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News: SoftBank Vision Fund 2 invests $160M in media localization provider Iyuno-SDI Group

• April 9, 2021
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Iyuno-SDI Group, a provider of translated subtitles and other media localization services, announced today it has raised $160 million in funding from SoftBank Vision 2. The company said this makes the fund one of its largest shareholders. Iyuno-SDI Group was formed after Iyuno Media Group completed its acquisition of SDI Media last month. In a

Iyuno-SDI Group, a provider of translated subtitles and other media localization services, announced today it has raised $160 million in funding from SoftBank Vision 2. The company said this makes the fund one of its largest shareholders.

Iyuno-SDI Group was formed after Iyuno Media Group completed its acquisition of SDI Media last month. In a recent interview with TechCrunch, Iyuno-SDI Group chief executive officer David Lee, who launched Iyuno in 2002 while he was an undergraduate in Seoul, described how the company’s proprietary cloud-based enterprise resource planning software allows it to perform localization services—including subtitles, dubbing and accessibility features—at scale.

Iyuno also built its own neural machine translation engines, trained on data from specific entertainment genres, to help its human translators work more quickly. The company’s clients have included Netflix, Apple iTunes, DreamWorks, HBO and Entertainment One.

Now that its merger is complete, Iyuno-SDI Group operates a combined 67 offices in 34 countries, and is able to perform localization services in more than 100 languages.

SoftBank Group first invested in Iyuno Media Group through SoftBank Ventures Asia, its venture capital arm, in 2018. SoftBank Vision 2 will join Lee and investors Altor, Shamrock Capital Advisors and SoftBank Ventures Asia Corporation on Iyuno-SDI Group’s board of directors.

News: Chinese hardware makers turn to crowdfunding as they look to go global

• April 9, 2021
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China’s tech giants have had a rough time in Western markets over the last few years. Huawei and DJI have been hit by trade restrictions, while TikTok and WeChat are threatened with their apps being banned in the U.S. Overall, Chinese companies with an overseas footprint are increasingly wary of rising geopolitical tensions. But at

China’s tech giants have had a rough time in Western markets over the last few years. Huawei and DJI have been hit by trade restrictions, while TikTok and WeChat are threatened with their apps being banned in the U.S. Overall, Chinese companies with an overseas footprint are increasingly wary of rising geopolitical tensions.

But at an event hosted by California-based crowdfunding platform Indiegogo for Chinese consumer product makers in Shenzhen, businesses from sizes ranging from a startup making portable power stations to 53-year-old home appliances behemoth Midea, listened attentively as Indiegogo’s China managers shed light on how to court Western consumers.

“The first stage is to let ourselves be heard by the world. We have done that,” Li Yongqin, general manager of Indiegogo China, exhorted a room of entrepreneurs. “Next, we will bravely ride the tide and accept the challenge of coming the brands loved by users around the world.”

For Midea, “crowdfunding gives us a very direct way to understand consumers,” said Chen Zhenrui, who oversees the group’s overseas e-commerce initiative. Platforms like Indiegogo and Kickstarter are ways for individuals and organizations to raise capital from a large number of people to fund a project. In most cases, backers get perks or rewards from the project they fund.

Midea raised $1.5 million last year for a new air conditioner unit launched on Indiegogo, an almost negligible amount compared to the 280 billion yuan ($42 billion) annual revenue it generated in 2019. But the support from its 3,600 backers on Indiegogo was more a proof of concept.

Within a few weeks, Midea learned that a compact air conditioner that saddles snugly on the window sill, blocks out noise and saves energy could entice many American consumers. Like other established Chinese home appliances makers, Midea had been exporting for several decades.

But “in the past, much of our overseas business was in the traditional, B2B export realm. I think we are still far from being a world-class brand,” said Chen.

When Midea first launched on Indiegogo, a user left comments on its campaign page calling the project a scam: How could a Fortune Global 500 company be on Indiegogo?

“Through rounds of communication, we got to know each other. That user gave us a big push,” Chen recalled, adding that Midea used a dozen of suggestions from Indiegogo backers to improve its product.

Li Yongqin, general manager of Indiegogo China, exhorted a room of entrepreneurs to develop brands loved by global users. Photo: TechCrunch

More and more traditional manufacturers from China are giving crowdfunding a shot. Padmate, based in the southern coastal city of Xiamen, built a new earbud brand called Pamu from its foundation as a white-label maker of sound systems.

Edison Shen, a director at Padmate, said that traditional export was getting harder as old-school distributors became squeezed by new retail channels like e-commerce. By creating their own brands and reaching consumers directly, factories could also improve profit margins. Padmate went on Indiegogo in 2018 and raised over $6.6 million in one of its wireless headphone campaigns.

Most of the projects on Indiegogo will go beyond the 9-million-backer crowdfunding site onto mainstream platforms, listing on Amazon as well as advertising on Google and Facebook. Though the core services of these American Big Tech firms aren’t available in China, they have all set up some form of operational presence in China, whether it’s stationing staff in the country like Amazon or working through local ad resellers like Facebook.

Indiegogo itself opened its China office in Shenzhen five years ago and has since seen China-based projects raise over $300 million through its platform, according to Lu Li, general manager for Indiegogo’s global strategy. China is now the company’s fastest-growing market and accounted for over 40% of the campaigns that raised over $1 million in 2020.

Kickstarter, a rival to Indiegogo, also saw a surge in projects from China, which reached a record $60.5 million in funding in 2020. The Brooklyn-based company recently began looking for a contractor in Shenzhen or the adjacent city Hong Kong to help it research the Chinese market.

“In recent years, more Chinese companies are getting the hang of crowdfunding and taking their brand global, so ‘blockbuster’ campaigns [from China] are also on the rise,” observed Li.

News: Watch a monkey equipped with Elon Musk’s Neuralink device play Pong with its brain

• April 9, 2021
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Elon Musk’s Neuralink, one of his many companies and the only one currently focused on mind control (that we’re aware of), has released a new blog post and video detailing some of its recent updates — including using its hardware to make it possible for a monkey to play pong with only its brain. In

Elon Musk’s Neuralink, one of his many companies and the only one currently focused on mind control (that we’re aware of), has released a new blog post and video detailing some of its recent updates — including using its hardware to make it possible for a monkey to play pong with only its brain.

In the video above, Neuralink demonstrates how it used its sensor hardware and brain implant to record a baseline of activity from this macaque (named ‘Pager’) as it played a game on-screen where it had to move a token to different squares using a joystick with its hand. Using that baseline data, Neuralink was able to use machine learning to anticipate where Pager was going to be moving the physical controller, and was eventually able to predict it accurately before the move was actually made. Researchers then removed the paddle entirely, and eventually did the same thing with Pong, ultimately ending up at a place where Pager no longer was even moving its hand on the air on the nonexistent paddle, and was instead controlling the in-game action entirely with its mind via the Link hardware and embedded neural threads.

The last we saw of Neuralink, Musk himself was demonstrating the Link tech live in August 2020, using pigs to show how it was able to read signals from the brain depending on different stimuli. This new demo with Pager more clearly outlines the direction that the tech is headed in terms of human applications, since, as the company shared on its blog, the same technology could be used to help patients with paralysis manipulate a cursor on a computer, for instance. That could be applied to other paradigms as well, including touch controls on an iPhone, and even typing using a virtual keyboard, according to the company.

Musk separately tweeted that in fact, he expects the initial version of Neuralink’s product to be able to allow someone with paralysis that prevents standard modes of phone interaction to use one faster than people using their thumbs for input. He also added that future iterations of the product would be able to enable communication between Neuralinks in different parts of a patient’s body, transmitting between an in-brain node and neural pathways in legs, for instance, making it possible for “paraplegics to walk again.”

These are obviously bold claims, but the company cites a lot of existing research that undergirds its existing demonstrations and near-term goals. Musk’s more ambitious claims, should, like all of his projections, definitely be taken with a healthy dose of skepticism. He did add that he hopes human trials will begin to get underway “hopefully later this year,” for instance – which is already two years later than he was initially anticipating those might start.

News: Gillmor Gang: Days Go By

• April 9, 2021
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You may ask yourself, say the Talking Heads. What is this thing working from anywhere? Or as Google says, work from right here in the office. As the vaccines roll on out, some of us are just not ready for returning to normal. On this edition of the Gillmor Gang, the office is a state

You may ask yourself, say the Talking Heads. What is this thing working from anywhere? Or as Google says, work from right here in the office. As the vaccines roll on out, some of us are just not ready for returning to normal. On this edition of the Gillmor Gang, the office is a state of mind, served up by Zoom and Clubhouse. It sounds like Clownhouse, with unlimited fungible bozos on the menu.

Surely we are binged out, election recalled, floating in a vat of VC alphabet soup. SPACs are everywhere and nowhere, water cooled conversations masquerading as big ticket conferences, right wing looneys seeking blanket pardons. And we’re applying for permission to stay home in our digital workshops? Yes, it will probably work for a hot second, but when will the research measure what has really changed. After a year of living a nightmare, some of us are ready for anything but the rest of our lives.

The other day on Clubhouse, they celebrated the life and times of Hal Willner, a record producer extraordinaire who died suddenly of COVID at 64. My Gang colleague Michael Markman sent me a Clubhouse notification suggesting I might want to listen in, and I did. I knew Hal a little bit, worked with him on several of his projects, and made the mistake we all make too often of assuming he or she would be around for the duration. So I clicked on the link and found myself in a room full of people who knew him a whole lot better. It was cathartic to hear them try and describe the guy, his life’s work, his day job at Saturday Night Live, and his magical series of projects pairing the strangest combinations of artists you could not even imagine. But he did.

So when we start to figure out this new world we’ve been propelled into, the normal we are fashioning out of the hints the virus has left us about what’s important, we all knew Willner and the mischievous glint in his eye just enough to wish for just a little more help in the now. His friends were on surer footing in this crazy clubhouse, chiming in from literally all over the world. Some saw him as a mentor, others as a collaborator, me with the twinge of regret for not being remotely brave enough to appreciate the brief window into this gentle giant for the luck of the encounter. I knew he was special, I knew it didn’t matter how or why we all got there at some time, and here was Clubhouse serving up a human experience only possible because people like Hal seized these moments of the days going by.

Yet it’s easy to say these new constructs are built like a house of cards, that the hype will fade, the economics atrophy, the big get bigger. It may all be true, but what part of the really big idea Clubhouse or Medium or Substack is truly vulnerable? There is where it becomes political posturing as much as anything. Just because the current or pivoted business model is suspect doesn’t mean success isn’t lurking just around the corner. If the world is suddenly toxic, does that preclude the idea that adjusting to the emergency can produce new realities that can improve on the nature of conventional reality?

Take Medium for a second. The writing platform announced a blogging flashback, blogrolls, as a new feature to amplify signals of affection for favorite authors. The Medium analytics are harnessed to project an organically-updating list of favorite follows informed by recent updates by the authors. For the readers, this is a convenient hybrid of social and feeds; for the writers an incentive to gain timely traction in the community of what on Twitter we call the social cloud. It is simple in execution but deep in purpose, as it encourages you to post to Medium. The platform has recently pivoted away from funding original content after pivoting away from eyeball-driven advertising, but this new feature could be a way of letting the existing architecture fund the growth of strategic analytics. The more you deliver signal to the follow notification stream, the more you prime the pump of handclaps and time to click metrics, which increases the strength of the blogroll signal and so it goes.

You may ask yourself, what does this have to do with working from anywhere? Well, the idea you can nurture a self-healing community of co-workers through digital technologies is right at the top of the list of things we want to do to bolster the new economy. While audio is seen as subtractive from video, it is additive in terms of broadening the user base beyond so-called creators to the so-called doers, the folks who move the products and services from place to place. It’s radio, a companion stream of news, music, soap box, ideas, alerts, reminders, and coffee breaks that fuels the day and lights the night. It’s digital mom and pop.

from the Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, March 26, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

News: Counting strongly favors Amazon in warehouse union vote

• April 9, 2021
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It’s been a little over a week since union voting concluded for Amazon warehouse workers in Bessemer, Alabama. Things have been fairly quiet in the eye of the storm for most of it. That changed today, however, as vote counting began in earnest. Thus far, things are breaking pretty dramatically in the company’s favor, following

It’s been a little over a week since union voting concluded for Amazon warehouse workers in Bessemer, Alabama. Things have been fairly quiet in the eye of the storm for most of it. That changed today, however, as vote counting began in earnest. Thus far, things are breaking pretty dramatically in the company’s favor, following a hard-fought anti-union campaign.

As of the end of the day, no votes have more than doubled the yeses, at 1,100 to 463. With counting resuming — and likely concluding — tomorrow, the Retail, Wholesale and Department Store Union, which would potentially serve as the worker’s union, is decrying the company’s tactics.

“Our system is broken, Amazon took full advantage of that, and we will be calling on the labor board to hold Amazon accountable for its illegal and egregious behavior during the campaign,” RWDSU President Stuart Appelbaum said in a statement provided to TechCrunch. “But make no mistake about it; this still represents an important moment for working people and their voices will be heard.”

The comments appear to be as much about actions the company has taken during the campaign as it is bracing for a likely challenge to the results. The numbers constitute around half of the 3,215 ballots that are being counted. They put Amazon around 500 no votes away from defeating union efforts.

We have reached out to the company for a response to Appelbaum’s comment, but have not heard back. In a comment offered to TechCrunch last month, the company had less than stellar words about Appelbaum, calling the union head the “Chief Disinformation Officer,” adding that “in an attempt to save his long declining union, [he] is taking alternative facts to a whole new level.”

Regardless of the final count, this process is likely to be drawn out. Among the complaints are reports that the company pushed the USPS to install an illegal ballot box, breaking National Labor Relations Board rulings in the process.

News: Facebook ran ads for a fake ‘Clubhouse for PC’ app planted with malware

• April 8, 2021
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Cybercriminals have taken out a number of Facebook ads masquerading as a Clubhouse app for PC users in order to target unsuspecting victims with malware, TechCrunch has learned. TechCrunch was alerted Wednesday to Facebook ads tied to several Facebook pages impersonating Clubhouse, the drop-in audio chat app only available on iPhones. Clicking on the ad would

Cybercriminals have taken out a number of Facebook ads masquerading as a Clubhouse app for PC users in order to target unsuspecting victims with malware, TechCrunch has learned.

TechCrunch was alerted Wednesday to Facebook ads tied to several Facebook pages impersonating Clubhouse, the drop-in audio chat app only available on iPhones. Clicking on the ad would open a fake Clubhouse website, including a mocked-up screenshot of what the non-existent PC app looks like, with a download link to the malicious app.

When opened, the malicious app tries to communicate with a command and control server to obtain instructions on what to do next. One sandbox analysis of the malware showed the malicious app tried to infect the isolated machine with ransomware.

But overnight, the fake Clubhouse websites — which were hosted in Russia — went offline. In doing so, the malware also stopped working. Guardicore’s Amit Serper, who tested the malware in a sandbox on Thursday, said the malware received an error from the server and did nothing more.

The fake website was set up to look like Clubhouse’s real website, but featuring a malicious PC app. (Image: TechCrunch)

It’s not uncommon for cybercriminals to tailor their malware campaigns to piggyback off the successes of wildly popular apps. Clubhouse reportedly topped more than 8 million global downloads to date despite an invite-only launch. That high demand prompted a scramble to reverse-engineer the app to build bootleg versions of it to evade Clubhouse’s gated walls, but also government censors where the app is blocked.

Each of the Facebook pages impersonating Clubhouse only had a handful of likes, but were still active at the time of publication. When reached, Facebook wouldn’t say how many account owners had clicked on the ads pointing to the fake Clubhouse websites.

At least nine ads were placed this week between Tuesday and Thursday. Several of the ads said Clubhouse “is now available for PC,” while another featured a photo of co-founders Paul Davidson and Rohan Seth. Clubhouse did not return a request for comment.

The ads have been removed from Facebook’s Ad Library, but we have published a copy. It’s also not clear how the ads made it through Facebook’s processes in the first place.

News: Daily Crunch: KKR invests $500M into Box

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Box gets some financial ammunition against an activist investor, Samsung launches the Galaxy SmartTag+ and we look at the history of CryptoPunks. This is your Daily Crunch for April 8, 2021. The big story: KKR invests $500M into Box Private equity firm KKR is making an investment into Box that should help the cloud content

Box gets some financial ammunition against an activist investor, Samsung launches the Galaxy SmartTag+ and we look at the history of CryptoPunks. This is your Daily Crunch for April 8, 2021.

The big story: KKR invests $500M into Box

Private equity firm KKR is making an investment into Box that should help the cloud content management company buy back shares from activist investor Starboard Value, which might otherwise have claimed a majority of board seats and forced a sale.

After the investment, Aaron Levie will remain with Box as its CEO, but independent board member Bethany Mayer will become the chair, while KKR’s John Park is joining the board as well.

“The KKR move is probably the most important strategic move Box has made since it IPO’d,” said Alan Pelz-Sharpe of Deep Analysis. “KKR doesn’t just bring a lot of money to the deal, it gives Box the ability to shake off some naysayers and invest in further acquisitions.”

The tech giants

Samsung’s AirTags rival, the Galaxy SmartTag+, arrives to help you find lost items via AR — This is a version of Samsung’s lost-item finder that supports Bluetooth Low Energy and ultra-wideband technology.

Spotify stays quiet about launch of its voice command ‘Hey Spotify’ on mobile — Access to the “Hey Spotify” voice feature is rolling out more broadly, but Spotify isn’t saying anything officially.

Verizon and Honda want to use 5G and edge computing to make driving safer — The two companies are piloting different safety scenarios at the University of Michigan’s Mcity, a test bed for connected and autonomous vehicles.

Startups, funding and venture capital

Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe — Oda’s aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets.

Tines raises $26M Series B for its no-code security automation platform — Tines co-founders Eoin Hinchy and Thomas Kinsella were both in senior security roles at DocuSign before they left to start their own company in 2018.

Yext co-founder unveils Dynascore, which dynamically synchronizes music and video — This is the first product from Howard Lerman’s new startup Wonder Inventions.

Advice and analysis from Extra Crunch

Four strategies for getting attention from investors — MaC Venture Capital founder Marlon Nichols joined us at TechCrunch Early Stage to discuss his strategies for early-stage investing, and how those lessons can translate into a successful launch for budding entrepreneurs.

How to get into a startup accelerator —  Neal Sáles-Griffin, managing director of Techstars Chicago, explains when and how to apply to a startup accelerator.

Understanding how fundraising terms can affect early-stage startups — Fenwick & West partner Dawn Belt breaks down some of the terms that trip up first-time entrepreneurs.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

The Cult of CryptoPunks — Ethereum’s “oldest NFT project” may not actually be the first, but it’s the wildest.

Biden proposes gun control reforms to go after ‘ghost guns’ and close loopholes — President Joe Biden has announced a new set of initiatives by which he hopes to curb the gun violence he described as “an epidemic” and “an international embarrassment.”

Apply to Startup Battlefield at TechCrunch Disrupt 2021 — All you need is a killer pitch, an MVP, nerves of steel and the drive and determination to take on all comers to claim the coveted Disrupt Cup.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

News: Facebook, Instagram, and WhatsApp are super broken right now (Update: but starting to work again)

• April 8, 2021
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Are Facebook, Instagram, and WhatsApp down for you right now? Us too! And lots and lots of other people too, it seems. We’re getting reports left and right of outages across the three Facebook properties, with no indication so far as to the cause. It’s all down so hard that Facebook’s own server status page

Are Facebook, Instagram, and WhatsApp down for you right now? Us too! And lots and lots of other people too, it seems.

We’re getting reports left and right of outages across the three Facebook properties, with no indication so far as to the cause. It’s all down so hard that Facebook’s own server status page won’t even load to explain what’s up. Some of the respective mobile apps appear to load, but are just loading cached data; refresh or try to pull in a new page, and things probably won’t load correctly.

When Facebook on the web does load, it’s largely throwing the following error message:

This outage comes just a few weeks after one that took out Instagram and WhatsApp in March.

(Update, 3:19 PM: It appears things are coming back online, about an hour after the outage first began.)

News: Crypto trading on Robinhood spiked to 9.5M customers in first quarter

• April 8, 2021
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It’s been a big year for crypto, and Robinhood shared some stats today providing more evidence that the crypto boom is more than just hype — at least for now. In a blog, Christine Brown, Robinhood’s head of crypto operations, revealed that in the first quarter of 2021, 9.5 million of its customers traded crypto

It’s been a big year for crypto, and Robinhood shared some stats today providing more evidence that the crypto boom is more than just hype — at least for now.

In a blog, Christine Brown, Robinhood’s head of crypto operations, revealed that in the first quarter of 2021, 9.5 million of its customers traded crypto via the company’s platform. That’s up big time from the 1.7 million customers who traded crypto in the 2020 fourth quarter. The company first launched its Crypto unit in January of 2018 but hasn’t provided numbers in previous quarters.

In February, Robinhood revealed it had seen six million new customers on Robinhood Crypto in the first two months of this year alone. That compares to  a peak of 401,000 in a single month in 2020, with a monthly average of about 200,000 customers.

Brown says the company’s intent behind launching Robinhood Crypto in the first place was to give its customers the opportunity to buy and sell cryptocurrency in addition to the range of assets offered through its brokerage, Robinhood Financial.

Robinhood Crypto currently offers seven tradeable coins: Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic and Litecoin. 

Brown also noted that Robinhood’s crypto team has already more than tripled since the beginning of the year, although it’s not entirely clear how many staffers it currently has on that team. There are a number of crypto-related openings on its careers site, including an open “Crypto CFO” role.

The company is making clear that crypto is an important part of its overall business and part of its mission to democratize access to the masses.

“All it takes to spend, trade, and store cryptocurrency, theoretically, is an internet connection — you don’t need access to a big line of credit, or startup capital,” Brown wrote. “You don’t even have to be awake at a certain time of day to trade. The crypto market doesn’t close. Crypto was born out of a mission to take power away from institutions and return it to the people.”

Last August, Robinhood raised $200 million more at a new, higher $11.2 billion valuation in its third raise of the year before filing to go public in March. The company has had a tumultuous past year or so that was filled with time in front of Congress, bad PR from a user’s suicide and settlements with the SEC.

Meanwhile, TechCrunch also reported earlier this week that in the first quarter of 2021, American consumer cryptocurrency trading giant Coinbase grew sharply, generating strong profits at the same time. Specifically, the company notched revenue of $1.8 billion in Q1 2021, up from $585.1 million in Q4 2020. Net income totaled “approximately $730 million to $800 million,” up from $178.8 million in Q4 2020.

This article was updated post-publication with some additional numbers

News: Nigeria’s SEC warns investment platforms to stop trading ‘unregistered’ foreign securities

• April 8, 2021
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In a circular released by Nigeria’s capital market regulator SEC today, investment platforms providing access to foreign securities might be treading on dangerous grounds. According to the SEC regulations that have just been brought to light, these platforms are trading foreign securities not registered in the country and have been warned to stop doing so.

In a circular released by Nigeria’s capital market regulator SEC today, investment platforms providing access to foreign securities might be treading on dangerous grounds.

According to the SEC regulations that have just been brought to light, these platforms are trading foreign securities not registered in the country and have been warned to stop doing so. Capital market operators in partnership with them have also been warned to renege on providing brokerage services for foreign securities.

Over the past three years, Robinhood-esque platforms like Bamboo, Trove, Chaka and Rise have sprung forth in the Nigerian fintech space. They offer Nigerians access to stocks, bonds and other securities in both local and international markets. These platforms have grown in popularity among the middle class and provide a haven to protect earnings from naira devaluations.

That said, there’s a vast difference in how they operate when compared to Robinhood. In addition to being a trading app, Robinhood offers online brokerages (introducing and clearing) and also zero commission trading. Nigerian investment platforms do not, and while any trading platform can get a brokerage license in the U.S., it can be a Herculean task to obtain one in Nigeria. This is where capital market operators (local and foreign brokerage firms in this case) come into play, forming strategic partnerships with these companies so Nigerians can access both local and foreign fractional securities.

After a series of regulatory onslaught from different government bodies on tech startups last year, the SEC followed suit in December. It singled out Chaka, one of the platforms and accused it of selling and advertising stocks. The regulator’s definition of the alleged offence was that Chaka “engaged in investment activities, including providing a platform for purchasing shares in foreign companies such as Google, Amazon, and Alibaba, outside the Commission’s regulatory purview and without requisite registration.”

The company’s CEO, Tosin Osibodu, denied any wrongdoing, and since the turn of the year, not much has been heard from the SEC and Chaka regarding this matter until the release of today’s circular. Unsurprisingly, the regulator continued from where it left off, only this time, all investment platforms including brokerage firms — not just Chaka — are involved. SEC’s subtle directive is to stop selling, issuing or offering for sale any foreign securities not listed on any exchange registered in Nigeria.

What this inherently means from now on is that investment platforms will have their work cut out and might only offer individuals access to only local stocks and securities. This affects the business models of these startups. And the core value they provide, which is to help Nigerians store monetary value and hedge against naira devaluation is at the threat of being wiped out.

Here’s the information released by the regulator as seen on its website:

The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.

The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.

The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.

This is a developing story. More to follow…