Daily business and finance update 25th July 2023
Venture capital critique
Good morning. Today we're talking about venture capital criticisms, Credit Suisse’s record fine and Adidas’ trainer windfall.
Venture capital critique
A group of MPs have criticised the venture capital industry for its lack of diversity and investment outside of London. The MPs, who sit on the Treasury Committee, said that the industry is "unacceptably concentrated" in the capital, with 80% of investment going to businesses in London, Oxford and Cambridge. They also said that the industry is "failing" to invest in businesses led by women and ethnic minorities, with just 2% of all venture capital funding going to all-female founded businesses in 2022. The report's findings come at a time when the government is seeking to boost the UK’s startup ecosystem. The government has pledged to invest £1bn in venture capital over the next five years, but the report's authors said that this investment will not be enough unless the industry changes its ways.
Credit Suisse’s record UK fine
Banking giant Credit Suisse has been fined a record £87m by the Bank of England for "extremely serious" risk management failures. The Swiss lender, which was taken over by rival UBS in March, has also been ordered to pay a further £210m penalty by US regulators over its "extremely serious" failures dealing with collapsed hedge fund Archegos. Archegos failed in 2021, costing banks billions of dollars in losses, and Credit Suisse took the brunt of the losses. The bank took more than $5bn in losses from the failure, which over a period of two years, ultimately led to its fire sale to UBS.
Adidas Yeezy payoff
Adidas has taken $565m worth of online orders for the first batch of unsold Ye-designed trainers, the footwear line designed by rapper Kanye West. The company had cut ties with West in October 2022 after he made antisemitic comments. Adidas was left with a large inventory of unsold shoes and it decided to sell them rather than destroy them which would have forced the company to write off €500m. The proceeds from the sale will be donated to charities that fight antisemitism and racism. Adidas has not yet announced how much of the proceeds will be donated, but it has said that it will be a "significant amount.”.
Bye bye birdie: Twitter has officially rebranded to "X" after owner Elon Musk changed its iconic bird logo.
Expanding reach: Primark has expanded its click-and-collect trial to 32 sites in London.
Banking mistakes: The BBC has issued an apology to Nigel Farage over a story on the closure of his Coutts bank accounts "which turned out not to be accurate".
Subscription surprise: Spotify is raising prices for its 200m ad-free subscribers for the first time in over a decade, the platform has announced.
High-end sponsors: French luxury brand LVMH announced it will be a "premium sponsor" of the 2024 Paris Olympics.
The amount of money paid in inheritance tax in the UK last month, the highest monthly total on record.
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