2020 has been a tumultuous year for a number of companies: from Virgin Orbit running low on cash to ByteDance pushing its TikTok replacement, and Canoo settling with the SEC. These events symbolize the resiliency of the tech industry in the face of adversity and the importance of staying ahead of the curve.
In May 2020, Virgin Orbit, the spaceflight subsidiary of Richard Branson’s Virgin Group, announced that it was running low on cash due to the COVID-19 pandemic. In an effort to remain afloat, Virgin Orbit secured a US$200 million capital injection from existing investors, including an additional US$25 million from Branson himself. The money will help the company pay outstanding expenses and support planned launch activities in 2020.
On the heels of this news, ByteDance, the parent company behind the popular video-sharing app TikTok, released its Chinese version of the platform named Duoshan. It was the company’s attempt to temporarily satisfy a Chinese audience after the Chinese government bannedByteDance from hosting the app in their country earlier this summer.
Finally, Canoo recently settled with the SEC after its highly controversial late-stage reverse merger with Hennessy Capital Investment Corp IV. Initially, the SEC proposed a nearly US$2 million penalty, which raised eyebrows and invited questions about the legitimacy of the merger. Following concessions by both parties, the two sides eventually agreed to a settlement amount of US$875,000.
Altogether, these events demonstrate the resiliency of the tech industry and its dynamic nature. Virgin Orbit’s cash injection and ByteDance’s quick response to the ban of its app in China both prove the importance of being able to anticipate and respond to changing trends and market forces. Withstanding the SEC’s legal onslaught required strong legal counsel, a savvy finance team, and a sound understanding of the corporate environment that Canoo had to navigate.
From these events, we have seen the clear importance of staying one step ahead of the competition and having a comprehensive understanding of both the technological and regulatory landscapes. Companies cannot rest on their laurels and must anticipate changes in the market to stay ahead of their competitors. In this ever-changing climate, only those that are quickest to embrace change and adapt with the times will be rewarded.