The Metaverse Has No Monopolies

Plus: Welcome back, nurses. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

May 2, 2023

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TOGETHER WITH

Good morning.

Umm, guys…? You’re on borrowed time.

On Monday, US Treasury Secretary Janet Yellen warned Congress that unless legislators immediately raise or suspend the debt limit ceiling, her department could be unable to fund the government’s debts as soon as June 1st. In a letter addressed to House Speaker Kevin McCarthy, Yellen also cautioned that any more political brinkmanship could prove deleterious for small businesses, the stock market, and the US’ economic health as a whole. She urged McCarthy “to protect the full faith and credit of the United States by acting as soon as possible.” Translation: I give you a month.

Morning Brief

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Zuck writes checks to keep trustbusters away from Meta.

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Europe’s instant grocery startups are almost done imploding.

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The US nursing pool is seeing gains.

Tech

Meta Bankrolled Influential Anti-Antitrust Lobbying Group

Meta-née-Facebook has long lived by the motto “When you can’t beat ‘em, buy ‘em” (see: Instagram in 2012).

But if you’re worried Washington won’t let you buy ‘em, buy influence. On Monday, CNBC reported that Meta made a $34 million contribution to a leading anti-antitrust advocacy group, American Edge Project, to help keep its shopping lanes open.

On the Edge

Let’s flashback to 2021, the time frame mostly covered by American Edge Project’s recently disclosed tax documents that revealed the mega contribution by an anonymous donor that a source now tells CNBC is in fact Facebook. Zuck’s empire was mired in a series of controversies at the time (remember the Facebook Files?) just as the social media giant was fending off a bipartisan probe into its outsized power, all while the company was prepping a massive pivot (rebranding) to the metaverse. Old habits die hard, so in typical Zuck fashion, that meant lots and lots of M&A.

The soon-to-be-called Meta went on a prolonged shopping spree, snapping up as many metaverse and virtual reality development studios as it could, like Big Box VR, Beat Games, Ready at Dawn, and plenty of others. “Facebook is going to probably have a near-monopoly in VR software before it even matters,” Alex Heath, editor at tech publication The Verge, tweeted at the time. Ah, the M word. Meanwhile, Meta’s dollars were hard at work on keeping trustbusters at bay:

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Between 2020 and 2021, American Edge launched a series of TV and digital ads warning that the wave of antitrust proposals circulating through Congress could hurt American “small businesses” taking on foreign competition. Those bills went largely unpassed, and one very large business founded by a Harvard College dropout continued to grow like a virtual beanstalk.

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Chief among those squashed bills was legislation aimed at forcing dominant platforms to bear the burden of proof in merger cases, and a proposal to ban self-preferencing on major platforms (like, say, Amazon surfacing their own first-party products to the top of search queries).

“The threats to America’s technological edge have a profound impact on our national security and economic well-being and we’re leading the charge to make sure everyone is aware,” American Edge CEO Doug Kelly told CNBC in a statement.

In Zuck We (Anti)Trust: Of course, Zuckerberg’s expensive metaverse gambit hasn’t exactly played out, and the insurgent TikTok is eating into the company’s core platforms. Now, after waves of layoffs totaling over 20,000 workers, employee sentiment is in the tank. In a recent company town hall, one employee even asked Zuckerberg why the rank-and-file should still have faith in his leadership, The Washington Post reported Monday. You can buy companies. You can buy influence. But money can’t buy you love from employees.

– Brian Boyle

M&A

Turkish Delivery Startup Getir In Talks to Buy Flink

(Photo credit: Herodotptlomeu/Wikimedia Commons)

Even the shortest-lived Mayflies got nothing on instant-grocery startups.

Istanbul-based grocery delivery startup Getir is in talks to buy up Berlin-based startup Flink, according to a report in the Financial Times. Speedy grocery startups experienced a European boom two years ago, but the wheel of time brought a tidal wave of consolidation to the sector, which appears to be drawing to a close.

15 Minutes of Fame

In 2021, instant-delivery startups proliferated in Europe like an algae bloom. At least 19 separate instant-delivery startups sprung up on the continent in 2021 according to Insider, and investment in them quintupled between 2020 and 2021, from $1 billion to $5 billion. These companies, which promised 15-minute delivery from mini-warehouses dotted around cities, were powered by wads of VC cash to keep them churning on the razor-sharp margins (or, more often, losses) that characterized their business models.

It’s taken only slightly longer than 15 minutes for that bubble to burst, as the vast majority of those companies have either gone bankrupt or been acquired in the last few months. Now it’s up to financial Darwinism to decide who will be the last delivery app standing:

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The consolidation wave reached critical momentum in May 2022 when Flink acquired Cajoo. Not only did the deal herald the end-days of pluralistic delivery startups, it became the subject of a viral TikTok, the truest marker of influential M&A (or perhaps just a riff on how silly their names were, you decide).

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Flink said in January that it expects its core German business to be profitable by the end of this year and that its international business should be in the black by the end of 2024. In April, Insider reported Flink was looking to raise a $100 million injection from investors and take a sobering trim to its valuation.

Gorilla Warfare: Even if Getir ends up the only 500-pound gorilla (made easier by its acquisitions of Berlin-based delivery startup Gorillas, alongside London-based Weezy and Spain’s Blok), that’s no guarantee of success. It faces competition from food-delivery apps like Uber Eats, a company that knows all too well what happens when growth-over-profit economics grind to a halt.

– Isobel Asher Hamilton

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Labor

Hospitals See Nurses Coming Back from Pandemic Dirth

President Obama once called nurses “the beating heart of our medical system,” but the pandemic resulted in virtual cardiac arrest.

Luckily, legions of US nurses who left their staff positions during peak COVID because of arduous schedules and heavy patient loads, or because they could make better money working temporary jobs, are now returning to hospitals, The Wall Street Journal reported.

Code Blue

The first nurse shortage to rattle the US happened during the Great Depression when doctors began relying more on complex health technology and legislators pushed for shorter work weeks. The pool of available nurses just couldn’t meet the demand. During World War II, plenty of the nurses serving overseas in the military had been pulled from suddenly understaffed hospitals and doctors’ offices.

Jumping ahead to the pandemic, the sheer amount of patients and working hours were just otherworldly, causing many nurses to look for temp jobs elsewhere or just take a break altogether. In the past two years, about 100,000 registered nurses quit their jobs due to burnout, and another 610,000 said they intend to leave the field by 2027, according to a study from the National Council of State Boards of Nursing.

However, the tide seems to be turning at some hospitals:

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Falling pay at temp roles, rising wages at hospitals, and new perks including flexible schedules, child care, and less demanding positions are driving nurses back to full-time staff jobs.

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For example, at HCA Healthcare – the nation’s largest public hospital chain – hiring of nurses went up 19% in the first three months of the year compared to the same time in 2022, and turnover is going back toward pre-pandemic levels, the WSJ reported.

“The boomerang nurses have returned,” Houston Methodist’s chief nurse Gail Vozzella told the WSJ.

Back to work: Over in Italy, Premier Giorgia Meloni’s government is taking a slightly different approach to luring nurses and everyone else back to the job market, Bloomberg reported. A May Day Decree will tax workers a little less on their earnings but also shrink the number of people eligible for “Citizen’s Income,” a welfare package set up under former Prime Minister Giuseppe Conte. Think of it like a carrot-and-stick approach to reigniting employment.

– Griffin Kelly

Extra Upside

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Tracking device: NYC Mayor Eric Adams advises drivers to put Apple AirTags on their cars amid GTA surge.

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Ticket to ride: More than 3 million Germans have already purchased new all-inclusive public transit passes.

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Just For Fun

Waterfall flyby.

Too far.

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