Brexit And UK Fintech Investment: Two Years On From The EU Referendum

, Opinions expressed by Forbes Contributors are their own.

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Days before the second anniversary of the EU Referendum vote, UK International Trade Secretary Dr Liam Fox launched an initiative that aims to bring together academics, experts and businesses and in turn, attract investment into the fintech sector.

This came after Prime Minister Theresa May’s announcement that more than 1,600 jobs will be created in addition to the £2.3 billion ($3bn) of private investment into the technology industry as a whole, as an attempt to showcase the UK as the best country in the world to run tech.

Dr Liam Fox MP said: “The UK is a world leader in the FinTech sector, thanks to our highly-skilled and creative workforce, fair regulatory system and ease of doing business.”

He continued: “The sector has already attracted £1.8 billion ($2.4bn) worth of investment in 2017 – a 153% increase on the previous year and as an international economic department, DIT [Department for International Trade] is putting technology and innovation at the heart of the UK’s global growth.”

So, has Brexit increased or decreased investment into UK fintech and is the UK government being forced to channel the country’s own cash into the financial and technology industries after a lack of funding from other countries?

In March 2017, the aftermath, or afterglow, of the decision to leave the European Union started to occur with Deutsche Bank announcing that it would be committing to a new office in London. Ahead of the Article 50 trigger date, this decision was particularly poignant during a time in which many financial institutions were contemplating moving out of the UK.

Rumored to have entered into a 25 year lease on a new building, the German bank’s UK CEO Garth Ritchie said at the time that this plan “underlines the bank’s commitment to the City of London”. This was thought to be the first of many other traditional banks setting up in the UK capital and in turn, minimize the impact Brexit will have on London fintech.

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Want to Build Elon Musk's Mars Rocket? Make Sure You Don't Have This One Key Thing Before Applying

Elon Musk and his rocket company SpaceX have big plans to send humans to the moon, Mars and beyond that you’ve probably heard about. This grand vision all hinges on a massive new rocket and spacecraft system called “BFR” for “Big Falcon Rocket” or “Big F***ing Rocket.”

Following the successful test launch of the company’s huge Falcon Heavy rocket, Musk is charging ahead with plans to start building BFR at a facility at the Port of Los Angeles. It’s also advertising a job opening for a “BFR Build Engineer” to lead the effort.

Not surprisingly, the role requires a lot of experience in various aspects of aerospace, mechanical and materials engineering.

For example, does your work experience include “exposure to advanced NDE methods such as phased array ultrasonics, eddy current arrays and digital radiography?” Mine sure doesn’t, but if you’ve got those words on your resume (or even know what they mean) then perhaps you’re the person that can take us to Mars.

The role also requires some background leading a team and a little technical drafting experience, but there’s one and only one “additional requirement” listed in the job description and it’s a doozy:

“Must be available to work long hours and weekends as needed.”

In other words, those with a life need not apply. Applying to build Elon Musk’s Mars rocket means your soul belongs to Elon.

Or from a less cynical standpoint, you will be devoting your being to the mission of making humans a multi-planetary species.

That sounds a little better.

This kind of requirement in a job listing isn’t actually that unusual, but kudos to SpaceX for being upfront about it. And it also helps the company attract the kind of motivated and mission-driven people it wants for its team. Transparency is a win-win here.

So if you have no life or are comfortable giving your life over to the future of a Martian sub-species, apply now.

Sprint, T-Mobile plan to file deal application to FCC on Monday

WASHINGTON (Reuters) – Wireless companies Sprint Corp and T-Mobile US Inc have informed the Federal Communications Commission that they will formally file an application asking for approval to merge on Monday, according to a document seen by Reuters.

A smartphones with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration

The document, which was filed to the FCC on Thursday, also requests a protective order that would shield sensitive corporate information from public view.

The two companies, which are the third- and fourth-largest wireless carries, agreed to a $26 billion all-stock deal in April that they said would create thousands of jobs and help the United States beat China to creating the next generation mobile network.

Two areas of potential regulatory concern focus on the companies’ large market share for prepaid and wholesale customers.

Neither Sprint nor T-Mobile immediately responded to a request for comment.

Reporting by David Shepardson; Writing by Diane Bartz; Editing by Dan Grebler

Etsy raises 2018 revenue growth forecast, shares hit record

(Reuters) – Etsy Inc on Thursday raised its full-year revenue growth forecast, boosted by an increase in its transaction fee for sellers, sending shares of the company surging 35 percent to a record high.

FILE PHOTO – A sign advertising the online seller Etsy Inc. is seen outside the Nasdaq market site in Times Square following Etsy’s initial public offering (IPO) on the Nasdaq in New York April 16, 2015. REUTERS/Mike Segar/File Photo

The share jump pushed up the company’s market cap by $1.4 billion.

The site for handmade goods, which struggled after its initial public offering in 2015, began its turnaround effort after board member and former eBay executive Josh Silverman took charge as chief executive officer in May last year after ex-CEO Chad Dickerson stepped down.

Silverman came to Etsy amid concerns about slowing growth, poor functionality of the company’s website and the specter of competition from Amazon.com Inc, which launched a marketplace for handmade goods in 2015.

The company now expects revenue growth of 32 percent to 34 percent in 2018, up from its previous forecast of 22 percent to 24 percent. It also raised the higher end of its gross merchandise sales growth range.

Etsy’s share movement was in contrast to arts and crafts specialty retailer Michaels Cos Inc, which dropped 15 percent after it expected flat comparable sales in the second quarter and comparable sales growth of up to 1.5 percent in fiscal 2018.

Etsy, however has beaten average analysts’ estimates in every quarter since Silverman’s appointment to the helm. It missed estimates in the four quarters prior to his arrival.

The company’s shares have more than doubled in the last 12 months.

“Etsy management has improved its merchandising, which in turn has led to stronger merchant sales. As Etsy is doing more for the merchants, Etsy is able to charge more, especially since the fees were relatively cheaper than competitors,” analyst Ronald Bookbinder of IFS Securities said.

Etsy said it would increase the transaction fee it charges when a seller makes a sale to 5 percent from 3.5 percent. The new fee would apply to the cost of shipping.

The company said it plans to increase direct marketing spending by at least 40 percent in 2018 and revamp community platforms.

Etsy has shifted its focus to areas that are showing the most growth for the handmade marketplace, particularly on its core e-commerce site.

The company has improved its website’s search function and uses artificial intelligence to provide better product recommendations for customers. In 2017 the company also ran holiday promotions for the first time.

“They took that really good business model and fine tuned the engine and now they have got that engine firing on all cylinders,” D.A. Davidson & Co. analyst Tom Forte said.

Reporting by Arjun Panchadar in Bengaluru; Editing by Bernard Orr and Shounak Dasgupta

U.S. agency's virtual currency oversight faces court challenge

BOSTON (Reuters) – An obscure virtual currency called My Big Coin is now at the center of a closely watched case that could determine whether the U.S. Commodity Futures Trading Commission has the authority to combat fraud associated with cryptocurrencies.

FILE PHOTO: Cryptocurrency miners are seen on racks at the HydroMiner cryptocurrency farming operation near Waidhofen an der Ybbs, Austria, April 25, 2018. REUTERS/Leonhard Foeger/File Photo

Amid a crackdown on virtual currency scams, the U.S. regulator in January sued technology entrepreneur Randall Crater and a company he founded, alleging they perpetrated a $6 million fraud on people who wanted to buy My Big Coin.

Lawyers not involved in the lawsuit say that Crater’s case raises a novel challenge to CFTC oversight of cryptocurrencies, which are not backed by any central bank.

His lawyers argue the CFTC has no authority over the virtual currency because it is not a commodity like wheat or cotton or a service that is traded using futures contracts, the typical focus of the agency’s enforcement regime.

“Our argument boils down to the fact that because My Big Coin does not have future contracts or other derivatives trading on it, it is not a commodity,” said Katherine Cooper, a lawyer for Crater.

Lawyers watching the case say a ruling against the CFTC could affect its ability to police virtual currency frauds as the only one on which futures contracts are traded in the United States is bitcoin, whose user base of millions dwarfs that of My Big Coin.

FILE PHOTO: A cryptocurrency mining computer is seen in front of bitcoin logo during the annual Computex computer exhibition in Taipei, Taiwan, June 5, 2018. REUTERS/Tyrone Siu/File Photo

“It would have a chilling effect on the CFTC’s application of its powers in this area,” said Gregory Kaufman, a lawyer with the law firm Eversheds Sutherland.

U.S. District Judge Rya Zobel in Boston is set to hear arguments in the case on Thursday. The CFTC declined comment.

Bitcoin, the most popular virtual currency, and nearly 1,630 others exist have a market capitalization of $276.6 billion, according to cryptocurrency market data site Coinmarketcap.

Regulators have expressed concerns about fraud schemes targeting cryptocurrency users, but questions linger about who has jurisdiction over them.

FILE PHOTO: A worker checks the fans on miners, at the cryptocurrency farming operation, Bitfarms, in Farnham, Quebec, Canada, February 2, 2018. REUTERS/Christinne Muschi/File Photo

The U.S. Securities and Exchange Commission has claimed authority over so-called initial coin offerings in which companies sell digital tokens to raise money. A federal judge in Brooklyn is now weighing whether cryptocurrencies can be considered securities.

To date, the CFTC has announced eight cryptocurrency-related cases.

In its lawsuit against Crater and Nevada-based My Big Coin Pay Inc, the CFTC says the defendants misappropriated $6 million from 28 customers they lured by naming their virtual currency to sound like bitcoin and further claiming it was backed by gold.

Lawyers for Crater contend, however, that My Big Coin is not a “commodity” under the Commodity Exchange Act because it is neither a tangible good nor a service on which future contracts are being traded.

The CFTC notes that in March, a federal judge in a different case, U.S. District Judge Jack Weinstein in Brooklyn, ruled for the first time that virtual currencies can be regulated by the agency as a commodity.

But Crater’s attorneys counter that ruling involved bitcoin, for which futures are traded.

Neal Kumar, a lawyer at the law firm Willkie Farr & Gallagher, said Crater may still lose because the Commodity Exchange Act defines services as commodities not just when they currently have futures contracts associated with them but in the future could.

“The argument that falls flat for them is that there needs be current or existing futures contracts,” he said. “And that’s just not what statute says.”

Reporting by Nate Raymond in Boston; Editing by Anthony Lin and Steve Orlofsky

Go Daddy founder Parsons buys revamped Arizona center for $133 million

NEW YORK (Reuters) – A real estate concern of Bob Parsons, founder of web hosting company Go Daddy, said on Tuesday it agreed to pay $133 million for a revamped retail center in a Phoenix suburb that was a major foreclosure in 2011 following the Great Recession.

The 76-acre Westgate Entertainment District in Glendale, Arizona includes 533,000 square feet of retail, office and residential space that was redeveloped by iStar Inc, a real estate investment trust headquartered in New York.

“If you go back to the depths of the recession in Phoenix, Westgate was one of the poster children for big failed white elephant real estate developments,” Los Angeles-based David Sotolov, head of West Coast originations at iStar, told Reuters.

The transaction, which includes 33 acres of undeveloped land, is one of Arizona’s largest retail real estate deals and marks the turnaround of a soured development with the popular “experiential” focus, iStar said in a statement.

Parson’s YAM Properties LLC said a boutique hotel and more housing, office and specialty entertainment are under consideration in a five-year plan, which aligns with the Super Bowl in 2023 at the adjacent University of Phoenix Stadium.

Parsons is a major Phoenix philanthropist who owns various local businesses through parent YAM Worldwide Inc, including more than $630 million of metro-area commercial real estate.

Westgate was a $2 billion mixed-use center championed by local developer Steve Ellman with the Gila River Arena, home of the Arizona Coyotes hockey team, as its anchor. The university stadium is home to football’s Arizona Cardinals.

In 2011 iStar Financial foreclosed on part of the property after the Ellman Companies failed to pay the balance of $97.5 million in debt on what was called the Westgate City Center, the Arizona Republic newspaper said at the time.

The size, tenant mix and entertainment opportunities, along with its proximity to the sports arenas, make Westgate a high-profile asset, said Dan Dahl, who heads YAM Properties.

“This property really fits our profile,” Dahl said. “Every business has a mess, and we’re here to help them clean that mess up,” he said, explaining the naming of Parsons’ companies with an expression from his youth: “You’re a mess!”

Reporting by Herbert Lash; Editing by Daniel Bases and David Gregorio

Micron: The Case For $100

When it comes to hunting for value in the technology sector, those two concepts – tech and value – seem to be irreconcilable. And while this is true of most of the sector, it’s not true of memory stocks; and within the memory sector, one name screams value more than any other: Micron Technology (MU).

I’ve been a longtime bull on Micron, especially after the company’s recent upward guidance revision to Q3 estimates, which kicked off a fresh rally in Micron shares above $60. The question on my mind, and on many investors’ minds, is simple: do we take the ~50% year-to-date gains on Micron and run, or do we hold on in the hopes of further appreciation?

In my view, the Micron rally still has plenty of legs. In addition to the catalysts coming out of Micron’s Q3 guidance revision, including the updated NAND/DRAM market predictions that Micron’s management made during its analyst day (covered in a prior article), Micron has several other drivers beyond the incoming Q3 results that can propel shares even higher, which we’ll discuss in this article.

Also consider the fact that while Micron has enjoyed the strongest performance of any of the major memory stocks thus far in 2018, it’s also still the cheapest. From a forward P/E perspective, which is how most analysts view Micron and the memory space, Micron is still a touch below Western Digital (WDC) and substantially lower than Seagate (STX). The divergence to Seagate’s valuation is perhaps most startling of all – Micron is a thought leader that has just started shipping its next-gen 3D NAND product, while Seagate is primarily an HDD manufacturer with little prospects for growth.

Chart

MU PE Ratio (Forward) data by YCharts

I’m holding out for Micron to touch at least $100 before letting go of the shares. It’s not an arbitrary round number that would inflate the stock’s valuation – note that analysts’ EPS targets for this year and next have moved up over the past month as Micron itself revised its guidance ranges. Wall Street is now expecting $11.56 in EPS for this year and $10.86 for next year, according to Yahoo Finance. A $100 price target would still imply a cheap single-digit P/E ratio of 9.2x against FY19 EPS estimates, and implies 64% upside from current levels.

If it sounds too good to be true, consider the fact that the reason memory stocks trade at such low P/E multiples is that, like auto stocks, the memory market has been known to be highly cyclical. In Micron’s latest memory market update given during its May analyst day, however, it has noted that supply growth will be slightly moderated compared to what it had originally expected, and that demand growth (on a “bits” basis) will match supply growth. Micron expects supply growth of 20% in DRAM against 20% demand growth; as well as 40% supply growth in NAND against 40-45% demand growth. This implies a balanced market and stable prices.

If the memory market has matured such that it no longer has the dramatic peaks and valleys in pricing as in the past, then memory stocks’ P/E multiples can normalize as well. A 9-10x P/E multiple for Micron, in my view, is only a small step in that direction. Stay long.

$10 billion buyback another catalyst for EPS growth

If you’ve paid even an iota of attention to Micron over the past several quarters, you’re well aware that the company has been able to drive massive earnings growth organically – that is, through pure revenue and operational improvements alone. Last quarter, Micron’s Q2 EPS of $2.67 represented 4x growth over the prior Q2. Well, Micron’s May 21 announcement of a new $10 billion buyback program is about to add some extra fuel to Micron’s EPS growth capabilities.

In general, Micron’s stock comp programs have boosted the share count over time. Here’s a look at Micron’s average diluted shares over time, taken from each quarter’s 10-Q filing:

  • 2Q18 (most recent): 1.159 billion shares
  • 1Q18: 1.156 billion shares
  • 4Q17: 1.114 billion shares
  • 3Q17: 1.106 billion shares

Micron’s EPS growth has essentially been achieved in spite of the increase in share count, and this upward creep in shares is about to go in the reverse direction. With an open-ended $10 billion buyback program, Micron has the capability to buy back 14% of its current market cap of $71 billion. Put another way, at its current share price of $61, if Micron were to deploy the full $10 billion it could immediately retire 164 million of its current 1.159 billion shares and produce about 16% “inorganic” earnings growth through share count reduction.

This $10 billion buyback isn’t just management blowing smoke, either. Micron is fully capable of financing this buyback through the $8 billion of cash on its Q2 balance sheet as well as the $3.8 billion in free cash flow it generated in the first six months of FY18 (Q1 and Q2) alone. Micron has newly committed to returning to shareholders at least 50% of FCF along with its new buyback program.

In essence, I think of the new buyback program as a fail-safe for if/when NAND and DRAM prices do cool off. In the event that Micron sacrifices a bit of margin and sees earnings growth headwinds from the operational front, it can still rely on its huge buyback program to drive positive y/y EPS comps. Analysts’ EPS estimates for FY19 imply a -6% contraction – Micron’s buybacks could drive this figure to positive even with slight memory pricing headwinds factored in.

3D NAND shipments taking off

NAND has always been the lesser portion of Micron’s business, with DRAM taking up two-thirds of its revenues. But Micron’s late May announcement that it began 3D NAND shipments in partnership with Intel is also worth mentioning.

3D NAND has long been awaited in the industry as it allows for the capability of stacking more memory chips in a smaller space. As envisioned by Gordon Moore of Intel years ago, the goal of semiconductor manufacturing is the continual improvement of packing more and more computing power into a smaller and smaller space year after year. 3D NAND allows manufacturers to stack memory chips vertically within the memory unit, unlike 2D NAND where memory chips are consolidated into a single flat layer, eating up space.

The Micron/Intel partnership is universally recognized as a technology leader in 3D NAND. Here’s the quote from an Intel VP highlighting the benefits of 3D NAND, taken from the press release:

“Commercialization of 1Tb 4bits/cell is a big milestone in NVM history and is made possible by numerous innovations in technology and design that further extend the capability of our Floating Gate 3D NAND technology,” said RV Giridhar, Intel vice president, Non-Volatile Memory Technology Development. “The move to 4bits/cell enables compelling new operating points for density and cost in Datacenter and Client storage.”

Bit growth in NAND shipments beginning in Q3 and beyond is another major driver for Micron’s earnings that may not yet have been factored into analysts’ expectations for EPS decline next year.

Key takeaways

Despite the robust performance of Micron shares year to date, the company still has plenty of room left to rally. Aside from Micron’s expectation of a stabilized memory pricing environment driven by balanced supply/demand growth, the company is also supporting its EPS growth via a huge new buyback program and new product launches (3D NAND) that can greatly increase its bit shipments.

Micron remains one of the truly value-oriented plays in the technology sector, and it even looks cheap against other undervalued memory stocks. Investors are encouraged to continue building a position, especially as upcoming catalysts (Q3 earnings) may prove to be another strong upside catalyst.

Disclosure: I am/we are long MU, WDC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

First 'Assassins Creed Odyssey' Screenshots Leak Ahead Of E3

Credit: Ubisoft

Assassin’s Creed Odyssey screenshots have leaked online prior to Ubisoft’s big reveal.

Screenshots for Assassin’s Creed Odyssey have leaked online prior to Ubisoft’s big reveal this afternoon.

The game, which is set in ancient Greece, looks remarkably similar to last year’s Assassins Creed Origins, which was set in ancient Egypt around 47 BC.

Judging by these screenshots, this game takes place much earlier, making it a prequel to the Assassins’ origin story. There’s a bit of evidence for this in the screens, though we’re left with questions.

It appears the game takes place during the War Peloponnesian, or about 431 – 404 BC. In many of the screenshots you see missions instructing you to fight, kill or weaken the Athenians. One mission instructs you to destroy Athenian war supplies and destroy weapon racks to reduce the ‘Nation Power’ of the Athenians. ‘Delians’ are also mentioned.

It would seem, then, that the protagonist is on the side of the Spartans if this does, in fact, take place during the war between Sparta (the Peloponneisan League) and Athens (the Delian League.)

Then there is a mission in one of the screenshots that says ‘Return to Thaletas.’ While the exact date of the historical Greek musician and poet is uncertain, it’s possible that he lived as far back as the 9th century BC. Either way, Odyssey appears to take place hundreds of years before the events of Origins.

How the Assassins and Templar fit into this—likely not named either of those things—remains to be seen.

Here are the screenshots, courtesy of Gematsu:

The protagonist:

Credit: Ubisoft

The protagonist.

Credit: Ubisoft

The protagonist.

Credit: Ubisoft

The protagonist and Kyra.

Naval warfare:

Credit: Ubisoft

Naval warfare.

Credit: Ubisoft

Naval warfare.

Credit: Ubisoft

The map:

The map is largely aquatic, making it more likely than ever that we’ll see plenty of naval warfare.

Credit: Ubisoft

Menus/UI

Credit: Ubisoft

Credit: Ubisoft

Interestingly, in this last screenshot you see Hunter Damage, Warrior Damage and Assassin Damage, presumably for bows, melee and stealth attacks.

Combat and Gameplay

Credit: Ubisoft

Credit: Ubisoft

Kick the Athenian

Credit: Ubisoft

Shooting with a bow.

Credit: Ubisoft

The eagle returns.

All told, the game is looking quite good though very similar to Origins. That game was the best in the series since Black Flag, so I’m not particularly worried about similarities. It is interesting that, at least in these screenshots, there appears to be no shield for the player character. It seems like shields would have been more pronounced in ancient Greece than in Egypt. Of course, it could just be these particular missions and menus don’t feature the shield. Or it could be that Ubisoft decided shields were a poor fit for this series.

We’ll know more tomorrow afternoon when Ubisoft is set to hold its big pre-E3 press conference. See the full press conference schedule (with links to livestreams) here.

See Also:

Amazon Founder Jeff Bezos Has Never Been Richer Than He Was This Week

The fortune of Amazon founder Jeff Bezos, the world’s only centi-billionaire, continues to grow with Amazon, which has seen its share price gain 42% this year. (Photo by David Ryder/Getty Images)

The stock of e-commerce giant Amazon took another step toward the stratosphere this past week, boosting the net worth of founder and CEO Jeff Bezos to an eye-popping $138.8 billion at the end of trading on Friday, according to Forbes’ Real-Time rankings of the world’s billionaires. That makes the world’s only centi-billionaire $3.3 billion richer than a week earlier.

The uptick in the company’s stock occurred amid a flurry of news: Amazon Prime announced it would live-stream English Premier League soccer games in the U.K; Whole Foods grocery store chain, which Amazon purchased last year for $13.4 billion, expanded its discounts for Prime members; and analysts released bullish reports about the company, which is the second largest in the U.S. after Apple in terms of market capitalization.

Bezos owns 16% of the e-commerce colossus, a stake that accounts for an estimated 95% of his fortune. The performance of Amazon’s stock has a direct, and significant, impact on his wealth. Since markets opened on Monday, Amazon’s share price may have only increased 2%, closing Friday at $1683.99, but for Bezos, that translates into billions of dollars.

The steady rise of Amazon stock this year—it is up 42% year-to-date—made Bezos the richest person in the world on Forbes’ annual Billionaires List for the first time, unseating Bill Gates.

Bezos’ position would have been hard to predict in 1994, when Gates was the richest person in the world and Bezos had just launched an e-commerce bookstore out of his garage in Seattle. In 1997, Bezos took Amazon public at $18 per share. He debuted on the The Forbes 400 list of the richest Americans the following year.

Though Bezos is the richest to see his fortune rise this week, he is not alone. Nike founder Phil Knight’s net worth grew by $800 million this week as retail stocks, particularly those of athletic brands, ticked up. Nike shares rose 3% over the past week.

The shoe company may have not brought Lebron James and the Cleveland Cavs enough luck to beat the Golden State Warriors in the NBA finals, but its success has lifted Knight’s fortune to $32.9 billion.

For more on the world’s richest and brightest entrepreneurs, follow me on Twitter @MadelinePBerg. Got tips or word about a new billionaire? Go to Forbes.com/tips.

French emergency room tests virtual reality path to pain relief

PARIS (Reuters) – The very thought of visiting a hospital emergency department is stressful enough for many people, even without the discomfort or pain of an examination or treatment.

A nurse treats a patient wearing the 3D therapeutic virtual reality headset developped by Healthy Mind start-up, at the emergency service department of the Saint-Joseph Hospital in Paris, France, June 7, 2018. The headset immerses the patient in the heart of a Zen garden or an enchanted forest to counter the pain rather than increase the doses of painkillers. REUTERS/Philippe Wojazer

Enter an immersive virtual-reality program created by three graduates being used in France to relax patients and even increase their tolerance of pain – without resorting to drugs.

“What we offer is a contemplative world where the patient goes on a guided tour, in interactive mode, to play music, do a bit of painting or work out a riddle,” said Reda Khouadra, one of the 24-year-olds behind the project.

As patients are transported by chunky VR goggles into a three-dimensional world of Japanese zen gardens or snowy hillsides, they become more tolerant of minor but painful procedures such as having a cut stitched, a burn treated, a urinary catheter inserted or a dislocated shoulder pushed back into place.

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“The virtual reality project … enables us to offer patients a technique to distract their attention and curb their pain and anxiety when being treated in the emergency room,” said Olivier Ganansia, head of the emergency department at the Saint-Joseph Hospital in Paris.

“I think in 10 years, virtual reality won’t even be a question any more, and will be used in hospitals routinely.”

The Healthy Mind startup is not a world first but has landed a $20,000 prize from a university in Adelaide, Australia – which will now pay for the three founders to present their project at Microsoft’s headquarters in the U.S. city of Seattle.

Writing by Brian Love; Editing by Kevin Liffey