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Investment
Early Tesla investor DBL Partners leads $70 million investment in logistics firm Airspace – CNBC
Matt Mawson | Corbis Documentary | Getty Images
Time-critical logistics start-up Airspace, which originally broke into the market handling shipments for emergency situations including organ transplants and life-saving medications, has nearly doubled its funding in a new round of venture capital led by DBL Partners, an impact investing firm that was an early investor in Tesla. The $70 million funding round — which also included new investors Telstra Ventures and HarbourVest, as well as existing investors Scale Ventures, Defy Ventures, Qualcomm Ventures and Prologis Ventures — brings Airspace’s total funding to $138 million.
The investment is an indication of the rapid growth of logistics start-ups in the pandemic years as global supply chain issues lead to new opportunities for disruptive business models. With DBL Partners, which focuses on “double bottom line” investing, coming on board, it also raises the profile of sustainability within the business model of logistics companies and throughout the global supply chain.
Airspace noted in a release that many of its largest customers are increasingly focused on carbon-neutrality.
“Airspace is unique in its ability to provide complete transparency into the carbon footprint of time-critical deliveries, enabling customers to optimize routes with the least possible environmental impact,” Ira Ehrenpreis, founder and managing partner at DBL Partners, said in a press release.
Ehrenpreis is on the Tesla board of directors, and DBL has invested in several solar energy companies (including SolarCity, now part of Tesla), as well as Elon Musk’s SpaceX, and previous CNBC Disruptor 50 companies, such as Apeel Sciences, which is focused on food system waste.
Joel Hwang, principal of HarbourVest, also received a seat on Airspace’s board.
Airspace uses AI and machine learning to optimize delivery opportunities around the world, and it provides real-time data — as many as 16,000 “touch points” — on shipments.
The company, which was founded in 2016 and has offices in Carlsbad, California, Dallas, Stockholm and Amsterdam, reported growth of 110% last year and said it is on pace to match that growth this year.
“With supply chain disruptions continuing to impact countries worldwide, no time in history has time-critical shipping & logistics been so essential to ensuring these complex and sensitive shipments reach their destinations on-time,” Nick Bulcao, co-founder and CEO at Airspace, stated in the release.
Airspace, which ranked No. 39 on the CNBC Disruptor 50, is one of ten companies from the logistics sector to make the annual list, the most of any sector in 2022 as the global supply chain crisis raised the profile of disruptive start-ups taking technology-enabled approaches to the global shipping problems, and growth led to increased attention from investors.
Several of the top logistics start-ups featured on the CNBC Disruptor 50 have made sustainability issues a key business focus within what is an often inefficient and carbon-intensive transport sector.
Between 15% to 40% of carbon emissions from truckloads can be eliminated through more efficient shipments, according to Flock Freight, which was the first freight company to be awarded B Corp. status, which requires companies to run business models designed to balance purpose and profits. Flock Freight has focused on removing “empty space” in trucking, with many truckloads only 60% to 70% full when they hit the roads, which is both inefficient as a logistics approach and needless as far as climate impact.
Airspace has noted that many commercial planes take off with low capacity utilization in cargo holds, one of the data points it can track and take advantage of in sourcing alternative transport options for customers.
Flexport, the No. 1 Disruptor this year, recently received a $900 million round of venture capital and has seen its annual revenue grow by billions during the supply chain crisis — it is on pace for over $5 billion in revenue this year.
“Historically, if you just needed shipments on a regular cadence it was good enough to move over ocean or road or rail, but with all of these disruptions, folks that used to move over ocean have shifted a lot to air freight,” said Airspace chief operating officer Ben Kozy in a recent interview.
Suppliers and shippers have shifted their mentality about relying on a single mode of transport.
“The global supply chain that has just taken a beating from the pandemic and labor shortages and growth in consumer demand for products,” Kozy said. “All of this has removed the relative certainty of logistics, taken it away and suppliers are scrambling for new mediums for transport,” he added.
The funding will be used to increase Airspace’s focus on Europe and Asia, as well as focus on clients in new sectors where time-sensitive deliveries are critical including semiconductors, autos and clean tech. Europe accounts for more than 10% of revenue, up from 1.5% in 2020, according to Airspace, and the company now operates in 134 countries.
“Our goal is to be able to ship the most packages to any destination, regardless of size,” Bulcao said in the release.
To date, Airspace has completed over one million shipments.
The global auto industry has been hit by multiple chip shortages in the past two years requiring waves of temporary plant shutdowns at major automakers. Earlier this month, Ford said the chip shortages plaguing the industry are persisting and the automaker being forced to prioritize ship supplies for the most in-demand models.
While its roots are in the medical market, Kozy told CNBC that as Airspace grows it is allowing more customers to define what is “critical” to their business. The inherent need to move organs for transplant fast is a business model that can now be applied to an automaker’s plant being down due to parts that have not arrived. “Critical is the time limit it needs to be delivered,” Kozy said.
Recently, Airspace has also found a market in items as diverse as high-end caskets, high-end aprons and hot tubs.
“Our model enables us to move quickly, in under 24 hours, once the customer has made the decision,” Kozy said.
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Compound interest is a thing of magic. It’s also one of your best bets if you’re looking to retire rich.
It might take time and patience but there’s not a whole lot of heavy lifting when it comes to a buy-and-hold investment strategy. What matters most is having decades of time in front of you, which will allow you to maximize the benefits of compounded returns. And, of course, choosing the right investments is equally important.
The magic of compound interest
With a decent return, building a million-dollar portfolio might not be as hard as you think. An initial investment of $15,000, returning 15% annually, would be worth just shy of $1 million in 30 years.
First off, 30 years is a long time, which means you’ll need to be planning your retirement far in advance. However, all it takes is one initial investment of $15,000 and the right stocks to build a $1 million portfolio.
Additionally, it’s important to remain realistic and acknowledge that a stock returning 15% annually is not exactly common. That being said, the TSX certainly has its share of dependable companies with track records of returning far more than just 15% per year.
I’ve put together a list of three Canadian stocks that are perfect for hands-off investors who are looking to retire rich.
Constellation Software
It will require a steep initial investment, but Constellation Software (TSX:CSU) is well worth its nearly $4,000-a-share price tag. When it comes to market-crushing returns, the tech stock has been in a league of its own over the past two decades.
Even as the company is now valued at a massive market cap of close to $80 billion, the impressive returns have continued. Shares are up more than 200% over the past five years. That’s good enough for a compound annual growth rate (CAGR) of 25%.
At a 25% annual return, a $15,000 investment would be worth a whopping $12 million in 30 years.
Descartes Systems
Descartes Systems (TSX:DSG) is another tech stock that’s no stranger to delivering market-beating returns. The company is also only valued at a market cap of $10 billion, leaving plenty of room for growth in the coming decades.
There’s a reason why Descartes Systems is one of the few tech stocks trading near all-time highs today. This stock is a proven winner, with lots of growth left in the tank.
Over the past five years, the stock has had a CAGR just shy of 20%.
goeasy
The last pick on my list is a beaten-down growth stock that’s trading at a serious discount.
The consumer-facing financial services provider has been hit by short-term headwinds from sky-high interest rates. With potential rate cuts around the corner though, now could be an excellent time to be loading up on goeasy (TSX:GSY).
Even with shares down 25% from all-time highs, the stock is still nearing a return of 300% over the past five years.
goeasy was crushing the market’s returns before the recent spike in interest rates, and there’s no reason to believe why the company won’t continue to do so for years to come.
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TORONTO, April 24, 2024 /CNW/ – Flagship Communities Real Estate Investment Trust (the “REIT” or “Flagship“) (TSX: MHC.U) (TSX: MHC.UN) announced today that it has completed its previously announced public offering (the “Offering“) of 3,910,000 trust units (the “Units“) on a bought deal basis at a price of US$15.35 per Unit for total gross proceeds to the REIT of approximately US$60 million.
The Offering was completed through a syndicate of underwriters co-led by BMO Capital Markets and Canaccord Genuity Corp.
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The REIT intends to use the net proceeds from the Offering to fund a portion of the approximately US$93 million aggregate purchase price for the REIT’s previously announced acquisition of seven manufactured housing communities comprising 1,253 lots (the “Acquisitions“) and for general business purposes. In the event the REIT is unable to consummate one or both of the Acquisitions, the REIT intends to use the net proceeds of the Offering to fund future acquisitions and for general business purposes.
The REIT has also granted the underwriters an over-allotment option to purchase up to an additional 586,500 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the date hereof.
About Flagship Communities Real Estate Investment Trust
Flagship Communities Real Estate Investment Trust is a leading operator of affordable residential Manufactured Housing Communities primarily serving working families seeking affordable home ownership. The REIT owns and operates exceptional residential living experiences and investment opportunities in family-oriented communities in Kentucky, Indiana, Ohio, Tennessee, Arkansas, Missouri, and Illinois. To learn more about Flagship, visit www.flagshipcommunities.com.
Forward-Looking Statements
This press release contains statements that include forward-looking information (within the meaning of applicable Canadian securities laws). Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, “can”, “could”, “would”, “must”, “estimate”, “target”, “objective”, and other similar expressions, or negative versions thereof, and include statements herein concerning the use of the net proceeds of the Offering.
These forward-looking statements are based on the REIT’s expectations, estimates, forecasts and projections, as well as assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies that could cause actual results to differ materially from those that are disclosed in such forward-looking statements. While considered reasonable by management of the REIT as at the date of this news release, any of these expectations, estimates, forecasts, projections, or assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those expectations, estimates, forecasts, projections, or assumptions could be incorrect. Material factors and assumptions used by management of the REIT to develop the forward-looking information in this news release include, but are not limited to, that the conditions to closing of the Acquisitions will be met or waived in a timely manner and that both of the Acquisitions will be completed on the current agreed upon terms.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as they are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors, many of which are beyond the REIT’s control, could cause actual results to differ materially from the results discussed in the forward-looking statements, such as the risks identified in the REIT’s management’s discussion and analysis for the year ended December 31, 2023 available on the REIT’s profile on SEDAR+ at www.sedarplus.com, including, but not limited to, the factors discussed under the heading “Risks and Uncertainties” therein and the risk of the REIT’s plans with respect to debt bridge financing for the Acquisitions not being achieved as anticipated. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Forward-looking statements are made as of the date of this press release and, except as expressly required by applicable Canadian securities laws, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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Kim Moody: Ottawa is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan
The Canadian federal budget has been out for a week, which is plenty of time to absorb just how terrible it is.
The problems start with weak fiscal policy, excessive spending and growing public-debt charges estimated to be $54.1 billion for the upcoming year. That is more than $1 billion per week that Canadians are paying for things that have no societal benefit.
Why? Well, for the CEI, virtually every entrepreneurial industry (except technology) is not eligible. If you happen to be in an industry that qualifies, the $2-million exemption comes with a long, stringent list of criteria (which will be very difficult for most entrepreneurs to qualify for) and it is phased in over a 10-year period of $200,000 per year.
For transfers to EOTs, an entrepreneur must give up complete legal and factual control to be eligible for the $10-million exemption, even though the EOT will likely pay the entrepreneur out of future profits. The commercial risk associated with such a transfer is likely too great for most entrepreneurs to accept.
Capital gains tax hike
But the budget’s highlight proposal was the capital gains inclusion rate increase to 66.7 per cent from 50 per cent for dispositions effective after June 24, 2024. The proposal includes a 50 per cent inclusion rate on the first $250,000 of annual capital gains for individuals, but not for corporations and trusts. Oh, those evil corporations and trusts.
Some economists have come out in strong favour of the proposal, mainly because of equity arguments (a buck is a buck), but such arguments ignore the real world of investing where investors look at overall risk, liquidity and the time value of money.
If capital gains are taxed at a rate approaching wage taxation rates, why would entrepreneurs and investors want to risk their capital when such investments might be illiquid for a long period of time and be highly risky?
They will seek greener pastures for their investment dollars and they already are. I’ve been fielding a tremendous number of questions from investors over the past week and I’d invite those academics and economists who support the increased inclusion rate to come live in my shoes for a day to see how the theoretical world of equity and behaviour collide. It’s not good and it certainly does nothing to help Canada’s obvious productivity challenges.
The government messaging around this tax proposal has many people upset, including me. Specifically, it is the following paragraph in the budget documents that many supporters are parroting that is upsetting:
“Next year, 28.5 million Canadians are not expected to have any capital gains income, and 3 million are expected to earn capital gains below the $250,000 annual threshold. Only 0.13 per cent of Canadians with an average income of $1.4 million are expected to pay more personal income tax on their capital gains in any given year. As a result of this, for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase.” (This is supposedly about 40,000 taxpayers.)
Bluntly, this is garbage. It outright ignores several facts.
Furthermore, public corporations that have capital gains will pay tax at a higher inclusion rate and this results in higher corporate tax, which means decreased amounts are available to be paid out as dividends to individual shareholders (including those held by individuals’ pensions).
The budget documents simply measured the number of corporations that reported capital gains in recent years and said it is 12.6 per cent of all corporations. That measurement is shallow and not the whole story, as described above.
Tax hit for cottages
There are also millions of Canadians who hold a second real estate property, either a cottage-type and/or rental property. Those properties will eventually be sold, with the probability that the gain will exceed the $250,000 threshold.
And people who become non-residents of Canada — and that is increasing rapidly — have deemed dispositions of their assets (with some exceptions). They will face the distinct possibility that such gains will be more than $250,000.
The politics around the capital gains inclusion rate increase are pretty obvious. The government is planning for Canadian taxpayers to crystallize their inherent gains prior to the implementation date, especially corporations that will not have a $250,000 annual lower inclusion rate. For the current year, the government is projecting a $4.9-billion tax take. But next year, it dramatically drops to an estimated $1.3 billion.
This is a ridiculous way to shield the government’s tremendous spending and try to make them look like they are holding the line on their out-of-control deficits. The government is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan.
I hope the government has some second sober thoughts about the capital gains proposal, but I’m not holding my breath.
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