Visions: Notations From the Grid (Weekly Edition): As a New Week Dawns....

As a new week dawns, our team presents the following courtesy The Visual Capitalist, the Information, the Economist, Fortune & the Financial Times:

The accidental mogul

Just how big in media does Apple want to be?

The $3trn tech firm is not playing the same game as its rivals

EXCLUSIVE

AMAZON

APPLE

ENTERTAINMENT

MARKETS

MEDIA/TELECOM

STARTUPS

Inside Blackstone’s Plans to Create an Entertainment Empire

By Jessica Toonkel

Two years ago, Joe Baratta couldn’t figure out what Blackstone, the private equity giant he worked for, should do for its next move in media and entertainment.

The big TV companies, such as ViacomCBS and Discovery, were bleeding viewers as people cut the cord to cable television and streaming powerhouses like Netflix grew ever bigger. “We were trying to figure out whether any of these assets were investable,” said Baratta, global head of private equity at Blackstone, referring to media companies.

Then, in the fall of 2020, Baratta huddled with Kevin Mayer, a longtime Disney executive who had just left TikTok as CEO of the social media app. At first, Blackstone executives discussed the idea of Mayer consulting with the firm or managing one of its existing portfolio companies. But Mayer and a former Disney colleague, Tom Staggs, had a different pitch: Would Blackstone back a brand-new media company they were forming that would tap into the gusher of money going into streaming?

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January 3, 2022

Welcome to 2022, Data Sheet readers. Let’s hope it’s better than 2021.

At a minimum, the new year figures to bring big changes to the tech world, with the pandemic, manufacturing challenges, looming business battles, and antsy domestic and foreign policymakers.

As the markets open for the first time this year, here are the key topics we’ll be watching over the next 12 months:

Supply chain challenges
While some experts are hopeful that the global supply chain squeeze will ease in 2022, the new year brings many of the same production challenges. Big Tech companies must overcome huge hurdles if they are to emerge relatively unscathed.

Keep a particular eye on Amazon, which undoubtedly learned important logistics and supplier relations lessons from the billions of additional dollars it spent during the holiday season to facilitate timely delivery. Apple, which cut production targets in 2021 amid widespread chip shortages, will also be a barometer as it prepares to roll out a slate of new products this year.

Rising economic nationalism
Several political winds blew in favor of economic nationalism in 2021:

• China made big moves to insulate its tech industry.
• The COVID-19 pandemic illustrated the perils of relying on overseas semiconductor manufacturers.
• President Joe Biden pushed for hundreds of billions in government subsidies for American-made products via his Build Back Better agenda.

We could see a quick return to an embrace of free trade as the pandemic (hopefully) subsides—especially if Congress fails to pass Biden’s spending package and inflation keeps rising. But for now, economic nationalists are having a moment.

Cryptocurrency’s coming of age
Expect another busy year in cryptocurrency. While crypto went mainstream last year, with the value of all coins combined tripling, big questions about its future loom in 2022.

Chief among them:

• How does inflation impact an already up-and-down market?
• How much do regulators and legislators step up their oversight?
• Are big businesses ready to dip their toes into crypto transactions?
• Do stablecoins gain more traction as a happy medium for those concerned about crypto’s volatility?

Antitrust onslaught
Antitrust advocates laid groundwork in 2021 for an assault on Big Tech. Now, we’ll see the fruits of that labor.

• European lawmakers are on the precipice of landmark legislation forcing unprecedented regulation of social media platforms.
• Biden’s Federal Trade Commission and Justice Department antitrust division are primed to stall mergers, limit the power of Silicon Valley giants, and foster greater competition in tech.
• And who knows what Congress may cook up (my prediction: probably not much).

Satellite wars ramp up
The prospect of high-speed Internet blanketing the globe figures to draw nearer in 2022, as more companies and countries expect to launch hundreds of low-Earth orbit satellites.

SpaceX, the leader in the field, continues to build on its roughly 1,500 satellites in orbit toward a goal of 12,000. British competitor OneWeb projects to reach its goal this year of nearly 650 satellites in orbit. And Amazon is set to join the crowd, with plans to send up its first Project Kuiper satellites in late 2022.

Donald Trump, social media mogul?
For better or worse, you can’t not watch Trump’s planned debut of Truth Social, his promised Twitter and Facebook competitor.

The company behind the would-be service already faces a U.S. Securities and Exchange Commission inquiry, and the platform appears behind schedule. Will Trump eventually take a bite out of his hated social media rivals in 2022? As with so much about the former president, who the heck knows.

moments last year. Now, it’s time to take a look at what other crypto companies could potentially follow suit with a public debut this year.

Kraken

Kraken, a competitor to Coinbase, seems like a good bet. The San Francisco-based crypto exchange has been in business for over a decade and is the fourth-largest crypto exchange by trading volume, according to CoinMarketCap. It’s raised $140 million to date and has a valuation of $10.3 billion, according to PitchBook data.

CEO Jesse Powell has also openly talked about the company’s ambitions of going public. He told Fortune in June that he hopes the company will go public in the second half of 2022. Powell also said an IPO seems more attractive than a direct listing in light of Coinbase’s performance.

On April 14, the day of Coinbase’s Nasdaq debut, the company’s shares closed at $328, down 14% from its opening price. It’s fallen another 24% since then as crypto prices tumbled. Some of that early drop could also be blamed on the direct listing, which typically allows for more shares sold versus an IPO because existing owners aren’t usually blocked from selling their shares. But tech direct listings in general performed better than traditional tech IPOs last year.

Either way, Kraken has been broadening its offerings beyond crypto trading. It secured a state banking license for a Wyoming-based bank that offers crypto custody services in 2020. Also, Powell said in December that the company is planning to launch a non-fungible token (NFT) marketplace with a unique twist—users will be able to secure loans backed by their NFTs.

The Securities and Exchange Commission hasn’t looked too kindly on mingling crypto with lending, however. The SEC threatened to sue Coinbase over an unreleased crypto lending product last year, so Kraken could face issues with its NFT offering. But the fact that the crypto exchange is willing to diversify its revenue model and branch into hot areas like the NFT market could attract investors should Kraken go public.

BlockFi

The wealth management and trading firm for crypto holders circulated documents in July indicating its intention to go public in the next 12 to 18 months, CoinDesk reported. The Jersey City, N.J.-based company has also won the attention of private investors, raising $500 million at a $4.75 billion valuation in July, in a deal first reported by The Information.

But the company’s BlockFi Interest Account, which allows customers to earn interest on their crypto holdings, has drawn regulatory scrutiny over concerns that the product is an unlicensed security. State regulators in New Jersey, Kentucky, Texas, Alabama and Vermont have taken action against BlockFi, with two of them issuing cease and desist orders. These kinds of regulatory issues could dampen investor interest in an offering.

FTX

FTX is another crypto contender for going public next year. The crypto exchange, which is the third-largest by trading volume, is a bit of a wild card, though. When I spoke with founder and CEO Sam Bankman-Fried in July, he said that the company was profitable and would consider going public. He said his preference was for a direct listing or some other alternative to a traditional IPO.

“The landscape might change a fair bit, and exchanges are thinking about what the future of direct listings look like and how those would be structured,” he said. “So, I think that there may be changes in the available options, and how they work over the next months and years.”

The company, which moved its headquarters from Hong Kong to the Bahamas in September, has certainly had success with private investors. FTX raised $900 million in July, the biggest funding round ever for a crypto company.

It then raised $420 million in October, bringing its total capital raised to $1.4 billion. My colleagues Kate Clark and Berber Jin and I also reported in November that FTX was looking to raise new funds in a round that aims to value FTX at $32 billion and its U.S. affiliate at $8 billion.

Other Contenders

There are likely other crypto companies that have been more under the radar when it comes to going public in 2022. When I spoke with Binance CEO Changpeng “CZ” Zhao in September, he mentioned that the crypto exchange’s U.S. affiliate was targeting an IPO in the next three years, but that timeline could be pushed up.

OpenSea also stirred IPO rumors when it named Brian Roberts as CFO. The NFT marketplace poached him from Lyft, where as CFO, he guided the rideshare company to an IPO in 2019. Roberts’ experience will likely prove useful as the company continues to raise capital.

The Information reported in November that the company was fielding investment offers that could increase its valuation roughly six times to $10 billion. The company is now reportedly looking to raise new funds at a $13 billion valuation from investors led by Coatue Management, according to Eric Newcomer’s newsletter. The independent crypto fund established by Andreessen Horowitz general partner Katie Haun, which is doing business under the initials “KRH,” is also reportedly participating in the round.

For more insight on companies in other industries that could go public, check out The Information’s 2022 Tech IPO Preview.

Regulatory Rundown

The Commodity Futures Trading Commission slapped Polymarket with a $1.4 million fine on Monday. The regulator said the company, a blockchain-based betting platform, was illegally operating an unregistered event market where users could bet on the outcomes to specific scenarios, such as the outcome of the 2020 presidential election, the possibility of a cryptocurrency reaching a certain price by a specific date or what the expected Covid-19 case count in the U.S. would be on a particular day.

The regulatory action shows that regulators are keeping crypto in their crosshairs and that they’re looking at decentralized finance (DeFi) platforms. The CFTC has already flexed its crypto regulatory muscle with stablecoin issuer Tether Holdings, which it hit with a $41 million fine in October. CFTC Chair Rostin Behnam said that same month that his agency is prepared to become crypto’s main regulator.

SEC Chair Gary Gensler is also lobbying for that position and he’s not afraid to tackle DeFi. He told The Wall Street Journal in August that DeFi isn’t immune to regulation and said that some aspects of this industry are centralized, despite the name.

But whether it’s Gensler or Behnam taking the reins, one thing is clear: crypto and DeFi regulation are going to ramp up in 2022.

Big Number: $133 Million

Brian Armstrong, CEO of Coinbase, just dropped that much on a Los Angeles estate, according to The Wall Street Journal.

It's a big check from an even bigger wallet; Armstrong's net worth ballooned to $11.8 billion when his cryptocurrency exchange went public last year, according to Forbes. Since then, it has dropped to $10.3 billion, as Coinbase's stock has fallen 34% since its April debut.

Armstrong isn't the only crypto backer with his sight on sprawling real estate. A group of cryptocurrency investors is reportedly scouting a Park Avenue penthouse worth $169 million currently owned by a Saudi retail mogul. In Colorado, the CEO of NFT company Worldwide Asset eXchange spent $12.3 million on a 70-acre estate, according to The Wall Street Journal.—Akash Pasricha

Deals

WonderFi, which offers a DeFi trading app, bought Canadian crypto exchange Bitbuy for $162 million in cash and shares.
Matt Levinson joined B Capital Group to lead fintech, crypto and property technology deals as a partner. He was previously a principal at FinTech Collective.
Cion Digital, which develops software for blockchain-backed payments products, raised $12 million in seed funding from investors led by Green Visor Capital and 645 Ventures.
The venture arm of crypto exchange Binance invested $12 million in WOO Network, a platform that connects users to crypto exchanges and decentralized finance (DeFi) platforms.