Ford Gears up to Make Its Own Chips

Ford Teams Up With Global Foundries

Ford Motor (F) is getting into the semiconductor market. The automaker is fed up with chip shortages which have hurt its ability to churn out vehicles and capitalize on robust demand. Ford is partnering with the manufacturing company GlobalFoundries (GFS) to produce semiconductors.

Chip shortages have prevented vehicle manufacturers from producing millions of cars and trucks this year, so companies are looking for ways to improve the supply chain in order to prevent shortages in the future. That has resulted in several new deals between carmakers and semiconductor companies, but Ford is going further than many of its peers with its plans for securing chips. Down the road, Ford hopes to create some of the chips it uses in-house.

Ford Looks Ahead

Ford is tapping GlobalFoundries to boost its near-term supply of semiconductors. At the same time, the two companies are also working on higher-end semiconductors that would be used in more advanced vehicles in several years. Ford thinks designing its own semiconductors with GlobalFoundries will put it in a more competitive position in the growing EV and self-driving markets.

Ford is taking an aggressive approach to solving its chip shortage because it has been hit hard by the lack of chips and other supply-chain problems. In the near term, shortages should improve somewhat, but constraints are expected to remain in 2022. Amidst strong consumer demand, vehicle makers have to compete with electronics makers and other sectors for chips.

Vehicle Makers Chase Battery Production

Ford’s entrance into the chip-making market is the latest example of a vehicle company taking supply shortages into its own hands. As companies like Ford, General Motors (GM), and Volkswagen (VWAPY) race to produce EVs, they are running into battery constraints. Instead of being at the mercy of manufacturers, these auto companies are inking long-term supply agreements and bringing production in-house. They are pouring billions of dollars into ensuring they have a stable supply of the products they need.

Vehicle makers have been struggling with supplies of semiconductors and other materials for over a year. Constraints are not expected to go away in 2022, so companies are finding innovative solutions.

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CVS to Close 900 Stores Amid Business Model Changes

The Pandemic’s Impact on Consumer Habits

CVS Health (CVS) is doubling down on its digital efforts. It has also announced plans to close roughly 900 stores over the next three years as part of the drugstore chain operator’s efforts to offer more online services in response to changes in consumer habits.

Consumers changed the way they shop at drugstores during the pandemic. Consumers are increasingly filling prescriptions online and through mobile apps and using curbside pickup or delivery to purchase drugstore items. There is also higher demand for telemedicine as people seek answers from healthcare professionals. By closing some of its stores, CVS can focus on transforming existing ones into healthcare hubs which will offer services including diagnostic testing and vaccines.

CVS to Shutter 9% of Its US Stores

CVS will begin closing stores next spring, shuttering roughly 300 per year. Overall, the drugstore chain is closing roughly 9% of its 10,000 stores in the US. CVS has yet to name which stores will be closed or how many employees will be impacted.

The drugstore company is betting that creating healthcare destinations inside its retail locations will boost foot traffic and increase sales. As it stands, CVS operates 1,100 MinuteClinics within its stores, which give customers access to urgent care. CVS operates what are called HealthHubs at select locations. These sell more medical products and offer services such as mental health assessments and health screenings. CVS wants to have 1,000 HealthHubs in stores by the end of 2021.

MinuteClinics, HealthHubs, and Traditional Drugstores

CVS ultimately wants to operate three different types of stores: MinuteClinics, HealthHubs, and its traditional drugstore. The company also plans to integrate its stores with health insurance company Aetna, which it acquired in 2018.

This decision to overhaul the CVS business model comes at a time when the drugstore and healthcare landscape is becoming more competitive. Big names like (AMZN) and Walmart (WMT) have recently entered the market. Instead of doubling down on selling shampoo and filling prescriptions, CVS is working to create healthcare destinations.

Fundings Friday: Grammarly, AllTrails, and Place

Digital Editing Tool Raises $200 Million

Editing software startup Grammarly raised $200 million in a new round of venture funding. The venture round, which was led by Baillie Gifford and General Catalyst, gives Grammarly a market value of $13 billion. Grammarly is a free digital tool that checks for grammar mistakes in documents. A paid version of Grammarly checks documents for plagiarism and offers additional editing suggestions.

The startup has been gaining customers, with about 30 million people using the tool daily. That has piqued the interest of investors. Grammarly was valued at around $1 billion the last time it raised venture funding in 2019.

Digital Trail Guide Startup Raises $150 Million

AllTrails, a startup that provides digital guides and trail maps, raised $150 million in venture funding in a round led by private equity firm Permira. AllTrails, which saw traffic boom during the pandemic, has more than 300,000 hiking, running, and mountain biking trails on its website in 190 countries on all seven continents.

AllTrails’ strong performance in 2020 has carried over into this year. Proceeds from the fundraising round will be used for product development and to expand internationally.

Real Estate Tech Platform Startup Raises $100 Million

Real estate services platform Place raised $100 million in its first round of fundraising led by Goldman Sachs. Place, which launched last year, is an online platform for real estate agents. Place handles hiring, accounting, advertising, and training for real estate professionals. The platform is experiencing fast growth with revenue expected to be $150 million at the end of 2021—a 100% increase from 2020.

Proceeds from the fundraising round will be used to increase the company’s headcount, expand its technology, and enter the consumer market offering services such as mortgage, title, and insurance.