🔗London’s biggest startup slashes valuation

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14th December 2022

Bite-sized business news from the UK and beyond

Good morning After serving four years in prison for defrauding investors out of millions of dollars, Billy McFarland is back. The founder of Fyre Festival – the shambolic 2017 music event that massively overpromised and underdelivered – is determined to prove he’s more than a convicted con artist and is launching a new festival in the Bahamas called PYRT.

Today's stories

London’s biggest startup slashes valuation
Scientists reach energy milestone

FINTECH
London’s biggest startup slashes valuation

What happened?
Yesterday payment processor Checkout.com cut its internal valuation to $11bn less than a year after it was valued at $40bn. According to reports in the Financial Times, the startup told employees the move was to “reflect current macroeconomic conditions”.

How did we get here?
Founded in 2012 Checkout.com processes billions of payments for some of the world’s biggest companies including Netflix, Sony and Shein. The company benefited from the explosion in ecommerce during the pandemic with a third of retail spending now done online in the UK, from a fifth in 2019.

In January 2022 the company raised $1bn in venture capital funding and overtook banking app Revolut to become London’s most valuable startup and second in Europe to buy now pay later giant Klarna.

Checkout.com’s decision to reduce its internal value — which is separate from the investor-determined valuation — helps staff by reducing the cost of their shares in the company. This means employees can potentially make a higher profit in the future if the company lists on the stock exchange.

2022 has seen fintech firms fall out of favour with investors
The gloomy backdrop of rising interest rates, soaring inflation and weaker consumer spending has dampening investor appetite for high-risk tech startups. Since the boom of 2021 European tech companies have seen more than $400bn in market value wiped out. Checkout.com, along with other payment firms like Klarna and Stripe, have announced redundancies as they prepare for lower ecommerce volumes in 2023.

Other stories to keep you in the loop

Pound rises to six-month high
Mortgage payments to surge by £3,000 a year, says Bank of England
US cost of living continues to rise but inflation appears to finally be slowing
Real wages shrank by nearly £80 a month this year, says TUC
Decade high 400k working days lost to strike action in October
Failed crypto founder arrested in Bahamas
Ghana agrees to $3bn debt bailout
KPMG chief snubs global split as consulting arm drives growth in revenues

ENERGY
Scientists reach energy milestone

What happened?
Yesterday the US Department of Energy announced a breakthrough in nuclear fusion that could eventually result in an abundant, clean and cheap energy source.

How did we get here?
A team of researchers at California’s Lawrence Livermore National Laboratory generated more electricity from a fusion reactor than they needed to trigger it for the first time ever. In the reaction 2.1 megajoules of input produced 2.5 megajoules of output creating a 120% net energy gain.

Scientists and governments have been trying to make that happen for decades because nuclear fusion, as opposed to the nuclear fission that current nuclear plants use, has the potential to create energy to power the world without producing carbon or radioactive waste.

While the excess energy generated isn’t much it comes at a time when the world is grappling with climate and fuel crises, and offers hope for an alternative, clean energy source.

The historic achievement raises the prospect that someday — perhaps decades from now — the global economy will be run on carbon-free electricity generated by the very process that powers the sun and stars.

Yes, but: Even if fusion can generate energy in a lab, there is a long (and expensive) road ahead before it reaches the point where it could be realistically used as an affordable, reliable power source.

Stat of the day

Bernard Arnault, the CEO of luxury goods group LVMH, has overtaken Elon Musk as the world's richest man with a net worth of $188bn

Interesting links from around the web

Easy ways to boost your December income (and make your salary last until the end of January)
The 13 best places to go in the UK in 2023
How much power your gadgets use

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🔗London’s biggest startup slashes valuation

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