Harvard’s endowment is a little smaller than usual

Harvard University gets cocky, loses $1B

Harvard is very, very well endowed.

Driven largely by alumni donations, the elite private college maintains a fund of approximately $37.1B. For reference, that’s more than 6 times the size of one of Silicon Valley’s biggest venture capital firms, Accel Partners.

Like any other large fund, Harvard has finance managers who are tasked with investing this capital in smart, responsible ways. But recently, this hasn’t worked out too well for the ol’ Ivy…

First, a quick primer on endowments

Simply put, an endowment is a fund created by public and private universities from the donations they receive. Each year, 4-5% of an endowment is withdrawn to fund things like financial aid programs, professorships, and new buildings.

The rest of the fund (which, in Harvard’s case, amounts to billions of dollars) is invested as a way to generate a permanent source of income.

Many universities prefer to play it safe and invest their endowments long-term in index funds, which match or track parts of a market index like the S&P. But Harvard’s financial “geniuses” thought they had a better idea…

“Hey guys, 3 words: Brazilian. Tomato. Farms”

In the wake of the Great Recession, Harvard’s endowment fund suffered huge losses, and it set out to diversify its portfolio.

Their grand solution: investing in tomato, sugar, and eucalyptus “farms” in the impoverished (but then growing) northeastern reaches of Brazil. According to Bloomberg, Harvard’s brightest minds thought the farmers’ profits could “outstrip those of conventional stocks and bonds.”

It didn’t work out — and last year, Harvard reported a $1.1B decrease in the value of its natural resources portfolio.

Still the biggest, but not the baddest

One thing Harvard’s risky investment strategies have earned them: the worst average annual return of any Ivy League endowment fund. Over the past 10 years, the school has eked out a 4.4% return — nearly half that of MIT, and less than the composite average of 809 US colleges:

Despite their poor performance, they paid out in excess of $240m to their endowment fund managers between 2010 and 2014 — some of whom earned as much as $13m per year.

TGIF: South Korea reduces its workweek to 52 hours

This week, South Korea passed a bill to reduce the country’s maximum workweek from 68 hours to 52, to boost quality of life — and population growth.

South Korea has one of the lowest birth rates in the world, due in part to their workaholic culture.

For context, the average employee in South Korea works 2,069 hours a year (about 40 hours per week in a 50-week working year), compared to the United States’ 1,783 (about 35 hours per week).

But we’re tireeedddd…

South Koreans have been working themselves to the bone

Since the SK economy started flourishing in the ’80s, its citizens have embraced a “work hard, work hard” lifestyle.

SK workers have the third-longest workweek in the world compared to other developed economies (excluding China and India).

And, even though employees’ annual time spent working fell nearly 500 hours since 2000, South Koreans work 400 more hours a year than employees in the UK.

Cutting back seems reasonable

But businesses aren’t into it. Under the previous law, weekends weren’t counted as “working days,” meaning companies could legally squeeze an extra 16 working hours out of people a week, completely unpenalized.

But, with the new bill, the standard workweek will be 40 hours, plus 12 hours of overtime (weekends included). And, those extra overtime wages will cost businesses an estimated $11B per year to maintain the same productivity.

If you need us, we’ll be hiding in the break room…

DoorDash raises $535m, is now worth $1.4B

Food delivery startup DoorDash has raised more than half a bil’ in a new funding round led by Softbank, which now values the company at $1.4B.

DoorDash originally sought $200m, but a bidding war erupted between Softbank and some of the other investors, including one of their return backers, GIC.

Cut to: DoorDash strutting down the street with a big wad of cash, burning a hole in their wallet.

What’s your angle here, Softbank?

Softbank has made it pretty obvious how they feel about the budding on-demand economy, recently backing the money truck up to companies like Wag and Uber.

With their new investment, the firm now has a stake in two food delivery companies: DoorDash, and UberEATS — and Axios speculates the latest move could signal a future acquisition.

“Yeah, but does it travel?”

DoorDash is in the fresh stages of a highly promising market.

According to their co-founder and CEO Tony Xu, only 5% of U.S. restaurant takeout is currently scheduled online — which means the market is green and growing for the company and their competitors.

And DoorDash is well aware of this: With the money, they plan to increase their corporate headcount from 550 to around 800, while expanding to nearly triple the cities they currently operate in from 600 to 1,600.

No pumpin’ the breaks for this delivery company.

$3B mapping company Here is making moves with Naver Labs robotics

Here, the massive, 33-year-old map-tech platform no-one’s heard of, has agreed to a robotics partnership with Naver Labs to expand their autonomous indoor mapping coverage using 3D technology.

Naver Labs specializes in image-recognition robots and indoor mapping technology, which Here plans to use to generate and update the maps on their platform automatically — and ultimately, sell those maps to companies developing autonomous tech.

What’s the deal with Here?

Previously owned by Nokia, the mapping and location services company sold for $2.8B to the Audi, BMW, and Daimler car consortium in 2015.

Since then, other high-profile companies have sneakily bought in, including Intel, who purchased a 15% stake in Here at the beginning of last year to improve their autonomous car tech.

And now, Here we are…

Naver Labs’ 3D indoor mapping robot will collect data using laser scanners and cameras that it will then upload to Here’s platform, while another Naver Labs Droid named “Around” will roam the given area to keep information current.

The pair will start mapping high-traffic areas like airports and train stations first, with plans to expand. And, once the maps exist on Here’s platform, can sell ‘em for big bucks to companies building out location-based apps or other autonomous services that rely on indoor navigation.

1. The floor is lava if you go deep enough.
2. When you put on a shirt you go in one hole and out three.
3. The mirror on the wall was the original Amazon Echo.
4. You never realize the importance of a bath mat until you don’t have one.
5. We were going to write a time traveling joke, but you guys didn’t like it.
6. via Reddit

How 2 MIT grads unlocked the code to perfect wine pairings

It all starts with a quiz… and how you take your chocolate.

After graduating MIT, the Bright Cellars founders found themselves dumbstruck in the wine aisle: they had absolutely no idea which wines they’d even like.

So, the two wannabe sommeliers set out to crack the secrets of the grape vine — with science.

After vigorous “research,” the duo created the Bright Cellars Wine Quiz — a quiz that uses a proprietary wine-scoring algorithm to match wines perfectly to your palate.

Bright Cellars: the OG master of wine matchmaking

Like a personal sommelier, the Bright Cellars Wine Quiz uses your favorite flavors of chocolate, coffee, and liquor to nail down your wine soulmates.

Each month, you get 4 bottles of hand-selected wine, tailored to your specific tastes.

And Bright Cellars has so much confidence in their scientific method, that if a bottle doesn’t tickle your tastebuds, they’ll send you a free replacement in your next shipment.

Curious which wines are your perfect match?

Take the quiz and see for yourself. Readers of The Hustle get 50% off their first order.