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About 175 to 225 workers in China, and an unspecified number in Japan and the U.S., will be laid off at the cloud robotics and AI startup after failed attempts at going public and a net loss of almost US$100 million in the six months ended June 2019. (Reuters)

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Talking point: CloudMinds, founded in 2015 and based in Beijing and Santa Clara, Calif., had the majority of its workforce—about 700 employees—in China, where it makes most of its revenue. It had been aiming to put 100,000 of its cloud-based robots on the market by 2021. Akin to Rosie the maid from “The Jetsons,” the machines are intended to eventually be able to care for humans. SoftBank bankrolled the idea as part of a US$300-million round in March 2019; the conglomerate’s CEO, Masayoshi Son, has previously envisioned super-intelligent robots surpassing humans in number and brain power within three decades. A Frost & Sullivan report predicted there would be 42 million domestic-use service robots by 2019, and found that personal robots would be a US$19-billion market by this year. CloudMinds is now hoping to list in China after attempts to list in New York and Hong Kong failed.

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The Japanese conglomerate’s Vision Fund walked away from three San Francisco-based startups after the fund submitted term sheets worth hundreds of millions of dollars and promised that closing delays were only temporary. (Axios)

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Talking point: SoftBank’s original US$100-billion Vision Fund spent about US$80 billion in less than three years. It had planned to raise $108 billion for its Vision Fund 2. The decision to pull away from investments comes as CEO Masayoshi Son is reportedly refocusing the fund’s investment strategy on profitability over growth in the wake of WeWork’s cancelled 2019 IPO. The Vision Fund had previously invested about US$10.6 billion in the co-working space company and provided another US$9.5 billion for a rescue funds in October 2019. Among the startups reportedly affected by the decision home-care startup Honor, B2B sales software startup Seismic, and food prep robotics company Creator. According to Axios, Honor received a SoftBank term sheet in November in a deal worth US$150 million. SoftBank said it needed some time for standard due diligence, and then abruptly pulled the deal in late December. Similar deals died for Seismic and Creator.

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An iconic aerospace firm is back in Canadian hands after a group of high-profile investors strike a blockbuster deal. Here’s what you need to know:

The deal: Colorado-based Maxar is selling MDA’s Canadian and U.K. businesses to a group of Canadian investors for $1 billion. That includes a workforce of 1,900 and “ground stations, radar satellite products, robotics, defense, and satellite components,” which are expected to bring in US$370 million in revenue this year.

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The buyers: Toronto-based Northern Private Capital led the consortium. The firm’s first fund is anchored by money from the fisheries and telecom billionaire John Risley, and is helmed by Andrew Lapham, a former executive at private equity giants Onex and Blackstone and husband to Ontario Transport Minister Caroline Mulroney. Jim Balsillie, the former co-CEO of Research in Motion (now BlackBerry) is also participating, as is Montreal-based Senvest, a publicly traded investment company that’s previously owned broadcasting assets. The transaction is also being financed with debt issued by Scotiabank, BMO and Toronto-based firms PointNorth Capital and Canso Investment Counsel.

Why it matters: Founded by University of British Columbia colleagues John MacDonald and Werner Dettwiler in the former’s Vancouver basement in 1969, MDA has worked on many of Canada’s most well-known space projects—including the one pictured on the five-dollar bill, the Canadarm. It built both generations of the robotic arm, as well as all three of Ottawa’s Radarsat surveillance and Earth-observation satellite networks, the latest of which became operational this month. It’s been hailed as a Canadian technology success story—so its acquisition by Maxar, following a 2017 deal that merged it with satellite operator DigitalGlobe, elicited worries over the loss of a national champion. The previous Conservative government had blocked a 2008 takeover attempt by U.S. defence contractor Alliant Techsystems. The new owners said they will repatriate MDA’s corporate headquarters, though they did not specify where—it has six offices across British Columbia, Ontario, Quebec and Nova Scotia.

The opportunity: Space is the final business frontier. Morgan Stanley estimates the industry could grow from US$350 billion in 2019 to more than US$1 trillion by 2040, led by demand for satellite broadband internet access. U.S. companies like Amazon, SpaceX and OneWeb, as well as Ottawa-based Telesat, are vying to offer coverage via constellations of low-Earth orbit (LEO) satellites. Those firms alone will spend billions buying equipment, and MDA is one potential supplier—in June 2016, it won a contract to build antennae for OneWeb. Space Systems/Loral, which MDA bought in 2012, also has a design deal with Telesat. Monday’s deal brings in domain expertise. Balsillie, who will reportedly sit on MDA’s board, commercialized telecommunications technology at RIM. Risley, meanwhile, made much of his money by selling his Carribean-based wireless, cable and broadband company.

The (possible) challenge: Governments tend to be particular about where their space suppliers are based, and to whom they sell technology. For example, MDA set up a San Francisco-based operating company in 2016 as part of a “U.S. Access Plan” to win contracts in Washington. The deal shores up MDA’s position in Ottawa, at a time when the Canadian government is backing LEOs—in July, it signed a $600-million deal for access to Telesat’s network, and awarded it $85 million from the Strategic Innovation Fund for development work. But it remains to be seen what the repatriation will mean for MDA’s prospects of winning U.S. business; Lapham did not respond to The Logic’s request for comment.

The market reaction: Maxar’s stock on the New York Stock Exchange was up more than 17 per cent in early afternoon trading. In a research note, CIBC analysts Stephanie Price and Scott Fletcher wrote that the deal was “positive” for the U.S. firm, “reducing leverage and allowing the company to focus on its core Imagery business.” They said the Canadian consortium paid a reasonable price, worth 2.1 times the division’s sales.

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Economy Minister Peter Altmaier’s proposal would give the government the power to intervene any time a non-EU investor tried to buy 10 per cent or more of a domestic firm in sectors including robotics, AI and quantum technology. (Financial Times)

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Talking point: Altmaier had previously proposed creating a state investment fund to prevent foreign takeovers, but reaction from the country’s business community was so negative he’s scaled back the plan to the version unveiled Friday, saying it is intended to be used only as a “last resort.” Europe’s biggest economy thanks to its robust manufacturing base, Germany is increasingly preoccupied with the emergence of the platform economy and the growing economic might of Beijing—especially after China’s Midea Group bought German robotics firm Kuka in 2016. “We don’t want protectionism,” said Altmaier, “but we also want to avoid a clearance sale.”

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SIP has announced its first deal, participating in a US$16-million round in AMP Robotics, a Denver, Colo.-based startup that makes robots that claim to sort your recycling twice as fast as humans, and with much greater accuracy. (The Logic)

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Talking point: SIP was created just over two months ago by Alphabet company Sidewalk Labs (one of the largest seed investors in AMP Robotics) and the Ontario Teachers’ Pension Plan. The spinout company promised to look for innovative ways to deal with mobility, energy, water and waste, among other areas. SIP has said it will invest in technology “to enable sustainable, distributed and intelligent urban infrastructure, creating jobs, improving mobility, and providing more environmentally friendly infrastructure solutions.” Last month, AMP installed 14 AI-guided robots at Single Stream Recyclers in Florida, the largest global deployment in the recycling industry.