14 ★ FINANCIAL TIMES Thursday22 August 2019COMPANIES
JUDITH EVANS— LONDONKnotel, a flexible office rival toWeWork
founded only three years ago, has
reachedunicornstatus with a valuation
above $1bn following a $400m funding
round led by a Kuwaiti state-backed
investment firm.
The New York-based company is one
of several serviced office providers that
have grown rapidly in the wake ofWeWork, the shared office group which
has helped to revitalise a formerly stuffy
sector and plans a public listingin the
coming weeks.
Knotel said yesterday that a Series C
funding round led by Wafra — an invest-
ment adviser owned by the Kuwaiti
state’s social security fund — had raised
$400m, bringing its total funding to
$560m and its valuation above $1bn for
the first time. It declined to reveal its
exact valuation.
Amol Sarva, co-founder and chief
executive, said Wafra would “help us
continue our rapid global expansion
and solidify our position”.The company said it would continue
an “aggressive” growth trajectory, add-
ing that it manages 4m square feet of
office space in 200 locations globally.
The group offers unbranded spaceto
midsized companies that want their
own name above the door, rather than
the branding and decor used by groups
such as WeWork. It typically rents out
entire floors to companies.
Three Japanese companies — the real
estate developerMori Trust;Itochu, one
of Japan’s largesttrading houses; and
private equity houseMercuria— also
took part in the funding round, along
with existing investors such as propertyservices groupNewmark Knight Frank
and investment firmNorwest Venture
Partners. Knotel’s last reported valua-
tion was $500m following a previous
funding round last year.
Knotel said it would also use the new
funds to boost digital products such as
Baya, a blockchain platform “used
internally to facilitate data-driven
acquisition decisions”, and Geometry, a
subscription service for products used
in flexible workplaces, such asmodular
conference rooms and phone booths.
The company is among several com-
petitors to WeWork, along with New
York-based Convene, which wasfounded in 2009, and London-based
TheOffice Group, which has been oper-
ating since 2003 and in which the pri-
vate equity groupBlackstonebought a
majority staketwo years ago.
Their longest-established rival is Lon-
don-listedIWG, with a market capitali-
sation of £3.7bn, which has been operat-
ing for 30 years. It was formerly known
as Regus but has expanded its Spaces
brand, a direct competitor to WeWork.
None come close to the $47bn valua-
tionassigned to WeWork after a series of
funding rounds dominated by Japan’s
SoftBank, a figure that will be testedin
the forthcoming IPO.PATRICK TEMPLE-WEST— NEW YORKA divided US Securities and Exchange
Commission has imposed new regula-
tory oversight on proxy advisory firms,
increasing legal scrutiny on theirmeth-
odsfor offering shareholder voting rec-
ommendations.The changes are a victory for corporate
lobby groups, which have argued Insti-
tutional Shareholder Services andGlass
Lewiswield too much power in battles
over corporate governance.
The five-member commission voted
along party lines at a meetingyesterday
to approve guidance clarifying that
proxy advisersare subject to anti-fraud
rules concerning materially false or mis-
leading statements. Previous SEC
guidance was vague on whether proxy
advisershad to adhere to anti-fraud pro-
visions, the agency said.
The change could saddleISSand Glass
Lewis with new legal costs and affect
shareholder votes atcompanies’ annual
meetings. Additional regulations aimed
at the proxy advisers are on the SEC’s
agenda for the months ahead.
ISS said after the SEC vote: “We are
concerned that the guidance will
hamper our ability to deliver independ-
ent, timely and accurate research, data,
insights and perspectives to aid in the
discharge of their fiduciary duties.”
Republican commissioner Elad
Roisman said at the meeting that the
changes would “help ensure that those
who make voting decisions are doing so
based on complete and accurate infor-
mation”. SEC chairman Jay Clayton, an
independent, voted with the agency’s
Republican commissioners over dis-
sents from the two Democratic mem-
bers.
“The policy choices reflected in
today’s releases create serious risks to
our system of corporate democracy by
adding cost, adding time pressure and,
potentially compromising the inde-
pendence of voting recommendations,”
Allison Lee, Democratic commissioner,
said.
Companies have historically faced lia-
bility under the SEC anti-fraud rule, and
now the agency “makes clear that proxy
advisory firms do not benefit from spe-
cial treatment or exemption from such
liability for violations”, said Sebastian
Niles, a partner at Wachtell Lipton, the
law firm.
“[It] remains to be seen whether any
actions are brought or whether we see
SEC enforcement actions against proxy
advisory firms in this area,” he said.
Shareholder advocates have opposed
SEC action.NEIL MUNSHI— LAGOS
HANNAH MURPHY— SAN FRANCISCOSierra Leoneans will be able to sign up
for bank accounts with a press of their
thumbs, thanks to a financial inclusion
programme that could serve as a model
for countries with large unbanked pop-
ulations across the developing world.
The Kiva Protocol, launched yester-
day by the Sierra Leonean government
andKiva, the Silicon Valley microloan
company, is a biometric system that
links a person’s thumbprint with their
identity.
It will allow the west African country
to create a universal credit bureau for
the first time, with its backers hoping it
will spur lending by banks reluctant to
lend to people without credit histories.
Further benefits identified include
enabling the government to reach more
people with its services, cutting costs formobile operators and start-ups and
bringing thousands of small businesses
into the formal economy.
“From the individual to the start-up
to the government to businesses... the
proof of ID becomes instantaneous,
meaning more access to services” for
Sierra Leoneans, said David Sengeh, the
country’s chief innovation officer. “This
is a great step a small country is taking.”
All of Sierra Leone’s 5.1m adult citi-
zens are signed up for the blockchain-
based programme, according to the
country’s National Civil Registration
Authority.
Mr Sengeh said that the government
helped design the data protection
aspects of the agreement with Kiva to
ensure data remained secure.
Just 20 per cent of people have bank
accounts in Sierra Leone, where per
capita gross domestic product is about
$500 a year. But financial inclusion is
increasingly a focus of governments
across the developing world, which see
it as an important step out of poverty.
Technology is playing a big role.
Mobile money is revolutionising pay-
ments, business and savings acrossAfrica. Hundreds of millions of Indians
have opened bank accounts in recent
years, raising the share of people with
accounts to more than 80 per cent, after
the government introduced a biometric,
digital ID system.
Some countries are turning to nascent
blockchain technology that enables
organisations to keep an immutable
electronic database of information or
transactions. In June, Facebookannounced plans to create its own
blockchain network in an effort to pro-
vide instant and nearly free interna-
tional money transfers via mobile
phone for the 1.7bn people in the world
without a bank account.
But huge challenges remain. The
World Bank estimates that about 1bn
people worldwide — the vast majority of
whom live in sub-Saharan Africa — lackbasic ID credentials, while many more
have unreliable or unverifiable IDs. The
McKinsey Global Institute estimates
that 3.4bn people have some form of ID,
but are unable to use it in the digital
world.
In most of sub-Saharan Africa, less
than half of children under five have
their births registered. The poorest, and
women in particular, are least likely to
have official identification, according to
the bank, while refugees, the disabled
and rural inhabitants often have the
hardest time obtaining IDs.
“This invisibility has significant
implications” for people trying to access
services, the World Bank said in a report
released last week.
“Without a secure and trusted way to
prove their identity, people... will
often find themselves unable to access
critical healthcare and social services,
enrol in school, open a bank account,
obtain a mobile phone, get a job, vote in
an election, or register a business in the
formal sector.”
Sierra Leone hopes to change that;
Kiva said it planned to expand the
project to other countries.Financials.Biometrics
Sierra Leoneans give bank access thumbs-up
Blockchain-based financial
inclusion programme offers
model for other countries
HANNAH KUCHLER— TAMPAColor, a Silicon Valley health technol-
ogy start-up whose backers include the
venture capital company General Cata-
lyst and Laurene Powell Jobs’ Emerson
Collective, has been hired to provide
“genetic counselling” to potentially
hundreds of thousands of Americans
taking part in aUS government
research project.The “All of Us” programme, launched
last year by the National Institutes of
Health, aims to collect data from1m
participants, looking for patterns in life-
style, environment and biology that
could explain the causes of disease and
suggest new treatments.
Unlike some other big data pro-
grammes in healthcare, such as theUK
Biobank, All of Us will enable people
who provide their genetic data to learn
what the researchers have discovered
about their health.
The contract, worth up to $25m,
allows Colorto expand its remote coun-
selling service to help participants and
their families understand the secrets
hidden in their genetic data and the
healthcare options they have to tackle
any increased likelihood of serious dis-
eases.
Brad Ozenberger, the genomics pro-
gramme director for the All of Us pro-
gramme, said returning informationto
participants was one of its “core values”.
“We’ve heard time and again that peo-
ple are eager to get information backand learn more about themselves,” he
said. “We want to do right by all of our
participants to get them the informa-
tion they need and referrals for fol-
low-up care, if appropriate.”
Investor interest in genetics start-ups
has been piqued by the soaring sales of
consumer genetic tests available on sites
such as 23andMe and Ancestry,
unearthing risks of serious disease or
family secrets.
Color sells genetic testing packages
including support for physicians and
counselling to health systems, employ-
ers and research institutions. It was
founded in 2013 by formerTwitterexec-
utivesOthman LarakiandElad Gil,
former cyber security engineerNish
Bhatand physicianTaylor Sittler.
Mr Laraki, chief executive, said it was
important to remember that genetic
data held sensitive health information.
He said the way the data had been used
by “genetics hobbyists” had meant there
were often notsafeguards, including
making counselling available so people
could understand their results.
Color’s five-year contract with the
NIH begins with funding of $4.6m for
the first year.
Since it opened in May 2018, All of Us
has enrolled about 175,000 participants
at a network of more than 340 recruit-
ment sites across the US.
The programme, part of a broader
government initiative in so-called preci-
sion health, aims to harvest data that
includes information on 59 genes tied to
risk of specific diseases for which there
are established medical guidelines for
treatment or prevention. Last week, the
programme announced that more than
80 per cent of its participants so far were
from groups that historically have been
under-represented in biomedical
research.The programme is working to
connect them with care.Technology
Start-up aims
to help 1m
people unlock
secrets of
genetic data
Property
WeWork rival Knotel becomes a unicorn
Latest funding round lifts
value of US-based flexible
office provider past $1bnFinancial services
US securities
regulator
imposes curbs
on power of
proxy advisers
GREGORY MEYER
WHITE PLAINS, NEW YORKThe US-China trade war has contrib-
uted to a slowdown in capital spending
atBunge, the global agricultural trader
with abig presence in the US farm belt.Escalating tariffs have redirected world
flows of soyabeans. China now favours
Brazil over the US as it meets its 100m
tonnes of demand.
Bunge, the world’s largest oilseed
processor, has crop export assets in both
North and South America. But the trade
dispute has complicated the company’s
decision-making on where to invest fur-
ther,Greg Heckman, chief executive,
said in an interview at the company’s
headquarters on Tuesday.
When Bunge considers spending
money on long-lived assets, it examines“all of the possible things that could
happen and ensuring that you’re com-
fortable with the outcome under all
those scenarios”, Mr Heckman said.
“We’ve got some new data points to put
in that stress test with the current US-
China trade tension.”
Mr Heckman was hired as chief exec-
utive this year as the company
embarked on a strategic review of busi-
ness units under pressure from two
activist investors. Bunge’s shares have
risen since his arrival but remain less
than half of their peak of a decade ago.
Bunge has outlined plans for $550m
in capital spending this year, a slight
increase from 2018 but well below the
$1bn spent annually early this decade.
The company has an asset-heavy foot-
print of grain silo complexes, ports and
processing plants necessary to handlemore than 150m tonnes of agricultural
products per year.
The company’s second-quarter
resultswere hit by low exports from
North America as a result of the US-
China trade conflict that began in 2018.
Mr Heckman has previously said the
company would be reluctant to spend
capital on projects that do not pay off.
Last week, Bunge announced it was
moving its global headquarters from
White Plains, New York,to St Louis,
Missouri.
“We’ve pulled back our capital spend
anyway, as we run our business better,”
Mr Heckman said.
Referring to the US-China trade dis-
pute, he added: “But in this environ-
ment, it’s even more reason with all the
uncertainty, to slow down the invest-
ment until some of the smoke clears.”Basic resources
Trade war takes toll on Bunge spending
NIC FILDES AND MADHUMITA MURGIAUhuru, a Japanese technology com-
pany backed bySoftBank, is to makeits
market debut with a London listing in
October, despite the uncertainty sur-
rounding the threat of a no-deal Brexit.The start-up develops technology that
connects smart devices and their associ-
ated internet infrastructure to the
cloud. Uhuru, whose business partners
include British chip designerArm Hold-
ings, among others, mainly supplies to
Japanese multinationals such asHonda,
Dentsu,Mitsubishi Heavy Industries
andYamaha.
Its technology helps customers to
operate and manage internet-con-
nected devices — from wind turbines to
heavy machinery — and analyse the
data flowing from them.The start-up is part of a broader push
by SoftBank into the world of internet-
connected devices. In 2016, Softbank’s
chief executiveMasayoshi Sonpaid a
massive 43 per cent premium for Arm,
which had reported just $1.5bn in reve-
nues the previous year, with a plan to
turn it into a central player in what he
sees as one of the tech world’s biggest
new markets.
Uhuru had $35m in revenue last year,
and employs a total of 279 people in
Japan and the UK, as of June this year. It
will issue a formal intention to float on
Aim, London’s junior market, in early
September, according to a person with
direct knowledge of the situation.
Last year, it raised ¥500m ($4.7m)
from SoftBank and received further
backing fromNEC,Salesforceand Japa-
nese investment armNGK Spark Plug.Uhuru declined to comment on the
total raised inprevious funding rounds,
and on whether it hoped to raise further
funds in theinitial public offering.
Thegroup opened an office in London
this year and said that it sees Brexit as
providing an opportunity for techcom-
paniesto raise capital and hire talented
staff in the UK, as opposed to Silicon
Valley, where competition is fiercer.
The last Japanesegroup to list in Lon-
don wasSecure Design KK, a fingerprint
authenticationbusiness, in 2006. The
same year, Japanese airlineANA Hold-
ingsdelisted its London shares.
In recent months, foreign issuers have
been increasingly turning to London
markets. In 2018, 33 per cent of the total
raised on the LSE came from non-UK
groups, up from 14 per cent in 2014,
according to a Financial Times analysis.Technology
SoftBank-backed Uhuru set for London IPO
‘From the individual to the
start-up to government to
businesses... proof of IDbecomes instantaneous’
The Sierra Leone National Civil Registration Authority says all adult citizens are signed up for Kiva’s programme— Bestami Bodruk/Anadolu Agency/Getty‘We want to do right by all
of our participants to get
them the information theyneed and referrals ’
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