A variety of stories lead Saturday’s papers, from the Salisbury poisoning to medical breakthroughs.
With Senate Minority Leader Chuck Schumer proposing a bill to decriminalize marijuana (in a huge reversal of established policy from the Democratic leadership), this 4/20 gives cannabis-focused startups and their investors a lot to celebrate.
Since investment in cannabis companies first took off in 2014, there’s been over $700 million invested in cannabis companies, according to data from Crunchbase.
Companies that have proven to be more than one-hitters in the high-stakes industry run the gamut from conglomerates operating several business units including cultivation, delivery and branded products, to businesses that focus on delivery or point of sales and logistics solutions.
Investing in cannabis is tricky for most venture funds, because many of the pension funds and institutions that finance them restrict investments in things like alcohol, drugs or guns through what’s colloquially known as a “sin clause.”
Firms typically skirt those requirements by investing in enabling technologies or backing companies whose primary focus is medicinal.
And while the industry celebrates its success, it’s important to know that these changing times haven’t come without a huge social cost for those that bore the brunt of the country’s misguided “war on drugs.” As the Marshall Project notes:
Even if the decriminalization push goes through, it’s unlikely that you’ll see many investment firms getting into recreational marijuana — unless they’re backed by wealthy individuals or get some kind of exception for cannabis startups.
Either way, it looks like these nine investments — in some cases with tens of millions behind them — are unlikely to go up in smoke.
But just in case, investors may want to heed the advice of the industry’s merry godfather:
Vera Papisova was groped at Coachella while reporting on sexual harassment for Teen Vogue.
A new independent film sheds light on the powerful role women are playing in the world of legal marijuana.
Stock market investors showed lukewarm enthusiasm for Pivotal Software’s debut on Friday. After pricing the IPO at $15, the company closed the day at $15.73.
The enterprise cloud computing company has been majority-owned by Dell, which came about after its merger with EMC in 2016. It was spun off from Dell, EMC and VMware in April 2013.
After that, it raised $1.7 billion in funding from Microsoft, Ford and General Electric.
Here’s how it describes its business in the S-1 filing:
Pivotal looks to “provide a leading cloud-native platform that makes software development and IT operations a strategic advantage for our customers. Our cloud-native platform, Pivotal Cloud Foundry (‘PCF’), accelerates and streamlines software development by reducing the complexity of building, deploying and operating new cloud-native applications and modernizing legacy applications.”
According to the filing, Pivotal brought in $509.4 million in revenue for its fiscal year ending in February. This is up from $416.3 million in revenue for 2017 and $280.9 million in revenue the year before.
The company is still losing a lot of money, however. Losses for fiscal 2018 stood at $163.5 million, improved from the than the negative $232.5 million seen in 2017 and $282.5 million in 2016.
“We have incurred substantial losses and may not be able to generate sufficient revenue to achieve and sustain profitability,” the company warned in the requisite “risk factors” section of its IPO filing.
Pivotal also acknowledged that it faces competition from “legacy application infrastructure and middleware form vendors” like IBM and Oracle. The company says it additionally competes with “open-source based offerings supported by vendors” like RedHat. Pivotal also faces challenges from SAP Cloud Platform, Amazon Web Services and Microsoft Azure.
The company says it believes it will stand out from the pack because of its strong security and easy-to-use platform. Pivotal also claims to have strong brand awareness and a good reputation. It has 118 U.S. patents and 73 pending and is betting that it will remain innovative.
Morgan Stanley and Goldman Sachs served as lead underwriters. Davis Polk and Fenwick & West worked as counsel.
The company listed on the New York Stock Exchange under the ticker “PVTL.”
It has been an active spring for tech IPOs, after a slow winter. Dropbox, Spotify and Zuora are amongst the companies that have gone public in recent weeks. DocuSign, Smartsheet, Carbon Black and Pluralsight are all expected to debut within the next month.