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THE MONETIZATION OF OPEN BANKING: How legacy institutions can use open banking to develop new revenue streams, reach more customers, and avoid losing out to neobanks and fintechs

Sun, 09/08/2019 - 6:02pm

Open banking has arrived, and it's transforming the UK's banking landscape — next up could be the world. Regulatory efforts in the UK are transforming retail banking, reshaping incumbents' relationships with customers, and easing entry for fintechs.

Regulators across every continent are responding with actions of their own. Underpinning open banking initiatives is the idea that ownership of transactional data belongs to consumers instead of incumbent financial institutions.

The implications of this change for established lenders in the UK are significant. For those that act, open banking presents substantial revenue-generating opportunities.

But the consequences of inaction are even more severe: Business Insider Intelligence estimates that by 2024, £6.5 billion ($8.4 billion) of UK incumbents' revenues will be under threat of being scooped up by forward-thinking companies like fintechs and neobanks. Yet even through the financial incentives to act are clear, many incumbents are struggling to determine the best path to monetization. In fact, some aren't even sure what their options are.

In The Monetization of Open Banking report, Business Insider Intelligence identifies monetization strategies incumbents have at their disposal, describes how they can determine the best approach for their specific needs, and outlines actionable steps they need to make their chosen open banking initiative successful.  

The companies mentioned in this report are: Allied Irish Bank (AIB), Bank of Ireland, Barclays, Danske Bank, HSBC, Lloyds Banking Group, Nationwide, RBS Group, and Santander, Monzo, Starling, ING, Yolt, Fidor, BBVA

Here are some of the key takeaways from the report:

  • Driven by regulatory action, open banking is transforming the UK's banking landscape, but it's also gaining momentum globally.
  • For incumbents, open banking entails a significant threat to their entrenched position.
  • But for forward-looking banks, there are substantial opportunities for revenue generation, both directly and indirectly.
  • To seize these opportunities — and avoid losing revenue to fintechs and neobanks — it's critical that legacy players focus their efforts in the right direction, including identifying their strategic priorities.

 In full, the report:

  • Details the UK's Open Banking regulation in depth.
  • Forecasts the size of the UK's Open Banking-enabled banking industry over the next five years.
  • Discusses the types of monetization opportunities available for incumbents, as well as non-direct revenue-generation opportunities.  
  • Provides actionable steps on how banks can best determine the best strategic approach from the options available.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of fintech.

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The tiniest apartment in San Francisco is just 161 square feet and will cost you over $2,200 a month — here's a look inside

Sun, 09/08/2019 - 10:04am

San Francisco is home to the most expensive rental market in the country

Business Insider's Hillary Hoffower reported in May that the typical rent in San Francisco exceeds $4,500 — which is more than 2.5 times the typical national rent. 

Read more: The salary you need to comfortably afford rent for a two-bedroom apartment in the 25 largest US cities, ranked

The city is so outrageously expensive that some people are dishing out $1,200 a month for bunk beds in co-living buildings to save on rent

With the help of the rental platform Zumper, Business Insider was able to track down the tiniest apartment currently for rent in San Francisco. For $2,295 a month, you can rent a 161-square-foot studio in a swanky downtown neighborhood, but you may feel a little cramped.

Business Insider called and emailed the listing agent to find out how long the studio has been on the market but did not immediately receive an answer. A contact at RentSFNow  — the leasing side of Veritas Investments, the company that previously managed the listing — told Business Insider that the building had recently changed ownership and that contact information on the listing had not yet been updated.

Keep reading for a look inside.

SEE ALSO: Here's how much it costs to rent a one-bedroom apartment in 15 major US cities

DON'T MISS: NYC landlords were caught renting out 'micro rooms' for $600 a month. Here are 7 places in the US where you can legally rent an apartment for that much — or less.

The tiniest apartment for rent in San Francisco is a studio located in Lower Nob Hill. The apartment is within walking distance of the Financial District and North Beach.

Source: Google Maps

The studio spans just 161 square feet and is currently available for $2,295 a month.

Source: Zumper

It includes all the living essentials in one small room — sort of. For one thing, the studio doesn't have a bathroom. The future renter will have to use a shared bathroom.

Source: Zumper


The sink, which can be seen below, is right next to the studio's front door — and the kitchen seems to consist of that, a mini fridge, and not much else.

Source: Zumper

The studio did manage to squeeze in some space for a triangular closet, which is also next to the front door.

Source: Zumper

Beyond that, the studio has one window and a space heater. According to the listing, the unit comes with a dishwasher and in-unit laundry, but we couldn't find them in the listing photos — or, frankly, imagine where they could possibly fit.

Source: Zumper

$2,295 may seem outrageously expensive for a 161-square-foot studio — and it is. San Francisco is home to the most expensive rental market in the country.

Source: Zumper

But not all major cities are as wallet-draining as San Francisco. Just consider Raleigh, North Carolina, where the median rent for a one-bedroom apartment is $975 a month.

Source: Business Insider

Meanwhile, if you venture further up the Pacific Coast from San Francisco, the median rent for a one-bedroom apartment in Portland is $1,595 a month.

Source: Business Insider

The startups that hack your devices, WeWon't, and Goldman Sachs ruffles feathers

Sun, 09/08/2019 - 9:42am


The Israeli cybersecurity firm NSO Group has been accused of selling sophisticated digital surveillance technology to Saudi Arabia and other countries that are suspected of using it to attack dissidents and journalists.

It's also very profitable. 

Becky Peterson this week lifted the lid on the secretive startup, revealing NSO Group's profits and customer breakdown for the first time, and shining a light on a web of more than a dozen similar startups in Israel, many of which operate in secret, that sell attacks against routers, computers, smart speakers, and other digital devices.

As she reports:

These companies often describe their wares as "lawful interception" or "intelligence" tools, though this hardly tells the full story. They all sell tools that take devices and turn them against their users to secretly spy without leaving a trace.

Whatever you call this technology, business is booming. Governments and law-enforcement agencies around the world are paying millions of dollars. And startups both inside of Israel and out are ready to sell.

You can also read about how Becky got inside the NSO Group and the offensive cyber world in this Q&A

In other news, WeWork's IPO appears to be on rocky ground, and the company could cut its valuation by as much as half. Here's our latest:

What would you like to read more of? Let me know!

-- Matt


In Business Insider's latest webinar, Headset CEO Cy Scott walks through how he put together the pitch deck that helped him raise a $12 million Series A. Scott was joined by Poseidon Asset Management partners Emily and Morgan Paxhia, who led the round. 

You can watch the full webinar right here

Finance and Investing

Goldman Sachs' push into private equity is ruffling feathers at Blackstone — and it might be a sign of big client skirmishes to come

Goldman Sachs' latest strategy pivot is already raising hackles with one of its largest clients.

In related news, Marty Chavez, Goldman Sachs' trading chief, this week announced his plans to retire from the Wall Street firm at the end of the year. Dakin talked to him about the bank's tech transformation, why now is the right time for him to step down, and what he's planning next.

Barclays insiders say a hiring freeze is afoot as roles stay unfilled, bonuses get slashed, and senior staff flee

Barclays has raised the bar for hiring outsiders and is leaving vacant roles unfilled — resulting in what some insiders say amounts to an informal hiring freeze for investment banking, FICC trading, and certain back-office roles — according to five sources familiar with the situation.

Investors have triggered a recession signal with a perfect 50-year track record — and one expert says years of 0% market returns could be in store

Since the US yield curve inverted and startled the market, there's been a debate about whether the recession warning sign was for real.

Tech, Media, Telecoms

Here's the pitch deck $1.95 billion ThoughtSpot used to raise $248 million for an AI-powered analytics tool that's challenging Salesforce's Tableau

Founded in 2012, ThoughtSpot offers businesses a way to visually analyze their data in order to make critical decisions faster.

Amazon is rolling out a tool that shows just how much Google and Facebook ads drive people to do their shopping on the e-commerce site

Amazon is trying to grow its nascent ad business by proving it can show advertisers how digital ads drive people to shop on Amazon.

Comcast Ventures has a plan to jumpstart direct-to-consumers companies like Away and Hippo and it's already slashing their customer acquisition costs

With massive growth in venture capital, VC firms are scrambling for the chance to invest in the next unicorn by retooling their business models and looking for ways to differentiate.

Healthcare, Retail, Transportation

Furious Peloton members are skewering the company's delivery partner over broken $2,000 bikes and scratched hardwood floors — and the company is starting to take note

Todd Mitchell loves his Peloton. He didn't love the gummy grape candy that he said ended up stuck to his $4,295 treadmill during the delivery process.

Meet the 11 alt-meat startups vying for a bite of a $200 billion industry

The market for a burger without beef is beginning to sizzle.

Join the conversation about this story »

NOW WATCH: Here's what airlines legally owe you if you're bumped off a flight

4 people who bought life insurance in their 20s explain why they still think it was the right choice

Sun, 09/08/2019 - 9:30am

Life insurance usually isn't top of mind for someone who hasn't made it to their 30th birthday yet. 

But it pays off to be ahead of the curve if you're expecting to have a family to protect one day. Generally, the younger and healthier you are when you buy life insurance, the cheaper it will be, regardless of the amount of coverage. 

In exchange for a monthly premium, a life insurance policy can replace income, help pay off debt, or provide a savings cushion for your partner or dependents if you die prematurely. 

In a series of stories written for Business Insider, four average people explained why they decided to buy term life insurance in their 20s — and why they're still happy with the decision. Here's what they said:

Clint Proctor bought a $500,000 life insurance policy shortly after becoming a dad and homeowner

When Clint Proctor and his wife became first-time homeowners in Florida and new parents within the same year, they decided it was time to protect their livelihood with a life insurance policy. 

Proctor was 25 at the time and chose a coverage amount equal to about 10 to 12 times his annual income. His $500,000 term-life policy costs about $21 a month.

"If I die before my wife, I don't want her to struggle to make our mortgage payment. She'll have enough stress without having to worry about losing our home," Proctor wrote. Now that he's changed jobs and expanded his family, he plans to add additional coverage.

"Having life insurance gives me peace of mind that housing won't be a concern for my wife and two boys. And that helps me sleep better at night," he wrote.

Holly Johnson pays $50 a month for two separate life insurance policies totaling $1 million

Holly Johnson, an editor and freelance writer, bought her first life insurance policy in her late 20s. It cost $25 a month for $250,000 of coverage lasting 30 years. 

Despite being debt-free, having above-average retirement savings, and earning some income from real-estate investments, Johnson later decided her family of four needed even more coverage. With an excellent health record, she took out another policy at age 37 and now pays about $50 a month for a total of $1 million in coverage.

"The reality is, having $1 million in life insurance coverage has allowed me to stop worrying about what would happen to my family finances if I died," she wrote. "I never lose any sleep wondering how they would pay for my funeral or whether my kids will be able to go to college, and I never stress over how my husband might pay bills or care for our two children if he were to suddenly lose my income."


Brynne Conroy bought a 20-year life insurance policy while pregnant with her first child

Brynne Conroy was pregnant with her first child in her early 20s when she decided it was time to buy a life insurance policy.

"As a parent, I knew it was only responsible to plan for the worst," wrote Conroy, a freelance writer, author, and blogger. "If I passed away, I wanted there to be enough money for my baby to be comfortable for a few years until their new guardian was able to adjust to the changed circumstances."

Because of pre-existing conditions, including a congenital heart defect, Conroy's monthly premium came out to $64 for $200,000 of coverage on a 20-year term life policy. As her income has gone up and she's expanded her family, she's continued to increase her coverage amount.

"There is a great peace of mind knowing that if I pass away in my prime earning years, my children will be OK," she wrote.

Eric Rosenberg bought a $1 million term life policy at age 28 and now wishes he had even more

Five years ago, before he had kids and a mortgage, Eric Rosenberg bought a $1 million life insurance policy to protect his future family.

He was in good health and locked in a rate of $78 a month for a 30-year term-life policy.

"I picked a $1 million policy because, based on our expenses and lifestyle at the time, it would have easily covered at least ten years of expenses not taking into account any investment gains on the proceeds," Rosenberg wrote. "But now that I actually have two kids, I sometimes wish I could go back and get a bigger policy that would have paid for college and a full mortgage payoff as well."

Still, he doesn't regret preparing early. In the years since, Rosenberg got his pilot's license and his father was diagnosed with cancer — two risk factors that would have significantly driven up the costs of his premiums had he waited to buy life insurance.

"I hope my family never gets the $1 million," Rosenberg wrote. "But if something happens to me, I'm not worried about my family struggling to pay the bills. That, after all, is what life insurance is all about."

Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price»

This luxurious tiny home on wheels was made from a Mercedes-Benz Sprinter van

Sun, 09/08/2019 - 8:52am

  • Motorhome maker Hymer and chemical company BASF have created the VisionVenture, a concept mobile tiny home using the chassis of a Mercedes-Benz Sprinter.
  • The VisionVenture has a roof and rear patio with a barbecue, bedroom, bathroom, kitchen, and living "room" that can double as an office space.
  • The home uses 3D printing, photovoltaic technology, and multipurpose furniture to create a self-sufficient space, according to Hymer.
  • Visit for more stories.

Motorhome maker Hymer and chemical company BASF have partnered to create the VisionVenture, a mobile tiny home built on a Mercedes-Benz Sprinter chassis.

The concept car-home was created as a foreshadowing of what travel could be like by 2025, according to Hymer. The home uses modern technology to increase its self-sufficiency, including a solar panel-like photovoltaic system in the inflatable roof and paintwork that regulates the surface temperature and the interior of the home.

"A major source of inspiration for this project was the camper community, who have given us new impetus with their creative ideas and DIY conversions," Hymer President Christian Bauer said in a prepared statement.

Read more: This 'self-charging' electric car has a dashboard filled with dead moss to clean the air

Hymer utilizes many preexisting "tiny home" concepts that allow the compact Sprinter to feel more spacious, according to the motorhome maker.

For example, many elements of the home are multi-purpose, including a lamp that serves as the patio light, ceiling light, and an interior light pendant. The staircase, which leads to the roof, doubles as a storage unit, and the bathroom sink can be tucked away to make room for the shower.

"We are confident that we will be able to introduce some elements from this array of innovative and extremely customer-friendly solutions into series production in the not too distant future," Bauer said.

Take a look at the VisionVenture concept built on the same van Amazon uses to deliver its packages:

SEE ALSO: See inside one of the largest 'log homes' in the US: a $9.5 million mansion that comes with a temperature controlled 22-car garage

Hymer has partnered with BASF to create a concept tiny home on wheels, the VisionVenture.

The home is built on a Mercedes-Benz Sprinter chassis.

BASF, a German chemical company with a self-proclaimed focus on sustainability, provided over 20 materials for the home, including the paintwork, high-performance plastics, and slate veneers.

The home keeps the Sprinter’s doors, headlights, and radiator grille.

However, the windscreen, A-pillar, hood, and rooflight have been redesigned.

Parts of the home, including the wheel arch panel, were produced using 3D printing, which Hymer claims gives the parts a “robust, rubber-like quality.”

Hymer claims the paintwork can cool the surface temperature of the car by 20 degrees Celsius, or 68 degrees Fahrenheit, and interior of the vehicle by 4 degrees Celsius, or 39.2 degrees Fahrenheit.

The LED-illuminated staircase also has extra interior storage space.

The home comes with an inflatable pop-top roof with a seven-centimeter thick honeycomb wall for insulation. The roof can be inflated with either hot or cooled air and is photovoltaic like a solar panel, increasing its self-sufficiency, according to Hymer.

The interior of the Sprinter-home includes a private patio with a pull-out electric barbecue, kitchen, bedroom, bathroom, and living “room” that doubles as an office space.

Multiple decorations in the home are multi-purpose. For example, the wall covering was designed as a “rail system” that allows for storage or decoration hanging. The lamp can be moved and serves as a patio light, ceiling light, and light pendant.

The bathroom side wall unfolds to allow the sink to be stored away.

This leaves more room for a shower cubicle that has a rain shower function.

Hymer claims the concept car is a foreshadowing of what travel could look like by 2025.

Everyone has forgotten about why Donald Trump can't win a trade war with China

Sun, 09/08/2019 - 8:12am

  • In all the chaos of markets convulsing and tariffs rising, it's been easy to forget the main objectives of the US's trade war with China.
  • And in doing so, it's easy to forget that those objectives are at odds with one another.
  • On one hand you have USTR Robert Lighthizer and his stated aim of turning China into a market-based economy. On the other hand you have Donald Trump, a populist obsessed with forcing China to buy more goods — a market distorting demand.
  • This inconsistency has seriously hurt negotiations, and contributed to putting China in a position where it cannot simply lose to Donald Trump. Under these conditions a stalemate is the best we hope for.
  • Visit Business Insider's homepage for more stories.

The markets have been a whipsaw, the US economy has slowed down, and one report suggests that US companies may have shed 10,488 jobs because of the trade war between the US and China — a trade war that has worsened over the last few weeks.

So the two sides have laid down their arms and agreed to a ceasefire in hopes of "creating the conditions" that will make it possible for discussions to resume in October.

Unfortunately those talks, should they ever occur, will achieve little aside from temporarily calming financial markets. Donald Trump's trade war is a trade war that cannot be won.

The reality is that from the start the objectives of Donald Trump's trade war have been at odds with one another, making it impossible for his administration to construct a deal that one might consider a win for US markets.

What's more, throughout this process, Trump's conflicting demands and brutish tactics have put Chinese President Xi Jinping in a position where he and his administration cannot concede. 

So we had better hope this ceasefire lasts beyond Trump's next tweet storm, because it's about as good as things are going to get.

Why Trump can't win

Before we get into any of this, let's remember that China has three demands that the US must meet in order to end the trade war. 

  1. That the US respect China's national sovereignty.
  2. That the US remove all tariffs it has imposed since the beginning of the trade war.
  3. That the US cease demanding that China buy an unrealistic amount of goods from the US.

Remember number 3, because it's the one that's really messing things up here. And of course it's the one Donald Trump is obsessed with.

It is easy to forget that initially this trade war was about making China's markets more fair for US businesses — ending favoritism for domestic companies, forced technology transfers, and intellectual property theft. Back in March 2018 the United States Trade Representative Robert Lighthizer wrote a report to Congress outlining all these issues and all the ways  China was in violation of World Trade Organization rules. It all made sense.

But at the same time there was Donald Trump and his obsession with trade deficits — with getting China to buy more US stuff. This did not, and still does not, make any sense. In sophisticated economies bilateral trade deficits don't mean anything.

Lighthizer wants changes that will make China a more free market economy like the US. Trump wants changes that further distort the Chinese economy by explicitly forcing it to buy goods from one place rather than another. The former is capitalism, the latter is Trump's variety of populist nationalism. And they do not play well together.

"There are various ways in the short run to reduce the bilateral trade deficit but this would be done in ways that are essentially market distorting," Carnegie Mellon University economist Lee Branstetter told Business Insider.

These two conflicting goals have repeatedly caused issues during the on-again-off-again negotiations. Think back to December: Trump ratcheted up the tariffs, China managed to negotiate a temporary peace by promising to buy US soybeans, negotiations resumed, and then collapsed as China refused to yield to the US's conflicting demands 

"Before Trump [making a trade deal with China] was always about setting the rules and structures and accepting the market outcomes," Branstetter continued.

Now it's about sales. 

And on the other hand, if Lighthizer's objectives — changing their rules to open up China for US companies — are met it's likely Donald Trump's core nationalist objectives — forcing companies to move to the US — will suffer.

"If China were to fix those problems, the result would be that the Chinese market would become more hospitable for American and other western companies to set up production within China," economist Chad Bown of the Peterson Institute told Business Insider via email.

"There seems to be a fundamental inconsistency between achieving that outcome, and the Trump administration's other economic nationalist priorities, which focuses on bringing manufacturing production back to the United States, even if that comes at the expense of everything else, including American farmers."

Why Xi can't lose

Making matters more complicated, on the other side of this deal we have Chinese President Xi Jinping, a man who cannot lose. There are political reasons for that, and there are practical reasons. On the latter point we need to return to Donald Trump's obsession with China buying more US goods.

Even if China could buy enough US goods to close its trade deficit, according to Citigroup analysts, the US doesn't have enough to sell to China without disrupting trade with its partners or changing US production.

From Citigroup:

"The US likely can increase supplies of soy products to China in the short run, as well as select meats. However, meeting the proposed $1.2 trillion of additional shipments of goods to China over six years, including energy, machinery and tech products, will require major adjustments in the US and China's current trading partners, as well as a reconfiguration of US domestic production of these items."

And Citigroup's researchers also found that when it comes to foods, motor vehicles, semiconductors, and aerospace, the US is at or near full-production-capacity-utilization rates. We can't make anymore. When it comes to energy and poultry, the US doesn't have enough to sell to meet China's demand.

Of course, there are also political reasons why Xi cannot just cave to Trump's demands.

Since talks collapsed in May Xi has adopted the language of struggle. He used the word around 60 times in a speech he gave last week. Using China's state controlled media he has cast the US as an aging power hell bent on stopping the country's rise. It is a position he and the Chinese Communist Party are very comfortable being in. It allows the party to blame its economic problems on the US, and it raises nationalist sentiment to a fever pitch that makes it impossible for Xi to lose face and back down.

So, what's this deal supposed to look like? What does a win even look like to Donald Trump? For some China watchers it simply does not exist.

"There's no deal to make," Anne Stevenson-Yang, founder of China focused investment firm J Capital Markets told Business Insider. "Everyone is going through a pantomime for the markets. It's super stupid that the markets believe it."

Join the conversation about this story »

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A Harvard grad was the first employee at buzzy credit card startup Brex and says the experience was better than any MBA program she could have taken.

Sun, 09/08/2019 - 8:00am

  • Larissa Rocha joined Brex, the buzzy credit card startup that caters to other startups, in 2017 after graduating from Harvard.
  • The Brazilian native met Brex cofounders Henrique Dubugras and Pedro Franceschi while they were building their first startup in Brazil. The group kept in touch even as Dubugras and Franceschi dropped out of Stanford to enter Y Combinator's accelerator program with what would become Brex.
  • Rocha has held multiple roles at Brex since joining more than two years ago, including sales, customer support, and engineer recruiting. She told Business Insider her time at Brex has been more valuable than any MBA program.
  • The buzzy startup has become the poster child for eye-popping growth and massive valuations in Silicon Valley, having raised more than $316 million in venture funding and achieving a $2.6 billion valuation in just two years, according to Pitchbook data.
  • Click here for more BI Prime stories.

If timing is everything, Larissa Rocha should teach a master class. And she might, as the new head of community at buzzy startup Brex.

Rocha holds the coveted title of Employee No. 1 at Silicon Valley's hottest startup, a credit card and banking system for other startups. In its two years of existence and Rocha's two years of employment, Brex has raised more than $316 million in venture funding and is worth $2.6 billion, according to Pitchbook data.

"I don't know what happens after 30 years, but I want to be at Brex for as long as we're building this and I will go wherever Brex takes me. It's my baby and we're here for the long term," Rocha told Business Insider.

Read More: Brex, the credit card for startups, raised $100 million at a $2.6 billion valuation — more than double what it was worth nine months ago

Unlike Brex founders Henrique Dubugras and Pedro Franceschi, Rocha took a sensible approach to entrepreneurship. Having grown up in a small town in rural Brazil, she was adamant about finishing her undergraduate degree in economics at Harvard before making the plunge. But she kept in touch with Dubugras and Franceschi, who she said she met while living in Brazil, even after they dropped out of Stanford to join Y Combinator with a new company that would become Brex.

"Henrique and Pedro are definitely a big reason," Rocha said of her decision to come to Brex. "They had that very clear vision of wanting to build something that will improve the world, and that really resonated with me. To have the chance to build that from scratch is so much more exciting and nerve wracking but more fun too."

Startup school

Since joining Brex in June 2017, two weeks after graduation, Rocha got to work. She said Dubugras and Franceschi tasked her with building spend models for startups at different stages so they could better predict what limits Brex should offer and what the market would allow.

"Even the ones that raised money, they don't want the credit," Rocha said. "They want just a payment instrument. No one was willing to give them one unless the founder was willing to personally guarantee it. And if you're an immigrant like we were, you don't even have that yet. So they said, okay, that's not right."

Rocha was heads down building a business development team when they noticed the startups' engineering team wasn't growing quickly enough. So Rocha stepped in and built a recruitment process for front end engineers.

"I hadn't even heard of that," Rocha said. "It was also a humbling experience in and of itself, trying to recruit for a company in stealth in the Valley."

Rocha said she built her own mentor network to help navigate the ins and outs of recruiting, and eventually hired a top-notch recruiting team to keep up with the growing company's needs. Then she moved to sales full time, and until recently, said the photo on her phone's lock screen was a screenshot of the first sale she closed.

Since then, she's led and built the customer support team in addition to the recruiting and business development teams. She is helping onboard 20 new hires every other week, and has started building Brex's suite of customer offerings as the company plans to expand beyond just corporate credit cards.

"I'm very, very grateful to have gone to school," Rocha said. "Having that opportunity to explore a lot of things definitely helped me to learn how to learn. But I think it's more effective than any MBA for me to have these on the ground experience here."

SEE ALSO: Activist investor Starboard bought a 7.5% stake in Box. Experts say that what comes next could be restructuring, layoffs, and maybe even a big sale to a competitor.

Join the conversation about this story »

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'Abrupt and severe market losses': One expert explains why stocks are on pace to underperform the safest government bonds for the next 20 years

Sun, 09/08/2019 - 6:05am

  • John Hussman — the outspoken investor and former professor who's been predicting a stock crash — sees the S&P 500 going absolutely nowhere for the next two decades.
  • He backs his thesis by highlighting hyper-valued stocks, weakening market internals, shrinking growth, and waning profit margins.
  • Click here for more BI Prime stories.

As the longest-recorded bull market in history stampedes forward, it's looking increasingly likely that investors will enjoy yet another year of double-digit returns.

In fact, as of today, the S&P 500 is up almost 19% in 2019, continuing to thrive in an environment where everything it's had to dodge a seemingly endless barrage of headwinds.

While some are delightedly riding the bull market's surge into new strata, others are positioning for a stern day of reckoning — and one renowned market bear thinks the market's historic run is setting up decades of pain for investors ahead.

That acclaimed market bear is John Hussman — the former economics professor and current president of the Hussman Investment Trust — and he's calling for more than 20 years of S&P 500 underperformance against the lowest-yielding and safest US government bonds.

"At extreme valuations, it's important to remember that the completion of a hypervalued market cycle can wipe out every bit of the stock market's total return over-and-above T-bills, going back not just a few years, but for over a decade," he said in a recent blog post.

He continued: "Within the 80-year period from 1929 to 2009, the S&P 500 took three long, interesting trips to nowhere, accounting for 53 of those years (1929-1945, 1959-1982, and 1995-2009), underperforming risk-free Treasury bills after all was said and done."

For context, Hussman characterizes a market that takes an "interesting trip to nowhere," as one with both steep losses and powerful advances along the way to — you guessed it — nowhere.

Hussman's rationale

Let's dig into that.

According to Hussman's favorite measure of valuation — the margin-adjusted, price-to-earnings ratio (MAPE) — the market is currently more overvalued than 1929 and 2000.

If those years sound familiar, that's because the former coincided with the worst economic event the US has ever experienced, where the market plummeted 86%. The latter is congruent with the bursting tech bubble, an event that lopped 50% off of the S&P 500. 

Below, you can see that Hussman's margin-adjusted, price-to-earnings valuation measure is towering near record highs.

But that's just the appetizer. 

To Hussman, an overvalued market isn't enough to warrant a crash. He needs to see internals diverging as well — and it just so happens that's exactly the case. Back in February, his view of internals shifted negative.

"I believe that the combination of hypervaluation and unfavorable market internals has opened a trap door that is permissive of abrupt and severe market losses," Hussman said.

The following chart depicts his proprietary S&P 500 return when market returns are across-the-board favorable against the benchmark's actual total return.

The stage is now set for what Hussman sees as a market that's getting ready to go nowhere.

A market that goes nowhere

"The current risk of yet another long, interesting trip to nowhere is easy to understand when one examines the underlying drivers of long-term stock market returns: 1) long-term growth in representative fundamentals; 2) changes in valuations (the ratio of market prices to those representative fundamentals); and 3) dividends received in the interim," Hussman said.

Let's break that down. 

There's no denying growth in the US is slowing down. In the second quarter of 2019, gross domestic product grew at 2%, a full 1.1% below it's first-quarter reading.

Structurally, Hussman has US economic growth pegged at just 1.4%. This metric reflects demographic labor force growth and trend productivity growth, barring forces of cyclical changes in unemployment.

Below, real structural growth is depicted by the red line, and is accompanied by the cyclical unemployment change to 8-year real GDP growth (green line) and the real US GDP growth 8-year average annual rate (blue line).

As you would imagine, slowing growth puts downward pressure on corporate margins. And although S&P 500 profits are teetering near record highs, Hussman wants investors to take heed: declines in margins often lag hiccups in economy-wide profits amidst nonfinancial companies. 

The graph below conveys this stark divergence.

These factors — along with assuming a 2% S&P 500 dividend yield — rounds out Hussman's criteria for understanding how stocks take a trip to nowhere: growth, valuations, and expected dividends.

Against that backdrop, it's time to do some math.

"The most reliable valuation measures we've identified across history are presently an average of 2.7 times their historical norms," he said. Assuming 4% nominal growth in fundamentals, and a future valuation multiple that simply touches its historical norm fully 20 years from today, the resulting average annual capital gain for the S&P 500 would be: (1.04)*(1/2.7)^(1/20)-1 = -1.0%."

Add in a 2% dividend yield, and we arrive at a 1% return over the next 20 years. A figure that will probably underperform T-bills.

"That's exactly how investors can get these very long interesting trips to nowhere," he concluded.

Hussman's track record

For the uninitiated, Hussman has repeatedly made headlines by predicting a stock-market decline exceeding 60% and forecasting a full decade of negative equity returns. And as the stock market has continued to grind mostly higher, he's persisted with his calls, undeterred.

But before you dismiss Hussman as a wonky perma-bear, consider his track record, which he breaks down in his latest blog post. Here are the arguments he lays out:

  • Predicted in March 2000 that tech stocks would plunge 83%, then the tech-heavy Nasdaq 100 index lost an "improbably precise" 83% during a period from 2000 to 2002
  • Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did
  • Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009

In the end, the more evidence Hussman unearths around the stock market's unsustainable conditions, the more worried investors should get. Sure, there may still be returns to be realized in this market cycle, but at what point does the mounting risk of a crash become too unbearable?

That's a question investors will have to answer themselves. And one that Hussman will clearly keep exploring in the interim.

SEE ALSO: Goldman Sachs unveils 2 simple IPO-investment strategies that have crushed the market over the past 25 years

Join the conversation about this story »

NOW WATCH: Super-Earths are real and they could be an even better place to live than Earth

The 15 highest-paid soccer players in MLS

Sun, 09/08/2019 - 5:03am

  • MLS sides have a salary limit of just over $4 million per year, however three players at each club are permitted to be exempt from the cap.
  • "The Beckham Rule," introduced in 2007, allows clubs to nominate three "designated players" who they are allowed to pay as much as they want.
  • Major League Soccer currently has 65 designated players in the division, and Business Insider has listed the 15 highest earners below.
  • Read more of our soccer stories here.
  • Visit Business Insider's homepage for more stories.

Major League Soccer has long been a retirement home for some of the world's most talented soccer players. 

David Beckham, Kaka, and Andrea Pirlo are just a few of the high profile stars to have spent their yesteryears stateside after illustrious careers in Europe.

While ageing players still continue to flock to the division, the MLS is also becoming a sought-after destination for players in their prime, particularly those from South America.

Add an ever-growing pool of homemade talents into the mix, and it means the division is slowly but surely beginning to establish itself as an emerging power in world soccer. 

But as its quality has increased, so have the prices, and in particular, the wages, of its players. 

Read more: Garber's 20 years as MLS commissioner time of huge growth

The MLS has a salary cap which permits each team to spend no more than $4.035 million on its wage bill for the season, however since 2007 and the introduction of the "Beckham Rule," each side is allowed three "designated players" to whom the cap does not apply.

Since the rule's inception, there have been 144 designated players in the MLS, 65 of whom currently play in the division at the moment.

Business Insider has listed the 15 current highest earners, according to the MLS Players Association, ranked in ascending order:

=13: Nicolas Lodeiro — Seattle Sounders FC ($2 million per year)

Lodeiro has had what you might describe as a "journeyman" career having played in five different countries and three continents.

The 30-year-old has had spells in Uruguay, the Netherlands, Brazil, and Argentina — but it is in Washington, America where Lodeiro has found his footballing home.

The Uruguayan has made 103 appearances and scored 28 goals for the Seattle Sounders since joining it from Boca Juniors in 2016. 

=13: Tim Howard — Colorado Rapids ($2 million per year)

No goalkeeper in history has won more caps for the United States national team than Tim Howard.

The former Manchester United and Everton star played 121 times for country, before announcing his retirement from the international stage in 2017.

Howard's still doing the business in the MLS, but not for long — the Colorado Rapids keeper announced in January that he is to retire at the end of this season. 

=13: Jonathan dos Santos — LA Galaxy ($2 million per year)

The younger of the two Dos Santos brothers (the other being Giovani), Jonathan began his career alongside his sibling at Barcelona — the pair both having been graduates of the club's prestigious La Masia academy. 

They've have since followed eachother around the globe, first to Villarreal, and later to LA Galaxy, where Jonathan remains to this day. Giovani left Galaxy in July 2019 to move to Mexican side Club America.

12: Marco Fabian — Philadelphia Union ( $2.001 million per year)

Marco Fabian has played a big part in Philadelphia Union's ascension to the top of the Eastern Conference this season.

The Mexico international has scored six times for Jim Curtin's side, but more importantly, he's been a reliable rock in the heart of the Union's midfield, completing 86.5% of all his passes this season.

11: Carles Gil — New England Revolution ($2.1 million)

Gil became New England Revolution's record signing in January 2019, when it paid Deportivo La Coruna $2 million for his signature. 

The 26-year-old midfielder has, so far, proven a reasonable return on that investment, scoring nine times in 28 appearances — including five in six games between July and August.


10: Diego Valeri — Portland Timbers ($2.32 million per year)

An MLS veteran, Diego Valeri has made nearly 200 appearances in the American top flight since joining Portland Timbers in January 2013. 

The Argentine helped the Timbers lift the MLS Cup in 2015, was named the division's MVP in 2017, and has also been an All Star in each of the last three seasons. 


9: Nani — Orlando City SC ($2.333 million per year)

Nani is one of the MLS' most decorated players ever, having won 17 major trophies with Sporting Lisbon, Manchester United, and the Portuguese national team. 

While he's been excellent since arriving at Orlando City in February, it's unlikely that the 32-year-old will be adding an 18th piece of silverware to his cabinet anytime soon, with James O'Connor's side currently sitting ninth in the Eastern Conference. 

8: Josef Martinez — Atlanta United ($3 million per year)

Josef Martinez scored 35 times last season as Atlanta United lifted the MLS Cup for the first time in its history.

This term, he's continued that impressive form, scoring 28 goals, including scoring in each of his last 13 games. Find the net for a further eight games in a row, and he will break the world record held by Lionel Messi for the most goals scored in consecutive games. 

7: Wayne Rooney — DC United ($3.5 million per year)

Wayne Rooney's spell in the MLS has been brief, but boy has it been memorable. His highlights so far include a goal from the half-way line, a broken nose, and two red cards. Classic.

The Englishman is leaving DC United for Derby County in January, but that means there is still plenty of time for him to add a few extra shots to his American fim reel. 

6: Alejandro Pozuelo — Toronto FC ($3.8 million per year)

Alejandro Pozuelo had the big boots (metaphorically speaking) of Sebastian Giovinco to fill when he arrived at Toronto FC in March 2019 from Belgian side Genk.

So far, he's done a pretty good job, managing eight goals in just seventeen games from attacking midfield, including an audacious brace on his debut. 

5: Carlos Vela — Los Angeles FC ($4.5 million per year)

Vela is currently the MLS' top scorer this season having scored an impressive 27 goals. He's also managed 15 assists, making him the second best playmaker in the league. 

The Mexican's contributions have played a huge part helping LAFC attain a 16 point lead at the top of the Western Conference, and if it goes on to lift the MLS Cup — it's a safe bet that Vela will be named as the division's MVP.

4: Jozy Altidore — Toronto FC ($4.891 million per year)

During his last full season in the Premier League with Sunderland AFC, Jozy Altidore managed just two goals in 39 appearances.

That form earned him a one way ticket out of England in 2015 and back to the MLS with Toronto FC, where he's since found his feet again, scoring 68 times in 128 games. 


3: Bastien Schweinsteiger — Chicago Fire ($5.6 million per year)

Schweinsteiger's career took a very sharp decline when he moved to Manchester United in the summer of 2015. The German playmaker went from Bayern Munich favorite to bench warmer at Old Trafford, and eventually to United's U-23 team when Jose Mourinho took over as manager.

Thankfully for him, he was rescued by Chicago Fire in 2017, and he's since recaptured some of the form that saw him held in such high esteem in Germany. 


2: Michael Bradley — Toronto FC ($6 million per year)

Toronto FC captain Michael Bradley has played in the top divisions of Holland, Germany, Italy, and England, meaning he is one of the most experienced players in the MLS. 

He returned to the division where he began is career in 2014, and helped Toronto lift the MLS Cup in 2017. He's also been an MLS All Star in three of the five full seasons he's been with the Canadian outfit. 

1: Zlatan Ibrahimovic — LA Galaxy ($7.2 million per year)

It comes as little surprise that LA Galaxy forward Zlatan Ibrahimovic is the best paid player in the MLS. The man, who on more than one occasion has referred to himself as "God," takes in just over $7 million per year, or $135,000 each week. 

He's proving to be worth every penny for Galaxy though, having managed 44 goals in 49 appearances since joining them in March 2018. 

The Epstein-funded MIT lab has an ambitious project that purports to revolutionize agriculture. Insiders say it's mostly smoke and mirrors.

Sat, 09/07/2019 - 5:41pm

  • An ambitious MIT project that purported to turn anyone into a farmer with a single tool is scraping by with smoke-and-mirror tactics, employees told Business Insider.
  • Ahead of big demonstrations with MIT Media Lab funders, staff were told to place plants grown elsewhere into the devices, the insiders said.
  • In other instances, devices delivered to local schools simply didn't work.
  • "It's fair to say that of the 30-ish food computers we sent out, at most two grew a plant," one person said.
  • MIT didn't provide a comment for this story.
  • Read more stories like this on Business Insider's homepage.

An ambitious project that purported to turn anyone into a farmer with a single tool is scraping by with smoke-and-mirror tactics, employees told Business Insider.

The "personal food computer," a device that MIT Media Lab senior researcher Caleb Harper presented as helping thousands of people across the globe grow custom, local food, simply doesn't work, according to two employees and multiple internal documents that Business Insider viewed. One person asked not to be identified for fear of retaliation.

Harper is the director of MIT's Open Agriculture Initiative and leads a group of seven people who work on transforming the food system by studying better methods of growing crops.

The food computers are plastic boxes outfitted with advanced sensors and LED lights and were designed to make it possible for anyone, anywhere to grow food, even without soil, Harper has said. Instead of soil, the boxes use hydroponics, or a system of farming that involves dissolving nutrients in water and feeding them to the plant that way.

"We design CO2, temperature, humidity, light spectrum, light intensity, and the minerality of the water, and the oxygen of the water," Harper said.

On Saturday, Joi Ito, the director of the MIT Media Lab, resigned following a lengthy expose in the New Yorker about the Media Lab's financial ties with late financier Jeffrey Epstein. Epstein died by suicide while in jail and faced sex-trafficking charges.

Staff placed food grown elsewhere into the devices for demos and photoshoots, they say

Ahead of big demonstrations of the devices with MIT Media Lab funders, staff were told to place plants grown elsewhere into the devices, the employees told Business Insider.

In another instance, one employee was asked to purchase herbs at a nearby flower market, dust off the dirt in which they were grown, and place them in the boxes for a photoshoot, she said.

Harper forwarded an email requesting comment on this story to an MIT spokesperson. The spokesperson didn't provide a comment.

The aim was to make it look like the devices lived up to Harper's claims, the employees said. Those claims, which included assertions that the devices could grow foods like broccoli four times faster than traditional methods, landed Harper and his team articles in outlets ranging from the Wall Street Journal to Wired and National Geographic

Harper's vision for the personal food computer is bold: "You think Star Trek or Willy Wonka, that's exactly what we're going for," he said in a March 2019 YouTube video produced by the news site Seeker.

Harper's coworkers told Business Insider a different story. They said the devices are basic hydroponic setups and do not offer the capabilities Harper outlines. In addition, they simply don't work, they said.

'They were always looking for funding'

Paula Cerqueira, a researcher and dietitian who worked as a project manager at the Open Agriculture Initiative for two years, told Business Insider that the personal food computers she worked with were "glorified grow boxes."

Cerqueira was part of a team that, on several occasions, delivered the personal food computers to schools. She also helped demonstrate the boxes to big-name MIT Media Lab investors.

During the organization's "Members Weeks" — once-a-semester events that drew donors including Google, Salesforce, Citigroup, and 21st Century Fox — Cerqueira and her coworkers would show investors how the technology worked.

On one occasion, Cerqueira said, her coworkers were told to fetch basil grown from a nearby location and place it into the personal food computers to make it look like it had been grown inside the boxes.

"They wanted the best looking plants in there," Cerqueira told Business Insider. "They were always looking for funding."

Cerqueira said in another instance, she was told by another MIT Media Labs manager to buy edible lavender plants from a nearby flower's market and place them in the boxes for a photoshoot, she said. Before any photos were taken, she carefully dusted off the tell-tale soil on the plants' roots.

The boxes simply didn't work, one employee told Business Insider

The central problem with the personal food computer was that it simply didn't work, Cerqueira and another person with knowledge of the matter told Business Insider.

"It's essentially a grow box with some sensors for collecting data," Cerqueira, a dietitian who worked as a project manager at the Open Agriculture Initiative for two years, told Business Insider. Cerqueira left her post after becoming increasingly frustrated with working conditions at the Media Lab, she said.

The boxes were not air-tight, so staff couldn't control variables like the levels of carbon dioxide and even basic environmental factors like temperature and humidity, Cerqueira and the other person said.

Other team members were aware of these issues, according to several internal emails that Business Insider viewed.

One email, on which Harper is copied, also said that team members weren't given the chance to test the devices' functionality for themselves. Another person with knowledge of the matter also described these issues to Business Insider.

'Of the 30-ish food computers we sent out, at most two grew a plant'

In the Spring of 2017, Cerqueira was part of a pilot program that delivered three of Harper's devices to local schools in the Boston area. Initially, the idea was for the students to put the devices together themselves. But Cerqueira said that didn't work — the devices were too complex for the students to construct on their own.

"They weren't able to build them," Cerqueira said.

In response, Cerqueira's team sent three MIT Media Lab staff to set up the computers for them. Of the three devices the staff members tried to setup, only one was able to grow plants, she said. That one stopped working after a few days, however.

When Cerqueira and her coworkers would visit the school, students would joke that the plants they were growing in plastic cups were growing better than the ones in the personal food computers, she said. The pilot ended shortly thereafter.

On another occasion, her team sent two dozen of the devices to classrooms across greater Boston as part of a curriculum being designed by one of MIT Media Lab's education partners.

"It's fair to say that of the 30-ish food computers we sent out, at most two grew a plant," Cerqueira said.

No one knew exactly what was wrong, but in general, the team was aware that the devices weren't functioning as they should be. In a last-ditch attempt to make the devices deliver, Cerqueira's team sent new packages of fresh seedlings to the school. When that didn't work, they tried it again. No matter what, the plants just kept dying, according to Cerqueira.

At one point, a representative from the Bezos Family Foundation, a private nonprofit foundation cofounded by Jackie and Mike Bezos, stopped by the school for a visit, Cerqueira said. Harper had been hoping to entice the group to help fund a new foundation that he was just getting off the ground. Even then, the devices wouldn't work. 

"It was super embarrassing," said Cerqueira.

Want to tell us about your experience with MIT Media Lab? Email the author at

SEE ALSO: uBiome insiders say key science at the buzzy startup was flawed from the start. Now, the company and a top science journal are investigating.

Join the conversation about this story »

NOW WATCH: Super-Earths are real and they could be an even better place to live than Earth

We got an exclusive look at the pitch deck buzzy marijuana-tech startup Headset used to raise $12 million and ink deals with Nielsen and Deloitte

Sat, 09/07/2019 - 11:44am

Fresh off a $12 million raise, Headset CEO Cy Scott is trying to navigate a future filled with as many roadblocks as opportunities. 

The Seattle-based analytics startup has so far carved out a lucrative niche in the booming cannabis industry, collecting retail-sales data and providing market intelligence to dispensaries across the country — but, as Scott told Business Insider in a recent interview — the only constant in cannabis is that change is inevitable.

Scott broke down what made his pitch deck successful in a webinar moderated by Business Insider. Scott was joined by Poseidon Asset Management partners Emily and Morgan Paxhia, who discussed which parts of Scott's pitch attracted them to invest in the company. 

Scott said he pitched 20 to 30 investors over a six-month period in order to nail the round. He learned a lot about what makes a successful pitch in the process, specifically that a startup needs to home in on a concise mission statement, and how to make Headset stand out in an increasingly crowded cannabis-tech market. 

"The whole industry is just moving at an insane clip," Scott previously told Business Insider. "We don't really know what the future holds. Anybody who tells you that they do with the cannabis industry is just trying to make it up."

What Scott does know, however, is that cannabis companies, and traditional corporations trying to muscle into the cannabis world, are hungry for data and anything that can give them an edge in an increasingly competitive business. 

It's a trend that hasn't gone unnoticed in the venture-capital world. Initially targeting $6 million on a $30 million pre-valuation for Headset's Series A funding round, Scott decided to double that funding number to just over $12 million when it raised in January. 

Read more: The CEO of cannabis-tech startup Headset told us why having a concise mission statement is crucial to successfully pitching investors

"When we initially went out, we thought six [million] would be enough to get by and reasonable to do in a quick fashion," Scott said. As he hit the fundraising circuit, he found a number of funds that wanted to lead the round, ready to write large checks.

"We started to reevaluate what we could do with more capital," Scott said. "It's always a fine line, you know, raising too much capital. There's the analogy that it's like pouring water on a plant — just like dumping too much water won't make the plant grow any faster."

Headset raised money from a mix of investors from inside and outside the cannabis world. The round was jointly led by AFI Capital Partners and the cannabis-focused Poseidon Asset Management, with Canopy Rivers (the venture-capital arm of Canadian marijuana giant Canopy Growth) participating.

"We really deprioritized traditional VCs and really prioritized more of the cannabis-related firms just because there's less of that education component," Scott said. Cannabis-specific firms, which generally don't take money from institutions like pension funds that are restricted from investing in cannabis since it's federally illegal in the US, have grown rapidly over the past two years. Their larger competitors from the traditional VC world largely remain boxed-out of the high growth industry.

Partnering up with Nielsen and Deloitte

On top of raising $12 million, Headset also inked partnerships with Nielsen, one of the leading market-research firms, as well as the consulting and accounting firm Deloitte. 

As more big consumer-packaged-goods (CPG) companies evaluate how to get into the cannabis industry, Scott said Headset's data — and the platform that its partnerships provide — would be crucial.

As big CPG companies watched cannabis legalization spread across the US and Canada, they were asking Nielsen questions like, "Where's the opportunity? What's the risk to my business?" Scott said.

Read more: Nielsen is diving into marijuana as the world's biggest consumer companies look for an edge in the booming industry

Nielsen, Scott said, didn't really have a good answer. "So they realized pretty quickly that they needed to go out and find a partner that can bring that type of insight," Scott added.

And while Scott and his team have their hands full after their most recent raise, he's still getting lots of interest from investors. That Rolodex will come in handy in the future.  

"Just yesterday I was fielding emails and kind of deferring — give us 18 months before we start talking — we just closed this round," Scott said. "If there's a real opportunity to race ahead, we might raise a little earlier, but I'd say 18 to 24 months is a safe bet." 

See below for the pitch deck Headset used to raise $12 million: 

SEE ALSO: An early investor in Juul is raising $75 million to make venture investments in pot companies

In the battle of the Tesla Model S and the Porsche Taycan, it's really no contest (TSLA)

Sat, 09/07/2019 - 11:22am

Last week, Porsche officially launched its much-anticipated Taycan all-electric car.

The German sporting brand, famed for the legendary 911 and more recently the Cayenne SUV, will initially offer a pair of staggeringly expensive versions of the vehicle, which bears more than a passing resemblance to Porsche's Panamera sedan.

Incongruously, both Taycans bear the "Turbo" moniker, but that's because Porsche perhaps hopes to fit the Taycan into the overall naming logic of the the portfolio (being electric, neither has a turbocharger). The Taycan Turbo stickers at $153,510, while the Turbo S rises to the stratospheric level of $187,610.

If that sounds like a lot, given that EVs such as the Chevy Bolt and Nissan Leaf sell for a lot less than $50,000, well, welcome to Porsche. The priciest Panamera, the wagon version of the hybrid four-door, comes in at nearly $200,000. There are literally dozens of other Porsches that crack the $100,000 ceiling. There's a reason why Porsche posts some of the juiciest and most envied profit margins in ther car business. If you want a daily driver, look to Volkswagen (Porsche has since in inception after World War II been entwined with VW and is now part of the gigantic VW Group). 

Read more: It's time for Tesla to redesign the Model S sedan — here are 9 changes I'd like to see

Taycan versus Tesla, a "rivalry" that goes way back

Ever since the Taycan was first touted as a concept car, known then as the Mission E, it's been pitted against Tesla, currently the dominant all-electric automaker, with 2018 sales of nearly 250,000 vehicles. There's something to this: the EV market, even in the affluent and early-adopting, tech-giddy US, is tiny relative to the gas-powered realm. But Tesla has shown that an upstart brand can validate the prospects of cars that run not on incinerated dinosaur remains, but on electrons.

That's given the world's established automakers a legitimate excuse to pursue electrification, despite the general lack of receptivity among the buying public. (The 10-20% sales penetration that car companies were throwing around for EVs back in 2010 has manifested as something more like 2%.)

But take it all with a grain of salt. Porsche sold only around 8,000 Panameras in the US last year — a perfectly satisfactory result because the vehicle is so expensive. The alternative-propulsion versions of the car make a marginal contribution to that total, and are priced accordingly. Even a cheaper version of the Taycan would likely cost more than the least expensive Panamera, which already costs about as much as the most fully blinged-out Tesla Model S (if you maximally trick out the highest-spec Model S, you're looking at something like $115,000).

Sales volumes matter to Porsche, but bear in mind that the company isn't trying to sell to everybody. In fact, it's ultimately trying to sell to almost nobody — nobodies who would joyfully cough up six figures to be able to quote Tom Cruise in "Risky Business," from behind the wheel of a 928: "Porsche — there is no substitute." Porsche sold about a quarter of a million vehicles in 2018, so it's not breathing the same rarefied air as Ferrari (less than 10,000 in total 2018 sales), but when one goes shopping for a Porsche, one does not bring a lightweight checkbook.

See also: Apply here to attend IGNITION: Transportation, an event focused on the future of transportation, in San Francisco on October 22.

The finest cars made by human hands on planet Earth

What you get for the hefty outlay is the best-driving car on the planet. And it doesn't matter if you choose the 911 or the Cayenne. I've driven a lot of Porsches, and something special always happens when you fire up for example, the legendary flat-six boxer engine in a 911 and apply throttle: on the asphalt, Porsches are magic. In a recent test of the new Cayenne SUV, it took me all of five seconds to be transported to that transcendent Porsche state of mind. I like to say that if I had to drive for my life, I'd want to be driving a Porsche.

Another reason for Porsche to throw down an electrified gauntlet with the Taycan is that the company, like all automakers, is up against a future of more stringent fuel-economy and emissions regulations. EVs help with overall fleet compliance, enabling continued sales of big-ticket petrol cars. The VW Group overall also has run smack into a major problem with its diesel strategy, in the gloomy wake of its 2015 emission-cheating scandal. As a result, the group has pivoted to electrification in a major way.

So what should Tesla make of the Taycan?

No much, to be honest. Tesla proved that EVs could be more than glorified golf carts when it rolled out its sexy original Roadster, and the Performance trim of the Model S can be configured to outrun supercars from zero to 60 mph. But the Model S is rather long in the tooth at this juncture, dating back to 2012 with only a few modest refreshes since then. With the less-expensive Model 3 and forthcoming Model Y crossover, Tesla is moving away from the Mercedes-Audi-BMW-Lexus luxury sedan market and concentrating more on a kind of tweener space, just above the mass market.

Porsche has no interest in those segments, leaving them to Audi and VW. Porsche also leads with performance, so typical EV fixations such as range are less important. That's why Porsche is using an 800-volt design and a 93 kilowatt-hour battery architecture for the Taycan, aiming to optimize dynamics and recharge times rather than raw distance-per-charge. A Taycan owner is unlikely to care about range if their Porsche doesn't drive like, you know, a Porsche.

Read more: Porsche's $153,510 electric sports car, the Taycan, is set to compete with Tesla's Model S — here's how they stack up

Tesla owners don't care about Nürburgring laps, while Porsche owners most definitely do

That implicit standard means that Taycan and Tesla occupy different cognitive regions, beyond the basic distinctions of a $188,000 EV versus a $115,000 one. Tesla Model S owners don't care that their car hasn't lapped the Nürburgring in 7 minutes, 42 seconds (the Taycan's impressive time), or even lapped the Nürburgring at all (a Model S hasn't, at speed, and Tesla has never officially taken on the famous German track). Porsche Taycan owners, meanwhile, would be dismayed if the Taycan hadn't conquered the "Green Hell." They're deeply aware that much of Porsche's history was forged and its credibility nurtured in motorsports.

The tricky thing here is that because the EV market is so small, there's currently a lack of meaningful competition. Tesla, understandably, has the market more or less to itself. And that's no bargain, because in 15 years of existence, the company has posted less than a handful of profitable quarters.

In that time, of course, Tesla has sold its cars for around $100,000 on average, and that's what garnered the attention of the Porsches. Established luxury automakers figure they're much better at building vehicles than Tesla and can effectively "create" new market share in EVs, with very high prices converting to rich margins. Tesla, after all, has bungled its way to 250,000 in annual sales, adding a point or so of share to a US market that prior to 2018 had looked pretty well locked up in terms of market-share expansion. 

See also: Apply here to attend IGNITION: Transportation, an event focused on the future of transportation, in San Francisco on October 22.

Tesla bulls and bears always make the same error

Of course, Wall Street short-sellers cheerleading for Tesla's demise are going to herald the Taycan's arrival as a watershed moment when Tesla's luxury-sedan business collapses as all the Model S customers jump to Porsche. Likewise, Tesla bulls will argue that the Taycan is too expensive and not tech-y enough to unsettle the Model S.

They're both making the same error: assuming that the cars are attempting to capture the same customers. Sure, there could be some overlap, but for the most part if you seek high-performance four-door electric driving, and you have the cash, the Taycan is your ride. If you want an electric alternative to something like a BMW 5- or 7-Series, the Model S has always been for you. Although with the Model S aging and no redesign on the horizon, it's not out of the question that Tesla may let the car wither as it shifts farther downmarket with the Models 3 and Y. So get your Model S while the getting is good!

You're going to hear a lot about Tesla-Porsche competition now that the Taycan is a reality, and that's fine. But it's also the script that both automakers want to hear everybody reading from, yielding as it does a welter of free advertising (especially valuable for Tesla, where the ad budget is CEO Elon Musk's Tesla feed). There's also some reflexive truth to Tesla versus Taycan; car people are raised on the concept of competition as central, and by the time they rise to the executive ranks, they dutifully recite the shibboleths in the same way that major-league ballplayers tell reporters that they're taking things one game at a time and are in it for the team.

That rhetoric masks what is often a healthy absence of competition, particularly when you're dealing with something esoteric, such as high-performance electric sedans. Nobody needs a $115,000 Tesla Model S or a $188,000 Porsche Taycan Turbo S (reliable motorized transport can be obtained for $20,000).

But there's a significant number of people who want a Tesla or a Porsche, and their mindshare tends to be well-capitalized. Auto execs who hope to live well have few qualms about creating products that will separate those people from a percentage of their net worth. Porsche has been doing it for decades. 

The bottom line is that in the battle between Tesla and Taycan, there's really no contest. Everybody wins. Especially wealthy consumers, who now have in Porsche not just more all-electric choice, but an EV that's based on the explicitly hedonistic values of driving performance, while simultaneously borrowing Tesla's save-the-Earth ethics.

That said, I must admit that after driving every Tesla ever made — and quite enjoying them all — I'm personally looking forward to some Taycan seat time for something entirely different.

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NOW WATCH: Amazon invested $700M into an electric vehicle startup. Here's how Rivian is doing exactly what Tesla isn't.

The VSCO girl is taking over the internet — here's the ultimate starter kit for becoming the latest 'it' girl

Sat, 09/07/2019 - 10:43am

The VSCO girl has taken over the internet in 2019.

Named after the photo-editing VSCO app, the VSCO girl is easy to spot on Instagram or IRL (in real life). She can be the girl on the street, but she can also be a popular influencer, like Emma Chamberlain. But she's not just appearing on her own social media channels.

Media outlets from Buzzfeed News and Cosmopolitan to The New York Times and The Cut have all commented on the rise of the VSCO girl.

Read more: Scrunchies, $80 Fjallraven backpacks, and Birkenstocks: There's a new type of 'it' girl online, and of course the internet is already hating on her

"Normally when you're talking about a VSCO girl, it is predominantly people who are white and very skinny and they own all these big name brands," Caiti DeCort, a 15-year-old YouTuber, told Lauren Strapagiel of Buzzfeed News. "So typically it's associated with being rich."

The VSCO girl has also been parodied online. But while some love to hate on the cool-girl, carefree aesthetic, others aspire to it.

A VSCO girl is easy to spot. She tries to embody a '90s-meets-surfer-girl look. Here, the ultimate starter kit on how to be a VSCO girl, from the uniform to the lifestyle.

SEE ALSO: There's new competition in town for influencers who can rake in as much as $1 million per Instagram post — and it isn't even human

DON'T MISS: A 25-year-old YouTuber quit her job and now makes 6 figures recording herself eating, and it's a trend more and more influencers are cashing in on

The products: The VSCO girl is known for her "no-makeup" makeup — a natural vibe that contrasts with the contoured faces of Instagram influencers. Burt's Bees or Carmex lip balm and Glossier Cloud Paint will do.

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It's a fresh and dewy look — which can be achieved with help from Mario Badescu facial spray.

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The VSCO girl likes a good tan — but not without protection, so go ahead and grab some Sun Bum.

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The VSCO girl paints her nails in pastel rainbow colors. For that, you'll need candy colored nail polish.

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The clothes: The VSCO girl also keeps her clothes casual. She's all about the crop tops or tube tops — so look no further than VSCO-loved brand Brandy Melville.

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But the VSCO girl alsos love the opposite of small baby tees: the oversized graphic t-shirt.

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And since the VSCO girl lives at the beach in the summer, you'll of course need a bathing suit ...

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... and an oversized sweater for the colder months.

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You'll also need high-waisted denim shorts for the summer and mom jeans for the fall — both preferably ripped.

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The shoes: The VSCO girl alternates between a trio of shoes: checkered Vans, crocs, and Birkenstocks.

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The accessories: No outfit is complete without the right accessories. A puka shell necklace is a must.

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The VSCO girl's go-to hairstyle is beachy waves — but she always has an assortment of scrunchies on hand to put it up in a ponytail.

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Pura Vida bracelets are essential, too — to stack on your arms along with scrunchies, of course.

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Another staple is the wave ring, which keeps in tune with the VSCO girl's beachy, surfer vibe.

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The VSCO girl is always seen sipping from her Hydro Flask ...

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... or touting a Starbucks tea.

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The VSCO girl keeps her Hydro Flask, lip balm, and scrunchies in the Fjällräven backpack, which retails for $80.

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Source: Fjällräven

You'll also need a Fujifilm Instax mini to take Polaroids of your VSCO girl life.

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You can paste those Polaroids to your bedroom walls. You'll also need string lights and succulents for decor.

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And while not required, it helps to get around in ultimate VSCO girl style — via Jeep.

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And don't forget your Ron Jon Surf Shop stickers — the VSCO girl loves to sticker everything from her Jeeps to her iPhones.

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The food: Many a VSCO girl's Instagram features a beach shot complete with watermelon.

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The catchphrase: Forget "OMG" — the VSCO girl lets the world know she's excited by saying "sksksksksk."

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Source: The Cut

And for surprise, there's "and I oop," referencing a video of drag queen Jasmine Masters.

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Source: The Cut

The cause: And you have to care about the environment. The VSCO girl is environmentally friendly and cares about "saving the turtles" — as evidenced by her stainless steel Hydro Flask and love for metal straws.

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Chase's Ink Business Unlimited is perfect if you're a small-business owner who wants to earn both cash back and travel rewards, and it has no annual fee

Sat, 09/07/2019 - 10:37am

  • If you're a small-business owner looking for a good credit card with no annual fee, the Ink Business Unlimited Card is a great choice.
  • It earns you 1.5% on every purchase, and you can redeem you rewards as cash-back statement credits on your account.
  • If you're interesting in using rewards to cover travel, you can pair the Ink Business Unlimited with the Chase Sapphire Preferred Card or another card that earns Ultimate Rewards points, and then transfer your rewards to travel partners like Hyatt and United.
  • The Ink Business Unlimited also offers some helpful protections, including primary rental car insurance and purchase protection.

Business owners have a lot to think about when it comes to how they manage their finances. To streamline and easily monitor company expenses, it's best to separate them from personal expenses. 

For business owners who prefer earning cash back to travel rewards points, the Ink Business Unlimited is a great option. It's a simple card with no fee and some solid benefits.

Read more: The best small business credit cards to open now

Ink Business Unlimited card details

Annual fee: $0

Sign-up bonus: $500 bonus cash back after you spend $3,000 in the first three months

Cash-back earning: 1.5% back on every purchase you make

Foreign transaction fee: 3%

Sign-up bonus and cash-back earning

With the Ink Business Unlimited card, you can earn $500 cash back as a sign-up bonus if you spend $3,000 within the first three months of opening the account.

You can also earn 1.5% unlimited cash back on all your purchases for your business.

Read more: The best cash-back credit cards

Annual fee and other charges

The Ink Business Unlimited doesn't have an annual fee, which makes it great for startup business that are looking to minimize expenses.

Currently, there's a 0% APR on purchases for the first 12 months from opening the account, and a 15.24% to 21.24% variable APR after that.

You can also request extra cards for your employees at no additional cost.

Read more: The best no-annual-fee credit cards to open now

Ink Business Unlimited travel benefits

Chase offers primary car rental insurance if you rent a car using your Ink Business Unlimited card. This means you can decline the coverage offered for an extra fee by the rental car company. You just need to be renting a car for a business purpose for this coverage to be valid.

As a cardholder you'll also have travel and emergency assistance in case anything comes up during travel. While you will have to cover the cost of any emergency assistance, a Chase benefit administrator can help you navigate the process of getting help during an unexpected event. 

Finally, the Ink Business Unlimited offers roadside dispatch services. As with the emergency assistance services, you'll be responsible for covering the cost of any services, but Chase can help you arrange booking them.

Redeeming your Ink Business Unlimited rewards

Even though this card is primarily for those who prefer cash back, Chase provides more than one way for cardholders to redeem their earned rewards.

Cash back

The most straightforward way to redeem your rewards is in the form of cash, meaning a statement credit or money deposited into your bank account. Since the Ink Business Unlimited card offers 1.5% back on every purchase, you're getting 1.5 cents back for every dollar you spend.


For those of you who want the option to use your rewards toward travel benefits, the Ink Business Unlimited card allows you to have the best of both worlds.

While it's technically a cash-back card, through Chase Ultimate Rewards, you can use your rewards from the Ink Business Unlimited to book travel expenses such as airfare (without any blackout dates), rental cars, and hotels.

To do this, you need to have another Chase card in addition to the Ink Business Unlimited — one that earns Chase Ultimate Rewards (UR) points. Options include the Chase Sapphire Preferred Card, the Chase Sapphire Reserve, and the Ink Business Preferred Credit Card.

If you have one of these cards, you can move the cash-back rewards from your Ink Business Unlimited over to your Ultimate Rewards-earning account, then redeem the rewards as points for travel directly with Chase, or with transfer partners like United, British Airways, Hyatt, and Virgin Atlantic.

Read more: How to turn cash back into Ultimate Rewards points with Chase cards

Gift cards

Chase gives you the option to redeem your rewards toward gift cards with more than 150 brands. 

Apple Ultimate Rewards store

You can choose to use your rewards toward Apple technology purchases, but you'll get less than 1 cent per point with this redemption option.

Purchase protection

Your purchases will be covered for 120 days and up to $10,000 per claim for damage or theft, and up to $50,000 per account.

You'll also be able to extended a manufacturer's warranty by one year on items purchased with your Ink Business Unlimited. This warranty extension is only applicable to manufacturer warranties of three years or less.

Benefits for your business

Using the Chase Ink Business Unlimited card for your business purchases does more than just separate personal and company-related expenses. It can also help you keep better track of your business finances — this make things easier when it's time for tax season.

Having this card can help build your credit as you build your business. It also provides insight into your spending patterns, and you can check in on your balances and spending 24/7. You can view account details, get quarterly reports, and access your monthly statements anytime you want.

The Ink Business Unlimited also offers its cardholders account protection in the form of alerts to you so you can easily monitor the activity on your account and identify any possible fraud. You get to choose the alerts you want to get and how you want to receive them.

Bottom line

The Ink Business Unlimited is a great option for business owners who want to keep their rewards simple. It has a flat cash-back rate of 1.5% on all purchases, and if you decide to dip your toe into travel rewards, you can pair it with another Chase card to start redeeming Ultimate Rewards points.

I personally have this card and have found it to be greatly valuable in separating and organizing my business finances for tax and accounting purposes. Plus, the bonus cash back has made a difference in my cash flow. It's like getting a discount on everything you buy for your business, without an annual fee.

Click here to learn more about the Ink Business Unlimited from our partner The Points Guy.

SEE ALSO: All our credit card reviews — from cash-back to travel rewards to business cards — in one place

Join the conversation about this story »

NOW WATCH: How Area 51 became the center of alien conspiracy theories

FREE SLIDE DECK: The Future of Fintech

Sat, 09/07/2019 - 10:02am

Digital disruption is affecting every aspect of the fintech industry. Over the past five years, fintech has established itself as a fundamental part of the global financial services ecosystem.

Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, incumbent financial institutions are getting in on the act, and using fintech to remain competitive in a rapidly evolving financial services landscape. So what's next?

Business Insider Intelligence, Business Insider's premium research service, has the answer in our brand new exclusive slide deck The Future of Fintech. In this deck, we explore what's next for fintech, how it will reach new heights, and the developments that will help it get there.

Join the conversation about this story »

VCs just bet $3.5 billion that tech will transform the future of healthcare. These are the top 9 firms making the most digital health investments.

Sat, 09/07/2019 - 10:02am

In healthcare lately, tech is king. 

Startups taking a tech-based approach to healthcare have been a magnet for VC investment dollars, and the trend shows no sign of slowing down. Around the world, VCs poured $3.5 billion into about 371 different digital health deals and financings in the second quarter of this year, according to CB Insights.

Nine VC firms were especially active in the space, according to a recent CB Insights report focused on the second quarter of 2019. CB Insights ranked the VCs based on the number of unique digital health company investments they had made, but the the report doesn't disclose those figures. 

Never miss out on healthcare news. Subscribe to Dispensed, our weekly newsletter on pharma, biotech, and healthcare.

These VCs have invested in such companies as Alma Health, which makes coworking spaces and tech for therapists, the digital therapeutics startup Omada, and health data platform LunaDNA.

At a time when iPhones are omnipresent and AI is taking over the world, healthcare is a relative latecomer to the potential of technology. The highly-regulated industry moves slowly, and isn't exactly known for its tech-savviness, but a new wave of startups is betting it can change that. 

Read more: One sector has emerged as the hottest area for AI investment. A top investor at Andreessen Horowitz told us why it's the 'natural next step' for the industry.

In an indication of how competitive the field has become, there's a two-way tie for the #1 slot on the CB Insights ranking. After that, there are a stunning seven VCs ranked as the #2 most active digital health firms. 

Here's who they are, and what they've been betting on: 

#2. Khosla Ventures

Menlo Park, California-based Khosla Ventures invests across a variety of industries, including healthcare, with the internet as one of its focuses. It's ranked as the #2 most active digital health VC along with six others. 

Investments: Microbiome diagnostics platform Whole Biome, memory-health-focused digital platform Neurotrack, tech-enabled physical therapy company Sword Health

#2. Illumina Ventures

Founded by the genome-sequencing giant Illumina in 2016, Foster City, California-based Illumina Ventures was built with the mission of "unlocking the power of the genome." 

The firm aims to invest in life science tools, clinical diagnostics and therapeutics, according to PitchBook. Illumina Ventures is one of seven total companies ranked as the #2 most active digital health VCs. 

Investments: Genome care delivery platform Genome Medical, health data platform LunaDNA

Read more: A tiny startup wants to pay you for your DNA, and it could lead to the next wave of medical innovation

#2. F-Prime Capital

The Cambridge, Massachusetts-based F-Prime Capital invests in healthcare subsectors like biopharma and medical technology, as well as enterprise information technology and fintech, according to PitchBook. 

Healthcare is "the largest sector of our economy and arguably the least efficient in many ways," Carl Byers, a partner at F-Prime, told Business Insider.

"That leads to huge opportunities to improve care while reducing cost. And people who create the technology and services in the middle can earn and should earn in terms of making that happen," he said. "So it's just a great opportunity for that reason."  

Investments: Health data platform LunaDNA, animal DNA testing company Embark, mental healthcare platform Quartet

#2. Echo Health Ventures

The Seattle, Washington-based Echo Health Ventures was founded in 2016 and is a collaboration between nonprofit healthcare company Cambia Health Solutions and healthcare VC Mosaic Health Solutions. 

Rob Coppedge, CEO of Echo Health Ventures, who's been looking at investments in healthcare services and health technology since the 1990s, says that the industries are at something of an inflection point today. 

"And I feel like we're finally at a point where we can make good on some promises we've been talking about as a system, as an industry, for 20-something years," he told Business Insider. 

Investments: Genome care delivery platform Genome Medical, on-demand urgent care company DispatchHealth, big data analytics platform GNS Healthcare

#2. Perceptive Advisors

The New York City-based Perceptive Advisors invests across healthcare sectors like biotech, pharma, diagnostics and health services.

Investments: Genomic care delivery platform Genome Medical, women's fertility startup Kindbody, next-generation genomic sequencing company Archer

#2. Civilization Ventures

San Francisco, California-based Civilization Ventures is focused on cutting-edge health tech and biology, and was founded in 2017. 

Investments: AI-powered chronic disease platform Gali Health, digital therapeutics startup Omada, at-home health tech platform Pillo Health

#2. Chiratae Ventures

Founded in 2006, Chiratae Ventures invests across areas like internet, health technology, e-commerce, media, biotech and more. 

Investments: Online fitness platform CureFit, AI-based medical diagnosis platform SigTuple, online cancer consultation platform

#1. Jumpstart Foundry

Jumpstart Foundry, in Nashville, Tennessee, was founded in 2010 and focuses on healthcare investments like digital health, tech-based health services and consumer health. 

Jumpstart is tied as the #1 most active digital health investor with the VC First Round.

Investments: Digital health management platform Lytic, hospital health software startup Medifies, billing software company iTherapyDocs, doctor real-time documentation platform ScribeLink

#1. First Round

Founded in 2004, First Round invests in a variety of sectors, including ones that are tech-based.

It's tied at #1 for most active digital health investor with Jumpstart Foundry. 

Investments: Alma Health, which makes coworking spaces and tech for therapists, AI-based hospital triage platform Vital, healthcare provider communication platform Karuna Health, dental care insurance platform Level

The SEC won't play ball on bitcoin ETFs. Here's how Franklin Templeton and others are launching funds with crypto and blockchain twists.

Sat, 09/07/2019 - 9:55am

  • Two asset managers are making crypto-related plays: one is launching a bitcoin fund open only to big investors, and the other is offering a money-market fund with a blockchain twist.
  • The SEC hasn't budged on approving bitcoin-backed exchange-traded funds, which would be open to investors large and small. The ETF field is hyper-competitive, with firms constantly looking for a new niche to lure assets. 
  • Franklin Templeton is hoping blockchain can help with fund transparency and offer other benefits. And VanEck has teamed up with SolidX to create what could be a predecessor to a bitcoin ETF. 
  • Click here for more BI Prime stories.

Asset managers haven't been able to persuade the SEC to greenlight bitcoin exchange-traded funds. Now they're turning to putting a crypto spin on other kinds of products. 

The field is crowded with ETFs tracking benchmarks like stock and bond indexes, and firms are constantly looking for a new niche to lure assets. Intense competition has prompted a race to, and even below, zero for fees on some more basic funds. 

$50 billion asset manager VanEck for years has been pursuing approval for an ETF that holds bitcoin. Another firm's attempt to launch ETFs with bitcoin futures instead was a non-starter — in February, Reality Shares withdrew a filing for an actively-managed currency and bitcoin futures portfolio.

VanEck this week said it's teamed with fintech partner SolidX on a bitcoin fund with the same behind-the-scenes plumbing as an ETF. But the new fund is not registered like an ETF, and it's off-limits to individual investors. 

And Franklin Templeton is putting a blockchain twist on the staid money fund realm. It already has a suite of money market funds, but said in a statement the new product is aimed at a "different and unique customer base."

The Franklin Blockchain Enabled US Government Money Fund keeps a traditional record of share ownership as well as a record on the blockchain technology that underpins bitcoin. It does not hold any crypto.

Read more: A new ETF is actually paying investors to hold it and it's the latest sign in how insane the fee war has gotten

A gradual process

The Franklin fund is "an interesting pilot," said Ben Johnson, Morningstar's director of global ETF research. Firms' margins are getting squeezed  as investors flee active management in favor of low-cost passive funds.

 "Asset manager fees are under greater pressure than they've ever been," Johnson said, leaving "no stone unturned" when it comes to their own expenses.

In 2017, Vanguard said it would work with two other groups to share index data using blockchain with the aim of improving benchmark tracking.

While the Franklin Templeton fund may in the future be maintained solely on blockchain, the $710 billion asset manager said in a filing there's "no guarantee" that will happen. Blockchain is "a ripe development platform," a firm spokesperson said.

Morningstar's Johnson said the VanEck bitcoin trust helps investors avoid the "headaches" of bitcoin custody, but noted "it's awfully hard to predict" demand.

Grayscale Investments offers crypto for big investors via periodic private placements. Its bitcoin trust charges a 2% fee, the asset manager's website says, and collected $2.4 billion since its 2013 launch. 

"Given the channel we're focused on, we think it'll be a gradual process – institutions will take their time to evaluate," said Ed Lopez, VanEck's head of ETF product.

For perspective, SPDR Gold Shares, State Street's physical gold ETF with an expense ratio of 0.4%, has picked up nearly $44 billion since its 2004 listing. 

Read more: Asset managers losing billions are hoping a new kind of fund can turn their business around. 

Volatile ride

Providers pushing to lock down ETF approval could risk crypto falling out of favor in the meantime.  SEC Commissioner Hester Peirce said in May it may be a long time before a bitcoin ETF gets green-lighted.

Todd Rosenbluth, head of ETF and mutual fund research at CFRA, highlighted the inherent uncertainty around new crypto products. 

"While the security's price has partially recovered from lows in early 2019, it has been a volatile ride and demand remains uncertain," he said. 

Only investors with over $100 million in assets can buy VanEck SolidX Bitcoin Trust shares. If the SEC ever does allow a mainstream ETF, institutions' shares could roll over into that product, Lopez said. Fees are 2% to the fund sponsor, plus a 0.9% insurance fee to cover bitcoin theft, VanEck's website says. 

Institutional investors lack the framework, including central clearing and brokerage accounts set up for crypto, to hold bitcoin, Lopez said. 

"What we're hoping this does for them is it wraps all that stuff together and makes a tradeable product," Lopez said. 

BNY Mellon is the VanEck fund accountant and administrator. 

Read more: The 'godfather' of a $4.7 trillion market says a bitcoin ETF will be approved 'no time soon'

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NOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life

The US-China trade war is helping drive the massive fires burning the Amazon rainforest

Sat, 09/07/2019 - 9:45am

  • The Amazon rainforest has been seized by massive fires as Brazilian farmers cut down trees for farmland.
  • China's desire for more soybeans and agricultural products is helping drive the need for more farmland in Brazil.
  • China's need for more agricultural products form non-US countries is partly being driven by the US-China trade war.
  • Sal Gilbertie is the president, CEO, chief investment officer, and founder of Teucrium Trading.
  • Visit Business Insider's homepage for more stories.

The Amazon rainforest is burning, and it's sparking outrage around the world. One reason for this growing ecological tragedy may be the escalating US-China trade war.

Brazilian President Jair Bolsonaro has been accused of not acting forcefully enough to fight the fires because he is said to be beholden to Brazilian farmers and ranchers eager for new hectares of income-producing arable land.

Many Brazilian farmers are now converting rainforest to farmland partly to meet China's growing demand for soybeans, soybeans that China was sourcing from the US until the trade war began last year.

US President Donald Trump has also been linked to the Amazon fires, thanks to his resolve in the US-China trade war. It is reasonable to assume that China would still be buying soybeans from the US if Trump hadn't started the trade war in the first place.

But this narrow viewpoint risks underestimating the dangers that China's long-term plans for securing a global food-supply chain pose to places like the Amazon. When viewed strategically, it becomes clear that the trade war is simply providing China's Communist Party the cover it needs to secure the future supply chains it will require as the preeminent global superpower.

The trade war has accelerated China's food push, endangering the Amazon

Recall that the trade war began over theft, espionage, and strong-armed commercial practices on behalf of the Chinese. Practices that include forcing intellectual-property transfers, intentional patent infringement, embedding commercial and military spyware in technology exports, dumping of government subsidized goods, and a host of other unscrupulous tactics. These are the things at the heart of the trade war and why a majority of Americans support confronting China on economic issues.

The heart of China's trade war strategy has been to target US farmers in order to politically pressure what was Trump's strongest base of support in the 2018 election. By placing tariffs on American soybeans, Beijing has artificially priced the US out of the Chinese market.

Chinese importers are instead turning to Brazil for their soybeans, which has in turn driven up demand for farmland. This desire for more planting area has helped fuel the fires burning thousands of acres of Amazon rainforest.

China has no problem with the burning of the Amazon, nor does China care to reign in its economy for the sake of appeasing those concerned about the environment and climate change.

The Chinese know that Brazil has far more land available for new farmland than perhaps any other country on earth; that land just happens to be covered by rainforest. In Nero-esque fashion, China is gleefully watching the rainforest burn with eyes toward a new Brazil, one with more soybeans for China.

The trade war is also enabling the Chinese to advance its plans of securing non-US-sourced food supplies long into the future by conveniently providing both cover and opportunity to create a more globally diversified food supply for its people.

China's push for Brazilian land goes beyond the trade war

The leadership in China is not too old to remember the Great Famine of 1959-61, when tens of millions of Chinese starved to death, primarily as a result of government policies preventing private ownership of land and businesses. China has come a long way since then, partially embracing free-market policies that have helped transform the country into an economic powerhouse. But not even its rapidly growing economy can help China domestically produce all the food it requires.

Despite recent efforts to improve its internal supplies, there is not enough available farmland in China to grow the food required to sustain its massive population. Chinese central planners have a very long-term plan to solve this issue, which they can implement with ruthless efficiency because of China's one-party totalitarian political system.

Under President Xi Jinping, China has embarked on an investment plan of epic proportions to achieve its long-term food-security goals.

Relatively small transactions like the purchase of US-based Smithfield foods to secure both supplies of pork and advanced agricultural technologies, and direct investments in agricultural land in South America and Equatorial Africa, are examples of China's food-security plan unfolding before our eyes.

Of course the crown jewel of its plan is the Belt and Road Initiative, which involves more than 60 countries and will extend China's economic and military reach across the globe, creating a super supply chain able to support China's needs for as long as earth's resources last.

The trade war is providing convenient cover for China to advance its long-term plans of securing food supplies long into the future. Those plans include decreasing Chinese reliance on single-source suppliers, such as US soybean farmers.

China is adroitly exploiting a double opportunity: It is undermining support for Trump by imposing tariffs on US soybeans hurting the farm belt (Trump's political base), while perhaps weakening the US resolve to win the overall trade war. And it is cultivating new supply chains by turning to Brazil to fulfill its demand for soybeans.

By using the trade war as a cover to accelerate its plans in Brazil, China is exacerbating ecologic pressures in the Amazon jungle by motivating farmers to burn and clear more land, all fulfilling a plan that's been in place long before the trade war began and will remain long after the trade war ends.

Join the conversation about this story »

NOW WATCH: How Area 51 became the center of alien conspiracy theories

Inside Teterboro Airport, NYC's private jet airport, where celebrities slip in unnoticed and Jeffrey Epstein was arrested on sex trafficking charges in July

Sat, 09/07/2019 - 9:27am

  • Teterboro Airport is New York City's private jet airport, where celebrities slip into the city unnoticed and where Jeffrey Epstein was arrested on sex trafficking charges on July 6.
  • It's only about 12 miles from Manhattan, making it the closest private jet airport to the city.
  • Teterboro has five fixed-base operators (FBOs) responsible for aircraft services including passenger handling, aircraft fueling, parking, maintenance, charters, rentals, and more.
  • The airport's FBOs, like the award-winning Meridian Teterboro, offer some swanky amenities including lounges, a gym, a private movie theater, and hotel and limousine concierge services.
  • Despite those offerings, a visit to the airport showed me that the true luxury of flying through Teterboro lies not in its amenities, but in the time it allows travelers to save. 
  • Visit Business Insider's homepage for more stories.

Just 12 miles from New York City, Teterboro Airport in New Jersey is the city's primary private jet airport.

Teterboro is a general aviation airport, which means its main purpose is to remove smaller, slower aircraft — i.e. private jets — from the regional air traffic and reduce congestion at the commercial airports such as Newark Liberty International Airport, John F. Kennedy International Airport, and LaGuardia Airport.

Celebrities like Miley Cyrus, Usher, and Brad Pitt and Angelina Jolie have been spotted at Teterboro, and late financier Jeffrey Epstein, who recently died in jail while awaiting trial on sex trafficking charges, was arrested at the New Jersey airport in July.

I recently spent a few hours at the airport and got a tour of some of its facilities — here's what it was like.

SEE ALSO: Take a tour of the private jet that a billionaire chief executive flies around the world

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Teterboro Airport in New Jersey is the main private jet airport serving New York City.

The 827-acre airport in Teterboro, New Jersey, is a general aviation airport, which means its main purpose is to remove smaller, slower aircraft — i.e. private jets — from the regional air traffic and reduce congestion at the commercial airports such as Newark Liberty International Airport, John F. Kennedy International Airport, and LaGuardia Airport.

Teterboro is only about 12 miles from Manhattan, making it the closest private jet airport to the city.

Depending on traffic, it's only about a 30-minute drive from Teterboro to Midtown Manhattan.

Opened in 1919, Teterboro Airport is the oldest operating airport in the New York and New Jersey metro area, according to the Port Authority of New York and New Jersey.

"During the 1920s, Teterboro Airport was at the center of America's golden age of aviation," The New York Times reported in 1976.

Famous aviators including Charles A. Lindbergh and Amelia Earhart spent time at the airport.

Today, many celebrities pass through the airport as an alternative to the area's major commercial airports: Newark Liberty International Airport, John F. Kennedy International Airport, and LaGuardia Airport.

Stars including Miley Cyrus, Usher, and Brad Pitt and Angelina Jolie have been spotted there.

Jeffrey Epstein, the financier who recently died in jail while awaiting trial on sex trafficking charges, was arrested at Teterboro Airport in July.

Teterboro isn't served by commercial airlines like Delta or United. Instead, when someone flies in or out of Teterboro, they go through what's called a fixed base operator, or an FBO.

FBOs are responsible for aircraft services including passenger handling, aircraft fueling, parking, maintenance, charters, and de-icing. They also handle towing and baggage handling, car rentals, hotel reservations, and some include pilot lounges.

The five FBOs operating at Teterboro are Atlantic Aviation, Jet Aviation, Signature Flight Support, Signature Flight Support - South, and Meridian Teterboro.

On a recent summer day, I took the PATH train and a Lyft from Business Insider's Manhattan office to Teterboro Airport.

I was on my way to get a tour of the airport and its facilities with the marketing director of Meridian Teterboro, which was recently voted the top FBO in the northeast and one of the top 5% in the US by an Aviation International News survey.

But one does not simply drive into Teterboro Airport.

My Lyft was stopped at the gate, and the security guard asked to see both my ID and the driver's ID.

I was on a visitors list, so we were let in without any problem.

Meridian Teterboro's 30,000-square-foot executive terminal includes a lobby, lounges and rest areas, work stations, a gym with showers and lockers, a pool table, and a private movie theater.

Meridian Teterboro, which started as a maintenance business, is "like a fancy gas station for private planes," Kirk Stephen, Meridian's director of marketing, told me jokingly.

Travelers passing through Meridian Teterboro are personally greeted by the customer service team at the reception desk.

Betsy Wines, Meridian's vice president of customer service and human resources who's been at Meridian for 34 years, told me that many of Meridian's customers are repeat customers that the team knows by name.

Meridian's customer service team handles any special customer requests as well as hotel reservation, rental cars, and limousines.  

The lobby is airy and bright, with high ceilings and walls of glass.

It's filled with comfortable seating and several large plants. Stephen likens Meridian's facilities to a "five-star hotel."

Having visited the 5-star hotel Amangani in Jackson Hole, Wyoming, not long before I went to Teterboro, I'm not quite sure that's a claim I agree with. Teterboro's airport was sparkling clean and modern, but the rooms and lobby in Amangani were full of texture, sumptuous wood accents, and furniture that was designed to look rustic but was clearly extremely expensive.

I get where Stephen was going with the comparison, though: Teterboro's interior is far nicer than any airport I've been to — and miles ahead of nearby LaGuardia, one of the most hated airports in the US.

Most of Meridian's clientele go straight to and from their planes rather than lingering in the terminal, so facilities like the work stations and rest areas are more often used by pilots passing through the airport, according to Stephen.

"Usually passengers just want to just want to walk through and get out and get to where they're going, but the pilots may have to be here for a while, so we wanted to provide those amenities for them," Stephen said.

In a lounge with a TV and pool table, I saw one pilot taking a nap on a couch and another relaxing in an armchair.

Pilots can get some shut-eye in a windowless rest area where small pillows and blankets are provided.

The terminal also includes a gym outfitted with cardio and weight lifting equipment.

There's even a private 10-seat movie theater.

Most people who pass through Meridian Teterboro are business travelers, both companies and individuals, according to Stephen.

"Most people think that private jets are for, you know, celebrities and athletes and [that] it's a luxury segment," Stephen said. "There are people that use private jets for those reasons, but believe it or not, the vast majority of private jets are used for business."

While it could take days for a business traveler to fly commercial between certain destinations, "if you have a private jet, you can go from A to B to C to D all in a very short period of time," he said. "So it's really saving time that's saving money for businesses."

On a slow day, about 40 planes pass through Meridian's terminal. On a busier day, it could be up to 80.

In 2018, Teterboro Airport saw more than 174,000 total take-offs and landings, according to data from the Federal Aviation Administration.

Meridian is coming up on one of its busiest times of the year, according to Stephen, including the day after Labor Day, New York Fashion Week, and the United Nations General Assembly, all in September.

Meridian operates its own charter fleet of 20 planes, which range from mid-size aircraft to ultra-long-range planes that can travel almost halfway around the world without having to stop for fuel.

While costs can vary, chartering a small plane with eight seats starts at about $3,500 per hour, while a larger plane that can hold about 16 people can go up to $11,000 per hour, according to Chris Battaglia, Meridian Teterboro's director of charter sales.

Meridian has three hangars: two are 40,000 square feet (one of which is new), and one is 20,000 square feet.

In the hangars, Meridian's maintenance team services, repairs, and cleans planes.

I got to take a peek into one of Meridian's planes, a Gulfstream G200.

The G200 has a roughly 25-foot by seven-foot cabin and can carry eight to 10 passengers.

It has a range of about 3,800 miles and a maximum speed of 541 miles per hour.

The interior is luxuriously appointed with beige leather seats and wood veneer.

The G200 includes seven leather armchairs and a divan that seats three people.

A small additional seat can be used in the bathroom.

Water bottles and a basket of snacks are placed on board before each charter.

Meridian's customer service team does its best to accommodate any request of its clientele, no matter how outlandish.

"You know, you'll have a customer call that wants to maybe a particular bottle of wine or Champagne," Wines said, "or there's someone's birthday on an aircraft and the crew will call and say, 'Can you get me a birthday cake and some balloons or some flowers?'" 

Those are normal requests, she said. But they've also had a customer call mid-flight and say something like, "Look, my boss forgot his suitcase and he's supposed to play tennis with somebody."

Wines' team will ask for the correct sizes, go to the store, and buy a full tennis outfit to have waiting at the terminal.

Unlike at a typical commercial airport, Teterboro customers don't have to bundle their liquids in one tiny plastic bag or take off their shoes and pass through a full-body scanner.

In fact, they don't even necessarily have to show up for their flight on-time — it's not going to leave without them.

"But you know, if time is money, they'll be there when they're supposed to be there," Stephen said. "Otherwise, it could cost them more money, or if they're expecting to land in a certain place and they have to be there by a certain time ... they can put themselves in jeopardy by not getting to where they need to be. But for the most part, they can probably be here a half hour beforehand and it would be OK."

In addition to their charter and aircraft handling services, Meridian manages aircraft for private jet owners, which includes flight operations, maintenance, and charter sales for those owners who charter their planes to mitigate costs.


I wasn't allowed to take photos of travelers at Teterboro, but I did see a small group of people walking out onto the tarmac to board a jet. They were dressed in business casual attire.

While the amenities at Meridian Teterboro were perfectly comfortable, the airport as a whole was much less glamorous than I'd expected. 

After my tour of Teterboro, it was clear that's because the true luxury of flying through the private jet airport is saving time. 

Teterboro's proximity to Manhattan — one of the major business centers of the world — as well as the hours saved by not having to show up to an airport two or three hours early or adhere to commercial flight schedules, embody the airport's true appeal to business travelers.

Meet the star women running Silicon Valley's largest IPOs; PE firms are hiring more undergrads

Sat, 09/07/2019 - 9:22am


Ah, WeWork. The gift that keeps on giving. 

This week, it was reported that the coworking firm is considering the drastic move of cutting its $47 billion valuation in half before its planned IPO. WeWork's roadshow is reportedly set to kick off next week, but it remains unclear if that'll happen. Some investors that I spoke to said they're still concerned about opacity around WeWork's financials and lack of disclosures. They think ultimately the deal will get done — it just may not be at the company's ideal price.

Meanwhile, even seasoned asset managers are confused about WeWork's valuation, reports BI's Bradley Saacks. 

Fidelity, which has exposure to WeWork through its massive Contrafund, slashed the fund's valuation on WeWork shares between the end of last year and the middle of this summer, according to a regulatory filing. The mutual-fund giant once valued the company significantly higher than its peers but has cut the valuation of WeWork shares in the Contrafund by roughly a third.

Other funds, like T. Rowe Price's Diversified Mid-Cap Growth Fund, have hiked the value of their WeWork stakes.

There does seem to be one thing that all the funds can agree on: WeWork is listed in the real-estate section of each funds' reports. It's a far cry from the high growth tech company that WeWork is trying to position itself as to prospective investors.  

Here's some more of our WeWork coverage from this past week:

If you were away all summer...welcome back! 


Meet the star women running Silicon Valley's largest IPOs at Goldman Sachs, Morgan Stanley, and JPMorgan

Facing outside criticism and investor concern over its all-male board, WeWork amended its IPO registration on Wednesday to include a new female board member, Harvard Business School professor Frances Frei.

But behind the scenes, much of the heavy lifting of the controversial initial public offering is being handled by two female bankers, Alice Takhtajan at JPMorgan, and Kim-Thu Posnett at Goldman Sachs, sources told Business Insider.

In the world of IPOs, much like the rest of banking and much of tech, high-profile male leaders are front and center of nearly every deal. But there's an influential rank of female bankers, each with more than a decade of experience behind them, quietly guiding some of the biggest deals in the industry.


PE firms are hiring more undergrads and casting a wider net — here's the new schools where top shops like KKR and Blackstone are scouting future stars

Private-equity firms have been casting a wider net for undergraduates. Through recruiters, academic advisers, and PE hiring executives, as well as public sources like LinkedIn, Business Insider gathered some of the schools outside the Ivy League where private equity is scouting future stars.

That push into undergrad outreach and recruiting reflects a battle for talent at the associate level — and marks a pivot from the more traditional route of private-equity firms hiring young people only after they do a stint in investment banking.


The CEO behind a tech-led turnaround at Domino's Pizza now wants to land huge private-equity deals. He told us the areas he's targeting and why he's excited about voice technology.

The Carlyle Group is partnering with Patrick Doyle, the former CEO of Domino's Pizza known for turning around its business by overhauling its recipe and implementing new technology like online ordering.

Doyle, 56, is now a private-equity investor and will help Carlyle identify multibillion-dollar deals in the consumer and retail sectors.

Doyle spoke with Business Insider about how companies could improve operations and said they would increasingly benefit from the use of voice technology.


Barclays insiders say a hiring freeze is afoot as roles stay unfilled, bonuses get slashed, and senior staff flee

Barclays has raised the bar for hiring outsiders, and it isn't filling vacancies after people leave, according to five sources familiar with the situation. Some of those sources described it as an ongoing informal hiring freeze that's hitting areas including investment banking and FICC trading.

The UK-based bank shed 3,000 jobs company-wide in the second quarter and has upped its 2019 cost-cut outlook. Barclays is pushing to hit a return target set by CEO Jes Staley, and its bonus pool shrank in the first half.


Bloomberg is investing in ways to make complex alternative data sets easier to use for hedge funds

One of the largest data providers in the world wants to make it easier for investors to digest complex, unique data sets.

Bloomberg LP is working to help investment firms, such as hedge funds, use alternative data despite lacking the resources or experience often required to digest it. The efforts come just over six months after Bloomberg announced a move into the booming market for data such as stats on drug approvals, retail foot traffic tracked through cellphones, and construction permits.


Wall Street move of the week:

Goldman Sachs has poached a top credit trader from a $30 billion hedge fund to jump-start its high-yield trading business

In markets:

In tech news:

Other good stories from around the newsroom:

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