Bloomberg

(Bloomberg) — In August 2020 professional dancer Brian Esperon posted a 15-second video to TikTok of choreography set to WAP, an explicit new song from Cardi B and Megan Thee Stallion, which was viewed more than 100 million times. Today he can struggle to reach even 1% of that audience.

Esperon was one of the TikTok creators that helped ignite a dance-video craze on the app that turned it into a staple of US digital life. But like all trends, it’s now losing steam.

That’s shaken the network of advertisers, music labels and influencers that organized their time and spending power around the video trend. While that’s not necessarily bad for TikTok, it marks a new phase of its commercial life — one that is less reliant on smaller, unknown creators and more on big names and companies with deep pockets.

“Nothing stays the same on the internet,” said Jamie Cohen, an assistant professor of media studies at CUNY Queens College. “For better or worse.”

TikTok, a unit of China’s Bytedance Ltd., was already popular in Asia when the Covid-19 pandemic hit. The circumstances of the virus helped it gain traction in the US. Creators already on the platform, including dancers Charli D’Amelio and Addison Rae, saw their follower counts soar as the newly homebound devoted more time to social media.

@charlidamelio

dc @karaleighcannella @jaedengomezz

♬ His & Hers – Internet Money & Gunna

However, the success of TikTok, which says it has more than 1 billion monthly users, has created new hurdles. The algorithm embedded in the app, which delivers new content to users in a tailored “For You” page, is designed to pinpoint the niche interests of TikTokers as it gathers data on them. Users are now viewing a wider breadth of videos from more people.

Esperon said it’s harder to get noticed in this crowded environment. He regularly achieved viral success when he joined in late 2019, but has only rarely been able to reach 1 million people with his videos this year. In June, D’Amelio lost her place as the most popular account on TikTok to a creator named Khaby Lame, who posts comedic reactions to how-to videos.

It’s also tougher to successfully allocate marketing money, with dance videos no longer surefire hits.

“In TikTok’s early days, in particular, what drew creators, especially smaller creators, is this idea that they could reach TikTok fame and go viral by one piece of content,” said Jasmine Enberg, principal analyst at marketing research firm Insider Intelligence. Now, “TikTok is much more saturated.”

Many companies are navigating the change by seeking out creators who are already famous. A dance video to Lizzo’s About Damn Time became one of app’s most popular of the year, with a clip of Lizzo performing it herself viewed almost 60 million times. (The dance itself was created by a choreographer named Jaeden Gomez.) Other chart-topping hits of 2022, such as Sam Smith’s Unholy, have had similar artist involvement.

@lizzo

DC @jaedenraegomez ????

♬ About Damn Time – Lizzo

Some have dramatically simplified the dances to capture the increasingly divided attention of audiences. The pandemic dance videos included intricate routines made by professional choreographers. This year, a dance set to Taylor Swift’s Bejeweled went viral with only three moves: a walk, turn and a finger wiggle.

Against The Grain, a digital marketing agency that runs around 3,000 campaigns per year, began facilitating dance challenges in 2020. That type of work, which usually consists of paying TikTok creators to create dances to certain songs, has decreased about 90% in two years, according to Omid Noori, who co-founded the company with Ramzi Najdawi. Their team now focuses more on working with music curators and other influencers to capitalize on trends of the moment.

@kathleen.post

#duet with @mikael.arellano my favorite dance on this app right now ✨???????????????????????? #bejeweled #swifttok #swiftie

♬ Bejeweled – Taylor Swift

Others are spending money on other platforms that copied TikTok’s dance trends, such Meta’s Instagram Reels and YouTube Shorts, and are still adding users attracted to the short-form video genre. They are typically either paying influencers to make songs to certain dances, or for the platforms to increase the visibility of individual videos or hashtags. Esperon said he was paid thousands of dollars to participate in a dance challenge for K-pop group Blackpink on YouTube Shorts.

To be sure, TikTok is still extremely popular. The platform received almost $10 billion in global revenue from marketers this year, according to an October report from Insider Intelligence and eMarketer. That number is expected to rise to more than $14 billion in 2023. But the nature of spending remains in flux.

TikTok has added tools to attract new advertisers, including smaller ones without major marketing departments. For example, it built a database of 800,000 creators and created search functions that will connect them to advertisers. The platform also highlighted trends it thinks will take off in 2023, including videos where people demonstrate a new product in an entertaining way or content that highlights self-care and societal values. 

Johnny Cloherty, co-founder and chief executive officer of Songfluencer, a music marketing agency that’s produced work on behalf of artists such as Bruno Mars and Gayle, said companies are always seeking to find the platform where ads have the greatest chance of success.

The platforms have “a firehose of money to spend,” he said. “I think we’re going to have another streaming war on our hands.”

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — In August 2020 professional dancer Brian Esperon posted a 15-second video to TikTok of choreography set to WAP, an explicit new song from Cardi B and Megan Thee Stallion, which was viewed more than 100 million times. Today he can struggle to reach even 1% of that audience.

Esperon was one of the TikTok creators that helped ignite a dance-video craze on the app that turned it into a staple of US digital life. But like all trends, it’s now losing steam.

That’s shaken the network of advertisers, music labels and influencers that organized their time and spending power around the video trend. While that’s not necessarily bad for TikTok, it marks a new phase of its commercial life — one that is less reliant on smaller, unknown creators and more on big names and companies with deep pockets.

“Nothing stays the same on the internet,” said Jamie Cohen, an assistant professor of media studies at CUNY Queens College. “For better or worse.”

TikTok, a unit of China’s Bytedance Ltd., was already popular in Asia when the Covid-19 pandemic hit. The circumstances of the virus helped it gain traction in the US. Creators already on the platform, including dancers Charli D’Amelio and Addison Rae, saw their follower counts soar as the newly homebound devoted more time to social media.

@charlidamelio

dc @karaleighcannella @jaedengomezz

♬ His & Hers – Internet Money & Gunna

However, the success of TikTok, which says it has more than 1 billion monthly users, has created new hurdles. The algorithm embedded in the app, which delivers new content to users in a tailored “For You” page, is designed to pinpoint the niche interests of TikTokers as it gathers data on them. Users are now viewing a wider breadth of videos from more people.

Esperon said it’s harder to get noticed in this crowded environment. He regularly achieved viral success when he joined in late 2019, but has only rarely been able to reach 1 million people with his videos this year. In June, D’Amelio lost her place as the most popular account on TikTok to a creator named Khaby Lame, who posts comedic reactions to how-to videos.

It’s also tougher to successfully allocate marketing money, with dance videos no longer surefire hits.

“In TikTok’s early days, in particular, what drew creators, especially smaller creators, is this idea that they could reach TikTok fame and go viral by one piece of content,” said Jasmine Enberg, principal analyst at marketing research firm Insider Intelligence. Now, “TikTok is much more saturated.”

Many companies are navigating the change by seeking out creators who are already famous. A dance video to Lizzo’s About Damn Time became one of app’s most popular of the year, with a clip of Lizzo performing it herself viewed almost 60 million times. (The dance itself was created by a choreographer named Jaeden Gomez.) Other chart-topping hits of 2022, such as Sam Smith’s Unholy, have had similar artist involvement.

@lizzo

DC @jaedenraegomez ????

♬ About Damn Time – Lizzo

Some have dramatically simplified the dances to capture the increasingly divided attention of audiences. The pandemic dance videos included intricate routines made by professional choreographers. This year, a dance set to Taylor Swift’s Bejeweled went viral with only three moves: a walk, turn and a finger wiggle.

Against The Grain, a digital marketing agency that runs around 3,000 campaigns per year, began facilitating dance challenges in 2020. That type of work, which usually consists of paying TikTok creators to create dances to certain songs, has decreased about 90% in two years, according to Omid Noori, who co-founded the company with Ramzi Najdawi. Their team now focuses more on working with music curators and other influencers to capitalize on trends of the moment.

@kathleen.post

#duet with @mikael.arellano my favorite dance on this app right now ✨???????????????????????? #bejeweled #swifttok #swiftie

♬ Bejeweled – Taylor Swift

Others are spending money on other platforms that copied TikTok’s dance trends, such Meta’s Instagram Reels and YouTube Shorts, and are still adding users attracted to the short-form video genre. They are typically either paying influencers to make songs to certain dances, or for the platforms to increase the visibility of individual videos or hashtags. Esperon said he was paid thousands of dollars to participate in a dance challenge for K-pop group Blackpink on YouTube Shorts.

To be sure, TikTok is still extremely popular. The platform received almost $10 billion in global revenue from marketers this year, according to an October report from Insider Intelligence and eMarketer. That number is expected to rise to more than $14 billion in 2023. But the nature of spending remains in flux.

TikTok has added tools to attract new advertisers, including smaller ones without major marketing departments. For example, it built a database of 800,000 creators and created search functions that will connect them to advertisers. The platform also highlighted trends it thinks will take off in 2023, including videos where people demonstrate a new product in an entertaining way or content that highlights self-care and societal values. 

Johnny Cloherty, co-founder and chief executive officer of Songfluencer, a music marketing agency that’s produced work on behalf of artists such as Bruno Mars and Gayle, said companies are always seeking to find the platform where ads have the greatest chance of success.

The platforms have “a firehose of money to spend,” he said. “I think we’re going to have another streaming war on our hands.”

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Grayscale Investments’ proposal to buy out certain holders of its flagship Bitcoin trust is the money manager’s latest bid to stanch losses in a fund that’s been a linchpin in the dramatic rise and fall of the cryptocurrency universe.

For years, the Grayscale Bitcoin Trust (ticker GBTC) served as the conduit through which billions of dollars flooded into crypto to exploit a seemingly automatic arbitrage trade. Now, some of those same industry titans are crumbling into bankruptcy while others contend with a wave of distress sparked in part by this very trade. Most famously, the trust attracted Three Arrows Capital, which held more than 5% of GBTC before the hedge fund’s demise over the summer.

Barry Silbert’s Digital Currency Group, the parent of Grayscale, is one of the most important players now left standing — and dealing with a dilemma of its own design. 

The setup was relatively straightforward: an investor would borrow Bitcoin (which, in many cases, involved using loans from Grayscale sister-company Genesis) and deposit those tokens with Grayscale in exchange for GBTC shares. The investor would then offload those shares at a markup to retail investors after a six-month lockup – or twelve months, prior to January 2020.

The trade’s popularity was in part powered by Grayscale’s own messages to and discussions with investors, including at industry events in Miami, communications reviewed by Bloomberg News show. Grayscale representatives encouraged attendees at Context Summits Miami in January 2020 to lock up their money in order to take advantage of the dislocation, according to a person who interacted with company officials at the time.

“Grayscale prioritizes educating our clients about the opportunities and risks of investing in crypto, as well as the unique characteristics of our product structures. For years, we have worked constructively with regulators to create and strengthen full and fair risk disclosures for our suite of digital asset offerings,” said a Grayscale spokeswoman in an emailed statement. “Grayscale has and will continue to provide the information necessary for investors and other market participants to make informed investment decisions. Any characterization otherwise is false.”

The past couple of months have been a painful reminder that the popular arb trade never really had an exit. GBTC shares can be created, but they can’t be destroyed or redeemed for Bitcoin. 

That inability to destroy shares represents a key difference from exchange-traded funds. With ETFs, specialized traders known as authorized participants can work with an issuer to create shares when demand is building. When buyers’ appetites cool, participants redeem those shares with the fund’s sponsor to reduce the supply, keeping the ETF’s price in line with its net-asset value. In the case of GBTC, accredited investors brought Bitcoin — either their own, or borrowed from now-bankrupt firms like BlockFi — to Grayscale in exchange for GBTC.  

For years, GBTC represented one of the easiest ways for crypto and traditional-finance investors alike to get exposure to the largest virtual currency. US regulators had repeatedly prohibited the launch of spot-backed Bitcoin ETFs, citing the token’s volatility and vulnerability to scams. That limited the investable options for anyone who was either unwilling to or prohibited from setting up their own digital wallet or interacting directly with crypto trading platforms, making GBTC an attractive alternative.

The trade’s ubiquity became apparent during the slow-motion chain of events, dating back to February 2021, that would ultimately result in the implosion of Three Arrows and spark a reckoning among crypto lenders that accepted GBTC shares as collateral. 

That month, the massive premium — which at one point reached more than 80% — evaporated and flipped into a discount, meaning GBTC shares were worth less than the Bitcoin it held. Things started going awry with the launch of the first physically backed Bitcoin ETFs in Canada, and the increasing ease of direct access to Bitcoin on exchanges.

Suddenly investors had multiple options to get exposure to Bitcoin. That seemingly endless demand for GBTC evaporated, removing the critical final leg of what was once called the “slam dunk” arbitrage. Exacerbating the pain was the explosion in GBTC shares, which reached a record 692 million in February 2021, just as the premium evaporated.

“In 2021, it turned negative — you can call it a widow-maker trade,” said Wilfred Daye, the former chief executive officer of Securitize Capital, a digital-asset management firm. “It’s been losing money for two years.”

“The liquidity is actually pretty poor, i.e., you have a liquidity disconnect between the trade itself and when you want to get out,” said Daye. “On paper it looked great, but it’s very hard to get out.”

Daye says Genesis, when the trust was trading at a premium, could require something like 25% cash collateral for an investor to borrow Bitcoin, but once it issued the shares, the investor would then be able to re-pledge them as extra collateral. On paper, it made the investor look like their position was collateralized at 125%. But, the liquidity issue came about because the investor was swapping a liquid holding — Bitcoin — for a much less liquid one — GBTC. 

“The layering of leverage around assets such as GBTC played a role in making the entire system more fragile,” said Noelle Acheson, author of the “Crypto Is Macro Now” newsletter and former head of market insights at Genesis. 

There were other complications: lenders lent out the Bitcoin originally used for creating GBTC shares, which were then used as collateral to create even more GBTC shares. And once it started to trade at a discount, many holders didn’t want to have to write down their investment, so they kept it going with the hope that the discount would eventually close, said Adil Abdulali, founder at Incrypture in New York, which develops crypto investment strategies.

“As long as there was a premium, there was enough value there that if anyone defaulted on their loan, the GBTC could be sold and the Bitcoin paid back,” said Abdulali. “But if it’s at a discount, there’s no way to do that.”

Grayscale has tried in vain to repair that discount, which is currently languishing around 50%. Chief among those attempts was a plan to turn GBTC into an ETF of its own, which would allow for share redemptions. The firm is suing the Securities and Exchange Commission for denying its repeated petitions on this front. The regulator said Grayscale’s plan to list the ETF didn’t do enough to prevent fraud and manipulation. 

Grayscale is now considering a tender offer for as much as 20% of outstanding GBTC shares, an action that requires approval from regulators. Grayscale Chief Executive Officer Michael Sonnenshein wrote in a letter to investors Monday that the tender-offer plan would need the SEC’s blessing, which he said the agency “may not provide.”

 

Grayscale is also facing challenges from other players in the industry, including over the relatively hefty 2% annual fee, which compares with an average of 0.54% charged across the entire US ETF universe, according to Bloomberg Intelligence data. Hedge fund Fir Tree Capital Management sued Grayscale this month, seeking information to investigate potential mismanagement and conflicts of interest. Fir Tree claimed the trust has roughly 850,000 retail investors who have been “harmed by Grayscale’s shareholder-unfriendly actions.”

Shares of GBTC fell to $8.08 as of the close of trading on Tuesday. They’ve declined 76% this year. 

–With assistance from William Selway.

(Updates to add the date for when GBTC went from 12-month lockup to 6-month lockup. An earlier update corrected a reference to the lender in a quote in 15th paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The joy of being a luxury photo editor is in the diversity of photography available to produce. From fierce vintage car collectors to dreamy, alluring cakes to notable change makers, there’s always a new way to capture the elegant world. 

What looks beautiful in outcome isn’t always easy in the set up. Photographers and subjects get sick at the last minute. There are critical delays in shipments of products. And as journalists, it’s important to be mindful of including a broad background of visual storytellers. But it’s these creative challenges of commissioning compelling images that keeps us motivated in doing what we love. 

Below are 11 of our favorite photos from the year, as well as explanations for what made them captivating, aspirational, uplifting and just plain fun. 

Virginia Ali of Ben’s Chili Bowl From “Chefs From Around America Share Their Juneteenth Cookout Menus”

Joy is the feeling that immediately comes to mind when I look at this portrait of Ben’s Chili Bowl founder Virginia Ali. We sent Nicholas Karlin and Clarissa Villondo to the Washington area to photograph a meaningful story about chefs’ Juneteenth celebrations. Ali’s restaurant is notable for its history. Revarand Dr. Marther Lutin King Jr. had offices nearby and would order a chili cheeseburger from Ben’s. Ali’s bright spirit comes through in the image, and our photographers helped honor it. —Evan Ortiz

Decorative Candles From “Fan the Flames of Dinner Party Excess With These Candles and Holders”

Frank Frances’s technical skills were the perfect match (I am sorry for the pun) for this roundup of high-end candles, candleholders and accessories. This moody shot brought the drama and elegance and made me want to level up my dinner parties. —Leonor Mamanna

 

King of Hammers Race From “Mad Max Meets Burning Man at This Car Race in the Desert”

I don’t own a car. In fact, I don’t even have a driver’s license. Seeing Larry Chen’s off-roading photos both exhilarates and terrifies me. We sent Chen to document the King of Hammers races in February outside Los Angeles. Having years of automobile photography experience, he knew exactly how to capture the energy of this crazed event. —E.O.

A Delicious Cake Display From “ Why Bake? The Best Cakes for a Festive Dinner Are Available by Mail”

Ted + Chelsea Cavanaugh are a dynamic duo who I knew would make a joyful and playful photo of this delicious strawberry crunch cake from Good Cakes & Bakes for our Holiday Entertaining issue. Along with prop stylist Marina Bevilacqua, they created a festive tabletop setting where we’d all like to have a seat. —L.M.

Dry-Aged Fish From “Dry-Aging Fish: Why ‘Fresh’ Is No Longer Seafood’s Key Virtue”

When I asked Joyce Lee to re-create Dutch master lighting with a mobile setup in the back of a restaurant to shoot a bunch of fish, I knew she would be up to the challenge. Her versatile skill set and artistic eye made her the perfect fit for this painterly shot, and she made my photo editor dreams come true. —L.M.

Joe Tolbert Jr. From “An Appalachian Group Is Forging a More Community-Led Approach to Giving”

At Pursuits, we’ve started a series called “Industry Shakers” celebrating entrepreneurs of color who are shaking up their perspective fields. It warms me to see Black joy, and I was grateful to send photographer Joseph Ross to capture Joe Tolbert Jr. of the Waymakers Collective. Tolbert’s work involves community-oriented grant-giving, and we wanted his portrait to capture this spirit of togetherness. —E.O.

Green Gifts Galore From “85 Decadent Gifts to Spoil Your Whole List”

Our annual gift guide is always a visual delight, and when we tasked photographer Sarah Anne Ward and prop stylist Paola Andrea to create sets with natural themes like flowers, wood and snow, I knew that they would rise to the occasion. It’s hard to pick favorites, but this lush, mossy green shot featuring a necklace with 1,250 round brilliant diamonds certainly rises to the top. —L.M.

Mr. Brainwash From  “Mr. Brainwash Puts Porsche, Mercedes-Benz, Ferrari in New LA Art Show”

I love a character, and it was a pleasure to have the opportunity to photograph artist Mr. Brainwash for his upcoming pop-up exhibition. Gabriel Nivera came through capturing both the playfulness of the exhibit and the expressive sides of Mr. Brainwash, and I particularly enjoyed this contemplative photo of him surrounded by his work. —E.O.

African Restaurants From  “There Has Never Been a Better Time to Eat African Food in London”

This fall, I had the wonderful opportunity to travel to London to shoot a feature about the city’s esteemed African restaurant scene. But after a promising first shoot, my excitement quickly turned to crisis when I came down with Covid-19 two days into my trip. That’s where heroic photographer Francis Augusto quickly stepped in for the remaining locations. Not only did he take on this last-minute assignment with grace, but he delivered a powerful set of dining images that caught my taste buds and my heart. I wanted a way to honor how we both  participated in this, so it was a great to use a scrapbook-style collage format to enhance his assets while still being able to include some of my own images. —E.O.

Stunt Driver Sera Trimble From “Stunt Driver Sera Trimble on How She Got Her Start (and Her Porsche 911)”

Our esteemed car columnist Hannah Elliot and I have been working on an energizing series about vintage auto collectors called “How’d You Get That Car?” and I was thrilled when we picked stunt driver Sera Trimble as a subject. She checked all the boxes for what we want from this type of story: a dynamic personality, a captivating story and a striking vehicle. Photographer Gabriel Nivera was able to marry all of that in a fierce set of images of this notable driver and collector with her bright red 1986 Porsche 911. —E.O.

Scenic Wales From “With Food and Drinks in the Spotlight, Now’s the Perfect Time to Visit Wales”

Photographer Emli Bendixen traveled around the countryside of Wales to contribute to our piece on the best places to visit. She captured countless bucolic scenes, making it challenging to just highlight one, but this idyllic image from Fforest is so soothing it’s like a breath of fresh air in photo form.  —L.M.

 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The breakthrough came in an impossibly small slice of time, less than it takes a beam of light to move an inch. In that tiny moment, nuclear fusion as an energy source went from far-away dream to reality. The world is now grappling with the implications of the historic milestone. For Arthur Pak and the countless other scientists who’ve spent decades getting to this point, the work is just beginning.

Pak and his colleagues at Lawrence Livermore National Laboratory are now faced with a daunting task: Do it again, but better — and bigger.

That means perfecting the use of the world’s largest laser, housed in the lab’s National Ignition Facility that science-fiction fans will recognize from the film Star Trek: Into Darkness, when it was used as a set for the warp core of the starship Enterprise. Just after 1 a.m. on Dec. 5, the laser shot 192 beams in three carefully modulated pulses at a cylinder containing a tiny diamond capsule filled with hydrogen, in an attempt to spark the first fusion reaction that produced more energy than it took to create. It succeeded, starting the path toward what scientists hope will someday be a new, carbon-free power source that will allow humans to harness the same source of energy that lights the stars.

Pak, who joined the Lawrence Livermore lab outside San Francisco in 2010, woke at 3 a.m. that day, unable to resist checking the initial results from his San Jose home. He’d tried staying awake for the shot itself, finally giving up as the experiment’s painstaking preparations dragged late into the night. “If you stayed up for every shot, every time for 10 years, you’d go insane,” he said.

For the last several months, it was clear his team was getting close, and in the pre-dawn dark, he checked for a key number that could show whether they’d succeeded — a count of neutrons the blast produced.

“When I saw that number, I was blown away,” he said.

“You can work your whole career and never see this moment. You’re doing it because you believe in the destination, and you like the challenge,” said Pak, leader for diagnostics on the experiment. “When humans come together and work collectively, we can do amazing things.”

The team at Lawrence Livermore — a government-funded research lab — will likely run its next test in February, with several more experiments to come in the months after. The goal will be to keep increasing the amount of energy that’s produced in the reaction. The means more tinkering: Use more laser energy. Fine-tune the laser blast. Generate more x-rays within the target — a key step of the process — using the same amount of energy. Maybe, eventually, upgrade the facility itself, a decision that would require buy-in from the Energy Department and a huge amount of funding.

All of that will take years, if not decades, starting with the Lawrence Livermore lab’s bite-sized experiments that last just nanoseconds.

“We need to figure out: Can we make it simpler? Can we make this process easier and more repeatable? Can we begin to do it more than one time a day?” said Kim Budil, director of the Lawrence Livermore lab. “Each of these is an incredible scientific and engineering challenge for us.”

Most experts forecast that the world is still at least 20 to 30 years away from fusion technology becoming viable on a scale that’s large and affordable enough to produce commercial power. That timeline places fusion beyond the scope of significantly being used to reach the world’s net-zero emissions goals by 2050. In that sense, fusion could be the carbon-free energy source of the future, but not of the current global energy transition that’s faced continuous hurdles.

Read more: What the fusion breakthrough means

Fusion has captured the scientific imagination for decades. It’s already used to give modern nuclear weapons their devastating power, but the dream is taming it for civilian energy demand. If it can be brought to scale, it would lead to power plants that supply abundant electricity day and night without emitting greenhouse gases. And unlike the nuclear power of today, sparked through a process called fission, it wouldn’t create long-lived radioactive waste. Entire generations of scientists have pursued it. President Joe Biden’s chief science advisor, Arati Prabhakar, spent a summer working on the lab’s laser-fusion program as a 19-year-old college student in bell bottoms — in 1978.

“This is such a tremendous example of what perseverance can achieve,” she said at a press conference last week. “This is how you do really big, hard things.”

Merging Atoms

The successful laser shot produced fusion reactions generating 3.15 megajoules of power, topping the 2.05 megajoules imparted by the laser. It was a major threshold, the first time more energy came out than went in from the laser. But the equation needs to tilt much more in the direction of how much comes out to become commercially viable.

While today’s nuclear power plants employ fission, splitting atoms apart, fusion merges atoms together. Fusion researchers have followed two primary tracks. Lawrence Livermore, using a process called inertial confinement, blasts targets with laser beams, imploding a small amount of hydrogen until it fuses into helium. A commercial plant using this approach would need to repeat the process over and over again, extremely rapidly, to generate enough energy to power the electric grid.

Numerous companies are developing inertial confinement systems, though there are significant differences. Some are looking at different materials for the target, while others use particle accelerators instead of lasers, triggering the fusion reaction by slamming atoms together.

The main competing idea is called magnetic confinement, with systems that create a cloud of plasma, superheated to hundreds of millions of degrees, which can trigger a fusion reaction. Powerful magnets control the plasma and sustain the reaction. This approach has not yet achieved a net-energy gain, and the approach faces challenges including developing better magnets and creating materials that can withstand superhot temperatures and be used for the container to contain the plasma.

About $5 billion in funding has gone into fusion companies to date, with the vast majority aimed at magnetic confinement technologies, according to the Fusion Industry Association trade group.

Inertial confinement may be better suited to proving that fusion can work, said Adam Stein, director of nuclear energy innovation at The Breakthrough Institute, an Oakland, California-based research group. But in the longer run when it comes to commercialization, “plasma magnetic confinement is more likely to succeed,” he said.

‘Be an Optimist’

Years were spent refining each part of the process at the Lawrence Livermore lab.

A lot of the success came down to precision. The fuel capsules all contain minute imperfections that can make a significant difference in how the reaction proceeds. So can the frozen hydrogen inside, a mix of the isotopes deuterium and tritium. The team would often produce the hydrogen ice, melt it back down and try again several times before a shot, hoping to get the best possible target and increase the chances of success.

Everyone working on fusion “has to be an optimist,” said Denise Hinkel, a physicist who focuses on improving the predictive ability of the program’s computer simulations and who has worked at Lawerence Livermore for 30 years. “Otherwise, you wouldn’t stay in the field.”

By this summer, the giant laser will be able to deliver about 8% more energy than it did during this month’s shot, according to Jean-Michel Di Nicola, chief engineer for the National Ignition Facility’s laser. Michael Stadermann, the target fabrication program manager, said that the lab is also developing a computer program that can examine the fuel-capsule shells for flaws much faster than humans can. They’re also working with capsule maker on improving the fabrication process.

It’s possible that the Lawrence Livermore breakthrough will remain just a moment of scientific history, and not mark the beginning of a new fusion industry powering the globe. Bridging the gap from experiment to commercialization could take decades, if it happens at all. And magnetic confinement could eventually be the fusion method that wins out, providing the world abundant clean energy. Pak, a soft-spoken man with a swoop of brown hair and a quick wit, said that outcome wouldn’t disappoint him.

“They can learn from us — we can learn from them,” Pak, 40, said. “When I’m an old man, I’m going to be really satisfied with my contributions.”

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The breakthrough came in an impossibly small slice of time, less than it takes a beam of light to move an inch. In that tiny moment, nuclear fusion as an energy source went from far-away dream to reality. The world is now grappling with the implications of the historic milestone. For Arthur Pak and the countless other scientists who’ve spent decades getting to this point, the work is just beginning.

Pak and his colleagues at Lawrence Livermore National Laboratory are now faced with a daunting task: Do it again, but better — and bigger.

That means perfecting the use of the world’s largest laser, housed in the lab’s National Ignition Facility that science-fiction fans will recognize from the film Star Trek: Into Darkness, when it was used as a set for the warp core of the starship Enterprise. Just after 1 a.m. on Dec. 5, the laser shot 192 beams in three carefully modulated pulses at a cylinder containing a tiny diamond capsule filled with hydrogen, in an attempt to spark the first fusion reaction that produced more energy than it took to create. It succeeded, starting the path toward what scientists hope will someday be a new, carbon-free power source that will allow humans to harness the same source of energy that lights the stars.

Pak, who joined the Lawrence Livermore lab outside San Francisco in 2010, woke at 3 a.m. that day, unable to resist checking the initial results from his San Jose home. He’d tried staying awake for the shot itself, finally giving up as the experiment’s painstaking preparations dragged late into the night. “If you stayed up for every shot, every time for 10 years, you’d go insane,” he said.

For the last several months, it was clear his team was getting close, and in the pre-dawn dark, he checked for a key number that could show whether they’d succeeded — a count of neutrons the blast produced.

“When I saw that number, I was blown away,” he said.

“You can work your whole career and never see this moment. You’re doing it because you believe in the destination, and you like the challenge,” said Pak, leader for diagnostics on the experiment. “When humans come together and work collectively, we can do amazing things.”

The team at Lawrence Livermore — a government-funded research lab — will likely run its next test in February, with several more experiments to come in the months after. The goal will be to keep increasing the amount of energy that’s produced in the reaction. The means more tinkering: Use more laser energy. Fine-tune the laser blast. Generate more x-rays within the target — a key step of the process — using the same amount of energy. Maybe, eventually, upgrade the facility itself, a decision that would require buy-in from the Energy Department and a huge amount of funding.

All of that will take years, if not decades, starting with the Lawrence Livermore lab’s bite-sized experiments that last just nanoseconds.

“We need to figure out: Can we make it simpler? Can we make this process easier and more repeatable? Can we begin to do it more than one time a day?” said Kim Budil, director of the Lawrence Livermore lab. “Each of these is an incredible scientific and engineering challenge for us.”

Most experts forecast that the world is still at least 20 to 30 years away from fusion technology becoming viable on a scale that’s large and affordable enough to produce commercial power. That timeline places fusion beyond the scope of significantly being used to reach the world’s net-zero emissions goals by 2050. In that sense, fusion could be the carbon-free energy source of the future, but not of the current global energy transition that’s faced continuous hurdles.

Read more: What the fusion breakthrough means

Fusion has captured the scientific imagination for decades. It’s already used to give modern nuclear weapons their devastating power, but the dream is taming it for civilian energy demand. If it can be brought to scale, it would lead to power plants that supply abundant electricity day and night without emitting greenhouse gases. And unlike the nuclear power of today, sparked through a process called fission, it wouldn’t create long-lived radioactive waste. Entire generations of scientists have pursued it. President Joe Biden’s chief science advisor, Arati Prabhakar, spent a summer working on the lab’s laser-fusion program as a 19-year-old college student in bell bottoms — in 1978.

“This is such a tremendous example of what perseverance can achieve,” she said at a press conference last week. “This is how you do really big, hard things.”

Merging Atoms

The successful laser shot produced fusion reactions generating 3.15 megajoules of power, topping the 2.05 megajoules imparted by the laser. It was a major threshold, the first time more energy came out than went in from the laser. But the equation needs to tilt much more in the direction of how much comes out to become commercially viable.

While today’s nuclear power plants employ fission, splitting atoms apart, fusion merges atoms together. Fusion researchers have followed two primary tracks. Lawrence Livermore, using a process called inertial confinement, blasts targets with laser beams, imploding a small amount of hydrogen until it fuses into helium. A commercial plant using this approach would need to repeat the process over and over again, extremely rapidly, to generate enough energy to power the electric grid.

Numerous companies are developing inertial confinement systems, though there are significant differences. Some are looking at different materials for the target, while others use particle accelerators instead of lasers, triggering the fusion reaction by slamming atoms together.

The main competing idea is called magnetic confinement, with systems that create a cloud of plasma, superheated to hundreds of millions of degrees, which can trigger a fusion reaction. Powerful magnets control the plasma and sustain the reaction. This approach has not yet achieved a net-energy gain, and the approach faces challenges including developing better magnets and creating materials that can withstand superhot temperatures and be used for the container to contain the plasma.

About $5 billion in funding has gone into fusion companies to date, with the vast majority aimed at magnetic confinement technologies, according to the Fusion Industry Association trade group.

Inertial confinement may be better suited to proving that fusion can work, said Adam Stein, director of nuclear energy innovation at The Breakthrough Institute, an Oakland, California-based research group. But in the longer run when it comes to commercialization, “plasma magnetic confinement is more likely to succeed,” he said.

‘Be an Optimist’

Years were spent refining each part of the process at the Lawrence Livermore lab.

A lot of the success came down to precision. The fuel capsules all contain minute imperfections that can make a significant difference in how the reaction proceeds. So can the frozen hydrogen inside, a mix of the isotopes deuterium and tritium. The team would often produce the hydrogen ice, melt it back down and try again several times before a shot, hoping to get the best possible target and increase the chances of success.

Everyone working on fusion “has to be an optimist,” said Denise Hinkel, a physicist who focuses on improving the predictive ability of the program’s computer simulations and who has worked at Lawerence Livermore for 30 years. “Otherwise, you wouldn’t stay in the field.”

By this summer, the giant laser will be able to deliver about 8% more energy than it did during this month’s shot, according to Jean-Michel Di Nicola, chief engineer for the National Ignition Facility’s laser. Michael Stadermann, the target fabrication program manager, said that the lab is also developing a computer program that can examine the fuel-capsule shells for flaws much faster than humans can. They’re also working with capsule maker on improving the fabrication process.

It’s possible that the Lawrence Livermore breakthrough will remain just a moment of scientific history, and not mark the beginning of a new fusion industry powering the globe. Bridging the gap from experiment to commercialization could take decades, if it happens at all. And magnetic confinement could eventually be the fusion method that wins out, providing the world abundant clean energy. Pak, a soft-spoken man with a swoop of brown hair and a quick wit, said that outcome wouldn’t disappoint him.

“They can learn from us — we can learn from them,” Pak, 40, said. “When I’m an old man, I’m going to be really satisfied with my contributions.”

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Stubbornly high inflation, soaring borrowing costs and geopolitical uncertainty hindered dealmaking in 2022, sending global mergers and acquisitions activity down by almost a third compared with last year’s record haul.

Companies announced $3.5 trillion of deals in 2022, according to data compiled by Bloomberg, striking transactions to bulk up existing businesses, push into new sectors or reorganize operations against a volatile backdrop of slumping equity markets and forceful antitrust actions. Megadeals announced early in the year were soon replaced by jitters about getting M&A over the finish line, with monthly deal activity plummeting by almost half from May to June. The volumes have yet to recover. 

“It’s really the tale of two years,” said Melissa Sawyer, global head of Sullivan & Cromwell’s M&A group. “When we started 2022, people were churning out deals left and right and SPACs were still a thing. Then the landscape for M&A changed dramatically.”

The year started off on a high note when Microsoft Corp. agreed in January to buy video game publisher Activision Blizzard Inc. for $69 billion, in the biggest deal since 2019. For a moment, 2021’s gangbuster performance — which saw a record $5 trillion of deals announced – looked set to continue. 

Sentiment quickly started to fizzle. In February, Russia invaded Ukraine, and the next month the US Federal Reserve embarked on its most aggressive interest rate hiking spree in decades, bringing the overnight rate to the highest level since 2007.

“There was so much stuff going on: inflation, the central bank’s response to that with the increase in interest rates, geopolitical stuff, supply chain issues and unbelievable stock market volatility,” said Damien Zoubek, co-head of US M&A at Freshfields Bruckhaus Deringer. “You throw all that stuff into the Cuisinart and you get really choppy M&A markets.”

Elon Musk’s pursuit of Twitter Inc. also brought a dose of uncertainty to the dealmaking community, tying up advisers and lenders for months as the billionaire flip-flopped on plans to take the social media network private. His $44 billion buyout, which eventually closed in October, left a Morgan Stanley-led cohort saddled with about $13 billion of debt financing.

As ever, volatility was the true menace to dealmaking, and to the fragile market for initial public offerings. The Cboe Volatility Index, known as the VIX, has for the most part stayed well above its long-term average this year, peaking at 36.45 in March. 

When the IPO window slammed shut, it removed an exit option for investors and a funding avenue for cash-burning firms that seemed unstoppable a year ago. Only $24 billion has been raised in US IPOs this year, the slowest since 2009, according to data compiled by Bloomberg. The backlog could lead to more acquisitions of startups in 2023. 

“A lot of management teams and boards now recognize that the multiple reset isn’t temporary,” said Edward Lee, a partner at law firm Kirkland & Ellis. “When a buyer approaches with a meaningful premium, it’s increasingly hard to ignore that. More and more you’re going to have targets who take those offers very seriously.”

Dealmaking among private equity firms followed a similar trajectory to public company M&A. The year started with a jumbo deal: the $16.5 billion buyout of Citrix Systems Inc. by Vista Equity Partners and Elliott Investment Management. After that, reality caught up, as inflation started weighing on firms’ operating costs and margins, monetary tightening around the globe made buyouts more expensive and banks got stuck with hung debt. Buyout volumes fell in every quarter of the year, according to data provider Preqin.

“I thought it would be tough but didn’t think it was going to be that challenging,” said Kristoffer Melinder, managing partner at Nordic Capital. “The problem is price and for that to settle you need lower rates — let’s call it what it is.”

While challenging financing markets meant several private equity transactions fell apart or got postponed, they also forced sponsors to get more creative. Some opted to use more equity to finance deals, while others got rid of a debt component entirely. And even in the absence of easy financing, buyout firms are still sitting on record amounts of dry powder. Plummeting public markets could provide opportunities once boards get comfortable with their new valuations. In the meantime, companies are selling assets. 

“Carveouts happen when large corporates re-assess what is non-core,” said Marco De Benedetti, co-head of Europe private equity for Carlyle Group Inc. “That often happens during times of volatility, which we are seeing now.”

There could be more of that in the consumer products industry, added Jim Langston, co-leader of US M&A at Cleary Gottlieb Steen & Hamilton.

“We think there are a lot of opportunities there to use spinoffs to separate high-growth from low-growth assets and achieve multiple re-ratings,” Langston said. That’s particularly true “in an environment where it’s tougher than normal to do divestitures because of regulatory pressures, equity market volatility and financing disruption,” he said.

The final months of the year did bring some highs for financial services dealmakers, with two large transactions in the sector. Insurer Aegon NV combined its Dutch business with local rival ASR Nederland NV in one multibillion-dollar deal, and HSBC Holdings Plc agreed to sell its Canadian business to Royal Bank of Canada for about $10 billion, continuing a trend of European lenders exiting North America.

“The most pronounced M&A trend in banking has been the continued streamlining by global banking groups,” said Andreas Lindh, co-head of JPMorgan Chase & Co.’s financial institutions group in Europe, the Middle East and Africa. 

Whether 2023 can surpass this year will hinge on when markets stabilize enough for debt financing to become more readily available and postponed situations to relaunch. A lot will also lie in the hands of antitrust enforcers: the US Federal Trade Commission is seeking to block Microsoft’s acquisition of Activision Blizzard, with the agency’s trial not set to start until August. 

Still, advisers are hoping that activity will start to pick back up in 2023 — especially after the first half — and that Amgen Inc.’s $27.8 billion deal to buy Horizon Therapeutics Plc, announced last week, could be a harbinger of big deals to come. 

“We’ve now had a couple quarters to digest what’s happened,” said Brian Haufrect, co-head of Americas M&A at Goldman Sachs Group Inc. “It feels like we’re finding more solid ground. The financing markets have been functioning a bit better. All the ingredients for M&A are still there.”

(Adds detail on financial services deals in 17th paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Equity Group Holdings Plc’s unit in Democratic Republic of Congo is opening as many as 3,000 new accounts a day and management expects to double profit this year.

Accounts at EquityBCDC have climbed to 1.6 million from 1.1 million when it completed its merger with Banque Commerciale du Congoat almost two years ago, helped by using an agency banking model from its Kenyan parent, according to Managing Director Celestin Mukeba. 

“We enable supermarkets, pharmacies, traders who are really manipulating cash to become banking agents” to accept withdrawals, deposits and sometimes open accounts, Mukeba said in an interview last week at a US-Africa Leaders summit in Washington. “We have opened 16,000 and the aim is to reach even 50,000 across the country so that it really reduces the cost of doing banking operations.”

Congo is one of the least financially inclusive economies in Africa. There are only about 1,000 physical bank branches in the continent’s second-largest country by landmass, and only 7% of its 100 million people have accounts, Mukeba said.

The group’s expansion means it’s vying with Rawbank Sarl to be the biggest lender in Congo. Both have about $4 billion in assets, according to Mukeba and Rawbank’s website. 

“The growth has come from all segments, from corporate, from SME, from retail,” Mukeba said, referring to small and medium-sized businesses. “As of today, we have 100% growth on the profit of last year already.” 

EquityBCDC reported $50 million in pretax profit for 2021.

Mining, Farming

Kenya’s Equity Group owns 77% of the unit, with the Congolese government holding 15% and the World Bank’s International Finance Corp. a minor shareholder.

The IFC agreed last week to help build a yield curve in Congo after signing a deal with Equity Group, Mukeba said. The lender will create a capital market with the central bank and is looking to issue commercial paper by the middle of next year, he said. 

Last month, Moody’s raised EquityBCDC’s credit rating one step to B3 from Caa1, making it the highest-rated bank in the country. 

The lender is targeting small-scale mining and agriculture by offering financial literacy programs to reach unbanked farmers, artisanal miners and entrepreneurs, Mukeba said. 

After a $100 million capital increase by shareholders in September, the bank can now loan as much as $85 million to a single business, Mukeba said. “We can do financing syndication of up to $450 million to one company, which gives us room to be able to play a big role in the corporate world.”

Mukeba said in the coming year the bank was looking to continue growing and would consider a deal. 

“We can grow organically, which you have seen,” he said. “And we can still continue growing by acquisition. It’s an option.”

–With assistance from Bella Genga.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) —

Elon Musk has said on several occasions lately — on Twitter, from a courtroom stand, on Twitter again, then back at the same court — that he doesn’t want to be a CEO.

He said so before and after he became the chief executive of a fifth company, which appears to have been one too many, at least for Tesla shareholders to stomach. Since April 4, the day Musk disclosed that he’d taken a stake in Twitter, the car and clean-energy company that accounts for a third of his net worth has lost about $749 billion of market value.

Taking a Twitter poll on whether he should step down as head of Twitter — and a decisive vote that found yes, he should — hasn’t stopped Tesla’s hammering. Overpaying for the social media company using tens of billions of his Tesla shares has proven disastrous. It hasn’t helped that Musk has oscillated from arguing that Twitter is doing better under his leadership, to describing it as in the fast lane toward bankruptcy, or that he’s repeatedly assured his followers that he was done selling Tesla stock, only to then dump more again and again.

When will Tesla’s shareholders or board of directors conclude that enough is enough? Some are already there.

“As his fanboy, I invested [because] of Elon,” Leo KoGuan, one of Tesla’s biggest individual shareholders, tweeted last week. “Of course, I prefer Elon to be CEO but he abandoned Tesla.”

There’s been no indication Tesla directors feel the same. Several members of the board, including his brother Kimbal, have stood by Musk through it all: the regrettable SolarCity acquisition, the April Fools’ Day tweeting about Tesla going bankrupt, the calling a critic a pedophile.

After Musk made the false and reckless claim he had the funding to take Tesla private, the Securities and Exchange Commission tried to strengthen Tesla’s corporate governance by removing him as chairman and forcing the board to add two independent directors. The effort was doomed from the start — one of the directors added was billionaire Larry Ellison, Musk’s friend and confidant, who left the board less than four years later. He and other directors said nothing publicly about Musk telling 60 Minutes he didn’t respect the SEC, or using the initials of the agency to refer to himself receiving oral sex.

Privately, Ellison and other fans of Musk’s have explained away Musk’s behavior to Jeffrey Sonnenfeld, the senior associate dean of leadership programs at the Yale School of Management. After all, had the professor ever managed to fly rockets into space and land them upright back on Earth?

“It’s true, I haven’t been able to do that, and you have to acknowledge the engineering genius and entrepreneurial will that he has is exceptional,” Sonnenfeld said of Musk in a phone interview. “It’s historic, and the world is, on balance, somewhat better off that he’s on the planet.”

That said, the Twitter poll Musk has vowed to abide by was just one of the recent votes against him. Last week, Sonnenfeld hosted the Yale Chief Executive Leadership Institute’s annual CEO summit, where chairmen, presidents and CEOs responded confidentially to questions on a range of topics dominating business news headlines.

Musk didn’t fare well among 100 of his peers: 98% said he overpaid for Twitter; 79% said he’d become a detriment to the value of the companies he runs; 56% think companies should stop advertising on Twitter.

“There have been some standout technological triumphs,” Sonnenfeld said of Musk’s track record. “But we could match each and every one of them with 10 failures that the media looks past because he dangles the new, shiny object and distracts you.”

Where, for example, are the 1 million robotaxis that Musk said almost four years ago would be on the road three years ago? Where is the Roadster (Sonnenfeld calls it “the Chitty Chitty Bang Bang car”) that Musk claimed would be able to fly, packing SpaceX thrusters in place of the rear seats? The CEO showed a prototype five years ago and promised a launch two years ago. It has yet to hit the market.

“Tesla is executing better than ever!” Musk tweeted last week in response to a shareholder who quarreled with him on Tuesday. “We don’t control the Federal Reserve. That is the real problem here.”

Investors haven’t been buying that argument, perhaps since Musk has provided ample evidence that he’s preoccupied with Twitter. On the day he fell from the top spot on the Bloomberg Billionaires Index, Musk dropped in on a Twitter Spaces with Marc Andreessen and other admirers, spending about 25 minutes talking artificial intelligence, his approach to using and running the social media service, the boos he got on stage at Dave Chappelle’s stand-up show in San Francisco, and how much punishment Sam Bankman-Fried deserves.

Tesla didn’t come up until the very end.

“Speaking of Tesla,” Musk said. “I have a Tesla meeting that I’m late for. I have to step off.”

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Tata Group’s Bigbasket may list its shares within three years after the latest capital raising valued India’s largest online grocer at $3.2 billion.

The profitable e-commerce firm, which is expanding its pan-India reach and generates about $1.4 billion in annual revenue, may choose to launch an initial public offering in 24 to 36 months, Chief Financial Officer Vipul Parekh said in an interview Wednesday at the company’s headquarters in Bengaluru. The firm, which this week announced it had raised $200 million, is open to receiving more private capital before it lists, he added.

“We’ll head to public markets at some point in time,” Parekh said. “The right time to approach capital markets is when you have a stable, growing business, when you have reasonable confidence in your forward forecast and we have increasing profitability – the markets can be brutal.”

Several highly anticipated technology IPOs in India have floundered and seen a rapid erosion in market value amid investor concerns over valuations, rising interest rates and profitability. Recently listed payments firm Paytm and beauty e-retailer Nykaa are attempting to stem the relentless stock rout, underscoring the need for Bigbasket to strengthen its business model before going public.

Controlling about a third of India’s online grocery market, Bigbasket was acquired by Tata last year. The 154-year-old conglomerate is seeking to compete and catch up with sector giants including Amazon.com Inc. and billionaire Mukesh Ambani’s Reliance Industries Ltd., which are attempting to capture Indian consumers with a range of hyper-fast deliveries and cut-price offers.

Dark Stores

Set up in 2011 by five founders, including 58-year-old Parekh, Bigbasket will use the freshly raised funds to bolster its quick commerce arm and expand its countrywide footprint to cement its dominance. 

How Dotcom Survivors Built a $950 Million Startup in India

Bigbasket will increase the number of dark stores supplying BB Now — it’s currently unprofitable quick commerce format which promises deliveries of household staples within 30 minutes — from about 200 to 300 outlets by March. 

“A lot of our capex is really going into building out our dark stores,” said Parekh, who added that BB Now would likely become profitable “somewhere between six to nine months.” 

Although online purchases account for just 2% of all grocery sales in India, they’re one of the fastest-growing segments in the country’s $1 trillion in yearly retail spending. The nation of 1.4 billion people is also leading other markets in the adoption of fast delivery, according to Sanford C. Bernstein, which estimates that quick commerce’s share of online grocery sales is 13% in India, against 7% in China and 3% in Europe.

‘Crazy Business’

But many of Bigbasket’s rivals earlier this year pared back or slowed their expansion into services that offer super-fast, but cash-burning, deliveries — some within 10 minutes.

“Customers love it — economically, it’s a crazy business,” Parekh said about the recent rush toward quick commerce. “Since we’ve been serving grocery for a long time, we know exactly where the pockets of demand are based on our data.”

Burning Cash, Ultrafast Grocery Delivery Ramps Up in India

Bigbasket wants to expand its network to 75 cities by March up from the 55 it’s in now. Anywhere between 80 to 100 towns could be added over the next year to the current tally of about 450 towns. A pilot with about a dozen brick-and-mortar shops, branded as Fresho, is also underway.

“The top 10 metros have got reasonable penetration now,” Parekh said. “But in the rest of the country, we’re still scratching the surface.”

(Updates with CFO comments from third paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.