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(Bloomberg) — Tennis legend Serena Williams is starring in a Super Bowl ad this Sunday for Tonal Systems Inc.’s home fitness gym, but there’s a whole lot more going on than just another celebrity pitching a product during the big game.

The 23-time Grand Slam singles title winner is also an investor in the company, which was valued at $1.6 billion in a funding round last year. It’s part of a larger Williams portfolio that includes several startups now valued at more than $1 billion, including Impossible Foods Inc., Daily Harvest Inc. and Noom Inc.

“I love playing tennis, but know I can’t do it forever,” Williams, 40, said in an interview. “I would see companies pop up, like Instagrams and Snapchats, and wanted to understand how I could get on those cap tables,” referring to the lists of a company’s investors put together by venture capital firms. “I asked around, did my due diligence, then started investing.”

Williams founded her venture capital firm, Serena Ventures, in 2014. She currently serves on the boards of Poshmark Inc., Momentive Global Inc. (formerly Survey Monkey) and Sorare SAS, a $4.3 billion sports NFT startup backed by SoftBank Group.

Her fund is shooting for a well-rounded portfolio and has investments in e-commerce, consumer products, fintech and health care, among other categories.

“We focus on pre-seed and seed, and like to take anywhere from 8% to 12% of the company,” Williams said. “For Tonal, I invested at the Series C stage because I was intrigued by the product and the opportunity to have such an incredible strength training machine at the house.”

Williams said she was shocked to learn that startups with only female founders were getting a mere 2% of venture capital funding, something she’s trying to change.

“I built my team to have no unconscious biases, so we invest in everyone,” she said. “But it’s important for us to give opportunities to those getting skipped over — if the founder happens to be a woman, or happens to be a person of color, that’s a bonus for us. Our portfolio is 60% diverse founders.”

Her husband, Reddit co-founder Alexis Ohanian, is also a prolific investor who’s backed dozens of companies worth more than $1 billion, including Instacart Inc., Coinbase Global Inc., Cruise.com and several in Williams’ portfolio, according to his website.

The couple met in Rome in 2015, when she was living in Europe for several weeks.

“Our first conversation was about investments, that’s literally how we met,” she laughed.

It was Ohanian who introduced Williams to Tonal in 2019. But other than that, she said he doesn’t typically source deals for her.

“We keep our businesses extremely separate,” she said.

Williams, whose list of achievements includes four Olympic gold medals, is one of the highest-paid female athletes in the world, with earnings of $45.9 million in 2021, second only to Naomi Osaka, according to Forbes. Much of her income is derived from sponsorships and investments.

She’s also no stranger to the Super Bowl. Last year, she appeared in two ads, one for Nintendo Switch and the other for Michelob Ultra, and she’s in another this year for that beer. In prior years, she’s done spots for Bumble and Mini. 

Tonal, which is based in San Francisco, has other high-profile investors, including Amazon, Silicon Valley venture capital firms, and sports celebrities like LeBron James, Steph Curry, Klay Thompson, Michelle Wie and Maria Sharapova. But the product also speaks to Williams on a more personal level.

“What I love about this Tonal campaign, ‘Strength Made Me,’ is that it celebrates women who are not only physically, but also mentally and emotionally strong,” she said. 

Para snowboarder Brenna Huckaby, soccer player Lindsey Horan, and swimmer Simone Manuel will be featured in social media posts associated with the campaign over the coming months.

“The key takeaway is to embrace your strength, no matter what other people tell you,” Williams said. “And you can achieve amazing things.”

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(Bloomberg) —

Britain’s antitrust regulator designated Amazon.com Inc. as a grocery retailer, subjecting the online retail giant to the same rules followed by U.K. supermarket chains, such as Tesco Plc.

The Groceries Supply Code of Practice prohibits companies from making changes to supply contracts at short notice, and requires retailers to give appropriate period of notice if they no longer want to use a supplier and demand reasons for ending contracts. It means that Amazon could now face a fine of as much as 1% of its U.K. revenue if it’s deemed to have mistreated vendors. 

The Seattle-based company sells groceries online under its Amazon Fresh banner, as well as through a partnership with supermarket chain Wm Morrison Supermarkets Plc. It has 15 Amazon Fresh stores and seven Whole Foods stores in Greater London and has a minority stake in food delivery service Deliveroo.

“Today’s decision to designate Amazon helps to ensure a level playing field for companies active in the groceries sector as people’s buying habits evolve,” said Adam Land, senior director of remedies, business and financial analysis at the Competition and Markets Authority.

To be governed by the rules, grocers must have annual sales of more than 1 billion pounds ($1.36 billion). Compliance is managed by the independent Groceries Code Adjudicator.

When the adjudicator was set up in 2013 it was given powers to oversee the behavior of ten supermarket groups, arbitrate on disputes and fine errant grocers. It has since expanded the number of operators it oversees, for example, adding Ocado, and B&M Homestores, the discount retailer, in 2018. 

One of its biggest investigations was into Tesco, the country’s largest grocer, which it found guilty of “serious breaches” of industry rules in 2016.

“We strive to build successful, long term relationships with our suppliers and look forward to working with the Groceries Code Adjudicator,” Amazon said in an emailed statement. 

(Updates throughout)

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(Bloomberg) — Moonbug Entertainment Ltd., which produces “Cocomelon,” the most popular kids’ show on Netflix, thinks it has found its next big hit.

Moonbug has acquired Little Angel, a network of kids-focused YouTube channels that generate about 1.5 billion views a month. Moonbug didn’t disclose the terms of the deal, the company’s first acquisition since it was acquired by Candle Media, an entertainment company run by two former Walt Disney Co. executives.

The main Little Angel channel produces animated videos set to nursery rhymes and songs for kids, and has about 27 million subscribers on YouTube. Another channel, Little World, also specializes in songs but has a much smaller audience. In all, its channels have almost 90 million subscribers.

Moonbug buys kids shows that first became popular on YouTube and builds them into global entertainment franchises. It produces TV episodes based on the characters from Cocomelon that rank among the most-watched programs on Netflix Inc. in the U.S., and the company has also licensed its Cocomelon and Blippi brands for toys and other merchandise.

Little Angel has many of the same attributes as those properties— affordable animation, addictive songs and a growing audience. But its current owner, Valnet Inc., has yet to expand it much beyond YouTube or market the show in many territories.

“We are putting it into our machine,” Moonbug Chief Executive Officer Rene Rechtman said. “We’ll create more content, we’ll internationalize it and we’ll start distributing it on global platforms.”

Rechtman said Little Angel reminded him of Cocomelon when his company bought it in July 2020, only the show is a bit edgier and its audience skews a year or two older.

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(Bloomberg) — Dutch cities are putting a halt on the explosive growth of new distribution centers of rapid delivery companies such as Getir, Flink and Gorillas.

After Amsterdam and Rotterdam have imposed a one-year freeze on new “dark stores,” The Hague and Utrecht are also considering similar measures, the spokespeople of the two municipalities told Bloomberg.

Grocery companies have sprung up in the Netherlands and are often located in residential areas to be close to their customers and live up to the promise of quick delivery.

“With the rapid growth of flash delivery from dark stores, the number of complaints has increased,” Amsterdam City Councilor Marieke van Doorninck said in a press statement last month, saying residents cited nuisances including blocked sidewalks, traffic safety and night time noise.

Dutch municipalities jointly discussed the issue on dark stores. The Hague sees the need of this service but doesn’t want tolerate nuisances and may introduce new measures in April, said a spokesperson.

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(Bloomberg) — Norway’s Komplett ASA agreed to acquire NetOnNet AB in a deal that values the Swedish e-retailer at 3.7 billion kroner ($420 million) to create the second-biggest electronics retailer in the Nordic region.

Komplett is buying the shares from SIBA Invest AB, NetOnNet’s sole shareholder, for 1.5 billion kroner in cash and 35.2 million of its own shares, the companies said in a statement. The combined company will have a market share of around 10% in the Nordics, second only to Elkjop, part of Currys Plc, according to the statement.

“We may look alike from the outside, but we have many complementary strengths that will enhance each others’ brands,” NetOnNet’s chief executive, Susanne Holmstrom, said by phone.

The companies sell electronics and IT equipment primarily online, a market they say is growing as consumers increasingly buy gear on the web. The combination will reduce costs, mostly in sourcing, by 200 million kroner a year, with the full impact seen within two years. 

The acquisition price is “fair” and the merger should create a “leading online-first electronics retailer in the Nordics,” according to Ole Martin Westgaard, an analyst at DNB Bank ASA.

Komplett will finance the cash consideration via a 1.5 billion-krone bridge loan, which will be replaced with proceeds from the issuance of new shares. SEB AB advised Komplett in the acquisition process and Carnegie Investment Bank AB advised SIBA Invest. 

“It’s a very nice industrial logic as we will double the purchase organization, and we’re sure that there are substantial synergies in combined purchases and lower prices,” Komplett’s CEO Lars Olav Olaussen said in a phone interview.

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(Bloomberg) — Klarna Bank AB is Europe’s most valuable fintech unicorn, a payment pioneer in a booming sector that’s being wooed by London for its potential stock listing. It also has a funding model that’s going to be threatened by the rapidly emerging reality of higher interest rates.

The Swedish “buy now, pay later” company gives out effectively interest-free loans so online shoppers can stagger payments, while it depends on merchant fees and late payment penalties for revenue. It was valued at almost $46 billion after a funding round led by Softbank Group Corp. last year.

It uses a mix of customer deposits — it offers conventional bank accounts in Sweden and Germany — and short-term debt to fund the loans. This is a model that thrives in a low interest-rate world because such debt tends to be very cheap, and rates on deposits are still extremely low.

But things are shifting fast. Bank of England interest rates are already rising, the U.S. Federal Reserve is set to follow in March, and there are bets that the European Central Bank could also move this year. Given the model behind Klarna’s rapid growth, the change coming in 2022 has implications for funding costs.

“The whole business model is based on wafer thin margins — it doesn’t have the buffer of high interests that credit card providers charge on usage,” said John Colley, a professor at Warwick Business School and a fintech expert. “Once the environment turns nasty, which it is going to, it falls flat.”

Klarna is among a raft of “buy now, pay later” companies attracting young consumers and investor attention. It says it has 90 million active customers and processes 2 million transactions a day. Others including Affirm, PayPal Holdings Inc.’s In 3 and Afterpay, which was bought by Jack Dorsey’s Square Inc. for $29 billion last year.

The firm’s debt includes 3.1 billion Swedish krona ($297 million) of bonds coming due in the next two years and a 5 billion-krona commercial paper program, a form of short-term debt that’s becoming less popular because of market stress at the onset of the Covid-19 crisis. 

The price of Klarna’s bonds maturing in February 2024 has fallen to the lowest since February 2021, when the debt was sold.

In response to questions from Bloomberg, Klarna said that only a small portion of its lending is funded through debt, and estimates that 80-85% comes from customer deposits. “The average maturity of Klarna’s credit portfolio is around 40 days. As such, the maturity profile of the funding overall is longer than that of the assets,” it said.

In a financial report last October, Klarna said that loans to consumers totaled about 52 billion krona. Deposits stood at 45 billion krona and debt securities at 8.1 billion krona, about 15% of the mix. 

The company has highlighted funding risks, saying in a 2021 prospectus for the issue of notes that an increase in costs would have a “material adverse effect on Klarna’s net interest margins.”

“Thanks to the ECB, short-term borrowing costs will remain very low for the next year or so. But eventually, rates will go up and companies using this will have to re-evaluate their model,” said Pierre Boyer, head of short-term debt at Belgian fund manager Candriam. “Will that mean a big change for financial institutions using this? Absolutely.” 

He hasn’t invested in Klarna’s commercial paper, but has positions in similar instruments by other European financial institutions. Klarna’s debt is mostly held by local Swedish investors; Bloomberg attempted to contact a selection of these without success. 

While traditional banks also borrow to lend, Klarna is different because it charges customers no interest if they pay on time; it only charges interest on its regulated financing product. It reported a pretax loss of 3.1 billion krona in the first nine months of 2021.

There’s also the fragility of commercial paper, where maturities typically range from a few days to a few months, which was exposed in the turmoil in the early days of the coronavirus outbreak.

Access to commercial paper froze when the pandemic first roiled markets, forcing the Fed and the European Central Bank to step in to stabilize it. Several large corporations have since reduced reliance on it.

“Understandably, companies such as Klarna like to get as cheap funding as possible, but the risks are when that debt turns over and the markets do get volatile or seize up as it did during the pandemic,” said Michael Taiano, an analyst at Fitch Ratings. “We tend to like longer-dated maturities that are, in an ideal world, spread out over a longer time frame.”

(A previous version incorrectly stated Klarna charges its customers little to no interest. In fact it charges no interest.)

(Updates with funding cost comment from prospectus.)

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(Bloomberg) — Europe will have 130 million electric vehicles on the road by 2035, according to a joint report from Ernst & Young and the electricity industry trade association Eurelectric.

The report’s projections show Europe’s EV fleet growing from its current base of less than 5 million to 65 million by 2030 and then doubling over the following five years. EY estimates that the continent will need 65 million chargers to fuel these cars, trucks, and buses, with 85% of plugs installed at homes:

Europe’s rapid adoption of electric vehicles presents two large tasks for utility providers. The first is to build a network of 9 million out-of-home chargers along roadways, at workplaces, and at fleet-charging hubs. There are about 445,000 public connectors installed across Europe, according to the latest tally from BloombergNEF.

“It took us 10 years to install 400,000 chargers,” says Serge Colle, EY’s global energy and resources leader. “Now we’ll need to do about 500,000 every single year until 2030 and about 1 million every year between 2030 and 2035.” EY estimates that tab for this buildout will be $62 billion, with another $72 billion needed to install 56 million residential chargers.

“It’s much cheaper to build a bit too much today and to have that necessary buffer, than to wait and find out too late that we’re short,” says Kristian Ruby, secretary general of Eurelectric.

The ramp-up of electric cars will coincide with an increase in renewable energy generation, the electrification of heating and an increase in extreme weather. “It’s just absolutely critical that we don’t sit on our hands and wait,” says Ruby, “This is a decade of doing.”

In addition to overseeing the installation of millions of chargers, Europe’s utility industry will need to manage an increased load on the grid. Along highway corridors, where drivers will expect fast charging on demand, EVs could increase peak loads by 90%, according to EY’s calculations. Managing these surges, says Colle, will require on-site solar and energy storage systems at charging stations.

In urban residential settings, EY expects charging demand to surge in the evenings, when drivers return from work, causing potential increases in peak load of 86%. To smooth these peaks electricity providers will need to offer incentives for drivers to charge at off-peak times and to put power from car batteries back into the grid, meaning both homes and cars will need two-way charging capabilities. With such mitigations in place, according to the report, utilities could reduce EV demand spikes by more than a fifth.

(Updates fourth paragraph to reflect just-made change toSerge Colle’s title.)

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(Bloomberg) — Stay on top of the electric car revolution by signing up to our Hyperdrive newsletter here.It was inevitable. President Joe Biden finally said the word “Tesla” at a White House briefing on Tuesday. Not only that: he mentioned Amazon-backed Rivian and electric bus maker Proterra, too.

“Since 2021, companies have announced investments totaling more than $200 billion in domestic manufacturing here in America — from iconic companies like GM and Ford building out new electric vehicle production to Tesla, our nation’s largest electric vehicle manufacturer, to innovative younger companies like Rivian building electric trucks or Proterra building electric buses,” Biden said during a speech touting domestic auto manufacturing.

Biden has long called himself a union guy and a car guy, and he’s embraced electric vehicles as vital to his economic and climate ambitions. For months, he focused on GM and Ford but ignored Tesla, a snub that sparked increasingly exasperated public reactions from Tesla Chief Executive Officer Elon Musk.

But Biden also refrained from mentioning all the other startups in the EV space — which is perplexing given that these companies are creating manufacturing jobs. They also employ a growing number of people who care deeply about climate change and probably vote in elections.

Biden has long enjoyed the support of unions in his political campaigns, including the United Auto Workers. Many of the EV startups, including Tesla and Rivian, are non-union but offer employees equity in their companies.

In 2021, Tesla delivered over 936,000 cars globally and is about to open a new factory in Austin, Texas (as well as Berlin). The company’s annual report, released this week, notes that it now has 99,250 employees globally. It’s no longer a scrappy Silicon Valley startup, having been a public company for over a decade. 

While that’s a success story worth celebrating, Tesla also carries with it a lot of baggage. Among the issues facing the company:

• The U.S. National Highway Traffic Safety Administration has an ongoing defect investigation into Autopilot, looking into how the company’s driver-assistance system handles crash scenes and whether it’s ineffective in preventing collisions with fire trucks and police cars; 
• The California Department of Fair Employment and Housing informed Tesla on Jan. 3 that it issued a notice-of-cause finding involving race discrimination and harassment, and  a lawsuit is apparently imminent; 
• The U.S. Securities and Exchange Commission sent another subpoena to Tesla in November regarding whether it’s been complying with the settlement springing from Musk’s tweeting in 2018 about taking the company private.

Musk, 50, is the richest person on the planet. His politics are complicated, which is yet another reason Biden may not have been in a hurry to praise him.

The transition to electric vehicles began with the help of government policies and is now being widely adopted by consumers, who have increasingly more models to choose from. Biden finally mentioning companies besides Ford and GM is a big step toward acknowledging this reality.

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(Bloomberg) — Sumco Corp., a key supplier of silicon wafers for the semiconductor industry, said it has already sold out its production capacity through 2026, a sign shortages in the industry may not abate for years.

The Japanese company, one of a handful to provide the specialized silicon slabs that chipmakers use to create their designs, has orders to cover all output of its 300mm wafers for the next five years, it said after reporting earnings on Wednesday. It is not taking such long-term orders for 150mm and 200mm wafers, but demand is likely to keep surpassing supply for years to come, the company said.

The price of wafers rose by 10% in 2021 over the previous year and Sumco expects to see increases continue until at least 2024. 

The company said it won’t be able to expand its production this year at all, despite strong demand from customers desperate for long-term supplies. The company has already done what it can in terms of optimizing its existing production lines, and its supply-demand imbalance is consistent across its full set of products, including 200mm and 300mm wafers.

Taiwan’s GlobalWafers Co. recently failed in its bid for regulatory approval of a $5 billion takeover of Germany’s Siltronic AG, a move that would have brought consolidation to this sector of the chip supply chain. 

GlobalWafers to Reassess Strategy After Siltronic Deal Demise

Sumco made the comments Wednesday after reporting revenue and profit that beat analyst estimates. The company also forecast sales and operating income for the first quarter ahead of projections.

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(Bloomberg) —

European regulators are telling the region’s banks to keep a close eye on potential hacking attacks as tensions with Russia rise over Ukraine.

The European Central Bank has reminded banks in recent weeks to keep up their cyber defenses, according to a person briefed on the discussions. And Germany’s top banking regulator said this week that hacking attacks are a key concern of bank executives in the current environment.

Tensions have soared as Russia amasses more than 100,000 troops near Ukraine’s border, though officials in Moscow have repeatedly said they have no intention of invading the country. A hacking campaign last month against nearly two dozen Ukrainian government websites was designed to “spread chaos,” a high-ranking official in the country told Bloomberg News last month. Russia has repeatedly denied state involvement in hacking.

“Talking to financial services providers at the moment, one of their concerns is ‘well if the geopolitics becomes very unstable, what’s going to happen in terms of cyber warfare alongside that?’,” Mark Branson, who leads German watchdog BaFin, said at a conference on Tuesday. “That’s a question we didn’t ask a couple of decades ago. But it’s absolutely front and center of our minds at the moment.”

Branson, who also sits on the ECB’s supervisory board, was responding to a question about tensions with Russia, although he didn’t name the country in his answer.

The ECB, the top banking regulator in the euro area, has pushed lenders to improve their cyber resilience in recent years, notably as they are exposed to additional risks by outsourcing more services and relying increasingly on cloud computing.

The ECB has also asked lenders about their wider financial exposures, a person familiar with the matter said last month.

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