryptocurrency won’t be FDIC-insured, according to Zhao.

Fidelity National Information, based in Jacksonville, Florida, caters to banks, providing access to services like chatbots or Apple Pay. It’s also a heavyweight in the payments industry, and two years ago bought processor Worldpay for $35 billion in the sector’s biggest acquisition to date.

Banks will determine how much to charge their customers for bitcoin trades and will retain most of that fee revenue, according to Sells. After rolling out the initial bitcoin product, NYDIG plans on other services, including debit card rewards paid in bitcoin, and a new type of bank account that is FDIC insured, but pays interest in bitcoin, he said.

More people would own bitcoin if they could do so through their existing banks, according to a survey commissioned by NYDIG. That allows them a single view of their financial assets and avoids the need to sign up with another institution and fund the account with a money transfer that typically takes three to five business days.

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CDC projects a surge in U.S. Covid cases through May due to B.1.1.7 variant before a ‘sharp decline’

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Covid-19 cases will likely surge again in the U.S. as the highly contagious B.1.1.7 variant takes hold across the country, peaking in May before sharply declining by July, according to new data released Wednesday from the Centers for Disease Control and Prevention.

The rise in Covid cases is expected as states relax pandemic prevention strategies for businesses, large-scale gatherings and schools, and the B.1.1.7 variant, first identified in the U.K., spreads more rapidly throughout the country, the CDC said in the report.

The agency projected the trajectory of the pandemic based on four different scenarios of vaccination rates and state reopenings. While the case numbers differed in each scenario, the general direction of the outbreak remained mostly the same in all four forecasts with cases surging in May before falling in July.

While Covid cases are expected to increase this month, hospitalizations and deaths will likely remain low nationally, the U.S. agency said, with cases expected to plummet by July as more Americans get vaccinated against the virus.

High vaccination coverage and compliance with pandemic safety measures “are essential to control COVID-19 and prevent surges in hospitalizations and deaths in the coming months,” federal health officials wrote in the report.

During a White House Covid press briefing later Wednesday, CDC Director Dr. Rochelle Walensky said the projections should remind Americans “we have a path out of this.”

“Although we are seeing progress in terms of decreased cases, hospitalizations and death, variants are a wild card that could reverse this progress we have made,” she said. “We are seeing that our current vaccines are protecting against the contaminant variants circulating in the country. Simply put, the sooner we get more and more people vaccinated, the sooner we will all get back to normal.” 

The rate of daily new infections fell below 50,000 per day over the weekend and continues to decline, according to Johns Hopkins University data, as the latest seven-day average stands at 48,100 cases per day.

The new data comes just ahead of the Memorial Day and Fourth of July holidays. President Joe Biden has said he hopes to see enough Americans vaccinated by Independence Day to safely hold small outdoor gatherings.

On Tuesday, Biden announced his administration’s latest goals in the fight against the coronavirus: getting 70% of U.S. adults to receive at least one dose of a Covid vaccine and having 160 million adults fully vaccinated by July 4.

As of Tuesday, more than 145 million Americans age 18 and older, or 56.4% of the total adult population, have received at least one dose of a Covid-19 vaccine, according to data compiled by the CDC. More than 105 million Americans age 18 and older, or 40.8% of the total adult population, are fully vaccinated, according to the CDC.

In recent weeks, the pace of individuals receiving their first vaccine doses has fallen, though U.S. health officials say they are working to improve access to the shots as well as encourage more hesitant Americans to get vaccinated.

The CDC used data from the COVID-19 Scenario Modeling Hub, which developed six models to assess the potential course of Covid-19 in the U.S. across four scenarios. Researchers took into consideration vaccination rates and the implementation of policies such as mask-wearing and social distancing.

Additionally, the projections were based on data through late March, when Covid cases were on the rebound.

– CNBC’s Nate Rattner contributed to this report.

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