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Revel founder Frank Reig a year later on driving EV adoption in big cities | Rebecca Bellan | 2,022 | 5 | 13 | ago, when Revel was on the cusp of expanding into multiple business lines beyond its original scope of providing shared electric mopeds. Today, we’re taking a second look to see how far the startup has come, and the distance it has to cover to achieve its stated goal of helping urban cities transition to electric transport. Revel started its moped business in New York in 2018, and it has since expanded into Miami, San Francisco and Washington, D.C. But if you just heard about the startup for the first time today, you might not even think of it as a moped sharing company. Over the past year, Revel has pivoted sharply toward building fast-charging hubs for electric vehicles, . Along the way, the company also started (and quietly shut down) an and launched . Reig recently told me the company is aiming to build 200 fast-charging stalls in NYC by the end of this year, “and we’re shooting for hundreds more in 2023 on top of that.” Revel’s ride-hailing business, which currently has 50 Teslas driving around Manhattan, will also expand alongside the EV charging infrastructure, he said. “The way we think about stations is at scale. Revel’s not interested in the one charger at a Walgreens. That doesn’t do anything for the city, and it doesn’t accelerate any transition. The only way to drive EV adoption in cities is with a real network of infrastructure, which does not exist right now. Until a company like Revel builds it all, this EV transition is just a lot of marketing and talk.” We sat down with Reig to talk about Revel’s business, the company’s recent funding from Blackrock, the need to work grid stability into its business model and how the company thinks about profitability. We have 6,000 mopeds across four markets, so it’s a sizable business that generates a sizable amount of revenue. At this point, we’re sort of waiting for COVID to be over officially until we really start to think about expanding our micromobility footprint. That said, some of the mopeds in our fleet are three, four years old. So we’re starting to think about the next moped technology we want to use. How do we want to think about reinvesting in our markets, in our fleets? We’re building many more in New York. Everybody keeps talking about the EV transition. Everyone keeps talking about how auto OEMs are saying they’re never going to produce another gas vehicle again. They’re falling over themselves to outdo one another. No one’s talking about where all these vehicles are going to charge. That story has not changed from last year. If anything, it’s gotten worse. Infrastructure is just so lacking, especially in some of these big cities like New York. New York state passed a law that said all vehicles sold after 2035 will have to be electric, and 20% of new vehicles sold will have to be electric by 2025. We literally have millions of vehicles that need to transition to electric, and there’s really no charging in sight, which is where our strategy comes into play. |
When your startup’s core mission is set to be overturned | Natasha Mascarenhas | 2,022 | 5 | 14 | , a digital health startup that scales access to abortion pills, makes sense. It’s a direct-to-consumer pharmacy that aims to meet consumers where they are, which is especially important as the pandemic’s extended stay continues. Hey Jane’s core product has significant red tape to deal with. It’s main product, abortion pills, are banned or restricted in several states. Add in the fact that is set to be overturned, and the world’s future could clash with the startup’s mission to expand healthcare. Hey Jane pretty much underscores the potential — and promise — of telehealth startups. But it also operates at the heart of an over-politicized issue. Earlier this month, I wrote about how Then, Hey Jane co-founder Kiki Freedman said that the overturn makes abortion care via mail “now likely to be the most viable form of access for most of the country.” A hurdle, she expects, will be a lack of education among consumers on medication-induced abortions. The majority of abortions performed in the U.S. are via medication, except she says that a minority of people are educated about the nuances of medical abortion. “It’s imperative that we continue to educate people about this safe, effective and common abortion option,” she wrote in a statement. But now I want to do a follow-up to these next-day reactions. Next week, I plan to interview Freedman for TechCrunch’s Equity podcast and ask her about how to build a company when the mission may be irreversibly challenged by our government; we’ll talk about the origin story, and how they plan to pivot in the future. I want her to tell me what the world is getting wrong about telemedicine’s ability to answer the biggest questions in health right now, and where startups could fit into the solution going forward. Also, are they actually raising For the answers, make sure to tune into the Equity episode wherever you get podcasts, and, heck, In the rest of this newsletter, we’ll talk about another round of startup layoffs, why your MVP isn’t the MVP, and a fintech company betting that it can make even your local credit card crave some Netflix & Chill time. As always, you can support me by forwarding this newsletter to a friend or or There’s unfortunately Tech workers experienced another hard week of layoffs and hiring freezes, coming from startups such as Section4, Latch and DataRobot. We rounded up Impact was felt across industries ranging from education to security, as well as stages from a post–Series A startup to a recently SPAC’d business. To me, that signals just how pervasive this pull-back truly is, regardless of what phase your company may be in. It’s not just the cash-rich tech unicorns that are cutting staff; it’s the early stage startups, too. / Getty Images I’ve been thinking about this headline from Haje Jan Kamps for the past week because it challenges one of those preconceived startup notions that everyone else happily adopts without too much of a fight. Aka, my sweet spot (and my weakness). In this op-ed, Kamps gets into why MVP is “such a profound misnomer” and what to focus on instead. Kamps’ new framework, and series of questions that you should be asking your first product, should make the complexities of MVPs a little more approachable. And II’ll end with his kicker: “I don’t have a suggestion for a better name for MVP, just don’t fall into the trap of thinking of it as a product, being viable or, necessarily, being small, simple or easy. Some MVPs are complex. The idea, though, is to spend as little of your precious resources as you can to get an answer to your questions.” Getty Images For the deal of the week that may have flown under your radar, ! Co-founded by Michael Broughton and Ayush Jain, this fintech startup believes that credit access should be free — so it found an atypical way to help people build credit. Altros, , helps folks build credit through recurring payment forms such as digital subscriptions to Netflix, Spotify and Hulu. It stands out because a lot of banks targeted toward low-income, historically disenfranchised people want to circumvent credit scores altogether — while Altros wants to tweak access to an established system. I highly recommend reading about the company’s origins, fundraising journey and spotlight — and subscribing to her newsletter, Getty Images Until next time, |
This Week in Apps: Google I/O wraps, a new ARCore API, Twitter deal drama | Sarah Perez | 2,022 | 5 | 14 | Welcome back to This Week in Apps, that recaps the latest in mobile OS news, mobile applications and the overall app economy. The app industry continues to grow, with number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the year-end . Global spending across iOS, Google Play and third-party Android app stores in China to reach $170 billion. Downloads of apps also grew by 5%, reaching 230 billion in 2021, and mobile ad spend grew 23% year over year to reach $295 billion. Today’s consumers now spend more time in apps than ever before — even topping the time they spend watching TV, in some cases. The average American watches 3.1 hours of TV per day, for example, but in 2021, they spent 4.1 hours on their mobile device. And they’re not even the world’s heaviest mobile users. In markets like Brazil, Indonesia and South Korea, users surpassed five hours per day in mobile apps in 2021. Apps aren’t just a way to pass idle hours, either. They can grow to become huge businesses. In 2021, 233 apps and games in consumer spend, and 13 topped $1 billion in revenue. This was up 20% from 2020, when 193 apps and games topped $100 million in annual consumer spend, and just eight apps topped $1 billion. This Week in Apps offers a way to keep up with this fast-moving industry in one place, with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps to try, too. Google We came, we saw, we I/O’d. But did we have fun? It’s a shame Google’s big developer event was still largely hybrid — save for select invitees (Google’s partners), the event was only streamed. The keynotes are held at an outdoor amphitheater so the COVID-era rule is starting to not make sense. Concerts are open and tech employees are being shuffled back to the office, but outdoor tech events are still closed, I guess? Unfortunately, this decision impacts those not fortunate enough to make the guest list at these real-world happenings that offer networking opportunities and chances to engage directly with Google employees. At least Apple turned WWDC into a , or so it says. After all, the keynotes are not the main reason developers go to these things. In any event, Google’s event sort of felt like an off-year, where some of the biggest hardware announcements had no exact ship dates, beyond “fall” or “next year” or “who knows?!” During the keynote, Google unveiled a lower-cost and new , both coming this summer, and the big news of , arriving this fall. But other announcements were just teased, like the Tensor-powered , due this fall; a new Android tablet (the ) for 2023; and , with a ship date of IDK MAYBE ONE DAY. In terms of Android developer news, there was still quite a bit: Plus Google , including a new , new (e.g. LaMDA 2), a new , ad personalization , Google Cloud , tools, and more. A couple of interesting things at I/O did hint toward Google’s longer-term vision for AR, starting with Announced this year, multisearch lets users combine images and text into a single Google Search query to tackle the sorts of searches that a text search alone could struggle with, or to aid with shopping purchases. But the tech could one day serve to help users scan items in the real world. For starters, Google said users can now scan real-world items and then add “near me” to their query to find a nearby retail store that carries the item in question. But more interestingly, Google said one day users will be able to pan their camera around to learn about multiple objects within that wider scene. The company suggested the feature could be used to scan the shelves at a bookstore, then see helpful several insights overlaid in front of you. Google Of course, this technology would make sense for an AR glasses interface — though the Google exec presenting didn’t directly come out and say that. “There are 8 billion visual searches on Google with Lens every single month now and that number is three times the size that it was just a year ago,” said Nick Bell, senior director, Google Search. “What we’re definitely seeing from people is that the appetite and the desire to search visually is there. And what we’re trying to do now is lean into the use cases and identify where this is most useful,” he said. “I think as we think about the future of search, visual search is definitely a key part of that.” Today, many developers are trying out AR experiences in their smartphone apps wondering how consumers will react to the new features. At I/O, Google shared how it sees use cases for AR. These ranged from scanning the world in front of you and augmenting it with information to indoor navigation to playing games. built by the new ARCore Geospatial API’s early adopters, which included AR gaming, navigation aids that helped concert-goers find their seats, as well as new tools offered by where to park their scooters and e-bikes with “less than a meter accuracy.” These tools are in the hands of Android and iOS app developers, but one day, the screen developers are building for may no longer be only the rectangular smartphone — but eyewear. (On that note, with a tease of its mixed reality glasses, but what’s there to say about a pixelated Zuck video?) But AR glasses are still a bet that the future generation wants a world with ever more personal tech, where tech becomes a further part of the human condition and experience, rather than the handheld tool it is today. That vision also implies the Big Tech backlash we’re experiencing today will come to an end, and people will agree to put Google or Facebook I mean even in “Star Trek” they still used tablets, you know? Bryce Durbin / TechCrunch Elon’s trolling. Or aiming to renegotiate the share price. Or looking for an exit. Who knows? But the would-be Twitter acquirer while he looked into details related to the percentage of spam and fake accounts on the app. Of course, he can’t really pause the deal over spambots. He declined due diligence. And Twitter discloses the percentage of spam and bots in its SEC filings. And even if it more than the 5% Twitter says it is, it can’t possibly be that it would actually threaten the deal going through. (Unless Musk just found out almost all Twitter users are bots! Ha! I mean…sometimes it feels like that when you tweet about crypto…) In any event, if Musk wants out, he’ll find a way — no matter what the contract or SEC has to say about it. But in a tweet, Musk wrote he was “still committed” to the acquisition. Okay then?? Regardless of what happens to Twitter, the real damage to the company goes beyond this financial mess. People saw their work demeaned. thought about cutting Twitter from their buys. left. This week, . Staff’s ability to focus on their work is, arguably, impacted by the ongoing drama. Maybe Jack Dorsey did want to take Twitter private, but why would he have supported doing it this way? Meanwhile, CEO Parag Agrawal on Friday the deal wasn’t stopping him from making the “hard decisions as needed,” a reference announced this week. Seen what's in store for the on May 24-25? 👀 Hear from devs at the forefront of across 24 keynotes, workshops, and panels. Check out the full agenda and register: — Lightship (@LightshipAR) Instagram YouTube to improve its caching technology and its sizable engineering workloads. Deal terms were not disclosed, but the full six-person team will now join Snap and remain in Toronto. led by Viola Ventures and F2 Venture Capital. The startup covers trips, health, belongings and pets via an app that sends alerts, offers 24/7customer support and enables digital claims filing, as well as electronic transfers of reimbursements to its Faye Wallet. for its platform that allows creators to connect directly with their community and generate revenue. Each fan views content that’s watermarked uniquely for them, to help prevent leaks. The app is nearing $10 million-plus in creator payouts after two years, it said. led by KKR. The deal values the business, which now has 3,000 software customers, at $1.4 billion. round led by Pendulum. The startup plans to further invest in its credit and financial literacy catalog and marketing, and will expand to include rent payments. |
On non-founder CEOs, turnarounds and priorities | Anna Heim | 2,022 | 5 | 14 | This may be your first time reading this newsletter — if so, welcome! If not, you already know that . And if you’ve read , you also know that I am taking over. This makes me something akin to a non-founder CEO, so today’s topic is also personal — . Our colleague Brian Heater wrote about earlier this week. But beyond how many bikes and subscriptions the fitness company did or didn’t sell, it’s this quote that caught my attention: “Turnarounds are hard work. It’s intellectually challenging, emotionally draining, physically exhausting, and all consuming. It’s a full-contact sport.” This is an excerpt from the penned by Barry McCarthy, Peloton’s CEO . McCarthy’s predecessor, John Foley, stepped down as the company he co-founded cut 2,800 jobs globally — around 20% of its head count. McCarthy’s job since then hasn’t been easy. The new CEO has focused on three priorities, he said: “1. stabilizing the cash flow 2. getting the right people in the right roles and 3. growing again.” It is too early to tell whether he will eventually succeed, but Peloton’s position isn’t unique. Peloton is one of several tech-enabled businesses that enjoyed strong tailwinds during the pandemic and are now facing The list also includes , and Zoom, for instance. Airbnb is a related but slightly different case. The company hopes that its accommodation marketplace will benefit from “the travel rebound of the century.” But it also plans to , CEO Brian Chesky told TechCrunch. Unlike the case with Peloton, Chesky is a founder CEO who’s going to lead Airbnb through this transition. But not every founder still has the stamina or the right combination of skills to do this after several years at the helm. This is one of the reasons why CEOs so often get replaced, and the tech sector can’t act like it never happens. The cult of the CEO takes several forms, and one of these is . This share structure is part of a wider myth: That a founding CEO should be in control forever. And sure, nobody wants to lose control of their company or get fired by the board. But it is also forgetting that founder CEOs might . There are many reasons why lead founders leave. “Former executives leave post-acquisition all the time,” my co-worker Natasha Mascarenhas noted (She was commenting on health company Ro, which has lost .) Founders may also want to leave before an exit, even when an IPO seems in the cards. Sometimes for the sake of their company. Sometimes for their own. And sometimes both. That’s the case of Monzo founder Tom Blomfield, who has been , while also full of praise for his replacement. There’s no doubt about it: Handing over a project you love can be bittersweet. And the perspective of having big shoes to fill can be daunting for the new person in charge. But it is not uncommon, so let’s stop pretending it is. Let’s just make the best of it, shall we? |
Here come the single-digit SaaS multiples | Alex Wilhelm | 2,022 | 5 | 14 | for a comeback on Friday after another torrid week of selloffs, it’s a fact that software valuations are testing new levels of price depression. There’s widespread damage as a result of all of those red charts plummeting down and to the right: The decline in the value of public software companies has been a key leading indicator for the present slowdown in venture capital activity, for example, and the ability of startups to push their own valuations higher. Day-to-day coverage, however, can . So this fine Saturday, I want to slow down and take stock of where are regarding software (SaaS, effectively) valuations. There’s no need at this point to gloat about how much investors got things wrong last year. Markets have a way of teaching their own lessons; we don’t need to add to the lecture notes provided by public-market immiseration of recent tech IPOs or the panic that overpriced unicorns feel as they compare their revenue base to their sticker price. |
Can carbon capture startup Carbon Clean deliver on its cost claims? | Tim De Chant | 2,022 | 5 | 14 | earlier this week that it raised $150 million in a Series C that provides it with a sizable war chest to continue the development of its modular carbon capture system. Carbon Clean has won its share of admirers, most recently Chevron, which led the round, and BloombergNEF, which it a BNEF Pioneer last month in part because of the startup’s small-scale approach to carbon capture and sequestration (CCS). Typically, the technology is a large-scale affair. After all, the world needs to eliminate emissions on a vast scale, and the technology benefits from a certain amount of scale. That’s why CCS is usually envisioned attached to massive coal- or gas-fired power plants. But there are still many smaller sites, from cement kilns to chemical plants, that are currently wedded to fossil fuels but still need to be decarbonized. These are the sorts of companies that Carbon Clean pitches itself to, and the startup says that its modular approach can help polluters deal with their carbon emissions incrementally as regulations ratchet up. Fundamentally, Carbon Clean relies on a tried-and-true process to strip carbon dioxide from exhaust streams. Exhaust containing carbon dioxide is sent through a filter that is wetted with an amine-based solvent. At lower temperatures (around 50 degrees Celsius, or 122 degrees Fahrenheit), carbon dioxide will bind to the amines. The CO -laden solvent is then pumped to another container, where it’s heated to 110 to 120 degrees C (230 to 248 degrees F) to release the gas, which is then compressed and sent elsewhere to be used or stored. Each company has its own amine solvent with different properties, and the details of the process may vary, but that’s the gist of it. Carbon Clean CEO Aniruddha Sharma said his company’s amine solvents can reduce costs compared with a commonly used amine by requiring less energy to heat and by reducing corrosion in the system. Until the company releases more data, such claims will be hard to judge. But based on the , Carbon Clean is likely to see in energy use. |
Another week of job slashes and crypto crashes | Greg Kumparak | 2,022 | 5 | 14 | Hi friends! Welcome back to , the newsletter where we wrap up many of the top stories to cross TechCrunch’s front page over the last seven days. The this week — at least based on what our backend suggests readers cared about most — was the crypto market plunging hard and fast. Bitcoin is down over 25% month-over-month, from around $41k per BTC to around $30k at the time I’m writing this. Ethereum is down over 30% in the same time frame — from around $3,100 per ETH to around $2,000. Why? For that I defer to Lucas and Anita and their new podcast/newsletter . Any time I write about cryptocurrency I tend to feel dumb and wrong within about 48 hours — fortunately, the Chain Reaction team has a better grasp on this stuff than I do. This week they sat down with repeat-founder-turned-investor Kevin Rose, who says this is his “10th or so” crypto downturn, for some insights. My goal with Week In Review is to keep you all feeling informed — to make it so that, when you click in at the end of a busy week, you can skim WiR and feel like you’ve got a pretty good sense of what happened in tech. So let’s dive in! Google Besides a crypto crash, what else happened this week? Lots. Whether everyone’s over buying a new phone every year or we’re all just focused on the going on right now, it felt like Google’s annual conference/keynote just kinda… came and went. While Google kept of the actual details under wraps, the big news out of the show was early glimpses of a new Pixel phone, a new “Pro” line of Pixel ear buds, and improvements to Google Maps, Assistant, and Translate. Oh, and Google’s finally making their own smartwatch! Oh, oh, and they’re still playing with the idea of Google Glass. I don’t wear glasses (yet), but the live, real-world subtitles in would have me rocking a pair in a heartbeat. Unfortunately, the recent trend of tech layoffs continues. Over the we’ve seen layoffs from Robinhood, Netflix, Thrasio, Cameo, OnDeck, and MainStreet. This week that list grew to include Carvana, Latch, DataRobot, and Section4. Meanwhile, a number of big tech cos. announced that they’re slowing or outright freezing hiring. Amanda and Natasha have the full breakdown. Because of course they are. Remember when Instagram was just a place where we’d spend way too much time taking sepia-toned pictures of our breakfast and that was enough? Well, that was fast. In March of this year, Tiger Global closed its latest venture fund with a gigantic $12.7 billion in commitments. Just months later, Connie Loizos writes “that new fund — which reportedly took less than six months to raise and includes $1.5 billion in commitments from Tiger Global’s own employees — is almost fully invested already.” DJI has a new drone, and TC’s Darrell Etherington is a fan so far (with the caveat that he mostly recommends the most expensive option, which is a few hundred bucks more than the $669 base model). The company best known for its exercise bikes (and more recently treadmills) has a new piece of at-home exercise hardware in the works: a rowing machine. While it feels like rowing machines are having a bit of a moment right now, it’s hard to imagine that this alone turns things around for Peloton — but, as Brian Heater puts it, it’s at least “a bright spot” for the company after a streak of bad news. Bryce Durbin/TechCrunch So you started your company outside of the US and now you want to move to Silicon Valley. What can you do? Immigration attorney Sophie Alcorn runs through the options. Airbnb went through a major overhaul this week, in a move that CEO Brian Chesky calls a “top-to-bottom upgrade.” Jordan Crook sat down with him to learn what changed and why. It’s pitchdeck teardown time! Haje takes a look at the deck used by pet telemedicine platform Dutch to raise a $20M Series A. Can every pitchdeck pull off 14 photos of adorable animals? Probably not. But this one can, much to Haje’s delight. |
Metaverse app BUD raises another $37M, plans to launch NFTs | Rita Liao | 2,022 | 5 | 22 | , a nascent app taking a shot at creating a metaverse for Gen Z to play and interact with each other, has raised another round of funding in three months. The Singapore-based startup told TechCrunch that it has closed $36.8 million in a Series B round led by Sequoia Capital India, not long after it secured a Series A extension . The new infusion brings BUD’s total financing to over $60 million. As with BUD’s previous rounds, this round of raise attracted a handful of prominent China-focused investors — ClearVue Partners, NetEase and Northern Light Venture Capital. Its existing investors GGV Capital, Qiming Venture Partners and Source Code Capital also participated in the round. Founded by two former Snap engineers Risa Feng and Shawn Lin in 2019, BUD lets users create bulbous 3D characters, cutesy virtual assets and richly colored experiences through drag-and-drop and without any coding background. The company declined to reveal its active user size but said its users have created over 15 million custom experiences i.e., virtual spaces with gameplay that others can join since the app launched in November. Virtual assets, including costumes and accessories that users design for characters, have changed hands more than 150 million times on BUD’s marketplace. These transactions are clearly a promising way to generate revenues, but BUD is not charging commissions for now. Nor has it started monetizing in other means via the app. Perhaps partly due to its free-to-use and ad-free nature, the app has been among the top 10 social apps in nearly 40 countries across North America, Southeast Asia and South America. It’s currently the top free social Android app in and , according to market intelligence company SensorTower. Apps like Roblox and South Korea’s have also made it easier for anyone to design virtual characters and spaces. BUD is taking the user experience a step further with plans to introduce a marketplace for non-fungible tokens (NFTs). That means the ownership of virtual items sold on BUD will be recorded on the blockchain. Reselling of digital assets will likely become possible in the form of NFTs, of which authenticity and provenance can be more easily verified. BUD declined to disclose which chain the NFT project will be on or what tokens it will use, but said the marketplace will “soon be live.” “While BUD makes 3D content creation possible for mainstream Gen Z consumers, we will continue to bring blockchain to mainstream consumers and allow our creators to truly own and monetize their creations,” said Lin in a statement. The company is quickly expanding and has a team of 130 employees spread across its headquarters in Singapore as well as its offices in Shenzhen and the U.S. |
Stripe and Plaid suit up for battle | Alex Wilhelm | 2,022 | 5 | 22 | from Stripe and Plaid indicate the two private companies are gunning for one another as the market for B2B financial technology matures, expands and individual players increasingly overlap. It might sound silly that Stripe, best known for its payments technology, and Plaid, best known for its API that connects consumer bank accounts to third-party services, are competing. It isn’t. The quote, “All software tastes like chicken from a financial perspective” is both funny and true. It’s also largely true for fintech companies, but for a reason unique to the space: Fintech startups, unicorns and even public companies tend to broaden their capabilities over time, adding more and more competencies. Both B2B and B2C startups have similar motives. Customer acquisition (advertising, onboarding, etc.) is expensive and competitive, so once a fintech lands a user or customer, it’s best to extract as much value from them as possible. That’s why companies like Plaid and Stripe build and buy to serve more and more of their customers’ needs — until they wind up at each other’s doorstep. What happens once they do? We’re going to find out. In January 2022, Plaid announced that it was buying Cognito, a decision that TechCrunch was part of a move “beyond merely connecting accounts.” In essence, Cognito added know-your-customer (KYC) and anti-fraud tools to Plaid’s feature list. By doing so, it could offer its customers far more than just account connections. In 2021, Plaid had bought a company called Flannel that focused on payments. With account connections, security tooling and payments tech, Plaid was building and buying its way into a larger potential total addressable market — one that’s already being attacked by other private fintechs. It’s obvious that Stripe has broadened its feature set away from its original remit. The company has so many services that its on-site menus are becoming more of a catalog than an organizational tool. Seeing the company launching something new here and there, then, is nothing out of the ordinary. But in early May, when Stripe announced “Financial Connections,” a service that will, TechCrunch , let its “customers connect directly to their customers’ bank accounts to access financial data to speed up or run certain kinds of transactions,” we took note. The product announcement put Stripe on a collision course with Plaid’s core business, even if it was fair play — the latter company had already told the market that payments were on its mind through the 2021 Flannel deal. Still, Plaid clearly took exception with what its leaders implied was a sneaky means of acquiring information and a lack of transparency on Stripe’s part in light of their partnership and history. With the two companies fussing at one another on Twitter, it was clear that the gloves, as much as they can be in the API world, were off. |
‘Move-to-earn’ Solana app StepN is latest crypto gaming craze | Rita Liao | 2,022 | 5 | 22 | in December, StepN, an app that lets users walk and run to earn tokens, has quickly become a household name in the play-to-earn blockchain gaming, or GameFi, world. Two to three million users worldwide are now active on the app every month, StepN’s co-founder Jerry Huang recently told TechCrunch. That number is nowhere close to the hundred-million player size enjoyed by popular Web 2.0 titles, but in the world of crypto, it’s a meaningful breakthrough for a five-month-old app. As of May 22, the of StepN’s native token GMT stood at around $860 million. Founded by Huang and his co-founder Yawn Rong in Adelaide, Australia, StepN debuted at a Solana hackathon . After coming in fourth, its exposure at the event helped land its first batch of beta users. When it officially launched two months later, words about the app that let one earn by staying fit had already spread within the blockchain community. Without any splashy ad campaign, scores of users signed up. In weeks, StepN was growing so fast that the team needed to cap the number of daily registrations. Now, tens of thousands of new users are joining the app per day, according to Huang. Huang, a serial entrepreneur, and Rong, a blockchain venture capitalist, were self-funding the project at first for the pair were “financially stable.” But in September, they decided that fundraising could bring in other meaningful resources such as partnerships and publicity. The founders spoke to over 100 investors and revised their pitch deck over 40 times before from Sequoia Capital and others in November. “We didn’t have a product at the time, and many investors couldn’t understand what we were doing. Sequoia did. The process of addressing investor questions also helped us refine the product to where it was later,” said Huang. Indeed, the fast-growing app appears to be self-sustainable for now. It’s generating $3 million-$5 million in net profit from trading fees a day and earning up to $100 million every month. In April, it picked up another round of from Binance. Some argue what makes StepN — and other — successful is the fact that they are essentially financial products with a gamified twist. To start earning tokens and logging one’s mileage on StepN, users need to first spend at least 12 sol or around $600 on a pair of virtual shoes Over time, StepN users will need to accumulate new kicks to level up. The In the eyes of some gaming veterans, the gameplay of most existing GameFi apps is “easy and mindless.” Axie Infinity, for instance, features cute blob-like creatures that fight in simple battles. As such, Web 2.0 gaming incumbents are entering GameFi in droves, pledging to bring quality back to the industry. Huang begged to differ. “A lot of the triple-A games overemphasize aesthetics and big budgets, but they aren’t really that innovative when it comes to gameplay, whereas some simple-looking games like Plants vs. Zombies come with brilliant gameplay that makes them last,” said Huang, who ran his own gaming studio in China before moving to Australia a decade ago. “Many newcomers to GameFi are blindly pursuing triple-A productions,” he continued. “But if they weren’t already successful in web2, why would they be in web3? Some simple-looking games aren’t that simple behind the scene; for instance, how we design the economics of our app.” Other critics question the financial sustainability of play-to-earn. Maintaining such a business model means the gameplay needs to be either so addictive that users continue to play without cashing out their coins, or that the app continues to attract new users who buy in only to replace those who cash out. Critics have even drawn parallels between play-to-earn to pyramid schemes. Axie Infinity hasn’t been able to sustain its meteoric rise. Sky Mavis, the Vietnamese gaming studio behind the game, was in a $150 million financing round last October. But its token has since peaking in November at $160, and its sales volume has from $754 million to just $5 million. Losing a few thousand dollars isn’t the end of the world for most of StepN’s users, who are 20-40-year-olds from affluent countries like the U.S., Japan and Europe. China, where crypto trading is banned, accounts for less than 5% of its user base, Huang said. But Axie Infinity’s players are concentrated in developing countries like the Philippines and Venezuela, many of whom are betting a significant amount of their savings on the game, a major source of their income during the COVID pandemic. StepN proposes a twofold solution to sustainability. For one, it’s working on a price stabilization mechanism to ensure the cost of its coins is always at a rate that the shoes are affordable for new users but also not so cheap that existing users lack the incentives to mint new shoes; that is, create new shoes on the blockchain and sell. Price manipulation is achieved through its dual-token system. When the price of its “utility coin” GST is too high and shoes get pricey, StepN will ask players to burn its “governance coin” GMT to mint new shoes. The supply of GST increases as a result, leading to a sell-off and bringing its cost down. Huang also argued StepN’s fitness component makes it fundamentally different from Axie Infinity. “Yes, users can make money from StepN in the early stage, but over time they will also grow accustomed to staying active, so they will continue to walk or run regardless of financial rewards.” “Many people don’t see StepN as a real game. Nor do they consider it a running app because users can make money from it,” said Curt Shi, founding partner at Welinder & Shi Capital and an early investor in StepN. “It’s hard to define what it is right now, but time will tell.” Huang’s other defense is the role StepN could play in evangelizing blockchain to the world. An estimate of 30% of the app’s users have never used any blockchain services before. “Many people might have used centralized exchanges like Binance and Coinbase to trade, but few know what a DEX [decentralized exchange] is, nor have they traded NFTs on a marketplace or owned a self-custodial wallet. We have the potential to onboard tens of millions of web3 users and I think this is something very meaningful.” “I think people are paying too much attention to the [sustainability] issue,” the founder continued. “ROI might slow over time, but all games have life cycles. You also need to look at what value an app creates.” Momentum might slow down sooner than expected for the app amid crashing crypto values. are warning startups to brace for a “crypto winter” and industry giants like Coinbase are . As consumers lose confidence in the market and become less willing to spend on tokens or NFTs, blockchain apps that rely on attracting new users to drive up their economies might face more roadblocks. But Huang finds a silver lining in the current downturn. “There was a lot of froth in the market. Now the bubble is bursting, our shoes will become more affordable, and only the [blockchain] apps with real use case will survive.” “The market was clearly frothy, so it’s a good thing that [StepN’s market cap] has shrunk over the past few days,” said Shi. “To maintain an ultra-high market cap can be stressful for the team, and now the team will be focusing more on the product itself and we believe StepN will outperform in bear and will be a winner in the next bull market.” Operating with a rapidly expanding team of 70 people across countries including Australia, the U.K., the U.S. and Singapore, StepN’s next step is to build a social product around its token holder community. The challenge now is to prove that it can continue to draw in a constant stream of new runners. |
Indigov lands more funding to connect besieged lawmakers and their oft-frustrated constituents | Connie Loizos | 2,022 | 5 | 25 | Republican lawmakers are facing over the deadliest mass shooting at an American school in nearly a decade yesterday, with many of their constituents expressing frustration over their repeated votes against even modest gun control reforms. Social media can’t solve the problem. , a three-year-old, 70-person Washington-based startup, can’t solve it either, but the outfit, a service platform for public officials, can likely help. Its entire raison d’être is giving lawmakers and others a way to communicate with those who voted them into office, as well as provide more assurance to these constituents that their voices are heard — and that their emails and tweets and letters are being read by an actual human. How does it work? We talked with Indigov’s founder, , last week, ahead of yesterday’s tragedy, and he explained Indigov’s software-as-a-service offering as a kind of multichannel communication platform with three components, all of which work together to better empower public officials to “ingest, triage, and resolve any type of request or opinion or message that comes into their office.” First, Indigov builds websites that Kouts says are far more responsive to voters than many you might find when looking up a public servant. The company declines to name its customers publicly, though we were pointed to a New York congressman’s website that immediately pushes a menu to visitors, asking if they’d like to request a meeting or sign up for a newsletter or help their community, among other options. A second, behind-the scenes piece of Indigov’s offering is a workflow management system that receives inbound messages from email, websites, social media and phone calls to which the company applies exact text-string matching in scouring their content, Kouts says. Kouts — who worked briefly at Brigade, a since-shuttered civic tech startup co-founded by famed founder Sean Parker — claims the tech is more accurate than natural language processing or machine learning, where error rates can range from 2% to 5%, which is just enough to be hugely problematic. “It could mean a constituent could receive a response that’s not appropriate and gets screenshotted and posted on Twitter and becomes a scandal,” says Kouts, adding of text-string matching that it has an error rate of “basically zero.” (He also maintains that by dramatically improving the ability for staffers to process inbound content that they can respond to constituents in “a matter of hours” and not months.) The third piece, according to Indigov, is simply better management of a public servant’s list of constituents so that she or he can more proactively communicate with them. As with any young startup, how much traction Indigov can gain remains a question mark. The young company, by our estimate, currently has hundreds of customers based on its claim that “190 million Americans are supported” through its technology. In the meantime, larger CRM vendors, , see the same opportunity that Indigov does to replace the janky legacy systems that are saddling the efforts of many public servants. Naturally, Kouts believes Indigov is a better fit given its growing expertise with government officials and voters. “A decent amount of large vendors are out there trying to get into space, but our customers need an enormous number of hyper-specific features, and whereas CRM systems are designed to push a customer toward buying something, the government fundamentally doesn’t do that.” Kouts further argues that the market Indigov is chasing is enormous — and still wide open. He points specifically to FedRAMP, the Federal Risk and Authorization Management Program created in 2011 as a way to ensure the security of cloud services used by the U.S. government, saying: “I don’t think venture capitalists or most people understand that the government, [through initiatives like FedRamp], is just now beginning to embrace cloud-based SaaS for the first time … there’s a window that’s just open for companies like us that are completely rewriting the script of what govtech is.” It’s a persuasive pitch. It seems to have worked, too. Today, Indigov is announcing it has garnered $25 million in Series B funding from Tusk Venture Partners, Wicklow Capital, Valor Equity Partners and earlier backer 8VC. The round brings the company’s total funding to more than $38.3 million to date. Asked why drew him to the deal, Bradley Tusk of Tusk Ventures notes that he previously spent over a decade working in local, state and federal government before becoming a political adviser and investor and seen a lot of companies promise to fix government. Indigov, he insists, is the “only platform I have seen that is actually providing a solution to a massive problem facing elected officials” and that “allows them to spend more time addressing individual needs of constituents.” They may need it more than ever after yesterday’s school shooting in Texas. Today, on social media and elsewhere, many Republican lawmakers are being taken to task, including for accepting contributions from the National Rifle Association. Among them is Senator Mitt Romney, who yesterday tweeted his “prayer and condolence” in the aftermath of the school rampage. Critics, including Jemele Hill, a contributor to The Atlantic, to the tweet that Romney has previously accepted more than $13 million in contributions from the NRA, according to data compiled by the . A spokesperson for the senator said in a statement afterward that, “No one owns Senator Romney’s vote, as evidenced by his record of independence in the Senate.” But the statement and many others were soon overwhelmed by anguished Americans who joined millions of others online to ask when the shootings will stop. Among them: NBA Coach Steve Kerr, whose own father died after being shot decades ago and whose open aggravation with pro-gun senators, during a pre-game interview, quickly . |
Venture’s mixed signals | Mary Ann Azevedo | 2,022 | 5 | 22 | Reporting on startups and the venture world at a time like this is a series of contradictions. One day, we’re reading about investment giants like Tiger Global . Then the next, I open my inbox to see pitches for nine-figure funding rounds (hello, ) and the birth of new unicorns (looking at you, ). One day, I’m hearing personal accounts of VCs pulling term sheets at the last minute, with some citing that their own investors had backed out of providing funds, leaving founders scrambling to save a round — and face. Then the next, I have a founder telling me their latest round was in their industry. One day, I’m having a fintech-focused VC tell me they haven’t invested in any startups since last October. The next, I’m having PayPal Venture alums share news of the closure of , ready to back about two dozen early-stage startups through their new firm, Infinity Ventures. One day, Y Combinator is advising its portfolio founders to “ ” as startups across the globe scramble to navigate a sharp reversal after a 13-year bull run. The next, Lightspeed Venture Partners is to “stay optimistic.” The myriad conflicting signals are enough to make anyone’s head spin, but as journalists, we have to take it all in stride. I’ve come to realize, in reporting on startups and venture capital pretty much exclusively for the past 5 years — and for many more before that in one capacity or another — that nothing is black and white, things aren’t always what they seem they can change in the blink of an eye. For example, that fund I referred to? It actually closed last October. During the late ’90s dot.com boom, I remember marveling at the ridiculous amounts of cash being thrown around to startups for sometimes ridiculous ideas. Not gonna lie, there was a similar vibe in 2021, where companies with no revenue, no customers and in some cases, no revenue model even, were landing millions of dollars in funding. It caused me serious anxiety to even open my inbox because the sheer number of pitches was so overwhelming and there were so many startups doing so many similar things, that it got harder and harder to tell them apart. Here we are today. I have a (slightly) quieter inbox, VCs appear to be applying more (or in some cases, when there was little to none) due diligence and valuations are either flat or only inching upward rather than soaring — even dropping in some cases. Layoffs abound, just months after headlines of a tech worker shortage in the midst of hiring frenzies. Meanwhile, startups are being held to higher standards when it comes to revenue, customers and profitability. There’s a panic in the air that wasn’t there before as everyone wonders what’s next for founders, investors and startups as a whole. Is this a market correction or just a shift to the way things be? Maybe a little of both. Either way, I do think fintech continues to be somewhat of an outlier, at least for now. Infinity Ventures The drama between Plaid and Stripe continued this week with the former announcing of account linking for the first time since its 2013 inception. The news that Plaid is moving into identity and income verification, fraud prevention and account funding was not entirely shocking considering that the startup had made a couple of acquisitions in the past 18 months. It was largely in demand, according to CEO and co-founder Zach Perret, from customers and a desire on its part to “own more of the account funding process.” And it puts Plaid into even more of a competitive position with payments giant Stripe. Meanwhile, Stripe had news of its own, taking the wraps off Data Pipeline, between their Stripe transaction data and data stores that they keep in Amazon Redshift or Snowflake’s Data Cloud. As our own Ingrid Lunden puts it, the move underscores how Stripe is positioning itself as more than just a payments provider. It has ambitions to be a larger financial services and data powerhouse, a “financial infrastructure platform for businesses” in its own words. Isn’t that what Plaid is? So, in essence, Plaid is becoming more like Stripe and Stripe is becoming more like Plaid. Not at all confusing. Plaid’s recent moves are less unexpected than they might seem at the surface — beyond the related recent acquisitions it has made. Recall that Visa almost bought Plaid for $5.3 billion before that deal in early 2021 due to regulatory concerns. The potential combination first gained a higher level of complexity when, in November 2020, the Department of Justice . The DOJ asserted that Visa was buying Plaid to eliminate a competitor in the world of online debit transactions. Visa denied that assertion, stating that Plaid was not a payments company and, therefore, not a direct competitor. But one of the things that came out at that time was that Visa in fact view Plaid as a potential competitor, with one executive the startup to an island “volcano” whose capabilities at that time were just “the tip showing above the water,” warning that “what lies beneath, though, is a massive opportunity — one that threatens Visa.” And when conducting due diligence in the acquisition process, Visa’s senior executives reportedly grew alarmed by Plaid’s plans to add “a meaningful money movement business by the end of 2021.” When you look back at that history, Plaid’s recent product announcements are hardly a surprise. If anything, most of us are wondering “What took them so long?” For more on Alex Wilhelm’s and my take on the topic, head . Meanwhile, in Mexico, retail brokerage startup Flink, which claims to be the first in its home country to offer fractional shares directly from the New York Stock Exchange, said it will be buying Vifaru Casa de Bolsa, subject to approval from the National Banking and Securities Commission (CNBV, by its acronym in Spanish). Why is this a big deal? It marks the first time in Mexico that a startup is acquiring a brokerage firm under the supervision of regulatory authorities. Once the deal closes, Flink says it will create new financial products “for millions of Mexicans to invest.” “At Flink, our mission is to create a much more equitable ecosystem, where anyone can access quality financial services. Therefore, this transaction is a great step toward fulfilling our objective of generating true financial inclusion in the country and the region,” said Flink CEO and co-founder Sergio Jiménez Amozurrutia in a press release. It’s not the first time that a startup has acquired an existing financial institution. In September 2020, I wrote about how mobile banking startup in Wadena, Minnesota. In that case, both the Federal Reserve and Office of the Comptroller of the Currency and the Federal Reserve Bank of San Francisco approved the transaction. But it was a process. “The deal came after 3 years of ‘rigorous’ R&D, testing and auditing, the company said.” More recently, Plaid co-founder William Hockey — who left the company in 2019 — purchased a community bank (Northern California National Bank or NorCal) for $50 million last year. He rebranded it to Column, , which he believes is the first financial institution of its kind: a “financial infrastructure” bank. I find it kind of fascinating when fintechs buy incumbents, and I expect we’ll only continue to see more of it. Also last week, Square continues to integrate Afterpay into its offering, by , meaning consumers now can use BNPL to make purchases at local businesses in the United States and Australia. The $29 billion deal closed in January. Also, in the world of BNPL, London-based — which was valued at $2 billion last November — announced its launch into the U.S. market. Launching with over 150,000 pre-registered customers, Zilch says its arrival in the U.S. follows a huge growth period, reaching over 2 million customers in the 18 months since it launched in the U.K. In other (big) BNPL news, the Wall Street Journal reported that Klarna aims to from new and existing backers in a deal that could value the company “at almost a third less than the it achieved just under a year ago,” or in the value in the low $30-billion-range, post-money. TC’s own Alex Wilhelm has thoughts about that. Read them . Meanwhile, Revolut co-founder Nik Storonsky announced that he , powered by artificial intelligence, to compete with “legacy” venture capital investors, reports Forbes. Storonsky said he will himself invest, with others, around $200 million into the . And, cryptocurrency exchange FTX said it is launching stock trading capabilities for its customers through its U.S. division. The company, helmed by co-founder and billionaire Sam Bankman-Fried, said that its launch will start in private beta mode for a select group of customers chosen from a waitlist before a full rollout in late 2022. Anita Ramaswamy gives us all the details . Plaid co-founders William Hockey and Zach Perret. Plaid Last week, I (exclusively) covered two raises that related to the residential real estate market, which is an increasing area of interest for VCs as of late. In this case, both were renter-focused. First off, I wrote about Arrived — a proptech that raised $25 million in a Series A funding round led by Forerunner Ventures to give people with “as little as $100.” Returning backers included Bezos Expeditions, the personal investment company of Jeff Bezos; Good Friends, a venture fund run by the CEOs and co-founders of Warby Parker, Harry’s and Allbirds, as well as Spencer Rascoff, co-founder and former CEO of Zillow. The concept of fractional real estate investing is not a new one. But what stood out about Arrived is that it claims to be the first in the space that is “fully SEC-qualified,” meaning that it has approval from the Securities and Exchange Commission to offer shares of individual homes. In other words, it’s essentially creating house IPOs, or taking houses public. As a former real estate reporter, I can’t help but geek out when tech and real estate intersect. Especially when companies give everyday Americans greater access to investing in a way they couldn’t before. I also wrote about Belong, a three-sided marketplace that provides services for homeowners who are both landlords and renters. From the homeowner perspective, Belong offers home management services that it says makes owning a rental home easier. For example, if a rental property needs a repair, the startup has an in-house maintenance team that can handle those on a landlord’s behalf. It also provides the homeowners with financial tools to manage their investment, as well as guaranteed rent on the first of each month. And it will also help an owner fix up a property and get it in rental-ready shape. On the renters side, Belong says it has created a system that gives them a way to build home ownership themselves. For example, with each one-time rent payment, residents get around 3% of the price of rent back, which accumulates in an account with the aim of being used toward a down payment on the purchase of a home — but only if it’s used to buy a home through its platform. You see, the company serves as a real estate brokerage as well. Belong just — $50 million in equity and $30 million in debit. Fifth Wall preempted the round, which also included participation from repeat backers Battery Ventures, Andreessen Horowitz and GGV Capital. My favorite line in this story was from Belong CEO and co-founder Ale Resnik, who said part of the company’s goal is to make renters not feel like “second-class citizens.” There’s a bigger story here on why startups focused on the rental market seem to be attracting venture dollars. One of these days, I’ll write it. Meanwhile, infrastructure continues to rake in the big bucks. Xendit, a payments infrastructure platform for Southeast Asia, . The company’s new valuation wasn’t disclosed, but it in September 2021. And, BaaS startup Unit at a $1.2 billion valuation. Speaking of infrastructure, payments infra startup Finix announced some last week, including the fact that it is now a registered payment facilitator and has expanded its in-person payments capabilities and added real-time fraud monitoring. In LatAm, UnDosTres, a Mexican fintech company working on airtime top-ups, service payments and entertainment purchases, announced it closed on a $30 million Series B led by IDC Investments. And Nomad, a Brazilian fintech company that allows Brazilians to open a 100% digital banking/investment account in a North American bank, just 9 months after their first round. Stripes led the latest financing. The company says it has amassed 300,000 customers in less than 18 months of operations. Speaking of Brazil, check out I did on Neon, a digital bank with 16 million customers in its home country focused on the working class. Trellis, a company that wants to help people pay less money for their car insurance and make it easier to switch with its API, from Amex Ventures. Caribou, a fintech whose mission is to help people take control of their car payments, in an “oversubscribed” Series C funding round, which valued the company at $1.1 billion. Goldman Sachs Asset Management led the financing, expanding its services across the auto financial landscape, recently launching its digital car insurance marketplace. That’s it for this week…Wishing you all a wonderful Sunday and week ahead. Thanks for reading! P.S. This newsletter is a work in progress, so I’m experimenting with different formats, lengths, etc. I intentionally made this edition a bit shorter than the previous one. I’m always open to constructive feedback, so let me know if there’s anything you’d like to see more — or less — of. Xendit |
Why a downturn can separate the recession-proof startups from the ‘hacks’ | Ron Miller | 2,022 | 5 | 22 | of economics is upon us — what goes up must come down — and we appear to be headed for the down part of the equation. But all is not lost. If you need a reminder, Venmo, Instagram, Uber and WhatsApp of 2008. When I think about recessions, I remember what an electrician said while working on my house during the dot-com blowup. I’d asked him if he was worried about the economy affecting his work, and as he drilled another hole for the wiring, he looked up at me and said, “Nah. A bad economy just weeds out the hacks.” If your company is lacking basic business fundamentals and burning cash, well, maybe you’re in for a reckoning. But then again, maybe you always were. But if you have a well-grounded startup built on a good idea with a solid foundation, you can probably ride out whatever storm is coming. The question is this: Are you building something essential at the core of your customer’s business, which founder and CEO Mallun Yen refers to as painkillers? Or are you building something less essential, which she calls vitamins? “Companies building painkillers rather than vitamins, especially solutions that are technically hard or tricky to develop, or anticipate fundamental but yet-to-be-mainstream shifts in an industry, are particularly well positioned to weather the macro conditions that are out of their control. Painkillers include products that increase revenue or significantly lower costs in a tangible way,” Yen told me. She said those startups can be in any category as long as they are helping companies work smarter, which is even more essential in an uncertain economy. “For instance, we have one company we are investing in that enables customers to significantly increase their sales by enabling them to do things in a way that hasn’t been done before. Another is materially lowering cloud infrastructure spend — a pain point that will only increase for companies across the board as more data is stored in the cloud and corresponding queries and other analysis need to be run.” Derek Zanutto, general partner at CapitalG, said that while many companies will experience some short-term hiccups due to market fluctuations, his firm still expects to see many grow and thrive over the coming years. “Some of the greatest companies have been founded or emerged stronger than ever during weakened market conditions. I’m particularly bullish on startups that are helping enterprises harness the power of their data. Data, when leveraged well, can help enterprises both rein in costs and generate more money, making it, over the long term, a recession-proof business sector,” Zanutto said. Soma Somasegar, managing director at Madrona Ventures, said his firm has been investing in intelligent applications, adding that regardless of what’s happening in the macro environment, they are sticking to the plan. |
Unacademy tells employees to focus on profitability at all costs to ‘survive the winter’ | Manish Singh | 2,022 | 5 | 25 | Unacademy, one of the high-profile Indian startups, has urged its employees to learn how to work under constraint and focus on reaching profitability as the SoftBank and Tiger Global-backed online learning platform predicts a dry funding spell across the industry for as long as 18 months. The Bengaluru-headquartered startup, which has raised over $800 million and was in its most recent financing round in August, “always raised more money than what was needed” to “continuously experiment and grow our platform without worrying about when we will run out of money,” wrote co-founder and chief executive Gaurav Munjal in an email to the staff on Wednesday. “[…] But now we must change our ways,” he wrote in the email, contents of which were obtained and reviewed by TechCrunch. “Winter is here.” Munjal said he anticipates scarcity in funding for 12 to 18 months. “Some people are predicting that this might last 24 months. We must adapt. This is a test for all of us. We must learn to work under constraint. We must focus on profitability at all costs,” he wrote in the email, titled “A different Iconic Goal this time.” “We must survive the winter,” he added. Investors across the globe have sounded alarms in recent weeks, urging portfolio founders to plan for the “worst” amid a sharp reversal in tech stocks after a 13-year bull run. Y Combinator last week advised its startups to raise additional capital if they can to ensure they have a , TechCrunch first reported. Sequoia and Lightspeed have offered . Scores of startups, many of which raised capital at peak 2021 valuations, are currently struggling to raise new rounds as investors increasingly become cautious and the good old due diligence makes a comeback. Several VCs who were in advanced stages of talks to back startups — across different stages — a few weeks ago are renegotiating prices. In the next few months we will open Unacademy Centres in various parts of 🇮🇳 Our online Subscription Product recently crossed 800,000 Active Paid Subscribers. And while that’s awesome, there is a segment of Learners who prefer going Offline specially in JEE and NEET. — Gaurav Munjal (@gauravmunjal) Edtech startups across India — and many other markets — are grappling with additional challenges as schools and other institutions open again and reverse some of the fast and wide adoption online platforms witnessed during the pandemic. Unacademy, Vedantu and Lido, three startups operating in the space in India, have each shrunk their workforces in recent months to eliminate redundancies and improve their financial performances. Byju’s, India’s largest edtech, was attempting to go public via the SPAC route as early as last month and seeking a valuation of over $40 billion but has since postponed the plans following the market teardown, according to a source familiar with the matter. Munjal emphasized in the email that Unacademy’s new goal is to reach profitability and generate free cash flow. Unacademy in recent months has taken steps — such as shutting the K-12 offering and winding down some inorganic areas where it had expanded to following acquisitions — to cut costs and risk exposure. He outlined several other steps the firm is undertaking: We have significantly reduced our brand marketing budget We will focus on organic growth channels instead Every test prep category that we run must become profitable in the next 3 months Unacademy centres should be profitable in FY’23 Businesses like Relevel and Graphy which are blitzscaling mode must become extremely mindful about burn and reduce it significantly All incentives for educators that are not linked to revenue have been completely removed or are in the process of getting completely removed Travel only if it is absolutely needed. Meetings that save travel cost and that can happen on Zoom should happen on Zoom “We can only achieve this Iconic Goal if every single one of us is working towards it,” he added. Gaurav Munjal, founder and chief executive of Unacademy, a high profile Indian startup, has urged employees that they "must learn to work under constraint" and "focus on profitability at all costs" in a candid email. — Manish Singh (@refsrc) |
Twitter agrees to pay $150M for breaking privacy promises | Rebecca Bellan | 2,022 | 5 | 25 | Twitter has as part of a settlement with regulators over allegations that the social media company misrepresented the “security and privacy” of user data over several years. The FTC and Department of Justice said that between May 2013 and September 2019, Twitter asked users for personal information to secure their accounts, but then used that information to target users with ads. This is not the first alleged violation of the , under which, among other things, the agency is “empowered to prevent unfair or deceptive acts or practices in or affecting commerce.” In 2011, , which had accused Twitter of serious lapses in its data security that allowed hackers to obtain unauthorized administrative control of the platform. The order prohibited misrepresentations around how Twitter maintains information like email addresses and phone numbers collected from users. The penalty announced today has been a couple years in the making. and potentially a fine of more than a hundred million dollars for both violating the FTC Act again and its 2011 settlement. “Specifically, while Twitter represented to users that it collected their telephone numbers and email addresses to secure their accounts, Twitter failed to disclose that it also used user contact information to aid advertisers in reaching their preferred audiences,” the , which was filed by the DOJ on behalf of the FTC, said. The complaint said users provided email addresses or telephone numbers based on Twitter’s “deceptive statements” that such information would be used for account security, like two-step authorizations. “This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue,” said FTC Chair Lina Khan in a . The agreement also requires Twitter to improve its compliance practices. Twitter did not immediately respond to a request for comment. |
Starliner returns to Earth after a successful first trip to ISS | Devin Coldewey | 2,022 | 5 | 25 | Boeing’s Starliner spacecraft has successfully touched down at the White Sands Missile Range in New Mexico after ferrying a load of supplies to the International Space Station — its first successful orbital mission. Though not everything went exactly to plan, this success may establish Boeing as a much-needed second provider of commercial ISS launch capabilities. The Starliner and , staying for a long weekend while the crew unloaded the food and other necessaries from the capsule’s interior and performed in-person checks of its systems. It detached earlier today and descended to an orbit where it could initiate its descent with a reentry burn. After jettisoning the service module, which provides power and propulsion during flight, it oriented its heat shield to take the brunt of the atmosphere, hitting some 3,000 degrees during descent. Here’s a view of Starliner’s fiery reentry from a plane tracking it at 50,000 feet: Starting to see views of from 's WB-57 aircraft. WB-57 is one of only two kinds of aircraft in which crews can fly over 50,000 feet. — Boeing Space (@BoeingSpace) The craft soon popped its chutes and landed on schedule and on target (a third of a mile away from the expected site, which is “basically a bullseye”) in the desert of New Mexico, where it was recovered by Boeing and NASA ground teams. Boeing / NASA / YouTube The spacecraft had a bit of a glitch during is ascent last week, with two maneuvering thrusters shutting down due to pressure problems, but other than that things went quite well. If Boeing can convince NASA that it’s got this issue buffed out, it could be looking at a serious opportunity going forward. The U.S. started the process of weaning itself off Russian Soyuz capsules years ago when it began to appear financially and politically unfeasible, and the Commercial Resupply and Commercial Crew projects were meant to produce American-made spacecraft capable of taking supplies and people to the ISS with as close to 100% safety as possible. SpaceX rose to the task more quickly and effectively than Boeing, which suffered the ignominy of an upstart company outperforming it handily. But while SpaceX’s Dragon spacecraft has proven reliable and now makes regular trips to the ISS, we all know the risks of putting all our eggs in one basket — especially if that basket is owned by someone like Elon Musk. So although the last few years have been far from Boeing’s finest in many ways, it has been hoped that the Starliner would eventually show up as a real alternative. The market for taking things to space is of course enormous, and although the ISS is on its way out in the long term, there will no doubt be a successor of some kind, to say nothing of the numerous projects in the Artemis program. This has been an incredibly important step for Boeing in proving it can provide these services. |
Twitter stock jumps on news that Elon Musk still wants to buy it … maybe | Alex Wilhelm | 2,022 | 5 | 25 | Shares of Twitter are sharply higher in after-hours trading in the wake of a detailing changes to how Elon Musk is approaching buying the company. In short, Musk initially indicated that he would execute a margin loan of $12.5 billion against other holdings to help finance his purchase of the social media platform. However, those have lapsed, and, per Twitter, “[c]oncurrently with the foregoing, [Elon Musk has] committed to … increase the aggregate principle amount of the equity commitment thereunder to $33.5 billion.” In other words, Musk now plans to front $33.5 billion in his bid to take over Twitter. The Tesla and SpaceX head is in talks with former Twitter CEO Jack Dorsey and others to help finance the deal or roll their shares over, to CNBC. In the wake of Musk’s frenetic dealing with Twitter, what appeared to be a push to buy the company became less certain over time. After purchasing a stake in Twitter and nearly joining the company’s board, Musk pivoted to outright acquiring the platform. The transaction was complex, but it set a per-share price on Twitter stock of $54.20, valuing the company at around $44 billion. Musk then made a number of social media posts either disparaging the company, calling the deal off and generally causing the market to increasingly value Twitter as if the deal was kaput. It is possible to vet market confidence in a transaction by how close the company in question trades to its sale price; shares of Twitter rose to the $50 range after the deal was agreed upon but fell to the $37 mark as the transaction appeared less than certain. Now with more news that Musk is still working toward the transaction’s financing — though there is nuance to the filing — investors are betting with their wallets that the deal is going to go through. So, up goes Twitter’s share price in the wake of the filing — more than 5% after hours. That the stock is now merely back to the roughly $39 per-share threshold does indicate, however, some doubt amongst the public market that the SpaceX and Tesla CEO will actually buy the social media company. Beyond , a dramatic shakeup today saw Dorsey step down from Twitter’s board and Twitter shareholders vote not to reelect Silver Lake co-CEO Egon Durban to the board. Elsewhere, Twitter agreed to pay $150 million to settle with the U.S. Department of Justice and the Federal Trade Commission in a user-privacy case in which law enforcement officials accused the company of mishandling user data over several years. |
Daily Crunch: a16z literally doubles down, announces $4.5B Crypto Fund IV | Christine Hall | 2,022 | 5 | 25 | It’s Wednesday the 25th of May, 2022, and we are devastated by the events of the last couple of days. It’s hard to put together a newsletter about tech against the backdrop of a school shooting. Big news events impact everyone differently, so please remember to give yourself and those around you a bit of extra space. We love you. — and Northwestern University / Northwestern University In startup land, it’s all crypto all the time today. covers how less than a year since . Meanwhile, , also backed by a16z. DJ Gabeau, one of Snapchat Stories’ earliest engineers and founder of web3 social network , told TechCrunch that he thinks NFTs can be an enjoyable way for people to connect, reports. As members of the Terra community try to pick up the pieces from its currently defunct economy, to entice the dozens of developers who had projects built on the inoperative blockchain, reports. And finally, the , but it is leaning on the accelerator with a $15 million series B, reports. Don’t worry, there’s non-blockchain news too: The cannabis industry is doing very well in the United States. A state-by-state patchwork of regulations has created a limited market for public and private companies that handle grow operations, distribution and transportation, inventory control, testing and point-of-sale software. Budtenders are a frequent sight at California weddings, but Anna Heim found that the industry still has a long way to go before it reaches maturity, largely because federal laws continue to prevent cannabis-related business from using traditional financial services. To learn more about the underlying market forces and hurdles facing entrepreneurs and investors in this maverick industry, she spoke to four investors: In anticipation of a possible reversal of abortion privacy law Roe v. Wade, a group of Democratic congressional members , urging the company to consider changing the way it currently collects and retains cell phone location data records. reports the fear is that it could become a tool for “far-right extremists looking to crack down on people seeking reproductive health care.” and was responsible for a 118% increase in U.S. small developer earnings over the past 2 years. and provide some analysis of the numbers, noting, “these figures highlight how important the App Store is to a wide range of global developers. That, in turn, could also help demonstrate why a system this large and powerful could also be due for more regulation and competition.” Speaking of Apple, , you can store your driver’s license or state ID there. The state became the second, behind Arizona, to offer the feature. Don’t miss these equally exciting stories from today: |
Dear Sophie: Does International Entrepreneur Parole have any advantages over an O-1 visa? | Sophie Alcorn | 2,022 | 5 | 25 | of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies. “Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says , a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to in my next column.” TechCrunch+ members receive access to weekly “Dear Sophie” columns; . Dear Eager, What a great question! (IEP) is the next best thing to a startup visa; its qualifying requirements are similar to the startup visa that I personally helped draft for Rep. Zoe Lofgren! This newly proposed startup visa is currently under consideration for inclusion in congressional legislation to increase U.S. global competitiveness. Joanna Buniak / Until a new startup visa is approved, here are the main advantages — and disadvantages — of IEP and how it stacks up against the O-1A visa for extraordinary ability: You mentioned one of the criteria to qualify for IEP is to receive at least $250,000 from investors. That figure increased to $264,147 at the start of the new federal fiscal year on Oct. 1, 2021 and is scheduled to adjust again in 2024. For your planning, the minimum investment and revenue amounts under IEP are adjusted according to the Consumer Price Index for All Urban Consumers — these adjustments occur every three years. Here are the criteria you would need to meet to qualify for IEP: |
Not trademarking can be an Excruciatingly Expensive® and Wildly Annoying® mistake | Haje Jan Kamps | 2,022 | 5 | 25 | I was recently talking to a startup that was airing its frustration over . The problem? The company had been spending 2 years building up its SEO and brand recognition for its cybersecurity products. Needless to say, when Apple launches a product and puts it on its website and cover the launch, chances of being found on Google drop precipitously. The only option TrackerDetect had was to change the name of its company. “Apple stole our name,” Mira Marcus, who runs PR for the company, said in the subject line of an email to TechCrunch. That surprised me, because that’s neither how intellectual property nor how theft works. The clincher is that the company actually hadn’t put basic protections in place, such as applying for a trademark for its name. A trademark application can seem like a really unimportant part of the startup journey — you’re busy building your company, hiring your staff, raising money, working on product and getting press. Spending a couple of grand on a lawyer to put in a trademark registration can feel like a lot of work and money out the window. And it is, if it turns out that you never needed your trademark in any way. On the other hand, having a trademark and not needing it is infinitely more convenient than needing a trademark and not having it. In the U.S., registering and babysitting the registration through the process can be a lengthy and expensive ordeal. In my experience, working with a lawyer and without a lot of resistance from existing trademark holders typically costs around $1,500. That can be a little less if it’s a very obscure word you are trademarking — and a lot more if someone decides to contest the application. I’ve experienced both — for my company Triggertrap, I ended up trying to register Redshift as a trademark, and the Red camera company sent a battalion of lawyers after me. That turned out to be a five-figure sum of money spent on lawyers and didn’t result in us getting a trademark. I also at some point registered my own name as a trademark in the U.K. ( ), in a very narrow class. That was uncontested; I did it myself without a lawyer, and the full cost was around $200. In other words, your mileage may vary. Trademarkia, one of the big trademark registration services, advertises prices ranging from $400-$800. In my experience, by the time you’ve filed and defended the filing of a trademark, you’re looking at around $1,500. The trademark itself can also end up being very valuable, as a friend discovered when Facebook launched a product that infringed on their company’s trademarks: “I can’t tell you exactly how much Facebook ended up paying me,” he told me — and declined to be identified in a story for TechCrunch — “but when the company launched a product that infringed on our trademark, we threatened to sue. For them, the cost of renaming the product would have been astronomical, and so they bought it off us. They gave us enough money that we could postpone our Series A fundraising by six months, is all I’ll say. Best of all, we hadn’t launched yet, so renaming our company turned out to be trivial.” Sadly, this wasn’t the case for TrackerDetect: “As a lean, early-stage startup we haven’t applied for a trademark,” Marcus told me. “It wasn’t a top priority for us.” It’s easy to say in retrospect, of course, but that slip down the priorities ladder ended up causing a lot of trouble. Enough, in fact, that the company decided to change its name when Apple launched its product. Although TrackerDetect already has customers and claims to have “millions of dollars in revenue,” it is announcing a name change in the near future, made necessary by Apple’s product launch. The new name is Reveal Security, “which will hopefully not need to fight a giant like Apple for search engine results,” Marcus notes. “Frankly, we don’t feel that a court would be able to help,” Marcus said in an email to me. “We feel a trademark would be a waste of time [because] we’d need to go to court and it would take years to correct. Even if we had a trademark it would not be realistic in a digitally transformative environment: By the time we would win in court we would have already dealt with the consequences.” “The change from TrackerDetect to RevealSecurity has allowed us to use our new name to talk about what we do and the business value we create,” said TrackerDetect CEO, Doron Hendler, in a statement provided to TechCrunch after we published this article. “We founded the company to detect anomalous activities in enterprise applications with user journey analytics. We own the TrackerDetect domain, but Apple named a new app Tracker Detect for consumers using AirTags. As avid users of Airtags ourselves, we realized this was the right time to change our brand to RevealSecurity. We’re renaming to avoid the noise and future search engine complications and focus on security.” Personally, I hope the company finds great prosperity and success, and I note that, when searching the United States Trademark and Patent Office, . It appears that some people never learn their lessons; and if another company chooses to file a trademark or launch a product called Reveal Security, there’s not a lick the company would be able to do about it. Of course, the company can run its business however it wants, but I know dozens of lawyers on a contingency basis who would gleefully take on Apple if there’s a chance of a large settlement check at the end of it. Chances are that if you have a valid trademark, Apple would wizard the problem away with a dip into its mighty coffers after a couple of firmly worded letters. In any case, as you might expect, a name change when your company is already up and running can be fantastically complicated, very expensive and a huge distraction from your core mission. And, of course, it can be easily avoided by getting your trademark applications in as early as possible — and definitely before you do a public launch of the company. Excruciatingly Expensive Wildly Annoying EDITS: |
Announcing the TechCrunch+ Stage Agenda at Disrupt 2022 | Alex Wilhelm | 2,022 | 5 | 25 | year that we are returning to in-person events here at TechCrunch, which means that after a few years running remotely, our flagship event is . But while we are shaking up the last few years of Disrupt history — thanks, COVID — we are keeping some things the same. The TechCrunch+ stage for one, which is great news for founders of all stages and stripes. Formerly known as before , the TechCrunch+ stage is gearing up to once again host a medley of high-impact panels and curated firesides with startup executives (Gusto, Maven, Mural, etc.), investors (Accel, Techstars, Kleiner Perkins, etc.), and founders (Firstbase, Brex, Clubhouse, etc.) to get the latest on how the leading startups of tomorrow are being built today. We’ll also dig into the unique and downright turbulent startup market that 2022 has brought. 2021 was all about the ascent, with startup valuations shooting higher, powered by a buoyant stock market, IPOs aplenty and funding rounds going off like firecrackers. Things have changed, and we want to understand the real landscape that startups have to navigate this year. As 2022 has progressed, we’ve taken an eraser and pencil to our planned topics and themes, meaning that we’re approaching some well-trod areas like fundraising but from an updated perspective. And we’re not done yet. But to get started, we’re providing an early and not-quite-yet-complete rundown of sessions that are coming to the TechCrunch+ stage this October. Yes, Disrupt is a few months out, but don’t let that slow you down. Come hang, it’s going to be a blast. Enough throat-clearing, here’s the list as we have it now: It is clear by now that the venture market has changed this year. That means that founders looking to raise first capital for their startup can’t follow last year’s playbook and expect results. So what do founders need to know, and how can they best snag investor attention in a market where the rules are changing? We’re bringing a few venture capitalists that we know well (and trust) to share the real nuts and bolts of early fundraising in 2022. While it’s always good to hear from venture capitalists when it comes to dollars and cents, how founders are navigating the capital market is just as important. So we’re gathering Amanda DoAmaral of Fiveable, Sara Du of Alloy Automation and Arman Hezarkhani of Parthean to talk us through what worked for them and how their perspective has been updated in light of the changing economy. If you haven’t heard of Nik, Josh or Gefen, where have you been? They are founders that are not only building very interesting companies but have taken a forward approach toward making noise on social media. We want to dive into how being a public person can help founders build a future public company. This should be a panel that will be not only informative but also lots of fun. Sure, you no longer have to be located in Silicon Valley — let alone California — to build a startup or raise money. But there are still areas where there are more venture capitalists per square mile and areas where there are fewer. To get to grips on raising outside of traditional startup hubs, we’re bringing together VCs who either live and invest, or simply invest in more up-and-coming geographies. Mike Asem of M25, Rich Wong of Accel, and Hustle Fund’s Elizabeth Yin are joining us for this particular chat. It’s going to rock. Hiring is not easy even in the best of times. With a tight tech talent market and an increasingly remote-friendly — and therefore globally competitive — corporate landscape, founders have never had more places to hire from and more competitors to measure up against. So we’re going to have Chris Herd from Firstbase who is an advocate for remote work, Kate Ryder who has built a global healthcare startup and Emil Yeargin, VP of Talent at Gusto, which is not only hiring itself but also helps other companies manage their staff. With the three we’ll go deep on hiring today with an especial focus on hard-to-fill roles. It’s always a good time to sit down and chat about the mechanics of term sheets and the give and take between investors and founders. It’s an especially good time as the balance of power between founders and investors has shifted from a period in which founders never had great ability to demand friendly terms to an era in which it feels like investors have more power than in recent history. So we’ll get the latest from investors on term sheets, negotiations and terms to help founders navigate the current climate. Companies big and small are figuring out how they are going to distribute and manage their workforces in 2022. After a few years when even the most traditional company was forced to go remote, startups are now having to choose between remote setups, hybrid teams or a return to the office. But no matter what they choose, all companies are going to have more remote staff than ever before. To help founders understand how to manage those staffers, Front’s Mathilde Collin and Mural’s Adriana Roche are joining us to talk about what works. We love a competitive startup category here at TechCrunch. Watching startups go head to head is fascinating and illuminating. But for startups in hot sectors with big markets, competing can be very expensive. So how should startups that have incumbents to take on, other startups to best, or both, approach the balance between growth and spend this year? We’re gathering some CEOs with a little bit of experience on the matter to help guide more early-stage founders. A common refrain from venture capitalists last year was that software valuations weren’t too high, as the TAM, or total addressable market for tech companies, was simply larger than folks had originally thought. Sure, but some of those startups are now stuck comparing high burn rates with future TAM. So how should founders and their backers think about TAM to avoid fooling themselves or their colleagues? Parts of this panel are in the last stage of finalization but we can share that Felicis’ Aydin Senkut is taking part. More to come. This is another panel we’re still finalizing, but Reddit Chief Product Officer Pali Bhat is coming to Disrupt to help founders hone their definitions of product-market fit. The concept, often shortened to PMF, is tricky as it’s not easily defined for all startups at once. But one thing that happens when market sentiment takes a dive is that definitions tighten. So how should founders measure PMF in a more difficult market, from both a fundraising and customer perspective? We’ll find out. Ransomware attacks are escalating at an alarming rate. We’ll hear from experts about what winning the war on ransomware looks like and how startups can play their part. Stay tuned for details! Featuring Metafy’s Josh Fabian and Brex’s Henrique Dubugras. These chats are going to be must-attends. is back in person to reengage the startup ecosystem on October 18-20 in San Francisco. to get access to our Memorial Day 2-for-1 savings!
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Fintech Bolt just laid off over 100 employees across engineering, sales and marketing | Natasha Mascarenhas | 2,022 | 5 | 25 | One-click checkout startup Bolt has laid off at least 100 employees and counting across go-to-market, sales and recruiting roles, sources say. CEO Maju Kuruvilla confirmed the workforce reduction but did not say how many people were impacted or what roles were targeted. “It’s no secret that the market conditions across our industry and the tech sector are changing, and against the macro challenges, we’ve been taking measures to adapt our business,” Kurvilla wrote in the blog post. “In an effort to ensure Bolt owns its own destiny, the leadership team and I have made the decision to secure our financial position, extend our runway, and reach profitability with the money we have already raised.” Note: As of May 26, that the number of affected employees was actually 185, or one-third of Bolt’s workforce. The restructuring comes weeks after Bolt was scrutinized for slowing revenue and customer growth. A major customer also filed a lawsuit against the fintech, leading to further questions about Bolt’s stability right now. , Kuruvilla then said that Bolt has seen a 131% year-over-year increase in shopper accounts and a 192% year-over-year increase in total active merchant accounts. Today marks an entirely different tone in Bolt’s mood. Kuruvilla said that “this is one of the hardest messages I’ve ever had to send” and that “Since stepping into this role just a few months ago, my top priority has been to do what’s best for Bolt’s business, customers, and employees. It’s the commitment I made to our board, investors, and most importantly to all of you as we continue on our journey to decentralize and democratize commerce.” Kuruvilla — a former Amazon executive — took over as CEO in January after founder Ryan Breslow stepped down. Since its 2014 inception, Bolt has raised over $1 billion in funding and was valued at $11 billion at the time of its in January. Investors include funds and accounts managed by BlackRock, Schonfeld, Invus Opportunities, CreditEase, H.I.G. Growth, Activant Capital and Moore Strategic Ventures. Bolt is no stranger to controversy. Its 27-year-old founder, , started the company after dropping out of Stanford. He stepped down as CEO in January and is generally known for his very outspoken rants, such as this and recent digs at the media. In that same month, he said the company had signed roughly 10 major deals in the second half of last year, with each being bigger “than any that Bolt has signed in the company’s history previously.” In mid-February, Breslow also made headlines after announcing on Twitter that Bolt — which already offered employees more time to exercise their stock options than most companies — was . This “ ” and possibly unprecedented proposal, Breslow explained, promised to give regular employees the same tax benefits in purchasing stock as high-level executives. (Employees who buy their stock earlier theoretically reduce their tax exposure if the value of the stock continues to rise.) Now, it’s unclear what happens to the people who were laid off and borrowed money from the company. Are they still on the hook for those loans? Also, notably, in early April, Bolt announced for $1.5 billion, a staggering amount for any company, but especially one in a space as mired with controversy as this one. Now less than two months later, it’s laying off a significant number of staff. The one-click checkout space has been tense. Last month, Fast — Bolt’s closest rival — shut down Staff were impacted then, and now there’s a new influx of fresh fintech talent on the market who recently lost their jobs. |
null | Alex Wilhelm | 2,022 | 5 | 13 | null |
Lucid recalls all of its 2022 Air EVs due to wiring issues | Jon Fingas | 2,022 | 5 | 25 | Despite already , luxury EV maker Lucid has now issued a recall for due to potential issues stemming from the car’s wiring harness. In a recent notice spotted by , a summary for the recall says unsecured wires on 2022 Air vehicles could cause the car’s displays to turn off. And because the Air’s displays contain critical information including speed, range and warning indicators, this would present a hazard in violation of the Federal Motor Vehicle Safety Standards. The notice states that the potential number of affected vehicles is 1,117. That means with Lucid having delivered less than 1,000 cars to date, the recall appears to cover all 2022 Air Dream Edition and Grand Touring models. For any potentially affected owners, you can get more info by calling Lucid’s customer service at and mentioning recall number NCR-22-01-0. Official notification letters are slated to be sent out on June 20th Meanwhile, for cars that are subject to the recall, the NHTSA says Lucid dealers will be responsible for inspecting vehicles and addressing the issue as needed, free of charge. Going forward, Lucid Insiders claims the company has already started making adjustments to the glass canopy on new vehicles to prevent any issues with unsecured wires. However, perhaps the bigger concern is that this recall comes just a few months after Lucid recalled 200 cars for having front strut dampers that may have been improperly installed by a supplier. And with reservations for the Air now exceeding 25,000 cars, ironing out any issues will be hugely important if Lucid hopes to deliver those vehicles in a timely manner. A Lucid spokesperson has provided Engadget with an official statement regarding the recall which you can see below. “For Lucid, the safety of our customers and their families is the highest priority. Lucid is recalling certain model year 2022 Lucid Air vehicles because of the possibility that the wiring connection to the instrument panel may not have been secured properly during assembly. The recall applies to 1,117 vehicles that have been delivered to customers, and it is estimated that the defect is present on 1% of cars. Lucid is not aware of any instances when these components have failed in a vehicle or caused an interruption to the instrument display panel. |
Box positive momentum continues with revenue up 18% and improved guidance | Ron Miller | 2,022 | 5 | 25 | Hey, it wasn’t that long ago that Box was lost in single-digit growth doldrums being . But today, the company announced its earnings, and revenue was up 18% over the prior year to $238.4 million, easily beating consensus estimates of $235 million, according to the company. This marks the fifth consecutive quarter of increased growth rate, and they were so positive on that outlook they improved their guidance slightly for FY2023 from $992 million to $996 million, up from the previous range of $990 million to $996 million, as the company edges toward the $1 billion revenue mark. The quarter is in which revenue grew 17%. It’s the kind of steady growth that is looking pretty good in the current climate. Consider that Zoom reported the other day , and Dropbox reported revenue up 9.9% earlier this month. Company co-founder and CEO Aaron Levie says the momentum is being driven by the continuing platform expansion. “So our expansion in e-signature, workflow automation, data security and compliance are all driving these results, and we’re seeing more and more of our customers adopt our multiproduct packaging and suites,” he said. Levie said that the company is working hard to ensure that it is well positioned for the softening economy, which enabled it to increase guidance incrementally on revenue growth for this year, as well as guide up on its operating margin and EPS targets for the year. He is cognizant of the shifting economic conditions, and although he is reluctant to make any predictions in this regard, he believes Box is well positioned to withstand economic ups and downs. “Everything I will say is based on how things are today and I can’t predict where the economic trends go next, but in general, we’ve tried to build a platform that is able to be very successful in any kind of economic environment,” he said. That’s because he believes the platform’s capabilities are relevant, regardless of external conditions. “We’re moving to an economic environment where necessity is going to trump all else … And we believe that our product roadmap has many characteristics that align well to either lowering costs for your customers or making them more efficient as they as they run their businesses.” |
NASA awards $2 million to moonshot solar sail project | Stefanie Waldek | 2,022 | 5 | 25 | The concept of solar sails is not particularly new — just check out the Planetary Society’s , French startup or . But one group of researchers is pushing the technology to new heights. The Diffractive Solar Sailing project as been awarded Phase III status in the , which comes with a $2 million budget to bring the team’s concept into reality. Solar sails are a means of spacecraft propulsion that work similarly to sails on boats, but instead of being powered by wind, they’re powered by light. Diffractive solar sails, such as the one being developed through NIAC, are a more efficient evolution of traditional solar sails that could one day aid space missions. “Diffractive sails are based off the optical mechanism of diffraction, whereas traditional solar sails we have seen are based off the law of reflection,” project lead Amber Dubill of the Johns Hopkins University Applied Physics Laboratory tells TechCrunch. As before, photons hitting the sail impart their momentum to the spacecraft, but Dubill’s team is working on a new twist on this proven tech: The advantage of using diffraction to do this instead of reflection is the ability to tailor the angle at which the incoming light is redirected so that the resulting force is more efficient for orbital maneuvers without having to tack a large flimsy structure. The Diffractive Solar Sailing project has already completed Phase I and Phase II of the NIAC program, which is NASA’s high-risk, high-reward incubator that . Those first phases are dedicated to developing concepts and proving their potential. Phase III, however, transitions the concepts into reality. (An aside: Since NIAC’s inception in 2012, just five projects have been awarded Phase III status, as most projects don’t prove enough potential in Phases I and II for NASA to pursue further.) Dubill and her team will use the $2 million in funding to design and manufacture sail materials, which they plan to test at various facilities across the country over the next two years. “In parallel, we plan to evolve the vision of a solar polar orbiter sailcraft mission by establishing optimal trajectories and attitude control of the sail to achieve the solar observations of a payload suite dictated by our heliophysicists,” says Dubill. “Through expanding the diffractive sail design and developing the overall sailcraft concept, the goal is to lay the groundwork for a future demonstration mission using diffractive lightsail technology.” That solar polar orbiter mission is of particular interest to NASA, as our star’s poles have not yet been explored. “Obtaining a full picture of the solar corona and surface magnetic fields are critical to space weather forecasting and awareness, and a constellation of instrumented sails circumnavigating the sun would not only improve our understanding of our nearest star, but would increase the warning time for solar events that may damage satellites and ground systems,” Mike LaPointe, acting program executive for NIAC, tells TechCrunch. The same technology could be used on similar missions throughout the solar system, suggests LaPointe. With such potential, it’s little wonder that NASA has funded the Diffractive Solar Sailing project — now it just needs to get off the ground. |
Jeep parent company Stellantis will reportedly plead guilty to emissions fraud | Igor Bonifacic | 2,022 | 5 | 25 | The world’s fifth-largest automaker will reportedly soon plead guilty to end a multi-year investigation into its efforts to conceal the amount of pollution created by its diesel engines. According to , the US Justice Department and Dodge parent company Stellantis could announce as early as next week that the automaker has agreed to pay $300 million to settle allegations of crminal fraud. Stellantis declined to comment on the report. The Justice Department began investigating Stellantis around 2019 when the automaker recalled nearly in the US and Canada for not meeting federal tailpipe emission standards. As of last year, the agency has announced criminal charges for just . The probe involved approximately 100,000 Ram pickup trucks and Jeep SUVs sold in the US. The deal comes five years after Volkswagen famously pleaded guilty to its own emissions scandal. “ ” saw the German automaker eventually pay more than and legal settlements for installing illegal software designed to cheat government emissions tests. Since then, sales of diesel vehicles have plummeted in Europe and other parts of the world. |
SEC weighs crackdown on phony environmental and social justice funds | Harri Weber | 2,022 | 5 | 25 | Environmental and social justice-focused funds are — so much so that the Securities and Exchange Commission is mulling new regulations to clamp down on funds that fail to back up certain altruistic claims. On Wednesday, the SEC proposed of its Names Rule, which enables the agency to take action against mutual and exchange-traded funds with misleading names. The amendment would require funds that use ESG (environmental, social and governance) or similar terminology in their names to put at least 80% of their holdings into those assets. According to the SEC, the update “would help to prevent potential ‘greenwashing’ in fund names by requiring a fund’s investment activity to support the investment focus its name communicates.” The SEC first floated such a change . Should the proposal pass, it would be the first amendment to the Names Rule since it was adopted more than two decades ago. The agency also proposed for funds that market themselves under the ESG banner, mandating that they explain how they plan to track their progress toward such goals. For example, “funds focused on the consideration of environmental factors generally would be required to disclose the greenhouse gas emissions associated with their portfolio investments,” the SEC said in a statement. The agency will seek public comment for 60 days before announcing final decisions on the proposed rules, which are just one component of the regulator’s efforts to crack down on dubious environmental claims. Earlier this week, the SEC slapped the Bank of New York Mellon Corp with a over “misstatements and omissions” about its ESG investments. The SEC is also pondering new . The floated updates would require public companies to disclose their emissions as well as warn investors of the ways that climate change threatens their bottom line. |
Apple VP kindly reminds retail workers that they can say no to unions | Amanda Silberling | 2,022 | 5 | 25 | As a handful of Apple retail locations begin the process of unionizing, the trillion-dollar company’s vice president of people and retail Deirdre O’Brien delivered a warning to 58,000 retail staff in a video that was to The Verge. “I want to start off by saying that it is your right to join a union, and it’s equally your right not to join a union,” O’Brien began her address. Since April, Apple stores in , and have announced their intent to unionize, and earlier today, the Apple store at Oxmoor Center Mall in Louisville, Kentucky campaign. Workers at these Towson, Maryland and Atlanta, Georgia stores have successfully filed to hold union elections. This means that even if Apple won’t voluntarily approve their union, they can still achieve formal recognition by earning more than 50% of votes in an election facilitated by the National Labor Relations Board (NLRB). The Atlanta store at the Cumberland Mall will likely be first to hold a vote, which is expected to begin June 2. When filing for an election, over 70% of the store’s employees were in favor, which means the odds of their formal union seem promising. But not if the ubiquitous corporate behemoth that lives in our pockets can stop it. Apple, which has been of illegal union-busting tactics, is working with Littler Mendelson, the working with Starbucks’ anti-union push. Last week, Motherboard a document of anti-union talking points that has been circulating among managers at some Apple stores. The document argues that unionizing would limit workers’ opportunities for career advancement, endanger Apple’s culture by bringing in a third party and take away employees’ ability to speak up. O’Brien echoed these points in her video to retail staff, which Motherboard is watermarked, likely so that Apple can identify any employee who leaks it. “I worry that because the union would bring its own legally mandated rules, that would determine how we work through issues,” O’Brien said. “It could make it harder for us to act to swiftly address things that you raise.” O’Brien also claims that the relationship between Apple and its workers would become worse under the representation of a union, arguing that Apple has a deeper commitment to its workers than a union. “We have a relationship that’s based on an open and collaborative … direct engagement which I feel could fundamentally change if a store is represented by a union under a collective bargaining agreement,” O’Brien added. “And I worry about what it would mean to put another organization in the middle of our relationship.” But these sentiments don’t hold up very well — if Apple wanted to make a change in policy, then they would pose the change to the union. Then, the workers who make up the union could choose how to respond. Unions like the Communications Workers of America, which represents the workers at the Cumberland Mall store in Atlanta, don’t make decisions independent of employees. Instead, they help support the workers and advocate for them as they bargain for better working conditions. BREAKING: Apple's head of retail Deirdre O'Brien sent an anti-union video to all of Apple's retail stores in the U.S. on Tuesday. In the leaked video, she falsely claims that if workers unionize, Apple may not be able to provide "immediate, widespread" benefits going forward. — More Perfect Union (@MorePerfectUS) Workers at the Atlanta store are seeking more equitable pay. Their union said in a statement that retail workers at Apple have been denied a living wage, cost of living adjustments or equitable stock options. , the union at the , shares this feeling. They are seeking a minimum pay of $30 per hour, more robust benefits including increased tuition reimbursement, more vacation time and better retirement options like higher 401(k) matching. “Year over year, the cost of living in New York City has not kept pace with our wages,” the FSWU reads. “Meanwhile, Apple has grown to be the most valuable company in the world. Why should its retail workers live precariously?” Right now, between $20 and $30 per hour, plus some Apple stock. Apple retail workers also have access to healthcare and tuition reimbursement benefits. Apple did not respond to a request for comment on this story, but provided this statement to TechCrunch two weeks ago: We are fortunate to have incredible retail team members and we deeply value everything they bring to Apple. We are pleased to offer very strong compensation and benefits for full time and part time employees, including health care, tuition reimbursement, new parental leave, paid family leave, annual stock grants and many other benefits. So far, no Apple retail stores have gained formal union recognition, but in February, that at least two stores were backed by major national unions and were prepared to file paperwork with the NLRB, while at least six more stores were in earlier stages of attempting to unionize. Around the same time, Apple for both full-time and part-time workers following about the struggles of frontline Apple workers. “I love the saying that feedback is a gift. It truly is,” O’Brien concluded her speech. “I want you to know that we are listening and will continue to listen so that we can support you and make your experience at Apple even better.” |
Terra community passes proposal to revive LUNA cryptocurrency following stablecoin-led implosion | Jacquelyn Melinek | 2,022 | 5 | 25 | , Terraform Labs founder Do Kwon shared a plan to revive the Terra Ecosystem after its stablecoin UST and cryptocurrency LUNA nosedived earlier this month, bringing down the crypto markets with them. Today, Terra’s plan has passed and been approved by the community. “Terra 2.0 is coming,” Terra’s official Twitter account on Wednesday. “With overwhelming support, the Terra ecosystem has voted to pass , calling for the genesis of a new blockchain and the preservation of our community.” The proposal will effectively create a new layer-1 Terra blockchain without its algorithmic stablecoin. The old blockchain will be called Terra Classic (LUNC) and the new blockchain will be called Terra (LUNA), the company . The Luna token is and should not be confused with the old one under the same exact name (confusing, I know.) The proposal had 65%, or about 200 million votes, in favor of the plan, while about 21%, or 54 million, abstained, and about 13%, or 41 million, voted no, according to from Terra Station. The votes are cast based on LUNA token ownership, with one vote per token, not per user. Given that it has passed its threshold, the relaunch plan will be rolled out on May 27. Per the terms of the proposal, Terra will airdrop tokens to community members who never sold their old LUNA tokens or UST stablecoins amid the ecosystem’s downfall. According to the plan, the tokens will be distributed as follows: The wallets tied to Terraform Labs and will not be a part of the airdrop whitelist, Terra wrote. “[This} will make Terra a fully community-owned chain,” Terra . “We believe this is an important step to empowering our ecosystem.” |
Google Photos starts rolling out new Real Tone filters | Aisha Malik | 2,022 | 5 | 25 | Google Photos is beginning to introduce new Real Tone filters this week, Google . The new filters are rolling out on Android, iOS and the web and can be accessed in the ‘Filters’ tab in Google Photos’ image editor. The company says the new Real Tone filters were designed by “professional image makers” to accurately represent various skin tones in photos. “These filters were designed by professional image makers to work well across skin tones, so you can choose the filter that reflects your style,” the company said in a about the launch. The new Real Tone filters in Google Photos are starting to roll out today on Android, iOS, and web. These filters were designed by professional image makers to work well across skin tones, so you can choose the filter that reflects your style. — Google Photos (@googlephotos) A screenshot tweeted by Google shows that among the Real Tone filters are “Playa,” “Honey,” “Isla” and “Desert.” The screenshot also shows that once you select a Real Tone filter, you’ll see a “Made with Real Tone” badge in the editing screen. Google first Real Tone for Pixel phones last year with the aim of making faces with all skin tones show up as well as possible in photos. Earlier this month, the company at its I/O developer conference that it was incorporating a 10-shade skin tone scale in several of its products over the coming months and that it planned to introduce a new set of Real Tone filters using the scale for Google Photos. These revamped Real Tone filters are now rolling out and are designed to work well across skin tones and evaluated using the MST Scale. The 10-shade skin tone, which is called the Monk Skin Tone (MST) scale, is designed to be more inclusive of various skin tones. It was created in partnership with Harvard professor and sociologist Dr. Ellis Monk. Google says the new approach and scale will help it to evaluate whether a product or feature works well across a range of skin tones. The company will continue to work with Dr. Monk to evaluate the MST Scale across different regions and product applications. Google outlines that the MST Scale is an important next step in improving skin tone inclusivity in technology and will help it make progress in its commitment to image equity and improving representation. |
Jack Dorsey steps down from Twitter’s board | Taylor Hatmaker | 2,022 | 5 | 25 | Former Twitter CEO Jack Dorsey’s time at the company has come to an end. Dorsey stepped down from Twitter’s board of directors Wednesday, a change that’s effective as of the company’s shareholders meeting. Dorsey had already begun to distance himself from the social media platform he co-founded, leaving late last year to focus on Block, The plan for Dorsey to leave the board has been in place since he stepped down as CEO. At the time, the company noted that Dorsey would stay on the board “until his term expires at the 2022 meeting of stockholders.” Dorsey’s exit from the board marks the end of an era, as Dorsey has been involved with the company in an official capacity since its founding. With SpaceX and Tesla billionaire Elon Musk still poised to buy Twitter, cold feet notwithstanding, the world’s most prominent real-time social network is on the cusp of a lot of change. While this particular change doesn’t come as a surprise, Twitter is still entering an unknown phase without the at times enigmatic leader who steered it as CEO during two different periods, shaped its policies during the political chaos of the Trump administration and ultimately to take to the company private. At Wednesday’s shareholder meeting, Twitter’s board voted to oust board member and Musk ally Egon Durban, CEO of private equity firm Silver Lake — just the latest twist in a corporate takeover that’s been as chaotic and unpredictable as the man who launched it to begin with. |
Spy agency pumps billions into orbital imagery companies BlackSky, Maxar and Planet | Devin Coldewey | 2,022 | 5 | 25 | A massive contract from the National Reconnaissance Office will put billions in the pockets of new and established Earth observation companies BlackSky and Planet, and the more generalist Maxar. The “Electro-Optical Commercial Layer” contracts will be paid out over the next five to 10 years. As you might imagine, incredibly sharp pictures from space, as well as the ability to interpret and act on this imagery, is something of a valuable asset for the NRO. It’s an obvious strategic asset that has proven its value time after time, but increasingly it is not necessary to rely on government-owned assets like spy satellites. “The NRO has a long-standing strategy of ‘buy what we can, build what we must,'” said NRO director Chris Scolese in a press release. And that balance has been shifting. Commercial imaging capabilities on orbit, as demonstrated by Planet and BlackSky in particular, have likely outstripped many assets put in place over the last few decades by the NRO. It’s not particularly feasible to launch a new, “secret” constellation that provides the level of coverage those providers do, so they’re just going to pay for the kind of high-level access the companies always knew would be valuable. Under the new EOCL contracts, the companies have a five-year base (comprising about half the awarded amount) and five additional single year options, so that the services can be extended or augmented at will. Maxar has been providing these services to the feds for decades, and some old capabilities and responsibilities will roll over under the new contract, which it valued at about $3.24 billion in total. “shortwave infrared, non-Earth imaging, nighttime imaging and theater direct downlink” to Maxar’s plate, which covers quite a lot of surface area, literally and figuratively. The NRO is interested in intelligence beyond the planet itself, obviously. Planet , but basically defined it as a premium subscription to all their imagery, including from the fleet not yet in orbit. So it may be that they declined to list a value so that the cost of that service could not be reverse engineered from it. Or maybe they’re just private people over there. BlackSky is perhaps the most thrilled of the three, if its stock price is . In addition to providing imagery directly through its own constellation, the company has recently focused on building a data platform meant to be the first stop for anyone looking to make sense of information coming from orbit. CEO Brian O’Toole recently told me “The world is going to be awash with sensors — it’s a massive market that’s massively fragmented. So we started building the software platform that integrates all that using AI and machine learning.” That bet seemingly has paid off, and O’Toole that BlackSky has been tapped to provide imagery for the Ukraine conflict, where hourly scale intelligence has proved invaluable. |
Marathon Venture Capital adds to its newest fund to back Greek founders around the globe | Connie Loizos | 2,022 | 2 | 3 | , an Athens, Greece-based venture firm co-founded in 2017 by two stalwarts of the Greek startup scene, has added €30 million in capital commitments to its second fund roughly a year after completing a with €40 million. Backers of the vehicle, which is more than twice the outfit’s €32 million debut effort, include the European Investment Fund, the Hellenic Development Bank of Investments (which really upped its investment, we’re told) and the European Bank for Reconstruction and Development. We traded emails yesterday with one of the outfit’s co-founders, George Tziralis, who said that he, co-founder Panos Papadopoulos and the rest of the team have been writing seed-state checks of between €1 million to €1.5 million into a wide variety of startups in exchange for a targeted 15% to 20% ownership stake. He made it sound from the exchange like the startup ecosystem in Greece is more active than ever, but far from frothy as in many regions around the world. Part of that exchange follows. GT: No, absolutely not [they don’t have to be born in Greece]. If you are an ambitious Greek founder, we want to talk no matter where you’re based. We have invested in 14 companies so far, and only two had female founders. There is an increasing number of female founders starting up in our broader community, and some of them have been quite successful. Still, obviously, we have lots to do on this front and we started by tracking related figures. [Specifically], we recently released a for tech roles in startups based in Greece in which we also studied gender ratios. The results further highlighted the underlying gender gap, especially in leadership roles. On the flip side, product and QA/testing roles proved to be more balanced, and we hope they can serve as an example. I’d say roughly half. We’ve invested in founders starting from Nicosia to Munich to Berlin to Stockholm to London, all the way to San Fransisco, and we’re increasingly getting access to more opportunities across Europe and the U.S. At the same time, our domestic market has been growing really fast. The next generation of Greeks want to build a career in startups rather than anything else. It’s also interesting to highlight that an increasing part of Greek founders based internationally maintain part of their operations in the country. Culture, quality and compensation-wise, this is becoming appealing to more and more companies. We all focus on company building — from setting up shop, recruiting a team, perfecting the product, nailing marketing and sales, then raising the next round, and so forth. These functions are largely sector agnostic in our experience. We believe founders know better when it comes to their domain of expertise. We started doing meet-ups in Greece 15 years ago. I actually was running Open Coffee meet-ups in Athens every month from 2007 until COVID. We built a vibrant startup community, but there was no investor around and someone had to do it. This is how I got started with venture capital. Since we launched Marathon in 2017, we’ve expanded our event footprint to destinations across Europe and the U.S., hosting a sizeable pool of Greeks doing startups and working in tech. We’ve been to Zurich, Munich, Berlin, Stockholm, Amsterdam, Paris, Barcelona, London, New York, Boston, Chicago and San Francisco, gathering hundreds of attendees and bringing together a global community accumulating experience and enthusiasm about startups. We are on a mission to find every Greek entrepreneur around the world. It has become sizeable, fast. It actually grew 2.4x to $4.5 billion last year. You can see our , using CB Insights data, to find every Greek founder who raised money last year, or who sold their company. We’ve done ten investments with our first fund, and had our first exit already. Data streaming platform Lenses.io was acquired by Celonis, one a fast-growing enterprise software company with a decacorn valuation. Last year alone, half of our Fund I portfolio companies raised a Series A. More specifically: LearnWorlds raised $32 million led by by Insight Partners; Causaly raised $17 million led by Index Ventures; Hack The Box raised $11 million led by Paladin Capital Group; Augmenta raised $8 million led by CNH Industrial; and Cube RM raised $8 million led by Runa Capital. We participate in Series A and B rounds, maintaining our pro-rata with our existing funds. The second closing of Fund II we are announcing today is providing us with more firepower toward that goal. SPVs are reserved for later stages. A significant number of our LPs are based in the U.S., and participate using various kinds of vehicles. Absolutely. The names from our portfolio speak for themselves. Yes, activity has been increasing and we believe there is space for more of it. Venturefriends announced a fund of similar size a few weeks ago. Genesis Ventures also recently launched a €20 million pre-seed fund. And there has been a bunch of funds originally started at the 2018 vintage that should follow with new funds soon. We led the seed of , a Munich-based pioneer of real-time commercial real estate analytics. It’s actually a pretty slick case. Its service tracks in real time the position and trajectories of visitors in an area without requiring an app download, WiFi login or using cameras. Its adoption by large retailers, shopping malls, transport operators, etc. has been spreading fast with landmark customers, including IKEA globally. |
In Ford’s transition to EVs, cost-cutting takes center stage | Rebecca Bellan | 2,022 | 2 | 3 | Ford has made cost-cutting a key piece of its EV strategy as the company works to improve profit margins while meeting what CEO Jim Farley has called of its new electric vehicle models. During the company’s fourth-quarter and full-year earnings call on Thursday, Farley said Ford has set up a task force dedicated to lowering the bill of materials for its battery-electric vehicles (BEV) “above and beyond just the usual declines in material costs.” “For example, on the Mustang Mach-E in just the last month, our team found $1,000 of opportunity per vehicle, and that’s deliberate through design simplification, vertical integration and leveraging our scale with supply chain as we ramp up production,” Farley said. “And that team is just getting started.” Notably, Ford isn’t waiting for a second generation vehicle to make changes that will lead to cost reductions or better efficiency. Through the process of producing Mach-E’s, Farley said the company has learned how to source profit opportunities by better integrating its engineering, supply chain and manufacturing segments. For example, Farley noted that the Mach-E’s cooling system has four motors when it probably only needs to have two; it has 60 or 70 hoses, when it can probably function well on a third of that. “Those are the opportunities we’re going after and we are not going to wait for next year,” he said. “We’re not going to wait for a minor change. We are going to reengineer that vehicle now and then use that expertise for the Lightning and the E-Transit and of course, all our electric platforms.” Ford CFO John Lawler noted that the company’s BEV margins need to improve. “We have an opportunity but we need to do that through scaling them,” Lawler said. “We’re going to want to have a strong lineup where we can lean into it with key vehicles in high-volume segments like we are today with Mustang Mach-E and the Lightning, and in our commercial vehicles, with the E-Transit, we’re going to reduce complexity.” The Ford F-150 Lightning truck and the E-Transit van are not yet out to market, although deliveries of the van are expected to begin later this month. For now, Ford’s BEV portfolio consists of one vehicle: the Mustang Mach-E. Sales of the crossover EV has accelerated since it came to market last year. In January alone, the , as opposed to 238 in the same month the previous year. Scaling operations is one obvious way to lower costs, but that can come with a lot of upfront investment. Ford and battery manufacturer SK Innovation plan to to build two campuses in Tennessee and Kentucky that will produce batteries as well as the next generation of electric F-Series trucks — a project the companies said will create 11,000 new jobs. Ford is contributing $7 billion to the project, the largest single manufacturing investment in its 118-year history. The investment is part of Ford’s previously announced plan to put $30 billion toward electric vehicles by 2025. Ford is prioritizing bringing down costs in its internal combustion engine vehicle business, as well, which Farley distinguished as a separate business from the company’s blossoming EV business, despite having models like the Transit van that will span both fuel segments. This is an important distinction to make, as Ford’s profitability still mainly comes from its ICE models. “On the ICE business, we’re gonna leverage the compute on the vehicles to really lower manufacturing costs and leverage that compute to simplify what we do coming down the line and bring that down to the bottom line of the vehicle,” said Lawler, noting that the company is also investigating ways to work with partners to lower distribution costs with manufacturers. The stated goal behind continuing to invest in a healthy ICE business is to fuel the growth of a healthy BEV business, said Farley, noting that the future manufacturing of ICE vehicles has a main focus in optimizing cash returns that can then be injected back into the electrification of Ford. Ford reported a net income $12.3 billion in the fourth quarter, a reversal from the $2.8 billion loss it reported in the period in 2020. Ford’s profit included $8.2 billion in gains from its investment in EV startup Rivian, which went public in November. Once the gains from its Rivian holdings were removed, the company had an adjusted profit of $2 billion in the fourth quarter. Revenue for the fourth quarter rose 5%, to $37.7 billion. For the full year, Ford reported a net income of $17.9 billion, up from a $1.27 billion loss in 2020. Ford shares are down 4.37% in after-hours trading because the company’s results did not meet analyst expectations. |
Aptiv’s latest investment shows that software-defined vehicles are here to stay | Rebecca Bellan | 2,022 | 2 | 3 | Automakers keen to sell vehicles loaded with features and software services — in a bid to generate more revenue — . These so-called software-defined vehicles contain Neither Aptiv nor Kopetz confirmed whether MotionWise would be applied to Motional vehicles in the future. The , which was originally launched in 2017, is already in more than 2 million passenger vehicles worldwide, including in VW Group brands Audi and Volkswagen. It’s also headed to several upcoming car models under Hyundai Kia Motors Group and SAIC Motor Corporation soon, according to Kopetz. |
Snap finally did it, y’all | Alex Wilhelm | 2,022 | 2 | 3 | , unveil the banners, cue the parade. . And we don’t mean adjusted-EBITDA profitable, adjusted-operating-income profitable, or even the infamous non-GAAP-net-income profitable. It’s -profit profitable. In the fourth quarter of 2021, Snap reported $1.3 billion in revenue (up 42% year over year), an operating loss of $25.1 million, and GAAP net income of $22.6 million. On behalf of all the mean things that I have written about Snap’s long and occasionally meandering path to profitability, I would like to say . With just a single, small, $63.2 million caveat. The company’s operating income was negative, so how did it manage to fire up positive net income? Observe: Snap What is the company’s “other income” that helped it push an operating deficit in Q4 2021 into the green? We don’t know. Not yet. It isn’t explained in the company’s earnings release, its slides or its prepared remarks. But no matter, Snap’s quarter was super good, and investors are thrilled. Shares of the company, after an awful day’s regular trading (down 23.53%) are currently up sharply after the numbers dropped (up 40.90%). In short, it appears that Apple’s privacy changes that have impacted a number of companies are going OK at Snap. This is a surprise because in Q3 2021 the company . What to think of the matter? Let’s turn to the company’s . Here’s the company’s chief business officer, Jeremi Gorman (emphasis added): On the Direct Response side, . As anticipated, on the Brand side, macro headwinds related to supply chain disruptions and labor disruptions materialized, and remain unresolved in the new year. Despite all of this, we continued to onboard new advertisers, which drove our active advertiser count to another all time high. Solid progress indeed! Driving the company’s blowout quarter is solid user growth, the very thing that Meta is struggling with at the moment. Here’s Snap’s chart on the matter: Snap To summarize, as the kids would say, it’s lit! In other, related business news, Amazon is having a great after-hours period after its own earnings came in hot. This is after PayPal, Spotify, Netflix and others in the tech realm have been forced to eat their hats after missing investor expectations. The earnings market is lumpy, in other words, and we’re seeing a divergence in terms of performance from companies that, in last year at least, appeared to be marching forward in lockstep. |
Amazon is increasing the annual price of Prime to $139 in the US | Aisha Malik | 2,022 | 2 | 3 | Amazon is increasing the price of in the United States, the company announced on Thursday as part of its quarterly and full-year . The monthly fee is going from $12.99 to $14.99 and the annual membership is rising from $119 to $139, marking a 17% increase. The price change will go into effect on February 18 for new Prime members. For existing members, the price will apply after March 25, on the date of their next renewal. The e-commerce giant says the reason for the increase is due to the continued expansion of Prime member benefits and the rise in wages and transportation costs. “Amazon continues to invest heavily in Prime. In the last few years, we’ve added more product selection available with fast, free, unlimited Prime shipping; more exclusive deals and discounts,” said Jamil Ghani, the vice president of Amazon Prime, in a statement. “With the continued expansion of Prime member benefits as well as the rise in wages and transportation costs, we will increase the price of a Prime membership in the U.S. This is the first time Amazon has raised the price of Prime since 2018.” Today’s announcement marks the third time that Amazon has raised the price of Prime in the U.S. The last time Amazon increased the price of Prime due to higher costs around shipping. Before that, the company raised the price in 2014. In its earnings release, Amazon revealed that Prime members in the U.S. received more than 6 billion free deliveries and that over 200 million members worldwide streamed shows and movies in 2021. |
11 ways to make personalized shopping more effective and profitable | Vitaly Alexandrov | 2,022 | 2 | 3 | Since customer-centric digital strategies are now the norm for successful brands, the current focus should be on ways to use new tools and tech to differentiate your brand experience from the competition. This is not so different from how brick-and-mortar shops operate: Customers walk in and are immersed in specific branding techniques, marketing strategies, and options for connection and personalized interaction. This is a tried-and-true formula for in-person shopping, so why shouldn’t it be translated to digital storefronts as well? Let’s look at some of the ways that brands can leverage emerging tech to create a powerful, profitable personalization experience. There are endless statistics about how important it is for consumers to feel like they are getting an individualized experience. Salesforce found that of consumers are far more loyal to brands that understand their needs, and 84% say that they’re more likely to shop with brands that make them feel like a person rather than a number. Additionally, say they’d prefer to shop with brands that offer relevant, personal recommendations. Data-driven personalization allows you to sell more and sell more often. Why? First, it allows you to anticipate what customers want and deliver it at just the right moment. Second, it helps you leverage what experts call “ .” In the simplest terms, dopamine is a neurotransmitter that drives us toward pleasurable experiences (like shopping or eating rich foods). When we do these things, we get a chemical reward that connects the activity with a positive feeling. Consider the extreme popularity of Walmart, Spotify, Netflix and Amazon. Part of the appeal is that they conveniently offer vast options, but that’s only part of the story. What these brands understand is that businesses need to create that rewarding dopamine hit that we all crave. That’s the hook that keeps us coming back. They achieve this through personalization. You can create a unique account, answer quick and easy questions about your tastes, and immediately get exciting recommendations. They continue to refine your profile by learning your browsing habits and matching you to new things that pique your interest. You might not like every pick, but you get that jolt of excitement that comes with something new and interesting to you. Harnessing the power of this “dopamine effect” is a skill that must be trained. Companies can no longer follow a generic “copy/paste” formula and expect consumers to care. Not only do brands need to personalize the content, but they also need to personalize marketing tactics like timing and communication frequency. To ensure that you’re getting the most from your personalization efforts, use data collection tools to measure and track relevant key performance indicators such as: |
null | Sarah Perez | 2,022 | 5 | 25 | null |
The truth about management in Silicon Valley: It doesn’t exist | George Arison | 2,022 | 2 | 3 | The tech industry is home to some of the world’s greatest innovators, most profitable and valuable companies, and incredible startup success stories. But, these achievements notwithstanding, it’s also a space where there’s a surprising lack of appreciation for skilled management. I founded three companies and have worked in the tech industry for 15 years, and I learned a lot of this firsthand through my experiences building Shift. If I could go back to when we launched in 2014, there are a lot of things I’d do very differently in terms of how we set up our culture — understood as the type of behavior that is rewarded and encouraged versus discouraged and penalized — and developed management practices. From my observations, lack of proper management leads to the failure of many great startups and ideas. More importantly, it’s contributing to the scarcity of engineering talent and, in turn, the rising people-related costs of building companies. That puts Silicon Valley at a disadvantage. At first glance, you might think that some of Silicon Valley’s best technology companies are incredibly well-managed. In practice, though, many of them are one-product wonders. They’ve figured out one product and have built, some would argue, a monopoly around that product. This is certainly true of both Google and Meta (formerly Facebook), both of which have one primary revenue stream (digital ads), and both of which have largely failed at building products outside of acquisitions (Google Maps and Android being possible exceptions, though both started as early-stage acquisitions). Because these companies command incredible pricing leverage in their respective advertising businesses, they can continue to dump nearly unlimited resources into attempts to build new products and take out potential competition through acquisitions – all while hiring any and every engineer they can get their hands on. But this issue goes beyond just these two prominent corporations. It is fairly widespread across large tech companies throughout Silicon Valley. There may be talk about objectives and key results in tech companies, but often these goal-setting frameworks are just words without any teeth. When the bottom line almost does not matter, the result is too much leeway and too little accountability. It is wasted resources and stalled innovation. If companies effectively utilized their existing talent, they would be able to produce the same, if not better, results. There would be fewer failed products, ultimately freeing up talent to work on more impactful tasks and produce greater innovation. I would even venture that many technology companies could eliminate 20% to 40% of their workforce with very little change to the bottom line. However, this would require getting work done with far scarcer resources, which would, in turn, require management (aka prioritization; the ability to start small, experiment, and only after testing and learning going big on a product; and greater control of the product initiatives and business through profits and losses). With better management, companies would also see a significant cut in their out-of-control people-related costs. We all know engineering salaries are high and keep rising, and while many tech companies with high-margin businesses can afford to hire an excess of engineers and other technologists, they would significantly reduce their costs if they simply managed their existing talent better – allowing them to put resources toward fewer initiatives and more profitable outcomes. Of course, not all companies building great technology suffer from this problem, with Amazon being by far the biggest and best example. It is also Amazon, of all the large, consumer-focused tech companies, that has been the best at innovating new products and creating new revenue streams — Amazon Web Services, Prime Video, Marketplace, Ads, to name a few — outside or on top of its initial retail business. This problem isn’t just a problem of large tech companies; it’s prevalent in many startups. There is a widespread belief that good culture equals having kombucha on tap, feeding employees gourmet food, and, pre-COVID, having an Instagram-friendly office space. This snowballs into a lack of accountability, which, from a management standpoint, is extremely easy to hide. And, sure, while those are all fun perks for many, culture should be, at its core, a consensus of the behaviors that are rewarded versus frowned upon, encouraged versus discouraged. Many founders have become conditioned to believe that they will not be able to innovate and enforce good management and accountability at the same time. Indeed, talent wars are so intense that lots of energy is spent on making everyone feel good about their job, not actually delivering results. Founders have come to believe that the users will come if and when they build a great product, rather than managing the business through the lens of P&L, testing, and learning their way to what that product may be. This is easier said than done. I’ve made this mistake more than once in my journey at Shift, and these mistakes cost us an insane amount of time and money. Yet we can — we need — to hire people who are much better managers than many founders can be in their early days. Speaking from experience, it is hard to be an early-stage founder (focused on product and capital) and manager (focused on people management and accountability) simultaneously, so you need to figure out where you succeed and where you don’t, and then fill in the gaps. You also need coaching — early! Only through good coaching can you recognize your blind spots and determine how to address them with the right people around you. Yet, if great companies are still being built — 2020 and 2021 saw some pretty incredible IPOs — why should anyone care about whether they are well-managed or not? There are two reasons. First, there is an unbelievable scarcity of engineering talent. We are doing a disservice to innovation, and to the future prosperity of the American economy, if companies who can afford it are hoarding great talent, even though they can accomplish the same results with fewer engineers. This also leads to underutilized engineers stuck in humdrum workplaces, and the scarcity of talent further exacerbates one of our country’s most pressing shortages. As a result, our ability as a nation to stay ahead on the global tech stage is massively constrained. Then, there is the cost issue. If you think inflation in this country is bad overall, you should see salary inflation in Silicon Valley. Salaries are out of control, and so is our cost of living. Many engineers are cognizant of the issue and use it to their advantage, as they should. But these problems continue to feed into each other like a vicious cycle. This, of course, impacts businesses, especially startups, which end up needing a ridiculous amount of funding to pay for all of this. There is an enormous opportunity for Silicon Valley companies to change their mindset on management. The first step is for founders to hire and surround themselves with people who embrace management and think about business through accountability and P&L. Recruit leaders who are experienced managers or seek the support of a management coach or consulting firm. When you think you need another engineer, pause and consider if what you really need is a manager to get more out of your existing engineers. Second, leaders should focus on developing and managing their existing talent, such as matching employees with the right growth opportunities, reorganizing teams, setting goals, and holding leaders and employees alike accountable for meeting them. What I’m proposing is a paradigm shift, one that is going to take time. Obviously, one or two companies implementing better management won’t change this issue overnight. However, the work culture in Silicon Valley as we know it today originated and evolved from just a few companies. If, over the next decade, we see more well-managed, Amazon-style businesses being built, it would completely shift Silicon’s Valley culture and, as a result, how this industry — and country — is managed overall. |
Dolby acquires low-latency streaming platform Millicast | Frederic Lardinois | 2,022 | 2 | 3 | today announced that it has acquired , a WebRTC-based developer platform for building ultra-low-latency video streaming experiences, as it works to build out its developer platform. The promise of Millicast, which was founded in 2018, is that it can deliver content across the globe in broadcast quality and with sub-second latency. The company says its customers range from broadcasters, conference organizers and concert venues to online gambling companies and auction houses, all of which require high-quality, low-latency streams. Users can opt to stream from the company’s web-based dashboard or through the popular desktop app — or from any RTMP-enabled service, including Zoom. It’s worth noting that this is very much an enterprise product, with monthly prices starting at $495, with 500 GB of CDN bandwidth included. While you are likely familiar with Dolby because of its audio codecs, the company has been working hard on building out a developer ecosystem to allow others to integrate its audio and video expertise into their own products. Back in 2020, the company with a couple of audio APIs. Today, it offers a of APIs that give developers tools to build anything from audio mastering solutions to transcoding services and . Unsurprisingly, the company plans to use the Millicast acquisition to strengthen its livestreaming portfolio with its low-latency broadcasting capabilities. “For Dolby, this acquisition is about expanding the opportunities for developers and businesses, bringing Millicast ultra-low-delay streaming to complement the already rich capabilities of Dolby.io,” a company spokesperson told me. Millicast (screen capture) Millicast’s current customers will continue to get access to the same functionality they have become accustomed to through the Dolby platform and the company tells me that there is already considerable overlap between the two companies’ customer base. “Dolby and Millicast share a passion for enabling the future of lightning-fast, crystal-clear content streamed to thousands of participants,” said Millicast CEO Alexandrine Platonoff. “Together, we have the opportunity to bring ultra-low latency to a global customer base and empower them to build virtualized, massive audience experiences that feel almost as if you were there. We’re excited to become a part of Dolby and can’t wait to see what we build together.” The two companies did not disclose the price of the acquisition. The company was seemingly doing quite well though in recent years, with entrepreneur and investor Keith Teare that it grew revenue by over 300% in 2021. |
Better.com loses more top execs in wake of Vishal Garg’s return as CEO | Mary Ann Azevedo | 2,022 | 2 | 3 | , , |
How to organize and execute an effective hybrid sales kickoff event in 2022 | Alon Alroy | 2,022 | 2 | 3 | in a world required to pivot from business-as-usual in person to Zoom meetings, and now to a mix of both. Many companies are continuing to consider various strategies to plan and host an effective, engaging sales kickoff. According to a recent event participation survey conducted by MarTech, respondents rated the . About 27% expressed interest in attending events in-person only, 34% preferred to attend virtually, and 39% wanted to participate in hybrid events with both in-person and virtual components. Regardless of their location, sales teams need the right talking points — and an infusion of morale and excitement — for a successful start to 2022. Companies hold sales kickoffs (SKO) internally at the start of each year. Intended to offer business growth strategies and have everyone on the same page, SKOs also educate, inspire and motivate sales teams. Before the pandemic, companies hosted SKOs in person. These experiential events included opportunities for: Since then, SKOs — like many other business operations — have gone virtual. Sales leaders now seek to elevate their virtual venues to platforms that have the power to inform, inspire and connect teams in preparation for hitting and exceeding 2022’s sales goals. Zoom fatigue is real, and working remotely can often result in too many meetings. According to a study by Korn Ferry, 67% of employees feel they spend too much time in meetings, and the time demand hampers their productivity. Sales professionals also continue to struggle with engagement — 36% of respondents in the listed it as their top challenge. While socializing won’t quite be the same and skipping 2022’s SKO isn’t always an option, companies can still deliver a high-impact virtual or hybrid SKO that engages, entertains and motivates their sales teams. Virtual or hybrid SKOs offer other benefits, too. Firstly, they’re cost-effective. Thanks to technology that allows distributed teams to connect virtually, companies can save money by not flying everyone to a central location. Organizations will save thousands on venue, hotel, transportation and catering costs. |
With a plan to decarbonize heating systems with hydrogen, Modern Electron raises $30M | Devin Coldewey | 2,022 | 2 | 3 | A huge amount of energy use on our planet goes toward creating heat, and not only that, but a large amount of that energy is wasted and byproducts like CO blasted into the atmosphere. could change that with a new system that captures the emissions and produces clean hydrogen, right inside a home or building, and $30 million in Series B funding will power its upcoming push to become a household name. Natural gas is the most common way houses, apartment buildings and offices create heat. It’s a pretty simple process: you burn the gas, it produces heat, carbon dioxide and water. The heat is piped in, the other stuff is piped out. But as Modern Electron co-founder and CEO Tony Pan explained, this may be convenient, but it’s not ideal (though admittedly it’s much better than oil and coal). “If you’re burning fuel just for heat, from a physics standpoint it’s very wasteful,” he said. “If you were burning natural gas or coal or biofuels in a power plant, you’d be generating electricity first, because electricity has about four times the value of heat. The reason we don’t do that is you can’t scale down power plant tech to the level of a commercial or residential building. This loss has been known about for a century — if you can generate heat and electricity, it’s like a holy grail.” By combining two new technologies, though, Pan hopes to achieve something like that holy grail. The first technology is called a thermionic converter, and it’s what the Seattle-area Modern Electron made its first pitch on. The size of a soda can, it’s a compact and efficient heat to energy converter, which takes the heat produced by a furnace and turns it into electricity. The second, which is still under development but about to make its debut, is what they’re calling the Modern Electron Reserve, which rather than burning natural gas — which is mostly CH , or methane — reduces it to solid carbon (in the form of graphite) and hydrogen gas. The gas is passed on to the furnace to be burned, and converted to both heat and energy, while the graphite is collected for disposal or reuse. Modern Electron You may be, as I was, suspicious that introducing a number of conversions and processes here would have a serious effect on the efficiency of the whole system, thermodynamically speaking. “There’s no free lunch, it’s true,” Pan said. “In order to not release CO into the atmosphere, we don’t have that exothermic reaction [i.e. burning the gas]. But if you use it for heat and power, since power is more valuable than heat, you can economically come out even. You sort of subsidize the extra cost.” In fact, users shouldn’t see any uptick in gas use at all — the energy that normally would have escaped your home in other forms stays in the system to the extent that your electricity needs should be covered easily. As for the carbon this reaction produces, it requires something of a shift in thinking. Right now, heat is kind of magic. You turn it on, the house heats up and you get a bill. But if you’re using a system equipped with Modern Electron’s tech, then you’re going to end up with a kilogram or two of of graphite — pure carbon dust — every day. (That’s about a liter, or a dustpan full.) A pile of graphite — and yes, your furnace shoots this into the atmosphere every day. Modern Electron “Gross,” you might think, “I just have to throw this stuff away?” Well, the fact is you’ve been throwing it away the whole time — into the atmosphere. Pan called it the “giant dump in the sky,” and it’s where we’ve been putting our carbon since the very beginning. Now you can just see your carbon footprint more conveniently (but try not to spill it). This pure carbon dust isn’t what you’d call toxic, being essentially pencil shavings. As a solid, it actually is an effective sequestration of the carbon for a few hundred or thousand years even if it’s sitting in a dump somewhere. Furthermore, facilities like offices or hospitals that use a lot of heat would probably produce enough carbon solids, and at locations convenient enough for pickup, that it could be sold on to industries that can use it. Modern Electron isn’t looking to replace your whole heating and electricity stack, though; for one thing, Pan pointed out, in the summer when a home needs very little heat, it will generate a correspondingly small amount of power. (Incidentally, the system would require some modification of most electrical systems for grid flexibility, but not an overhaul.) Modern Electron It’s all about decarbonization of whatever heat you use, and hopes to integrate with existing HVAC providers rather than reinvent the wheel. Its thermionic converter fits right in with no increase in volume, and the gas to hydrogen converter won’t take up more space than any other small appliance. Pan said that there is a huge opportunity to decarbonize not just homes, but buildings big enough to be major consumers of gas but not big enough to use the large-scale industrial infrastructure or even fuel cell tech like Bloom’s. That includes medium-size industry with high heat requirements and things like steam production. The timing is good — the EU will soon require new furnaces and boilers to be hydrogen-compatible (and old ones can be converted fairly easily), yet there is no sign of a global hydrogen economy on the scale that would be needed in order to switch from natural gas. Converting it on site with little or no loss, and considerable benefits, might be the new default for heating hundreds of millions of buildings. Not a bad place to be, startup-wise, which is probably why the company has attracted continued investment. The $30 million B round had new investors in At One Ventures, the fund co-founded by former Google X head Tom Chi, along with Extantia, Starlight Ventures, Valo Ventures, Irongrey and Wieland Group. Previous investors Bill Gates (the man, not the foundation) and MetaPlanet also continued and expanded their investment. The funding will go toward continued product development and the upcoming pilot tests with big HVAC OEMs, which Pan said should be up and running in the next year. They’re also , he added, especially in the Seattle area. If Modern Electron’s tech becomes mainstream, and the trend away from oil and coal continues, it could make natural gas a much cleaner and more viable complement (and one already with a heavy global presence) to renewables like solar and wind. |
Daily Crunch: Mos evolves from fintech into challenger bank, as early users start post-college lives | Alex Wilhelm | 2,022 | 2 | 3 | Hello and welcome to Daily Crunch for Thursday, February 3, 2022! Today we have a few angles on the startup market. The gist is that there are some positive signals to digest, as well as some more cautionary data points. I think it nets out to a changing market, but not one that has settled on a new level of risk tolerance. What the heck does that mean? Read on! But before we dig into the matter, don’t forget that (it’s going to be great!) and that fintech newsletter is coming soon. You can . – Today’s startup news has a few Tiger rounds, a toilet paper headline and more. But first up is , which founder Amira Yahyaoui says is gunnin’ to become “the incumbent bank in the U.S.” The startup, which just raised $40 million, appears to link neobanking to the college student demographic and their peculiar needs. Sticking just to the fintech theme, , which is building a corporate spend giant for the Middle East, backed by some of the most interesting founders in its own market, and . Tiger also took a bite out of Bold, which just to “enable digital payments” in the Latin American market. The lesson? Fintech’s rise is increasingly a global story, with some models tested in the United States finding resonance in new markets. And today in Good Headlines, pulled off the following: “ .” Lyu Liang / VCG / Getty Images) “You’ve got to spend money to make money” is a cliché, but if you’re building a company that hopes to compete in the cloud, it’s a fact. This week, Google Cloud reported $5.5 billion in revenue for Q4 2021, but “that was the good news,” reports Ron Miller and Alex Wilhelm. “The bad news was that Google Cloud accrued operating losses worth $890 million at the same time.” Given such high stakes, industry watchers don’t seem overly concerned by these ongoing losses, however. “Businesses of this nature require a lot of upfront investment and buildout of infrastructure and often don’t break even for several years,” said John Dinsdale, chief analyst at Synergy Research. SEAN GLADWELL / Getty Images TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this along to your clients; we’d like to hear about why they loved working with you. If you’re curious about how these surveys are shaping our coverage, check out this article on TechCrunch from Jonathan Martinez: |
Tackling touchpoints on your customer’s path to purchase | Jonathan Martinez | 2,022 | 2 | 3 | Someone clicks your ad on Facebook, and they choose to purchase the item for sale. We’d be in Utopia if that’s how 100% of user interactions panned out. However, as you might have guessed, such immediate success is far from what happens in real life. Many startups are hyper-focused early on with their ads’ click-through rate (CTR) and the conversion rate (CVR) for purchases. This is good information, but it leaves so much more to be desired. Welcome to the First Touchpoint Misconception: First Touchpoint Misconception. Jonathan Martinez A great deal has changed since Google Ads (formerly AdWords) launched in 2000 with a scant 350 advertisers. By 2015, the number of advertisers, and thus competition, had ballooned to 4 million, according to . Paid social channels like Facebook launched with only one primary ad format. Today we have dozens of formats. What does this do? It emphasizes the importance of being more creative to get consumers to click on these ads. This increased competition means that startups have become laser-focused on beating the opposition on initial clicks. I am a firm believer that amazing copy and creative can make or break paid acquisition. However, it is also too easy to get lost while focusing solely on the first touchpoint. I’ve seen this happen frequently at early-stage startups. Instead of a user converting right after clicking or viewing an ad, here’s what the journey to purchase usually looks like: A common user pathway. Jonathan Martinez I’m always surprised at how much the second, third, fourth, etc., touchpoints are ignored in analysis. I would much rather have a fully fleshed lifecycle than a CTR of more than 50%. Consider the example below: Jonathan Martinez Here, Startup A focuses only on the first touchpoint, and Startup B focuses on all touchpoints. While Startup B had half the overall number of clicks, it saw higher CVR due to retargeting and lifecycle emails, which led to the lower CAC. Even in one or both of those scenarios, you won’t maximize your paid acquisition without retargeting, email marketing, and diversified messaging for each touchpoint. Let’s break down the ways you can combat First Touchpoint Misconception. We’ll cover this topic through the lenses of retargeting, email marketing and diversified messaging. Every startup should have an “always on” retargeting campaign. In 99% of cases, it will be more cost-effective to acquire a retargeted user versus a net-new user. This can be a simple dedication of 5% total paid acquisition toward a retargeting campaign. If it proves fruitful, it can also be very robust with recency nesting and different user segments. A simple recency- and user-segmented structure for an e-commerce store can be something like: With this structure, you’ll want to exclude the audiences in each of the campaigns so that there isn’t any overlap. The beauty of this structure is that it allows you to funnel more spend into higher propensity retargeting buckets that are performing best. Without segmenting, it’ll be difficult to measure which audience pool is the best performer. Many will argue that email marketing shouldn’t be turned on until after you’ve acquired a predetermined number of customers. I believe that email marketing should be turned on instantly. Why try to find product-market fit without giving it your best shot? This isn’t to say that you should have nine fully fleshed-out drip campaign series set up on day one. Far from it. When a new lead comes in from a web or app campaign, leverage the emails you’ve recorded from the sign ups, as these users have shown some interest. Below is what a simple drip campaign setup can look like: A simple seven-day drip campaign. Jonathan Martinez If a user signs up but doesn’t complete your conversion event, send them an email on day one (D1), D3 and D7. Each email can have different themes, such as including additional value props, social proof or discounting. It also doesn’t hurt to ask for feedback on the last message as to why they haven’t finished the funnel. One surefire way to increase conversion rates across all touchpoints is to diversify messaging. The first message should be different from the second, and so on. Start paying attention to how companies communicate when you engage with them. I can almost guarantee that you will see very educational sales messaging early on, with more social proof sprinkled into subsequent touchpoints. Below are some of Headspace’s ads that lean heavily on the promotion of meditation: letting go of stress and being happy. Facebook ads from meditation app Headspace. Jonathan Martinez In Headspace’s email communications, they push more on discounts and how easy it is to get started (for example, that meditation can be done at any point in the day). Emails from meditation app Headspace. Jonathan Martinez I’m not saying you can’t have a discount code on your first and last touchpoint. Instead, start thinking about diversified messaging and experimenting with what styles resonate best at different stages. Between the initial ad view, email/push sends, and retargeting, I strongly recommend that all touchpoints should carry slightly different flavors. You are not alone in thinking about the various touchpoints. There are myriad resources that can help you extract valuable insights and knowledge. One of my favorites is the , which is a repository of all the platform’s ads that are currently live. This library not only provides you with competitor intel — it also has valuable intel about others in the same verticals or brands who are simply running a great performance marketing program. Another gold mine is an email repository called . There are hundreds of other resources available, but I won’t start listing them all. Instead, I’ll leave you with one question: As a customer, how often do you purchase something on the first touchpoint? |
Over the borderline | Brian Heater | 2,022 | 2 | 3 | before times of 2018, Ayanna Howard joined us onstage at our Robotics event to discuss human-robotic interactions, along with UC Santa Cruz’s Leila Takayama and Veo Robotics’ Patrick Sobalvarro. Plenty has changed since then — both for Howard and, you know, just in the world, generally — so it seems as good a time as any to catch up. At the time, Howard was the chair of Georgia Institute of Technology School of Interactive Computing in the College of Computing, and the founder and director of its Human-Automation Systems Lab (HumAnS). Last March, she made the move to Ohio State University, where she serves as the Dean of its College of Engineering. It’s the latest addition to an already impressive resume that also involves a long stint at NASA’s Jet Propulsion Laboratory and the founding of Zyrobotics, a mobile therapy and educational startup for children with special needs that spun out of her work with K-12 students will at Georgia Tech. Howard is also an IEEE Senior Member and, in 2020, co-founded Black in Robotics, an organization designed to “[bring] together a global network of Black Roboticists, Allies, and Organizational Sponsors contributing to the goal of enhancing diversity, inclusion and equity in robotics.” Ayanna Howard. Logan Wallace/The Ohio State University One is the students. It’s not just the next gadget, it’s that I’m training the student that will make the next gadget and multiply that by 10,000. By feeding it to students, I actually amplify the knowledge that I have in my head and my experience. The other thing is that fundamental research is still allowed outside the boundary condition. I love NASA, but our function was very specific: exploration. If I want to do something like figuring out how to design technology for eradicating cancer — as an academic, you can do anything. You can be a material scientist and decide, ‘you know what? I think I want to study genomics,’ and just do it. When I first entered academia, actually, the first project that I led was SnowMote. It was science-driven robotics and was funded by NASA. It was looking at our hazardous environments on Earth. So, glaciers, working with scientists to look at the ice shelves melting and collecting data from them. It was still very sciency. The difference was, my budget was much smaller and my engineers were students. But I realized as I was doing that project and really focused on addressing problems for Earthlings, that I like doing things to better our planet. The healthcare robotics really came out because I was thinking about what we can do with robotics in the space, and my thesis was to focus on healthcare. I actually have my own startup. It’s a nonprofit now, but it licensed technology from Georgia Tech that was focused on assistive tools for children with special needs. Children primarily with motor disabilities, but also sensory processing disorders, some aspects of language, speech disorders. It was tactiles, as well software, and we did actually have a robot, right before COVID and the supply chain issues. We’re ramping that up. There’s a couple of really big initiatives at the university level that involve the College of Engineering. And as an example, President [Kristina M.] Johnson established Buckeye Accelerators. Think of it as a pitch competition. Anyone can apply. They had so many students, they narrowed it down to 100, then down to eight. They’ve given each of the eight student teams $50,000 to do prototype development, matching them with mentors and things like that. In engineering, we actually have a representative that’s with the university that helps us do IP translation. During the summer of 2020, when we had all of the protests of the George Floyd murder, there were a lot of conversations about everything. There was a webinar that was hosted around robots and racism in general. I didn’t participate in that, but after, what happened was some of the people who participated said, ‘we need to have a conversation, because of things that some of the students said professionally.’ And so that conversation was basically senior roboticists that were in the field came together to talk about it. […] Black in Robotics really came to address inequities, specifically among black roboticists, but also underrepresented populations, to have the conversation and actually impact and affect change. Abundant Robotics This young month is already bringing some interesting news around the world of robotics. Following the purchase of its IP last year, plans have finally been laid out for the resurrection of Abundant Robotics. As I mentioned when the firm first went under, its closure was a surprise — not because robotic startup failures are entirely uncommon, but rather because things seemed poised for success in agtech robotics. The startup’s new parent, Wavemaker Labs, in hopes of relaunching the apple-picking robotics brand with a fresh $20 million seed. As for Abundant’s previous issues, says new CEO Buck Jordan: We saw great value in the breakthrough technology Abundant Robotics had developed so far, including its computer vision and machine learning applications; however, the protype was overly engineered and expensive to produce. Using the acquired IP, software product and a proven team that knows how to bring products to market at a cost that makes sense, we will use the funds to re-engineer a fully functioning prototype at a fraction of the current build cost, as well as to conduct business development and fundraising efforts. Miso Robotics Fellow Wavermaker firm Miso Robotics also that it’s seeking more funding, with plans to raise a $40 million Series E. Meanwhile, the story of Philly’s Ghost Robotics . The company made waves last year after images surfaced of its quadruped robots sporting a remote-operated sniper rifle. The company has made no bones about its work with the U.S. government, and this week, the Department of Homeland Security announced that it’s looking at Ghost’s legged robots to potentially patrol the southern border. “Technology such as semi-autonomous drones (air, ground, and even water) are used effectively as force multipliers elsewhere—and robot dogs are no different,” the DHS’s Brenda Long said. Personally, I would probably try to disassociate these robots from the government’s historic use of drones, but maybe that’s just me. Dive Technologies Speaking of robotic defense, Palmer Luckey-founded Anduril that it has purchased Dive Technologies, a Boston-based producer of autonomous underwater vehicles. Anduril cites a bunch of different uses, including, unsurprisingly, military/defense applications, including, “long-range oceanographic sensing, undersea battlespace awareness, mine countermeasures, anti-submarine warfare, seabed mapping and infrastructure health monitoring.” Robotic arms on duty in a car factory. gerenme / Getty Images This week we got our best look yet at Viam, a firm created by MongoDB co-founder and former CTO Eliot Horowitz. The news arrives as it announces a $30 million round, led by Tiger Global. The New York-based startup is looking to address a familiar problem: How do you actually go about deploying that fancy new fleet of robots. From the company’s site: At Viam, we’re addressing these issues by building a novel robotics platform that relies on standardized building blocks rather than custom code to create, configure and control robots intuitively and quickly. We’re empowering engineers – aspiring and experienced – across industries to solve complicated automation problems with our innovative software tools. Bringing us back around to medical robotics, where we (kind of) started this week with new research from Johns Hopkins. The school says its Smart Tissue Autonomous Robot (STAR) system completed without human guidance. Such research could go a ways toward the end goal of democratizing access to advanced surgical procedures using robotics. Bryce Durbin/TechCrunch |
Google Workspace goes all in on shadow IT | Frederic Lardinois | 2,022 | 2 | 3 | Google today a new version of , the company’s productivity service that you probably still . With the new — and free — Google Workspace Essentials plan, Google wants to bring more business users onto the platform by offering them the basic Workspace productivity tools — with the exception of Gmail. Until now, in order to use Workspace with a non-Google email address, you had to sign up for the account after a 14-day trial. That paid plan is not going away, but all you now need to do is sign up with your work email and you’re good to go. No credit card needed. The new free plan is essentially the existing entry-level Business Starter plan, but with a reduced storage quota of 15 GB (down from 30). Otherwise, though, you can use Google Meet with up to 100 users for up to 60 minutes in each call, get access to Spaces for work collaboration and Chat for gossiping about their co-workers. All of the standard tools like Sheets, Slides and Docs are also included, of course. Since you already have an email address from work, though, there’s no Gmail included in this edition, which makes sense, given that it would be tough to send out emails with your work address from there, leading to all kinds of confusion. Google There is a little complication here, though. There is a cap of 25 users per Essentials Starter team account. But multiple team accounts can be created within the same company. So basically, somebody from your team needs to start an account and can then invite other team members if you’re working in a larger company. With this move, Google is opening up a whole new world for shadow IT — and Google says as much in its announcement when it writes: “With Essentials Starter, we’re making it easy for employees to choose their own productivity tools and bring modern collaboration to work.” If IT doesn’t make the choice, employees will make it for them. This also opens up all kinds of questions about data governance and security. “Google Workspace Essentials Starter was designed for people to easily start using Google Workspace at work by themselves or with their team,” a Google spokesperson told me when I asked about this. “While it does include some lightweight admin controls — such as the ability to invite users to their team — granular IT controls and features like more advanced security are only available with paid Google Workspace plans.” Chances are, this will get any large enterprise that doesn’t have a paid Workspace account yet to quickly sign up for one in order to block its employees from setting up their own. |
Homeland Security establishes the Cyber Safety Review Board to learn the mistakes from past cyber incidents | Carly Page | 2,022 | 2 | 3 | The has assembled a review board that will be tasked with investigating major national incidents in an effort to “meaningfully improve” the nation’s cyber resilience. The Cyber Safety Review Board (CSRB), whose creation was set in motion by a May 2020 executive order signed by President Biden in response to the , will be tasked with studying the cause and fallout from major hacks so that the government, industry and security agencies can better protect national networks and infrastructure, . The board has been loosely modeled on the (NTSB), which investigates air crashes, train derailments and other transportation accidents. The CSRB’s first review will focus on the vulnerabilities discovered in December in , with a full report set to be delivered this summer. Examining these vulnerabilities, which are being exploited by a growing set of threat actors since details of the vulnerability , “will generate many lessons learned for the cybersecurity community,” DHS says, adding that the CSRB’s advice, information or recommendations will be made public “wherever possible.” The board is composed of 15 members — three times as many as the NTSB — made up of cybersecurity leaders from the federal government and the private sector. Homeland Security undersecretary for policy Robert Silvers will serve as chair, and Google’s security engineering chief Heather Adkins will serve as deputy chair. Other board members include Rob Joyce, director of cybersecurity at the , Dmitri Alperovitch, co-founder and chairman of Silverado Policy Accelerator and former chief technology officer at CrowdStrike, and Katie Moussouris, a bug bounty pioneer who founded and heads . Moussouris tells TechCrunch that the CSRB could not have come at a better time: “It will be instrumental in strengthening our resilience in the face of cyber incidents that affect public and private sectors with increasing frequency,” said Moussouris. “I’m looking forward to sharing recommendations and what we learn from investigating these incidents starting with Log4j.” Senator Mark Warner (D-VA), chairman of the Senate Intelligence Committee, also welcomed the formation of the CSRB, warning that “it’s only a matter of when, not if, we face another widespread cyber breach that threatens our national security.” “I was glad to see this NTSB-like function included in the President’s May 2020 executive order on cybersecurity, and this is a good first step to establishing such a capability,” he added. “I look forward to monitoring how this board develops over the coming months.” |
Over 500 mobile apps are now using the term ‘metaverse’ to attract new users | Sarah Perez | 2,022 | 2 | 3 | A true “metaverse” , but that hasn’t stopped marketers from adopting the buzzword to promote their apps and games on mobile app stores. According to new data shared today by , there are now 552 mobile apps that include the term “metaverse” in their apps’ titles or descriptions, in hopes of capturing consumer interest in this next evolution of the web. And many of the new additions were added in just the past few months, the firm notes. Across all global apps ranked on the App Store and Google Play, a total of 86 apps added references to the “metaverse” to their title or description between November 2021 and January 2022, Sensor Tower’s data indicates. Sensor Tower This time frame follows Facebook’s announcement of its to “Meta,” and its plans to invest heavily in “metaverse” technologies over the coming decade. While Facebook, now Meta, never claimed to have already built the metaverse, the word soon began to be used much more casually to describe nearly any immersive online environment where people interact with one another as virtual selves. Startups began to describe themselves as metaverse companies. Gaming platform Roblox was touted as a metaverse frontrunner. Social-crypto — which were really just MMORPGs with a heavy financial component — were also dubbed metaverses, land rushes for metaverse real estate. And so on. It seems that marketers didn’t much care about the actual technical requirements for the metaverse to exist — like the new industry standards that would need to be built to allow for movement between interoperable digital worlds, where all your friends, connections and virtual “stuff” comes with you. After Facebook announced its metaverse efforts on October 28, the number of apps that referenced the word “metaverse” grew 66% month-over-month by November. As of the end of November, 29 apps had been updated to include the word, more than double the 11 apps in October. The new firm also analyzed what sorts of apps were tapping into the metaverse trend. It found that many of the apps also referenced other popular tech terms alongside the word “metaverse” — like “crypto,” “NFTs,” “AR” or “VR,” for example. Sensor Tower Of these, “crypto” was the most common term to be spotted alongside “metaverse,” with 23% of apps (144 total apps) mentioning the term. That’s not surprising, given that the web3 crypto community relies heavily on hype these days, and dubbing something the “metaverse” before it even exists is certainly the definition of hype. “NFTs” was the second-most popular term, appearing in 18% of the studied group, or 118 total apps. The terms “AR” and “VR” were found in 11% and 9% of the “metaverse” apps, respectively. Sensor Tower The term “metaverse” was also surprisingly used across a wide variety of apps, not just games and crypto finance apps. However, mobile game publishers led the adoption of the keyword, as 107 apps in the Game category now reference the term, or 19% of the apps studied. The second-largest category where the term appeared was Finance, accounting for 101 of the “metaverse” apps. This was followed by Social (70 apps), Entertainment (57 apps), Books (37 apps), Lifestyle (33 apps), Tools (26 apps), Business (25 apps). Art and Design (13 apps) and Education (11 apps.) As to whether or not the addition of the word “metaverse” to these apps is working to bring in users remains less clear. While it’s clearly been adopted to capitalize on users’ app store searches for the word, apps that succeed in this market are likely just offering better user experiences than those that aren’t. |
Novi is building a B2B marketplace for brands that care about sustainability | Haje Jan Kamps | 2,022 | 2 | 3 | It’s that old chestnut: You are a fancy-pants brand wanting to make a product that makes you feel all warm and fuzzy inside because you only use fair-trade, sustainably grown ingredients and materials, but you don’t know where to turn. Next thing you know, comes bursting through the wall holding a freshly squeezed pitcher of solutions to all your problems, newly backed by a $40 million bundle of checks from , and . Novi is a B2B marketplace for sustainable, innovative ingredients and packaging, helping its thousands of customers bring products to market with more sustainable materials. Essentially, Novi is taking a data-rich network of suppliers, manufacturers, retailers and brands, making it easier to formulate, discover, sample and purchase sustainable and innovative ingredients and packaging as they build new products. The idea is simple: If you make it easier for brands to make sustainable products, the excuse not to do so goes away, and hopefully we make the planet burn a little less brightly under the burden of our rampant consumerism. “Early in my career, I joined the Air Force and I wanted to work on hard problems. I had this incredible career as a data scientist in the Air Force. And then I went on to build data teams for tech companies such as Eventbrite,” explains Kimberly Shenk, CEO and founder. “I got pregnant in 2017 and started to become very aware of the products I was using and the ingredients in my products. I got obsessed about learning about the toxicity to human health and to the environment. In 2017 I started a brand — — to address this. I was leveraging all the passion I have for data science to build personal care products that are better for your health and the environment. I experienced firsthand all the difficulties in actually bringing a truly sustainable product to market.” Shenk discovered that it was hard to find trusted materials and that for a small company without a huge, sophisticated supply chain analytics operation, it is hard to assess the materials. NakedPoppy started building a database to help capture its findings along the way, and in the process discovered that this could be the beginnings of the new company. Other brands started showing an interest, and Novi was born at the intersection of its founder’s interest in data and her personal experience of trying to build a sustainable brand. Novi’s existence as a B2B marketplace is particularly interesting, given that we’ve seen a huge trend on that front evolving recently: “At the most basic, we help brands find sustainable materials and build sustainable products. We are doing that as a B2B marketplace and so the data is that suppliers list their materials — things like ingredients or fragrances or packaging — and they give us a wealth of data,” explains Shenk. “As the trusted third party we assess the materials for different standards that they may care about so they can come and find materials that are trusted for their sustainability impact and then build a better product.” The company collects its data in a few different ways. O Kimberly Shenk, CEO and founder at Novi (Image: Novi) “Pre-Novi, brands would spend weeks hunting down materials and interpreting disparate material documentation to determine if they met complex industry standards,” says Shenk. Novi collects, digests and digitizes all of this data, ensuring real-time accuracy against ever-changing standards and claims, which allow our users to make procurement decisions around sustainability more efficiently and with confidence.” Of course, as with any data play, it’s a game of GIGO — garbage in, garbage out. It’s easy enough to slap a “sustainably grown” sticker on a pallet of wood and call it a day, and so far, there hasn’t been much incentive for brands to look much deeper than that. That’s one of the things Novi is eager to change. “We guarantee the accuracy of our assessments, but if supplier falsifies data…,” Shenk says, claiming that it is actually pretty hard to falsify the data because of the amount of information associated with certifications. “That is not something that we can solve independently; there are of course certification bodies that certify responsibly sourced palm oil. They are going out and trying to make a change in how you certify something as meeting those standards. But as we start to elevate the suppliers are doing good and get them in front of brands who are really looking for better materials — that’s the shift that we’re starting to see change the industry.” Novi doesn’t want to share exact numbers, but claims “thousands” of customers, working with brands like Croda, Grove Collaborative, Sephora, Target and many others. Novi plans to deploy its new capital to build additional technology for both sides of the marketplace to comply with evolving sustainability claims, grow its selection of ingredients, fragrances and packaging, as well as expand into new verticals like home care and food — segments that Novi is already seeing organic traction in. |
GM Ventures invests in startup building fast charge-capable battery tech | Rebecca Bellan | 2,022 | 2 | 3 | Soelect, a battery technology startup based in North Carolina, has closed an $11 million Series A round. It plans to use the fresh capital to scale its fast charge-capable anode technologies that might enable the next generation of batteries for electric vehicles. Alongside lead investor Lotte Chemical and investment company KTB Network, General Motors’ corporate venture capital arm, GM Ventures, signed on as a strategic investor. GM Ventures tends to invest in companies that offer transportation safety or sustainability solutions that can then be implemented in future GM vehicles, manufacturing facilities and operating businesses, said GM spokesperson Mark Lubin. “One of the competitive advantages of adding Soelect to GM Ventures’ portfolio is its fast charge-capable anode technologies, which could serve as an enabler for both future lithium-metal and solid-state EV battery anode designs,” Lubin told TechCrunch. “This investment, and others in the space, further expands GM Ventures’ efforts to accelerate the advancement of battery technologies that could increase range, improve efficiency and reduce costs in future GM products.” Soelect is not the only battery company that the VC invested in recently. It also invested in and partnered with SolidEnergy Systems (SES), an MIT spinout startup with an “anode-free” lithium metal battery that improves overall battery life and makes batteries twice as energy-dense. in Massachusetts and aim to have a high-capacity, pre-production battery by 2023. While GM is in the process of building two battery manufacturing facilities for its Ultium batteries with partner LG Chem, the company is open to other potentially fruitful battery partnerships. In October, the automaker shared plans to build a in Michigan to help it come up with battery tech that will result in long-lasting, quick-charging, sustainable batteries. GM wants to produce batteries with an energy density of up to 1,200 watt-hours per liter and cut costs by at least 60%. |
ACME Capital, run by Scott Stanford and Hany Nada, has $300 million more to invest in early startups | Connie Loizos | 2,022 | 2 | 4 | , an early-stage venture firm that’s run by industry insiders Scott Stanford and Hany Nada, has just closed two funds totalling $300 million in capital commitments, including a $240 million early-stage fund and a $60 million vehicle for later-stage bets. The money is significant given that the outfit’s last fund closed with $181 million in commitments in 2019 — not that ACME has been lacking money to plug into startups. On the contrary, Stanford and Nada say they also invested $155 million in “three or four” startups last year through special purpose vehicles (SPVs) — akin to pop-up venture funds with a specific investing target in sight — and that they have invested $1 billion over the years in companies using SPVs. Asked which companies received this capital, the two declined to specify, saying only that the recipients are within their portfolio. That the two came together owes to some serendipity. They say they met roughly 16 years ago, when Stanford worked in investment banking at Goldman Sachs and Nada was a managing partner with the cross-border firm GGV Capital, which he co-founded in 2000. Nada was on the board of Glu Mobile, a mobile gaming company that more recently to Electronic Arts; Stanford was trying to understand Glu to help Goldman with its broader approach to internet businesses in a post-dot-com world. The friendship stuck. When Stanford was forced to part ways with an earlier business partner — Shervin Pishevar, with whom Stanford had partnered on an earlier iteration of ACME called Sherpa Ventures, and who became engulfed in sexual harassment allegations — Stanford reached out to Nada to regroup and move forward. Together with Alex Fayette and Aike Ho, two colleagues who were just promoted to partner, the team has focused on a of startups in what Stanford calls their off-Broadway strategy, even while some of their focus seems center stage for many investors right now. One of ACME’s current investments, for example, is the young blockchain gaming startup Forte, which has now raised from investors, including via a whopping round that closed in November. Another is Brightside Health, a telemedicine company for depression that closed on $24 million in Series A funding last May. Altogether, say the partners, over the past three years, 60% of the firm’s investments have been into companies that have at least one non-male and/or non-white founder. To underscore how far ACME has moved from its roots, they also stress that ACME is itself diverse, with 68% of its employees non-male, non-white and/or members of the LGBTQ community.
As for how much they are investing and when, Stanford describes the firm’s “sweet spot” as “that late seed, Series A” stage, while Nada notes that the firm has written checks as small as $1 million and as big as $15 million. They also say they are willing to collaborate but prefer to lead a deal where possible. “The last thing we want to do is elbow anybody, that’s not our strategy,” explains Stanford. “If there is a seed or late seed [round coming together] and a founder would love to have us in early, we’ll put a million bucks, we’ll put half a million bucks, but . . . what we’re really looking to do is write that $5 million to $10 million check, take a board seat,” and hang on for the ride. ACME, which is structured as a registered investment advisor, saw a number of its investment go public last year, including the quantum computing company IonQ, which merged with a blank-check company back in October, and a space company, Astra, which merged with a blank check company last July. Another of its bets, the dog-walking outfit Wag, that it intends to go public by merging with a blank check company, too. At an expected combined value of $350 million, Wag will be worth slightly less than it raised from a single investor — SoftBank — back in 2018, when the Japanese conglomerate investor wrote Wag a $300 million check at a $650 million valuation. Indeed, it was a bit much for the young company — which had been looking to raise $75 million — to absorb at the time, and Wag later ran into trouble, conducting layoffs and half of SoftBank’s stake. IonQ and Astra have meanwhile seen their share prices fall considerably from their peaks, but both Stanford and Nada say they like the companies’ prospects, as well as DraftKings, another portfolio company that, in April 2020, also went public through a special purpose acquisition company (SPAC) and whose shares are currently worth slightly less than one third what they were worth roughly a year ago at their high point. Nada, who sits on the board of DraftKings, attributes part of the uneven performance the companies’ shares on shifting investor sentiment. “The public market tends to be fickle. A year ago, they were looking for growth . . . now they’re looking for profitability.” Meanwhile, both insist they remain bullish on SPACs more generally. “You can say what you want about SPACs and all the fees and how bankers are making out like bandits and sponsors aren’t adding much value — all those stones that people throw,” says Stanford. “But at the end of the day, you’re getting more supply out to public investors that otherwise historically has just been held back behind the curtain and [whose] growth investors have been absorbing all the alpha.” The real question, Stanford says, is whether retail investors “should buy the IPO. That’s a decision they need to make, and frankly, [they should] probably think about it from a portfolio perspective as opposed to stock picking.” |
A Twitter slap fight goes wrong | Connie Loizos | 2,022 | 2 | 4 | Certain VCs who tweet a lot have grown a little vituperative of late, with some of the most powerful people in the industry lashing out in unprecedented ways. Two who spring to mind are Chris Dixon and Marc Andreessen, who’ve lately shown little patience for influential people who question whether the promise of crypto, blockchain-based collectibles, or decentralisation is overblown. The most prominent battle began in late December with billionaire entrepreneur and Twitter cofounder Jack Dorsey, who tweeted to the six million accounts that follow him, “You don’t own ‘web3.’ The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.” Sure, Dorsey was dissing VCs, but there is some truth to the observation, of course. Andreessen and other crypto-forward firms like Paradigm and Pantera have a financial stake in some of the biggest platforms out there, and that’s . Very possibly those platforms wouldn’t exist without the firms’ support, and very possibly, these platforms will become more decentralized over time. Nevertheless, Dorsey’s tweet launched a war. Dixon lobbed the first grenade by to his nearly 800,000 followers, “[F]irst they ignore you, then they laugh at you, then they fight you, then you win.” There was some reason for Dixon to gloat. For years, Andreessen Horowitz was thought to be on a fool’s errand because of all of the money and resources it poured into crypto projects. Now, the joke is on everyone who dedicate a bigger slug of their time and money into those same endeavors. As a reminder, Andreessen Horowitz’s investment in Coinbase alone was valued at $11 billion the day the crypto exchange began trading publicly last year. But the war didn’t stop there. Dorsey wrote back to Dixon, Lately, the miasma has expanded even further. Yesterday, Bobby Goodlatte, a former Facebook employee turned angel investor turned venture capitalist, tweeted to no one in particular, “I’m a huge crypto bull and I think art NFTs are stupid.” Although Goodlatte’s tweet seemed relatively inoffensive on its face, suddenly, Dixon, who has more than 10 times Goodlatte’s 70,000 followers, retweeted Goodlatte’s comment, writing above it, “Can I short Bobby Goodlatte?” Before a horrified Goodlatte could respond, Dixon blocked his account. Dixon appears to have since deleted that comment and another insult directed at Goodlatte, whose father is a former Congressman, that read, “My parents are billionaires and I lucked into crypto, but now I’d like to trash hard working founders who worked [their] way up.” Goodlatte, who seemed genuinely hurt by the whole thing, subsequently called Dixon a clown. I’ve beat Chris to every good investment he’s ever made so I welcome the short. Chris was series B at Coinbase, I was series A. Chris bought ETH in 2015, I bought in 2014. 🤷♂️ Dunks, then blocks me. What a clown — Bobby Goodlatte (@rsg) Many industry observers have been quietly asking what’s going on over at Andreessen Horowitz. Have the partners simply made so much money that, as one VC posited privately earlier today, they are “post giving a fuck?” Eric Bahn, a general partner with the seed stage fund Hustle Fund, has another theory. “If you look at the content on Facebook that has been shared historically, you know that its algorithms have favored negative stories, attack stories. That’s very shareable fodder. The same is true on Twitter. Some people realize that if you do mean takedowns, it gets noticed.” Clearly, the firm’s investors aren’t going to say anything. Andreessen Horowitz has been minting money for everyone involved with the firm. Some of those backers — and also certain founders in the market for capital — might even find such brass-knuckled tactics compelling. Meanwhile, some of its rivals are likely using its pugnacious behavior — one of the only chinks in the firm’s armor these days — to their advantage. Parker Thompson, a venture capitalist with TNT Ventures, summed up in the aftermath of the Dixon-Goodlatte kerfuffle what many are whispering when he , “There seems to be something in the water over there that’s making people lose their damn minds. It’s not a bullish sign for the portfolio.” |
Daily Crunch: Shark Tank India host Ashneer Grover tries to get his BharatPe CEO removed from board | Alex Wilhelm | 2,022 | 2 | 4 | Hello and welcome to Daily Crunch for Friday, February 4, 2022! The TechCrunch team is getting pretty stoked for our 2022 slate of live and online events. Equity and Found – for which I can confirm that – and . It’s going to be, if I may, a party. – / Getty Images One recent survey of sales and marketing professionals found that only half of respondents said they were likely to attend an event in H1 2022. Traditionally, companies hold in-person sales kickoffs (SKOs) in January and February to brief sales teams about new products and devise strategies. Today, those convention centers and hotel ballrooms are dark and quiet. Hybrid events won’t give teams a chance to bond over karaoke, but with a tight agenda and a compelling theme, you can create a virtual or hybrid SKO that people will actually want to attend. If you lead a sales team, this post shares strategies for finding a theme that reflects your goals, as well as advice on scheduling and tips on ways to express your company culture. Even if your team is spread across several time zones, there’s still time to grab a sandwich and network, and Zoom karaoke counts as team-building. SEAN GLADWELL / Getty Images TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this along to your clients; we’d like to hear about why they loved working with you. |
3 views: How should creators weigh monetization strategies in the platform era? | Alex Wilhelm | 2,022 | 2 | 4 | The scrap between Joe Rogan, Spotify, has resurfaced the simmering . Given that creators include everyone TikTok performers mega-podcasters, YouTube celebrities, and Instagram influencers, no single revenue model will work for them all. But do creators have to employ all revenue models to make their business math-out? Being cross-platform can be a boon to creators looking for a larger audience, but doing so quickly becomes too much work than one person can handle. Creators making enough money from their work to get by, let alone prosper, is something of an Internet holy grail. Substack has one take on the question. YouTube’s revenue-split with select creators is another. TikTok’s creator fund was headline-grabbing, but . Is any platform doing a job? So how should creators think about monetizing their work today? TechCrunch’s Amanda, Natasha, and Alex – – worked to map out some possible routes forward. Here’s how it panned out: My friend Hannah went for crocheting chicken nuggets (now that’s a sentence that would’ve been incomprehensible three years ago!). She works full-time in publishing, but with her newfound audience of 26,000, she started up an where, you guessed it, she sells crocheted chicken nuggets — which sometimes have hats. She’s made some unexpected cash thanks to her sudden popularity. Sometimes, when we talk about the creator economy, we’re really only talking about a small subset of creators – people like the kids from who make millions of dollars through brand deals. Then you have creators like Hannah. She makes money on the internet by leveraging her audience and selling products to compensate herself for the labor of being really funny and really good at crocheting chicken nuggets. It’s a side-hustle, not a full-time job, but that doesn’t make her venture less legitimate or interesting in the greater context of the creator economy. I’ve already written about how TikTok’s current creator monetization model , and how YouTube’s Partner Program, which operates by sharing a percentage of ad revenue, offers a more generous payout. But I can’t stop thinking about the advertising of it all. You have your YouTube ad revenue, then you have your brand deals, which are essentially just ads disguised as Instagram posts – bigger stars bring in the bulk of their money through brand deals. Even independent podcasters pay the bills through advertising (as well as fan membership programs, merch… !). |
Apple will reportedly hold its next hardware event in early March | Igor Bonifacic | 2,022 | 2 | 4 | Apple will host its next hardware event sometime on or around March 8th, according to . At the event, the company will reportedly announce the third-generation , a refresh of the and a new Mac computer that will feature an Apple Silicon chip. The date aligns with the March to April timeframe Mark Gurman previously said Apple had set for the SE’s debut but warned potential production delays could force the company to change its plans. As before, the new phone will reportedly feature a 5G modem, a first for the SE line. It’s also expected to include a faster processor and a better camera. However, it will retain the iPhone 8-era design of the current model. As for the new iPad Air, it too will get a processor refresh and the addition of 5G connectivity. didn’t say much about the new Mac that Apple may announce at the same event, but most recent reports point to the company unveiling a new . |
Experts Weekly: Microsegmentation, PMF experiments and personalized shopping | Miranda Halpern | 2,022 | 2 | 4 | Elise King, director of Human Ventures’ entrepreneur-in-residence program and member of the firm’s investment team, spoke with founders and tells us about finding product-market fit. Returning contributor Jonathan Martinez shares his thoughts about using segmentation and retargeting to boost conversions: There are myriad resources that can help you extract valuable insights and knowledge. One of my favorites is the Facebook Ad Library, which is a repository of all the platform’s ads that are currently live. This library not only provides you with competitor intel — it also has valuable intel about others in the same verticals or brands who are simply running a great performance marketing program. Another gold mine is an email repository called Really Good Emails. E-commerce platforms should use every signal they can detect to triangulate shoppers along the customer journey, writes Vitaly Alexandrov, founder and CEO of Food Rocket. Alexandrov takes us on a deep dive of the online shopping space, sharing marketing tactics and data insights that make mundane shopping experiences more memorable. “There is no longer a question of whether or not you should offer personalized digital experiences. Anything less is a death knell to your brand’s long-term success.” As we mentioned in our last , I interviewed the CEO of Wolfpack Digital, Georgina “Gina” Lupu Florian. The intake process can vary a lot depending on the particularities of each project and collaboration. We typically assess the information provided by our clients and put together a proposal that we refine afterwards with the client as we discover more about the product along the way. To get to a robust estimated project timeline and budget, we consider user stories, wireframes, and/or a requirements document as the perfect starting point. We can either collect them directly from our clients (if they have them ready after attending incubators, etc.), or we can help with putting them together and join a discovery phase, which typically takes from a few hours to a few days. From the moment we have enough information to prepare a proposal, it usually takes less than a week to deliver it. |
Jar raises $32 million in Tiger Global-led funding to help Indians start their saving and investment journeys | Manish Singh | 2,022 | 2 | 3 | A seven-month-old fintech app that is helping millions of Indians to begin their investment and saving journeys has attracted the attention of Tiger Global. The Bengaluru-based said on Thursday it has raised $32 million in its Series A financing round, just . The New York-headquartered investor led the new round, with participation from scores of investors, including Rocketship.vc, Stonks, Force Ventures, Arkam Ventures, Klarna founder Victor Jacobsson, Suleman Ali of Ali Capital, Shamir Karkal of Sila Money, Byron Ling of Cannan Partners and Joel John of Ledger Prime. The new round values Jar at over $200 million, according to two people familiar with the matter. Jar co-founders declined to comment on the valuation. Nearly a billion Indians have bank accounts today, but they have never made any investment. Part of the reason is confusion, said , co-founder and chief executive of Jar. “Their world is littered with ads of different financial instruments,” he told TechCrunch in an interview. For decades, banks and mutual funds have been trying to tap India masses with their products. Despite the hundreds of millions of dollars they have sunk in to win the market, they have been able to court fewer than 30 million individuals. “Manufacturing a product is one thing and being able to sell it is another. All these institutions are good at manufacturing. For selling, you have to be aligned with the individual’s persona, idiosyncrasies, insecurities, cognitive load and the cultural significance. That’s an art and science by itself,” he said. Jar is tackling this by choosing a financial instrument that is familiar to most Indians: gold. For over a century, Indians have been stashing gold in their houses, treating the yellow metal as both good investment and status symbol, he said. To say Indians, who have a private stash worth $1.5 trillion of the precious metal, would be an understatement. For generations, Indians across the socio-economic spectrum have preferred to stash their savings — or at least a part of it — in the form of gold. In fact, such is the demand for gold in India — Indians stockpile more gold than citizens in any other country — that the South Asian nation is also one of the world’s largest importers of this precious metal. Jar, which raised $4.5 million from a range of investors including Tribe Capital and Arkam Ventures last year, operates an eponymous app that makes it very simple for users to start investing. The app fetches a tiny amount each time a user makes a transaction. It rounds up an individual’s daily spendings and puts some money aside as investment. Users’ investments in digital gold is backed by physical gold of the same amount and they can choose to withdraw that much gold or liquidate their investments at any time, said , co-founder and chief product officer of Jar, in an interview. The bet is working. The app has amassed over 4 million users, 99% of whom are investing in any asset class for the first time, said Nishchay. December data for some investment / financial services apps, per App Annie. — Manish Singh (@refsrc) The duo first connected several years ago when MarsPlay — Misbah’s previous venture (which has been acquired since) — and Bounce — where Nishchay served as head of engineering, supply and business — attempted to explore synergies for the startups. They stayed in touch and in late 2020 during one of their many conversations realized that neither of them knew much about investments. This was a triggering point for Misbah, who had seen his family struggle through debts, he said. “We were both tech savvy, running businesses and yet we too hadn’t thought much about savings and investments,” he said. “We started to wonder if we were alone or whether it was a systemic issue with everyone. It’s pretty much the latter,” he said. Jar is attempting to build a financial habit among individuals to start their investment journeys. Now that it’s made inroads among consumers in every Indian state, said Nishchay, the startup is looking to offer many more financial instruments where its users can invest, he said. “A habit and discipline is clearly being formed and we are seeing a jump of 20% in investments month over month among our users,” he said. The startup is also looking to lend to its users and offer them insurance in the next few months, he said. “Jar is bringing new users into the online investing space, starting with digital gold as the first product,” said Alex Cook, partner at Tiger Global, in a statement. “We are bought into Jar’s mission of helping users build a daily savings habit, and we’re excited to partner with the team as they scale to millions of customers.” |
Discord is testing forums, new mod tools and homepages that surface hot topics in some servers | Taylor Hatmaker | 2,022 | 2 | 4 | Discord will start testing a handful of new features in some of its biggest communities this week. The social audio and chat platform got its start connecting gamers for online play, but it’s grown into one of the main ways to build a thriving online community, complete with custom emoji, , topic channels and a whole suite of third-party plugins that can do everything else. The company recognizes that as servers grow, things can get unwieldy. At any given time, some of Discord’s most popular communities have hundreds of thousands of people online simultaneously (hit Chinese RPG Genshin Impact’s official server boasted more than 300,000 at the time of writing — and that’s just one example). A Discord server is kind of like a real-time subreddit, but instead of people dipping in and out of the conversation, a ton of people are chatting live, all at once. For smaller communities, this works really well and it’s easy to stay on top of the conversation, but as those servers scale up — sometimes really, really up — a lot gets lost in the mix. If you’re new to a large Discord server or if you step away from a conversation, it can be overwhelming to figure out how to get caught up. Most big servers have introductory channels to onboard members and topic-specific channels to direct people to relevant conversations, but it’s not a perfect solution at scale. To make everything run more smoothly, some big servers will be . The first new feature gives servers a forum-like channel as a hub for “more organized conversations.” The idea is that people could dip in and out of these special channels asynchronously and not miss out, the same way they might on Reddit. It’s also a way to surface older content that’s still relevant and loop people into an ongoing thread, letting conversation topics develop over time. Discord’s forum-like test feature. Discord Apart from forums, Discord will test a new homepage-style feature that collects hot topics, offering a tl;dr-style snapshot of timely content that’s relevant on that server at any given moment. Right now, many servers use dedicated news channels to pull off something kind of similar, but those spaces aren’t very dynamic and often don’t offer a lot beyond highlighting major announcements. On the moderation side, Discord is testing new automated tools that bring some of the functionality communities get with third-party mod tools in house. While the company didn’t disclose much in the way of specifics, some of the most popular Discord mod bots automate the process of welcoming new users, scan for bad behavior and even kick people out when they break the rules. (Mee6, one of the most popular premium third-party Discord bots, is that .) Last July, Discord that makes AI software to detect online hate and harassment. The acquisition was meant to bolster the company’s own in-house automated moderation capabilities, though the company did not confirm if the new test features grew out of that deal. The experimental features are only available through a closed beta for now, with Discord tapping some large servers to take them for a spin. Communities in the test won’t necessarily have all of the experimental features enabled right off the bat, as the company watches how the new tools can meet the needs of different servers. The current wave of experimental features might only be a glimpse of what’s on the near horizon, though the company hasn’t dropped hints about what else it’s working on. Discord boasts some of the largest active online communities anywhere and the company is wisely evolving to offer those servers more utility as they grow. “We think about Discord like a growing neighborhood and have to design for all the shapes and sizes of communities that call Discord home — from small friend groups to music, gaming, or education communities with thousands to hundreds of thousands of members,” Discord Group Product Manager Rick Ling told TechCrunch. “We care deeply about enabling admins, moderators and community members to make their spaces uniquely their own and will continue to invest in tools and features to help them come together and find belonging.” |
TechCrunch+ roundup: Stealth recruiting, virtual sales kickoffs, Google Cloud’s Q4 | Walter Thompson | 2,022 | 2 | 4 | Traditionally, companies hold in-person sales kickoffs (SKOs) in January and February to network, educate sales teams about new products and devise strategies for the year ahead. These days, the convention centers and hotel ballrooms that once hosted those events are dark and quiet. Even though most employees are vaccinated, companies are still reluctant to send them to in-person events, and in the midst of a pandemic, many workers are reluctant to get on a plane. One recent survey of sales and marketing professionals found that only half of respondents said they were likely to attend an event in H1 2022. Hybrid events won’t give teams a chance to bond over karaoke, but with a tight agenda and a compelling theme, you can create a virtual or hybrid SKO that people will actually want to attend. If you lead a sales team, for finding a theme that reflects your goals, as well as advice on scheduling, and tips on ways to express your company culture. Even if your team is spread across several time zones, there’s still time to grab a sandwich and network: after all, Zoom karaoke still counts as team-building. Thanks very much for reading TechCrunch+ this week! Walter Thompson
Senior Editor, TechCrunch+
Lyu Liang/VCG via Getty Images “You’ve got to spend money to make money” is a cliché, but if you’re building a company that hopes to compete in the cloud, it’s a fact. This week, Google Cloud reported $5.5 billion in revenue for Q4 2021, but “that was the good news,” reported Ron Miller and Alex Wilhelm. “The bad news was that Google Cloud accrued operating losses worth $890 million at the same time.” Given such high stakes, industry watchers don’t seem overly concerned by these ongoing losses, however. “Businesses of this nature require a lot of upfront investment and buildout of infrastructure and often don’t break even for several years,” said John Dinsdale, chief analyst at Synergy Research. / Getty Images You wouldn’t hire a plumber to redo your wiring, and you shouldn’t hire a web3 developer if you’re building a team for your metaverse startup. Investors are swooning over startups in these sectors, but a fat pre-seed check is not a hiring strategy. Making matters more difficult, most developer talent is focused in a few verticals, and any offers you make must compare to incentives from companies like Apple and Microsoft. “Engineers don’t want to only be putting out fires, they want to create and pioneer projects,” says Sergiu Matei, founder of remote talent platform Index. The crypto market hasn’t had a good year so far, with Bitcoin losing nearly a fifth of its value, and other tokens seeing similar declines. But VCs don’t seem to mind. In fact, funding for blockchain startups has already exceeded $4 billion so far in 2022, and investors seem intent on keeping up the pace, wrote Alex Wilhelm in The Exchange. “Sure, SaaS valuations are coming back to Earth, and some investors are taking things a bit more slowly than before — at least so we’re told — but that newfound, or perhaps reforged, conservatism does not appear to be taking hold in the crypto market.” / Getty Images Public technology companies had a banner year in 2021, but fintech firms significantly outperformed the major stock indexes, according to a report by Matrix Partners. Dana Stalder and Matt Brown from Matrix outlined the most interesting fintech trends of 2021 for TC+, and explained why they believe the sector will fare better than the broader market in 2022 as well. “Fintech’s consistent outperformance signals that the changes brought about by COVID-19 – including shifts toward e-commerce, online payments and digital interactions over physical ones – are here to stay.” SPACs had a great run. But nothing lasts forever. However, open source relational DB provider MariaDB’s SPAC deal may be a bellwether for startups too expensive to be sold, but not yet mature enough to IPO, wrote Alex Wilhelm in The Exchange. “MariaDB is getting a pretty good price for its equity and a bundle of cash to boot. The transaction indicates that unicorns and companies near that valuation mark with mid-double-digit ARR can find a SPAC partner that will take them to the public markets far in advance of when they might be able to on their own.” / Getty Images Collectors spent $22 billion on NFTs in 2021, up from $100 million the year before. Last month, Canadian videographer Dan Olson released a two-hour video about his strongly held views on web3 and blockchain technology titled “Line Goes Up — The Problem With NFTs.” I asked John and Alex to share their thoughts on Olson’s video as a point of departure for discussing the state of the crypto industry in general. Here’s where we ended up: / Getty Images My favorite story from my time working in retail: helping a familiar customer find a book they were looking for, even though the only detail they could remember was that it had a blue cover. I reflect on that moment whenever I consider how essential personalization is for online sellers. E-commerce platforms should use every signal they can detect to triangulate shoppers along the customer journey, writes Vitaly Alexandrov, founder and CEO of Food Rocket. Alexandrov takes us on a deep dive of the online shopping space, sharing marketing tactics and data insights that make mundane shopping experiences more memorable. “There is no longer a question of whether or not you should offer personalized digital experiences. Anything less is a death knell to your brand’s long-term success.” When a stock’s value falls 10% or more from its most recent high, it’s called a correction. This week, shares in Facebook, PayPal, Spotify, Snap and other high flyers saw double-digit percentage declines. In yesterday’s edition of The Exchange, Alex Wilhelm looked at public tech valuations and concluded that the ground is shifting underfoot. “Why? Investors had valued a host of companies like their pandemic bump was more akin to their new reality. However, it turns out that a lot of pandemic growth wasn’t free — it came at the expense of later growth.” |
Should tech bootcamps keep using job placement metrics in their advertising? | Natasha Mascarenhas | 2,022 | 2 | 4 | Coding bootcamp Nucamp will no longer publish job placement metrics in its advertising materials, a move that CEO Ludovic Fourrage is making to rebuild student trust in the industry. “Students have to be accountable for finding the right job in the industry, and too often placement is easily used as a justification of increasing the cost of education without necessarily looking at the quality of the kind of education,” he said. “Now, that does not mean we don’t care about the placement; of course we care and we measure it, but we will never want the registration decision of the students based on that promise, because right now that promise is extremely disputed in the industry.” The move is less about Nucamp declaring that it doesn’t market its placement rates, and more indicative of a broader issue: job placement is the most in-demand outcome, but also one of the hardest to deliver. Edtech has always been in pursuit of a magic metric, but measuring success for the sector remains elusive. Fourrage launched his bootstrapped startup, a full-stack coding bootcamp with a focus on affordable education, in 2017 – a year before Lambda School “What we found about [income-share agreements], which was very intriguing and surprising, is how much students are not able to understand the value of what they are buying,” Fourrage said. “[They were] very confused between the value of the education, with the value of the outcome, or the potential outcome.” He believed that consumers didn’t question Lambda’s high price tag because of the advertised and promised outcome of job placement. Fourrage immediately saw Lambda, which recently rebranded to Bloom Institute of Technology, as a direct competitor, even though tuition at Lambda was nearly double that of what Nucamp charged. The flashy Lambda, led by Austen Allred, sported a Y Combinator stamp of approval and an enticing pitch in the income-share agreement: Graduates only pay tuition off a future income. “The challenge with that is that promise very often doesn’t materialize, and so that’s the vicious cycle that we want to break,” he said. |
After the acquisition: 3 startup executives share their exit experiences | Ron Miller | 2,022 | 2 | 4 | at , then-CEO of Pure Storage, Scott Dietzen, was asked about the possibility of exiting via acquisition. He didn’t pull any punches: “Acquisitions always suck, and suck worse than you think that they are going to suck.” That doesn’t sound like is the best thing that could happen to your startup, but this is only one perspective on the matter, and perhaps it depends . If being acquired means losing the brand and identity you have worked so hard to build — or perhaps worse, losing your cultural identity — it probably will suck. If you get stuck with a company that simply imposes its will on you, it definitely will. Sometimes, in spite of Dietzen’s proclamation, it can be at least OK, and both sides get something out of the deal: the acquiring company needs your product or your talent, you receive an exit and a check. Previously, on the deal and how they fold these companies into the larger entity. Now, we’ll hear from executives who worked at three companies that they bought. These companies said their acquisition experience was just fine, thank you very much. Though they aren’t about to talk crap about their new overlords, you do get the sense that they landed in a pretty decent spot, all things considered. The companies we selected are not fresh startups by any means. One was owned by a private equity firm, and one was owned by another company when they were sold, so they had been around the block and knew what it was like to report to someone else. The last company, a 72-year-old operation, was the exception. Will Conway, CEO of Pathwire, had been down this path before. His startup was a member of the YC Winter 2011 cohort, and was sold to Rackspace a year later. Private equity firm Thoma Bravo picked it up a while later and for $1.9 billion. As part of a private equity firm, Conway didn’t have a lot of input when it came to being sold. If the firm was going to sell, it was going to sell, but as Conway sees it, he landed with as good a company as he could have hoped for. Pathwire’s primary products, Mailgun and Mailjet, gave Sinch a missing email marketing piece, and fit nicely into the company’s platform of communications services. |
How to recruit when your software startup is in stealth mode | Michael Fey | 2,022 | 2 | 4 | valuable asset is its people, especially for organizations still in their infancy. A startup’s founding team can be the difference between an industry-changing unicorn and just another failed venture, making early recruitment one of the most critical processes in a company’s first year. But the war for tech talent has rarely been so brutal. Large technology companies are growing at amazing rates and startup funding is at an all-time high. Great candidates have more choices than ever, and hiring them is harder than ever before. By taking a unique approach, we achieved a near 100% acceptance rate with almost 100 employees while we were in stealth mode. With the right strategy, founders can find and hire people whose passion aligns with their vision. Working in stealth mode for over a year required me and co-founder Dan Amiga to take a highly personalized approach to recruitment. Similar to a football draft, we listed everyone in our network that we thought were absolute rock stars. Some of these people had startup experience, but we didn’t let that limit our search. We were looking for nothing short of the best — people who we personally knew or who came with referrals from trusted parties. Our targets included people who we either couldn’t wait to work with again or who we couldn’t believe we hadn’t worked with already. We knew that a list based on our own network would always outperform individuals found through a blind recruitment process. We also considered each candidate’s personal journey. Would our company be a good fit for them? Did the timing, lifestyle requirements and the early stage of the organization make sense? Based on this pool, we identified the skills that we felt were critical for making our company a success. Next, we cross-referenced these two lists. This final headcount gave us a good “draft prospect” list with which to start our recruitment process. In our company’s early stages, we had to find a way to turn interviewees into believers without actually divulging the details of what we were working on until the very last minute, meaning most of the interview process happened without sharing a glimpse or description of the product. Yet we achieved a near 100% acceptance rate. Instead of relying on a demo to attract recruits, we sold them on the leadership team we were creating, the investors we had already engaged and the opportunity to build a new category of software. We emphasized the goal: to change the industry and make a real impression, not just another version of an existing solution. |
On Meta’s ‘regulatory headwinds’ and adtech’s privacy reckoning | Natasha Lomas | 2,022 | 2 | 4 | What does Meta/Facebook’s favorite new phrase to bandy around in — as it warns of “ ” cutting into its future growth — actually mean when you unpack it? It’s starting to look like this breezy wording means the law is finally catching up with murky adtech practices which have been operating under the radar for years — tracking and profiling web users without their knowledge or consent, and using that surveillance-gleaned intel to manipulate and exploit at scale regardless of individual objections or the privacy people have a legal right to expect. This week a major decision in Europe found that a flagship ad industry tool which — since April 2018 — has claimed to be gathering people’s “consent” for tracking to run behavioral advertising has . The IAB Europe was given two months to come up with a reform plan for its erroneously named Transparency and Consent Framework (TCF) — and a hard deadline of six months to clean up the associated parade of bogus pop-ups and consent mismanagement which force, manipulate or simply steal (“legitimate interest”) web users’ permission to microtarget them with ads. The implications of the decision against the IAB and its TCF are that major ad industry reforms must come — and fast. This is not just a little sail realignment as Facebook’s investor-soothing phrase suggests. And investors are perhaps cottoning on to the scale of the challenges facing the adtech giant’s business — given the 20% drop in its share price as it reported Q4 earnings this week. Facebook’s ad business is certainly heavily exposed to any regulatory hurricane of enforcement against permission-less Internet tracking since it doesn’t offer its own users any opt out from behavioral targeting. When asked about this the tech giant typically points to its “ ” — where it instructs users it will track them and use their data for personalized ads but doesn’t actually ask for their permission. (It also claims any user data it sucks into its platform from third parties for ad targeting has been lawfully gathered by those partners in one long chain of immaculate adtech compliance!) Fb also typically points to some very limited “controls” it provides users over the type of personalized ads they will be exposed to via its ad tools — instead of actually giving people genuine control over what’s done with their information which would, y’know, actually enable them to protect their privacy. The problem is Meta can’t offer people a choice over what it does with their data because people’s data is the fuel that its ad targeting empire runs on. Indeed, in Europe — where people do have a legal right to privacy — the adtech giant claims users of its social media services are actually in a contract with it to An argument that the majority of the EU’s data protection agencies look minded to laugh right out of the room, by local privacy advocacy group which has been filing complaints about Facebook’s practices for years. So watch that space for thunderous regulatory “headwinds”. (noyb’s founder, Max Schrems, is also the driving force behind another Meta earnings call caveat, vis-a-vis the little matter of “the and their “, as its CFO Dave Wehner . That knotty issue if, as expected, an order comes to stop transferring EU users’ data over the pond, with all the operational cost and complexity that would entail… So that’s quite another stormy breeze on the horizon.) While regulatory enforcement in Europe against adtech has been a very slow burn there is now movement that could create momentum for a cleansing reboot. European legislators frustrated at the lack of enforcement are also piling further pressure on by being explicitly written into new digital rules that are fast coming down the pipe — making the case for contextual ad targeting to replace tracking. So the demands for privacy are getting louder, not going away. Bloomberg suggested the two giants may yet have a few more years’ grace before regulatory enforcement and increased competition could bite into their non-diversified ad businesses in a way that flips the fortunes of these data-fuelled growth engines. But one factor that has the potential to accelerate that timeline is increased transparency. Even the most complex data trail leaves a trace. Adtech’s approach to staying under the radar has also, historically, been more one of hiding its people-tracking ops in plain sight all over the mainstream web vs robustly encrypting everything it does. (Likely as a result of how tracking grew on top of and sprawled all over web infrastructure at a time when regulators were even less interested in figuring out what was going on.) Turns out, pulling on these threads can draw out a very revealing picture — as a into digital profiling in the gambling industry, carried out by researcher and just published last week, shows. We've been working on it for more than a year, probably the most detailed investigation into data flows in the online gambling industry to date, commissioned by You can download our report (plus a technical report) here, published today: — Wolfie Christl (@WolfieChristl) The report was commissioned by UK based gambling reform advocacy group, , and quickly got picked up by the Daily Mail — in a headlined: “Suicidal gambling addict groomed by Sky Bet to keep him hooked, investigation reveals”. What Cracked Labs’ research report details — in unprecedented detail — is the scale and speed of the tracking which underlies an obviously non-compliant cookie banner presented to users of a number of gambling sites whose data flows it analyzed, offering the usual of (‘Accept-only’) compliance. The report also explodes the notion that individuals being subject to this kind of pervasive, background surveillance could practically exercise their data rights. Firstly, the effort asymmetry that would be required to go SARing such a long string of third parties is just ridiculous. But, more basically, the lack of transparency inherent to this kind of tracking means it’s inherently unclear who has been passed (or otherwise obtained) your information — so how can you ask what’s being done if you don’t even know who’s doing it? If that is a system ‘functioning’ then it’s clear evidence of systemic dysfunction. Aka, the systemic lawlessness that the UK’s own data protection regulator already warned the adtech industry . The individual impact of adtech’s “data-driven” marketing, meanwhile, is writ large in a quote in the Daily Mail’s report — from one of the “high value” gamblers the study worked with, who accuses the gambling service in question of turning him into an addict — and tells the newspaper: “It got to a point where if I didn’t stop, it was going to kill me. I had suicidal ideation. I feel violated. I should have been protected.” “It was going to kill me” is an exceptionally understandable articulation of data-driven harms. Here’s a brief overview of the scale of tracking Cracked Lab’s analysis unearthed, clipped from the : “The investigation shows that gambling platforms do not operate in a silo. Rather, gambling platforms operate in conjunction with a wider network of third parties. The investigation shows that even limited browsing of 37 visits to gambling websites led to 2,154 data transmissions to 83 domains controlled by 44 different companies that range from well-known platforms like Facebook and Google to lesser known surveillance technology companies like Signal and Iovation, enabling these actors to embed imperceptible monitoring software during a user’s browsing experience. The investigation further shows that a number of these third-party companies receive behavioural data from gambling platforms in realtime, including information on how often individuals gambled, how much they were spending, and their value to the company if they returned to gambling after lapsing.” A detailed picture of consentless ad tracking in a context with very clear and well understood links to harm (gambling) should be exceedingly hard for regulators to ignore. But any enforcement of consent and privacy must and will be universal, as the law around personal data is clear. Which in turn means that nothing short of a systemic adtech reboot will do. Root and branch reform. Asked for its response to the Cracked Labs research, a spokeswoman for the UK’s Information Commissioner’s Office (ICO) told TechCrunch: “In relation to the report from the Clean Up Gambling campaign, I can confirm we are aware of it and we will consider its findings in light of our ongoing work in this area.” We also asked the ICO why it has failed to take any enforcement action against the adtech industry’s systemic abuse of personal data in real-time bidding ad auctions — following the , and the issues raised in its own report in 2019. The watchdog said that after it resumed its “work” in this area — following a pause during the coronavirus pandemic — it has issued “assessment notices” to six organisations. (It did not name these entities.) “We are currently assessing the outcomes of our audit work. We have also been reviewing the use of cookies and similar technologies of a number of organisations,” the spokeswoman also said, adding: “Our work in this area is vast and complex. We are committed to publishing our final findings once our enquiries are concluded.” But the ICO’s spokeswoman also pointed to a issued by the former information commissioner before she left office last year, in which she urged the industry to reform — warning adtech of the need to purge current practices by moving away from tracking and profiling, cleaning up bogus consent claims and focusing on engineering privacy and data protection into whatever for of targeting it flips to next. So the reform message at least is strong and clear, even if the UK regulator hasn’t found enough puff to crack out any enforcement yet. Asked for its response to Cracked Labs’ findings, Flutter — the UK-based company that owns Sky Betting & Gaming, the operator of the gambling sites whose data flows the research study tracked and analyzed — sought to deflect blame onto the numerous third parties whose tracking technologies are embedded in its websites (and only referenced generically, not by name, in its ‘Accept & close’ cookie notice). So that potentially means onto companies like Facebook and Google. “Protecting our customers’ personal data is of paramount importance to Sky Betting & Gaming, and we expect the same levels of care and vigilance from all of our partners and suppliers,” said the Sky Bet spokesperson. “The Cracked Labs report references data from both Sky Betting & Gaming and the third parties that we work with. In most cases, we are not — and would never be — privy to the data collected by these parties in order to provide their services,” they added. “Sky Betting & Gaming takes its safer gambling responsibilities very seriously and, while we run marketing campaigns based on our customers’ expressed preferences and behaviours, we would never seek to intentionally advertise to anyone who may potentially be at risk of gambling harm.” Regulatory inaction in the face of cynical industry buck passing — whereby a first party platform may seek to deny responsibility for tracking carried out by its partners, while third parties which also got data may claim its the publishers’ responsibility to obtain permission — can mire complaints and legal challenges to adtech’s current methods in frustrating circularity. But this tedious dance should also be running out of floor. A number of by Europe’s top court have sharpened guidance on exactly these sorts of legal liability issues, for example. Moreover, as we get a better picture of how the adtech ecosystem ‘functions’ — thanks to forensic research work like this to track and map the tracking industry’s consentless data flows — pressure on regulators to tackle such obvious abuse will only amplify as it becomes increasingly easy to link abusive targeting to tangible harms, whether to vulnerable individuals with ‘sensitive’ interests like gambling; or more broadly — say in relation to tracking that’s being used as a lever for illegal discrimination (racial, sexual, age-based etc), or the democratic threats posed by population scale targeted disinformation which we’ve seen being deployed to try to skew and game elections for years now. TechCrunch contacted a number of the third parties listed in the report as receiving behavioral data on the activities of one of the users of the Sky Betting sites a large number of times — to ask them about the legal basis and purposes for the processing — which included seeking comment from Facebook, Google and Microsoft. Facebook and Google are of course huge players in the online advertising market but Microsoft appears to have ambitions to expand its advertising business. And recently it acquired another of the adtech entities that’s also listed as receiving user data in the report — namely Xandr (formerly AppNexus) — which increases its exposure to these particular gambling-related data flows. (NB: the full list of companies receiving data on Sky Betting users also includes TechCrunch’s parent entity Verizon Media/Yahoo, along with tens of other companies, but we directed questions to the entities the report named as receiving “detailed behavioral data” and which were found receiving data the highest number of times*, which Cracked Labs suggests points to “extensive behavioural profiling”; although it also caveats its observation with the important point that: “A single request to a host operated by a third-party company that transmits wide-ranging information can also enable problematic data practices”; so just because data was sent fewer times doesn’t necessarily mean it is less significant.) Of the third parties we contacted, at the time of writing only Google had provided an on-the-record comment. Microsoft declined to comment. Facebook provided some background information — pointing to its data and ad policies and referring to the partial user controls it offers around ads. It also confirmed that its ad policies do permit gambling as an targetable interest with what it described as “appropriate” permissions. Meta/Facebook announced some changes to its ad platform last — when it expanded what it refers to as its “ ” to cover some “sensitive” topics — and it confirmed that gambling is included as a topic people can choose to see fewer ads with related content on. But note that’s fewer gambling ads, not no gambling ads. So, in short, Facebook admitted it uses behavioral data inferred from gambling sites for ad targeting — and confirmed that it doesn’t give users any way to completely stop that kind of targeting — nor, indeed, the ability to opt out from tracking-based advertising altogether. While its legal basis for this tracking is — we must infer — its claim that users are in a contract with it to receive advertising. Which will probably be news to a lot of users of Meta’s “family of apps”. But it’s certainly an interesting detail to ponder alongside the flat growth it just reported in Q4. Google’s response did not address any of our questions in any detail, either. Instead it sent a statement, attributed to a spokesperson, in which it claims it does not use gambling data for profiling — and further asserts it has “strict policies” in place that prevent advertisers from using this data. Here’s what Google told us: “Google does not build advertising profiles from sensitive data like gambling, and has strict policies preventing advertisers from using such data to serve personalised ads. Additionally, tags for our ad services are never allowed to transmit personally identifiable information to Google.” Google’s statement does not specify the legal basis it is relying upon for processing sensitive gambling data in the first place. Nor — if it really isn’t using this data for profiling or ad targeting — why it’s receiving it at all. We pressed Google on these points but the company did not respond to follow up questions. Its statement also contains misdirection that’s typical of the adtech industry — when it writes that its tracking technologies “are never allowed to transmit personally identifiable information”. Setting aside the obvious legalistic caveat — Google doesn’t actually state that it gets PII; it just says its tags are “never transmit” PII; ergo it’s not ruling out the possibility of a buggy implementation leaking PII to it — the tech giant’s use of the American legal term “personally identifiable information” is entirely irrelevant in a European legal context. The law that actually applies here concerns the processing of — and personal data under EU/UK law is very broadly defined, covering not just obvious identifiers (like name or email address) but all sorts of data that can be connected to and used to identify a natural person, from IP address and advertising IDs to a person’s location or their device data and plenty more besides. In order to process any such personal data Google needs a valid legal basis. And since Google did not respond to our questions about this it’s not clear what legal basis it relies upon for processing the Sky Betting user’s behavioral data. “When data subject 2 asked Sky Betting & Gaming what personal data they process about them, they did not disclose information about personal data processing activities by Google. And yet, this is what we found in the technical tests,” says research report author Wolfie Christl, when asked for his response to Google’s statement. “We observed Google receiving extensive personal data associated with gambling activities during visits to skycasino.com, including the time and exact amount of cash deposits. “We did not find or claim that Google received ‘personally identifiable’ data, this is a distraction,” he adds. “But Google received as defined in the GDPR, because it processed unique pseudonymous identifiers referring to data subject 2. In addition, Google even received the customer ID that Sky Betting & Gaming assigned to data subject 2 during user registration. “Because Sky Betting & Gaming did not disclose information about personal data processing by Google, we cannot know how Google, SBG or others may have used personal data Google received during visits to skycasino.com.” “Without technical tests in the browser, we wouldn’t even know that Google received personal data,” he added. Christl is critical of Sky Betting for failing to disclose Google’s personal data processing or the purposes it processed data for. But he also queries why Google received this data at all and what it did with it — zeroing in on another potential obfuscation in its statement. “Google claims that it does not ‘build advertising profiles from sensitive data like gambling’. Did it build advertising profiles from personal data received during visits to skycasino.com or not? If not, did Google use personal data received from Sky Betting & Gaming for other kinds of profiling?” Christl’s report includes a screengrab showing the cookie banner Sky Betting uses to force consent on its sites — by presenting users with a short statement at the bottom of the website, containing barely legible small print and which bundles information on multiple uses of cookies (including for partner advertising), next to a single, brilliantly illuminated button to “accept and close” — meaning users have no choice to deny tracking (short of not gambling/using the website at all). Under EU/UK law, if consent is being relied upon as a legal basis to process personal data it must be informed, specific and freely given to be lawfully obtained. Or, put another way, you must to accept or deny — and do so for each use of non-essential (i.e. non-tracking) cookies. Moreover if the personal data in question is sensitive personal data — and behavioral data linked to gambling could certainly be that, given gambling addiction is a recognized health condition, and health data is classed as “special category personal data” under the law — there is a higher standard of explicit consent required, meaning a user would need to affirm every use of this type of highly sensitive information. Yet, as the report shows, what actually happened in the case of the users whose visits to these gambling sites were analyzed was that their personal data was tracked and transmitted to at least 44 third party companies hundreds of times over the course of just 37 visits to the websites. They did not report being asked explicitly for their consent as this tracking was going on. Yet their data kept flowing. It’s clear that the adtech industry’s response to the tightening of European data protection law since 2018 has been the opposite of reform. It opted for compliance theatre — designing and deploying cynical cookie pop-ups that offer no genuine choice or at best create confusion and friction around opt-outs to drum up consent fatigue and push consumers to give in and ‘agree’ to give over their data so it can keep tracking and profiling. Legally that should not have been possible of course. If the law was being properly enforced this cynical consent pantomime would have been kicked into touch long ago — so the starkest failure here is regulatory inaction against systemic law breaking. That failure has left vulnerable web users to be preyed upon by dark pattern design, rampant tracking and profiling, automation and big data analytics and “data-driven” marketers who are plugging into an ecosystem that’s been designed and engineered to quantify individuals’ “value” to all sorts of advertisers — regardless of individuals’ rights and freedoms not to be subject to this kind of manipulation and laws that were intended to protect their privacy by default. By making Subject Access Requests (SARs), the two data subjects in the report were able to uncover some examples of attributes being attached to profiles of Sky Betting site users — apparently based on inferences made by third parties off of the behavioral data gathered on them — which included things like an overall customer “value” score and product specific “value bands”, and a “winback margin” (aka a “predictive model for how much a customer would be worth if they returned over next 12 months”). This level of granular, behavioral background surveillance enables advertising and gaming platforms to show gamblers personalized marketing messages and other custom incentives tightly designed to encourage them return to play — to maximize engagement and boost profits. But at what cost to the individuals involved? Both literally, financially, and to their health and wellbeing — to their fundamental rights and freedoms? As the report notes, gambling can be addictive — and can lead to a gambling disorder. But the real-time monitoring of addictive behaviours and gaming “predilections” — which the report’s technical analysis lays out in high dimension detail — looks very much like a system that’s been designed to automate the identification and exploitation of people’s vulnerabilities. How this can happen in a region with laws intended to prevent this kind of systematic abuse through data misuse is an epic scandal. While the risks around gambling are clear, the same system of tracking and profiling is of course being systematically applied to websites of all sorts and stripes — whether it contains health information, political news, advice for new parents and so on — where all sorts of other manipulation and exploitation risks can come into play. So what’s going on on a couple of gambling sites is just the tip of the data-mining iceberg. While regulatory enforcement should have put a stop to abusive targeting in the EU years ago, there is finally movement on this front — with the Belgian DPA’s decision against the IAB Europe’s TCF this week. However where the UK might go on this front is rather more murky — as the government has been , and specifically on the issue of consent to data processing, which could end up lowering the level of protection for people’s data and legitimizing the whole rotten system. Asked about the ICO’s continued inaction on adtech, Rai Naik — a legal director of the data rights agency AWO, which supported the Cracked Labs research, and who has also been personally involved in long running litigation against adtech in the UK — said: “The report and our case work does raise questions about the ICO’s inaction to date. The gambling industry shows the propensity for real world harms from data.” “The ICO should act proactively to protect individual rights,” he added. A key part of the reason for Europe’s slow enforcement against adtech is undoubtedly the lack of transparency and obfuscating complexity the industry has used to cloak how it operates so people cannot understand what is being done with their data. If you can’t see it, how can you object to it? And if there are relatively few voices calling out a problem, regulators (and indeed lawmakers) are less likely to direct their very limited resource at stuff that may seem to be humming along like business as usual — perhaps especially if these practices scale across a whole sector, from small players to tech giants. But the obfuscating darkness of adtech’s earlier years is long gone — and the disinfecting sunlight is starting to flood in. Last the European Commission explicitly warned adtech giants over the use of cynical legal tricks to evade GDPR compliance — at the same time as putting the bloc’s regulators on notice to crack on with enforcement or face having their decentralized powers to order reform taken away. So, by hook or by crook, those purifying privacy headwinds gonna blow. |
Meta adds ‘personal boundaries’ to Horizon Worlds and Venues to fight harassment | Kris Holt | 2,022 | 2 | 4 | is a feature called Personal Boundary in its and Horizon Venues virtual reality spaces to combat harassment. Each will have a bubble with a radius of two virtual feet, so they won’t be able to come within around four feet of each other. If someone tries to move into your personal space, their forward motion will halt when they get too close. However, Meta told that avatars will still be able to move past each other, so users won’t get trapped in a corner or doorway. The Personal Boundary feature, which users won’t be able to disable, builds on previous measures Meta added to tackle harassment, such as making an avatar’s hands vanish when they enter someone else’s personal space. Shortly before to everyone aged 18 or older in the US and Canada in December, a beta tester her avatar was groped by a stranger. Eventually, you may be able to change the radius of your Personal Boundary. Users can still high-five and fist bump other avatars, but they need to extend their arms to do so. |
Circular takes on Oura with a $259 smart ring | Brian Heater | 2,022 | 2 | 4 | Oura wasn’t the first smart ring to market, but over the course of its life, the device has had surprisingly little competition. In general, it’s proven difficult for consumer hardware companies to find a toehold beyond the wrist. Though the brand’s relative success has no doubt raised hope that the fitness band/smartwatch isn’t necessarily the end-all-be-all for the category. CES has never been a huge show for wearables, but the event that gave us at what seemed to be the first viable smart ring delivered two more this year. There’s , which we highlighted late year. The company said it’s shooting for a second-half launch. Also notable is . The French startup offered a sneak preview — but not much more — at the show. Today, the company announced its titular ring will open for preorder on February 27, priced at $259. That’s $50 less than the , and Circular’s not yet discussing a monthly subscription plan for its promise of “not […] just raw data but personal insights.” Let’s be frank though — everyone appears to be on a steady march in that direction these days, regardless. The company’s got a wide time frame for the actual delivery of the product — between April and June. To some degree, that’s to be expected for a relatively young and small firm, particularly as we’re in the throes of ongoing chip and supply chain constraints. The ring sports a number of different sensors for things like heart and respirator rate and body temperature. From that standpoint, at least, we’re operating in the general Oura territory, creating actionable insights based on a number of vitals in a bid to “democratize personal health,” per the marketing material. That’s coupled with a “personal assistant” in the app. The battery should last up to four days and charges in around 45 minutes. From the sound of things, consumer is the first step for a still-small hardware startup. Moving forward, the company is looking to hit the B2C market via insurance and health companies. That’s probably where the real money is for a product like this, but it’s a longer runway with more regulatory red tape. The ring is launching in Europe (France, Germany, Italy and the U.K.), along with the U.S., Hong Kong, Singapore and Australia. |
Spotify CEO hints HiFi tier delay is related to licensing issues | Aisha Malik | 2,022 | 2 | 4 | Spotify CEO Daniel Ek has hinted that the of the streaming service’s HiFi subscription tier is related to licensing issues. Speaking to analysts and investors during Spotify’s quarterly and annual earnings release on Wednesday, Ek stated that the company doesn’t have much to share about its plans for the HiFi tier, but noted discussions were ongoing. In response to a direct question over Spotify’s failure to bring the HiFi service to the public as promised, Ek only provided a vague answer before moving on. “Many of the features that we talk about and especially that’s related to music ends up into licensing,” Ek told investors. “So I can’t really announce any specifics on this other than to say that we’re in constant dialogue with our partners to bring this to market.” Last February, Spotify plans to roll out the new high-end subscription service. The company had said Spotify HiFi would launch sometime in 2021 and give Spotify Premium subscribers the option to listen to music in “CD-quality, lossless audio format.” Spotify also said the HiFi service would work across devices, including on Spotify Connect-enabled speakers. The company didn’t provide any further information, such as details about pricing or which markets will support the new subscription. But the service was going to be offered as a Premium “add-on,” meaning it would cost more than the usual Premium subscription. This plan could have been complicated by changes in the competitive landscape. Ek’s comments about the delayed feature follow those left by a Spotify representative on the company’s last month, after a thread about the feature blew up into hundreds of pages of angry posts. “We know that HiFi quality audio is important to you,” the comment reads. “We feel the same, and we’re excited to deliver a Spotify HiFi experience to Premium users in the future. But we don’t have timing details to share yet. We will of course update you here when we can.” It’s worth noting that rumors of Spotify’s lossless subscription tier , when it was revealed that the streaming service was thinking about introducing a new paid option called Spotify Hi-Fi. At that time, it was rumored that the feature would cost an additional $5-$10 per month. Spotify’s delays with its HiFi tier come as both Apple Music and Amazon Music have released high fidelity streaming features for their customers. Last June, Apple lossless audio streaming and Spatial Audio with support for Dolby Atmos to its Apple Music subscription at no extra charge. Apple Music’s entire catalog of 75+ million songs supports lossless audio. The begins at CD quality — 16 bit at 44.1 kHz, and goes up to 24 bit at 48 kHz. Audiophiles can also opt for the high-resolution lossless that goes up to 24 bit at 192 kHz. Meanwhile, Amazon its Amazon Music HD subscription tier with lossless audio streaming in 2019 for an additional $5 per month. Last May, the company made Amazon Music HD Amazon Music Unlimited subscribers at no extra cost. Amazon HD streams songs with a bit depth of 16 bits and a sample rate of 44.1kHz (around CD-quality). Some songs stream in Ultra HD, or 24-bit, with a sample rate of up to 192kHz (or better than CD quality). The launch of high-fidelity streaming is seen as a way to counteract the threat from music streaming service Tidal, which has been catering to audiophiles with higher quality streams. Although Tidal hasn’t exactly been able to compete with industry-leading music streaming services in terms of subscriber numbers, its continued existence indicates there’s a demand out there for better quality music. |
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Why 2022 insurtech investment could surprise you | Alex Wilhelm | 2,022 | 2 | 4 | markets for insurtech startups in 2021: one welcoming and one dismissive. Private market investors poured capital into promising insurtech startups, while the public markets sent the value of recently public insurtech companies down — and then further down as the year progressed. The decline in the value of public insurtech unicorns was a , noting rising damage as valuations . And yet when CB Insights dropped , it noted that global insurtech venture activity hit a new high in the year. In 2021, insurtech funding reached 566 deals (an all-time record and a 21% gain over 2020) and $15.4 billion in capital (again, an all-time record, and a 90% gain over 2020.) TechCrunch has discussed the , as an exuberant venture capital market seemed to move further apart from a late-2021 decline in the value of many technology companies. Much of the losses persisted or worsened in early 2022. And yet the insurtech market is an even more extreme example of the decoupling we’re seeing more broadly in startup land. How so? Root, which raised a $350 million Series E in 2019 at a valuation of around $3.6 billion, , traded as high as $22.91 per share after going public. Today it’s worth $1.82 per share, or $460 million, about half the money it raised while private. Other examples are at hand. MetroMile was valued at $540 million during its final private round in 2018, . The company’s SPAC-led public debut valued the company at around $1.3 billion. Today, after seeing its stock crest the $20 per share mark, MetroMile is worth $1.52 per share and awaiting a Lemonade, another recent insurtech IPO. Lemonade has seen its value fall from an all-time high of $171.56 per share to $28.92 as of this morning. The company went public at $29 per share. For insurtech startups, the public-market mess that some of their peers have endured is bad news. , a seed-stage investor in Europe who puts capital to work in the insurtech space through Astorya.vc, told The Exchange that “there is a growing gap between valuations of these startups and M&A deals done recently in the insurance industry,” citing the recent sale of Aviva France for $3.9 billion. The company had, , “3 million customers and 7.8 billion euros in revenue.” ( .) Revenue multiples of less than one don’t get founders’ hearts racing. And there are startups in the business of writing insurance products for which such a low multiple would be akin to a death sentence, from a valuation perspective. Falling share prices for insurtech startups and worrying acquisition prices for insurance companies could prove a sticky wicket for the companies in the sector that raised so much money last year. But that doesn’t mean that all the news is bad. |
Numeral wants to turn bank accounts into microservices | Romain Dillet | 2,022 | 2 | 4 | Meet , a French startup that wants to upgrade corporate bank accounts. While clients interact with Numeral using a modern application programming interface (API), the startup connects directly to bank servers to upload payment files and interact with outdated information systems. By abstracting that layer of complexity, you can treat your bank accounts like another microservice in your architecture. Last month, Numeral that it raised a $14.8 million (€13 million) funding round led by Balderton Capital. Alexandre Prot, Tom Blomfield, Guillaume Princen and Kima Ventures also participated. The Numeral team originally started working on the project within Logic Founders, . The best way to describe Numeral is by describing what it isn’t. Numeral isn’t an open banking aggregator for consumer apps. It doesn’t compete with , or . Numeral isn’t a banking-as-a-service provider either. The company doesn’t offer bank accounts, doesn’t generate IBANs and doesn’t issue cards. “We are a payment automation platform for tech companies,” co-founder and CEO Édouard Mandon told me. “We let tech companies connect to their bank account to automate payment operations.” While retail banks are just starting to offer APIs, corporate banks opened their banking platform many years ago. But don’t expect a REST API with documentation pages. Many banks expect you to upload a text file to an SFTP server. The file is supposed to be formatted in a very specific way as well. Numeral sells its product to fintech, insurtech or real estate companies that rely heavily on bank transfers. For instance, the company’s first clients are and . Numeral has created integrations for its first clients so that Spendesk and Swile can interact with their bank accounts using an API. By the end of 2022, Numeral plans to offer coverage for a dozen different banks. “Right now, half of our customers discover our service through a French bank that describes Numeral as the APIs they don’t offer,” Mandon said. Once the integration is done, Numeral customers can integrate payment capabilities and features in their apps. The startup also offers a web app for non-technical staff. This way, they can reconcile payments and accounts without having to use the legacy web app offered by corporate banks. Numeral can then add some additional features on top of its API. For instance, you can imagine setting up an approval workflow, a notification system, etc. The startup is also thinking about orchestration capabilities. If a customer has multiple bank accounts, they could route payments to the right account depending on several rules. Numeral could also be used to actively manage cash balances across multiple accounts. That could be particularly useful for global customers with accounts in multiple countries. Mandon worked for before starting Numeral, so he knows a thing or two about having several partner banks spread across multiple countries. With the funding round, Numeral plans to grow to a team of 30 to 40 people. In addition to new integrations with French banks, the company plans to expand its coverage and customer base to other European countries, such as Germany, the U.K., Spain and Italy. |
We’re building a social+ world, but how will we moderate it? | John S. Kim | 2,022 | 2 | 4 | Social is not just what you do on Facebook anymore; it’s what you do in every single app you use. Think of the experience on Venmo, Strava, Duolingo or even Sephora. Companies that implement social components into their apps and services, known as social+ companies, are thriving because they can establish connections and enable interactions with users. Andreessen Horowitz’s D’Arcy Coolican explained the appeal of social+ companies, : “[Social+] can help us find community in everything from video games to music to workouts. Social+ occurs when delight-sparking utility is thoughtfully integrated with that essential human connection. That’s powerful because, ultimately, the more ways we find to connect with each other in authentic and positive ways, the better.” Social+ will soon permeate all aspects of our lives, accelerating at breakneck pace in the months ahead. I would wager adoption will continue to the point of utility – where every company is a social company. This is very exciting, but only if we plan accordingly. As we’ve seen with social’s influence in the past, it’s amazing … until it’s not. What’s incredibly additive to the user experience today could become an absolute nightmare if apps invoking social don’t find religion on sound moderation practices and invest the necessary resources into ensuring they build the right tech and processes from the start. As the OG social pioneer, Facebook redefined how society functions. In doing so, it endured some very painful lessons. Notably, it must bear the burden of monitoring individual, group and organization posts from 1.93 billion daily active users– all while trying to cultivate a sense of community without censorship and driving platform adoption, engagement and profits. While social+ companies are not likely to see this kind of volume, at least in the near-term, they will still have to contend with the same issues – only they no longer have the excuse of not being able to foresee that such things could happen. Let’s look at a few areas where Facebook stumbled on moderation: All of these issues should be considered carefully by companies planning to incorporate a social component into their app or service. Social engagement is key to sales, adoption and much more, but we must not forget that humans are flawed. Trolling, spam, pornography, phishing, and money scams are as much a part of the internet as browsers and shopping carts. They can wipe out and destroy a community. Consider: If Facebook and its army of developers, moderators and AI technology struggle, what kind of chance do you have if you don’t make moderation and community guidelines a priority from the start? Companies must build moderation features – or partner with companies that provide robust solutions – that can scale with the company, especially as services go global. This cannot be overstated. It is fundamental to the long-term success and viability of a platform– and to the future of the social+ movement. For moderation tools to do their part, however, companies must create clearly defined codes of conduct for communities, ones that minimize the gray areas and that are written clearly and concisely so that all users understand the expectations. Transparency is vital. Companies should also have a structure in place for how they handle inappropriate conduct – what are the processes for removing posts or blocking users? How long will they be locked out of accounts? Can they appeal? And then the big test – companies must enforce these rules from the beginning with consistency. Any time there is ambiguity or a comparison between instances, the company loses. Organizations must also define their stance on their ethical responsibility when it comes to objectionable content. Companies have to decide for themselves how they will manage user privacy and content, particularly that which could be of interest to law enforcement. This is a messy problem, and the way for social companies to keep their hands clean is to clearly articulate the company’s privacy stance rather than hide from it, trotting it out only when a problem arises. Social models are getting baked into every app from fintech to healthcare to food delivery to make our digital lives more engaging and fun. At the same time, mistakes are unavoidable as companies carve out an entirely new way of communicating with their users and customers. What’s important now is for social+ companies to learn from pioneers like Facebook in order to create safer, more cooperative online worlds. It just requires some forethought and commitment. |
Collaborate with the founder community at TechCrunch Early Stage 2022 | Alexandra Ames | 2,022 | 2 | 4 | Ready to get serious about launching a startup? Aspiring and newly minted entrepreneurs will find all the essential building blocks they need to create a solid foundation for startup success at . This live, in-person event takes place on April 14 in San Francisco, California. The day-long founder summit offers three concurrent tracks featuring an all-encompassing range of topics that the earliest of early-stage founders Need-To-Know. What’s more, you’ll hear from successful founders who share their experiences — warts and all — so you’ll get a real sense of what you might encounter. No hype — just the facts and the reassurance that comes from knowing you are not alone. Here’s what Chloe Leaaetoa, the founder of Socicraft, told us about her experience at You learn from industry leaders and seasoned founders — people who’ve already been there and done that. They were genuine and honest about industry expectations. Plus, they shared first-hand accounts, which made them more relatable. ($199) before they sell out, and you’ll save $350. Make an informed decision and before you buy your pass. Okay, enough with the housekeeping and back to the good stuff. What will you learn at TC Early Stage? Short answer: plenty. Expert-led workshops and smaller roundtable sessions address vital topics. Here’s just a sample of what you can expect: You can’t attend every session, but never fear. You’ll receive access to videos of all the sessions when the event ends. You won’t miss a thing! We’re limiting the number of overall attendees to keep this event intimate. You’ll have time to talk with the session experts, VCs and founders — and each other. And you’ll have access to CrunchMatch, our AI-powered system that lets you find people who align with your business goals and set up 1:1 meetings on site. Don’t underestimate the power of networking with other like-minded, early-stage entrepreneurs. You might meet someone who’d make the perfect co-founder or an engineer who can help you turn your idea into a viable product. takes place on April 14 in . Some of the best teachers are the people who’ve paved the way and want to help you benefit from their experience. , join your community and get ready to grow your startup. .
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Q5D is using robots to automate electronic wiring during manufacturing | Brian Heater | 2,022 | 2 | 5 | Q5D’s proposition is a simple one: use robotics to automate the process of producing wiring harnesses for electronics. It’s one that — surprisingly — is often still executed by hand, owing to its overall complexity. It’s a process, the company is quick to point out, that hasn’t really changed all that much over the previous century. Turning things over to machines would help speed up the process of manufacturing (a definite plus amid all of the current slow downs), lower costs and mitigate human error. The Bristol, U.K. startup was founded in 2019 by Steve Bennington and Chris Elsworthy, who were previously involved in Cella Energy and CEL-UK and now serve as CEO and CTO, respectively. In fact, the firm is actually a joint venture between CEL-UK — a company that makes 3D printers (including the Robox brand) — and M-Solv, which makes machine tools for electronics manufacturing. Q5D Q5D is a HAX hardtech startup program alum, with that firm’s parent, SOSV, participating in its newly announced seed round. “Laying wiring inside of products is one of the most manual and tedious parts of manufacturing. Q5D’s process and products are fundamental in closing the loop for automation in advanced manufacturing,” HAX partner Duncan Turner says in a release tied to the funding. The $2.7 million seed is led by Chrysalix Venture Capital and features additional participation from the Rainbow Seed Fund. The money will be used to scale up its technology, which is currently being used primarily by aerospace clients, including Safran and Oxford Space Systems. Consumer electronics and automotive are also on the table, though the firm is quick to note that the technology can be deployed across an extremely broad range of categories — the primary qualifier being electronics that have built-in wiring systems. “This is a time of great change—the rapid electrification of our transport systems and the increasing function of everything from washing machines to mobile phones means that wiring is becoming more complex and labor intensive,” Bennington says in the release. “The way the world has made wiring for the last 80 years has to change.” |
This Week in Apps: Open App Markets Act, Facebook loses daily users, Snap turns a profit | Sarah Perez | 2,022 | 2 | 5 | Welcome back to This Week in Apps, that recaps the latest in mobile OS news, mobile applications and the overall app economy. The app industry continues to grow, with number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the year-end . App Annie global spending across iOS, Google Play and third-party Android app stores in China grew 19% in 2021 to reach $170 billion. Downloads of apps also grew by 5%, reaching 230 billion in 2021, and mobile ad spend grew 23% year-over-year to reach $295 billion. In addition, consumers are spending more time in apps than ever before — even topping the time they spend watching TV, in some cases. The average American watches 3.1 hours of TV per day, for example, but in 2021, they spent 4.1 hours on their mobile device. And they’re not even the world’s heaviest mobile users. In markets like Brazil, Indonesia and South Korea, users surpassed five hours per day in mobile apps in 2021. Apps aren’t just a way to pass idle hours, either. They can grow to become huge businesses. In 2021, in consumer spend, and 13 topped $1 billion in revenue. This was up 20% from 2020 when 193 apps and games topped $100 million in annual consumer spend, and just eight apps topped $1 billion. This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too. TechCrunch While it may be a hair too soon to say it’s of Facebook, the social giant now called Meta is finally starting to feel the combined impacts of a number of challenges hitting all at once. On top of the ongoing issues over content moderation and the general harms of social media — as the world was alerted to by whistleblower Frances Haugen — the company, at last, also has a formidable threat to its future in the form of TikTok. The short-form video app has managed to do the seemingly impossible: stop Facebook’s growth and cut into its ads business. In its , Facebook , from 1.93 billion in Q3 to 1.929 billion in Q4. Those are still mind-blowing user numbers to be sure, but it’s the first real hint as to how Facebook’s inability to reach the younger generation and competition from TikTok could be stalling its growth. In addition, Meta’s family of apps (FB, Instagram, Messenger and WhatsApp) reported slower growth than in past quarters, from 2.81 billion to 2.82 billion. Meanwhile, Meta is attempting to navigate a future to some sort of immersive “metaverse” that won’t be realized for perhaps a decade, while also trying to fend off the TikTok threat. CEO Mark Zuckerberg and other video projects, even as the company is simultaneously building out features with the metaverse in mind — like . TikTok isn’t just taking away users, it’s . The company reported $10.3 billion in profit in the quarter, and EPS of $3.67, falling short of Wall Street’s expectation of $3.84. And it reported Q1 revenue guidance of $27-29 billion, down from Q4’s $33.67 billion. That’s not all TikTok’s fault, of course, Meta plainly said that Apple’s privacy changes introduced last year already during 2021. But even Apple can’t be fully at fault here. Both Snap and Pinterest have more nimbly weathered the disruption caused by the iOS privacy changes, according to their own earnings and the accompanying stock recoveries. (Snap even turned its first net profit.) What’s ultimately the issue is that Meta lacks diversified revenue streams — ads for 98% of its revenue. For example, despite being a longtime home for creators, Meta is only now spinning up new efforts to cash in on those economies through things like tips and subscriptions. Instagram’s subscriptions are . Meta also started to dabble in web3 and NFTs, but has little to nothing to show for those efforts. It even had to . Meanwhile, when Meta has expanded into new areas — like VR-based gaming or e-commerce — it has done so with an eye on how those are tied to social networking products, including key apps like Facebook and Instagram. So if Meta’s grip on social begins to trend downwards, it could impact the rest of its business in the process. A bill that could force Apple and Google to allow third-party app stores, sideloading and alternative payments, aka the , won Senate Judiciary Committee approval this week after gathering bipartisan support. It’s also a great example as to why the tech giants should have never let things get to the point of needing regulators to step in to even the playing field, as the bill in its present form is not really a win for either consumers or smaller developers in its present form. Apple has aggressively fought against this legislation, making valid points that opening up mobile devices to sideloading could increase the risk of “malware, scams, and data-exploitation,” or so to Senate Judiciary Chair Dick Durbin and ranking Republican Chuck Grassley. Plus, Apple pointed out how sideloading could help “big media platforms” avoid the consumer privacy protections it’s added to its platform. The passage of the Open App Markets Act out of the Senate Judiciary committee brings us one step closer to having this legislation signed into law. This bill will let people download apps directly from outside companies rather than being forced to go through official app stores. — Sen. Marsha Blackburn (@MarshaBlackburn) Not all developers are on board with the bill. The Coalition for App Fairness — which counts Match, Epic Games and Spotify among its members — backs the legislation. But another trade group representing small companies in the app economy, The App Association, wrote a to Durbin and Grassley stating their opposition to the bill due to the security and privacy issues it could introduce, among other things. But the bill won’t likely become law without a number of changes. In early debates, for example, some and unintended consequences of to find their way onto consumer devices. The bill amended to make it more clear what sort of security considerations the app stores can take without violating the law. Pinterest Tik Tok'ers buy what they see on the platform — these stats are NUTs Community & Commerce — Rich Greenfield, LightShed 🔦 (@RichLightShed) Meta We've been testing how we can surface the most relevant replies within Tweets with the use of downvoting on replies. As we're expanding the experiment to a global audience, we want to share a little about what we have learned thus far! 👇 — Twitter Safety (@TwitterSafety) Sensor Tower Riot Games valuing its business at $400 million, up from $50 million in May 2021. The fintech app began as a tool to connect students with scholarships and grew its community to over 400,000 users before expanding into banking. valuing the business at over $200 million. The new funds come only months after Jar’s seed round. The app, which rounds up transactions and sets money aside as an investment, now has over 4 million users. again led by Glad Brook Capital. The startup, which helps travelers book tours, attractions and more, had previously raised $15 million in Series B funding. Headout has been EBITDA profitable since last July, despite COVID. co-led by Notion Ventures and HV Capital. The company has amassed 200 customers, spanning 1 million end users who use Flip for things like swapping shifts, checking on payslips and more. . The mobile traveling book app lets users book flights, hotels and cars, and now has over 70 million downloads. and provider of financial services to consumers and merchants, in Series A funding last August, but had not yet disclosed the investment. The company offers services in Nigeria and Ghana. co-led by U.S.-based Greycroft and Tiger Global. The app offers a similar experience to Robinhood and reports having more than 300,000 users, around 20% who are actively trading on a daily basis. in Series A funding led by Insight Partners. The service runs a live version of apps in a browser window and then records every step of the test, which is triggered directly from CI workflows. 🤝 🤝 makers of a workout and meal planning app backed by $10 million in funding, for an undisclosed sum. The company will integrate 8fit’s offerings into its existing software suite, and said it plans to invest an additional $30 million into building out its connected fitness offerings. led by Paradigm, and launched its iOS app. Other investors in the now-unicorn include a16z, Variant Fund, Jump Capital, DeFi Alliance and Solana Ventures. The startup plans to expand support to other blockchains, including Ethereum. from On Deck and Santa Clara Ventures. The gamified platform allows teens to invest in more than 30 cryptocurrency coins by having parents co-own the account if the user is under 18. The company develops online ordering tools for enterprise restaurant chains and ghost kitchens, acting as the restaurant’s entire digital tech stack for everything from managing orders to apps to loyalty programs. 🤝 for a figure in the range of $5-10 million in an all-stock transaction. The deal allowed the company to bring on board former Pinterest technical lead for growth and well-known growth advisor Jeff Chang to lead its own growth team. The company also hired the former head of Growth and Product Engineering for Lyft, Ludo Antonov, as VP and head of Engineering. 🤝 following their partnership to scale the massively multiplayer real-time strategy mobile game Astrokings. The acquisition is Tilting Point’s first since its July 2021 raise of $235 million, and will elevate the company’s presence in the Korean market. Sunroom A new creator platform founded by Hinge and Bumble alums, Sunroom ( ) this week launched its iOS apps aimed at women and non-binary creators. Members who join Sunroom can learn from, connect with and cheer on their favorite creators, as well as help them earn through tipping and subscriptions. The app also features anti-screenshot technology to keep content more private and safe from leaks. So many tweets today are making the case for an all-powerful tyrant to protect each of us from ourselves and tax us all to pay for it. These bozos deserve to live in the world for they advocate for. The rest of us don’t. — Tim Sweeney (@TimSweeneyEpic) “When software isn’t polished, when it’s full of things that feel like paper cuts, it becomes less joyful and more frustrating. It sucks all the opportunity for delight out of the room.” — Peter Steinberger (@steipete) |
Edtech’s search for the magic metric | Natasha Mascarenhas | 2,022 | 2 | 5 | Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, If there’s one sector that is incessantly in pursuit of Magic Metrics, it’s edtech. For the past two years, I’ve spoken with every top investor and founder in the industry and each of them have made their own, independent arguments for what is considered an effective outcome in education. Some argue that completion rates show necessary engagement, while others say that it’s less about how far you get into a course and more about if you show up and participate in the moments that count. Some believe that it’s time to reinvent grading systems, while others think that scores are a way to beat inequity in acceptance rates. The magic metric that does it all — encompasses outcomes, engagement and heck, even fun — has always had debate, and honestly, trust issues around it. Still, it’s rare for me to interview someone who will go on the record to say why there’s so much disagreement, or perhaps more interestingly, why they are right and the status quo is wrong. And that’s why my conversation with Nucamp CEO Ludovic Fourrage stood out to me. Fourrage, who has spent years building up a coding bootcamp with accessible pricing, tells me that he’s no longer publishing job placement metrics in advertising materials. The move was made to rebuild student trust in the industry. As I wrote in my story, the move is less about Nucamp declaring that it doesn’t market its placement rates, and more indicative of a broader issue: job placement is the most in-demand outcome, but also one of the hardest to deliver. Of course, the obfuscation of metrics can cast a questionable light on a startup. Nucamp doesn’t even share job placement metrics with learners once they join the platform. What it aims to gain in lack of deception, it could lose in lack of transparency. After all, if your job placement rates were so good, why wouldn’t you advertise them? For my full take on this topic, check out my latest TechCrunch+ column: In the rest of this newsletter, we’ll get into Mos’ evolution from an edtech into a fintech, and if your head of product needs a career agent. As always, you can support me by sharing this newsletter, or With $40 million more in funding, . Amira Yahyaoui started the company in 2017 as an edtech business built to help students navigate their way through applying to and attending college. Now, she’s trying to build a “radical” fintech that can support the same user base through all of life’s similarly complicated demands. When I spoke to Yahyaoui, she talked about how buzzy fintech has gotten — from NFTs to credit cards with fancy branding. She’s set on building for the masses, even if it doesn’t feel as exclusive and fancy. “I wish I had to only convince 1,000 nerds,” Yahyaoui said. “But we need to convince 20 million students.” “Rather than being a player tangentially on the side of financial access and inclusion, they recognize that they have the unique opportunity to be the primary bank, credit card and home [for] their students,” she said. In other words, the TAM is increasing. Bryce Durbin / TechCrunch explored tech’s hot hiring market, and if it’s about time for top tech talent to start hiring career agents. I specifically looked into Free Agency, a startup that recently raised a $10 million Series A, and its marketplace that connects in-demand techies with experienced agents. Free Agency helped a client secure a senior director of Product role worth more than $900,000 in total compensation, a 53% jump over the client’s previous pay package. In the process, the company arranged 21 interviews with companies like Snapchat, Coinbase and Lyft without requiring the client to send out a single application or email during his job search. As I spoke about , we rarely see recruiting companies building for the employee instead of the employer. Free Agency is a bet that people want to pay so they can take a backseat and let a professional navigate their career opportunities for them. To date, the company estimates it has helped candidates set up 4,700 interviews and secure $200,000,000 in negotiated compensation for total salary offers. What a time to be an engineer at Stripe: Bryce Durbin / TechCrunch Bryce Durbin / TechCrunch , the tech news podcast I co-host alongside Alex Wilhelm and Mary Ann Azevedo, is going live! Join us for a — tickets are free, puns will come at the cost of our producers’ sanity. Our bestie pod, Found, is also joining the live circuit, Until next time, |
Equity Shot: Making sense of the Paypal and Alphabet earnings | Alex Wilhelm | 2,022 | 2 | 5 | Hello and happy weekend from the Equity crew! We had a busy week, including a Twitter Space with and taking to the mics to dig into some tasty public-market news. Naturally our show is more startup-focused than public-market centered. But! We can learn a lot from the world of public companies that have a wide footprint inside particular tech niches that matter for younger companies. So when we digest , we are not super interested in PayPal per se, but more what its results can tell us about the fintech world more generally. After all, around a fifth of all venture capital dollars invested last year went to fintech startups. And Alphabet, it has , and the advertising market, both places where startups live and play. We do the occasional live taping on Twitter, so make sure you are . Hugs! We are back Monday morning! |
The startup sobriety gambit | Alex Wilhelm | 2,022 | 2 | 5 | Hello and welcome to the weekend, my friends! Today we’re sticking to simple fare. The meat and potatoes — pea protein and gluten-free starches? — of our beat, namely startup activity. So, read on for some news from startups that we think are pretty neat. Not to beat the personal drum too hard, but I’ve had my ins and outs with drinking. Ultimately, I gave it up entirely. So when Reframe entered my view the other week, I was curious. The startup offers an app built to help people reduce their alcohol consumption, focused on individuals who are not physically addicted to the drug but do want to reduce their consumption or quit altogether. The market for help with drinking — really any drug addiction, dependency or issue — is huge. I know this because I have the enormous privilege of talking to lots of folks who are looking to cut back or stop boozing altogether. The situation is getting worse during the pandemic, I’d add. So I was not surprised to learn that Reframe has been on a rapid trajectory of late, raising $1.4 million from Atlanta Ventures before taking part in Y Combinator (Summer 2021 class, when as one of my favorites). It raised $3.4 million after the accelerator program and recently closed a $12.5 million round. That final funding event took place just as 2021 closed, and was put together at a $100 million post-money valuation. The startup is clearly onto something. And, thankfully, it was willing to talk about its results in detail. I spoke with the company’s CEO, , who told The Exchange that in the last six months, Reframe has scaled its ARR by a compounding rate of around 79%. Pradeep also said that his company has seen 10.3% compounding growth over the last 12 months. All that has added up to $9.5 million worth of ARR by January 28, a figure that Pradeep updated to $10 million earlier this week by text message. Even better, the company’s mix of tools — CBT, journaling, etc. — is helping people make real changes to their drinking. Per Pradeep, some 88.63% of its users “reported meeting their drinking goals” at the two-month mark. The CEO added that based on his company’s data, the preceding data point “represents a [greater than] 50% reduction in their drinking.” That’s huge. Like . Now, I do have some squeamishness about for-profit care for drug-related matters. But I talked through the company’s pricing model with Pradeep, as well as his policies regarding those without enough money to pay Reframe. At least by my standards, the company is striking a fair balance. At a time in which it seems that every tech leader, luminary and knave is piling head-first into the crypto space in hopes of a quick buck, Reframe is a reminder that solving real problems is another way to make money. I just wonder why the company’s most recent valuation didn’t have another zero in it, given recent startup pricing trends. Sticking to the boozing theme of today: wine. It’s a whole thing. I can tell you that time spent learning about wine is not wasted. Provided you aren’t in the Reframe customer demographic, wine snobbery is a fun pastime. Knowing how to enjoy a chablis over a robust California cabernet is table-stakes if you like to plop around chairs with friends and slowly intoxicate your cranium. But not all wine is strictly for drinking. Some of it is actually investment-grade stuff. Which is why is building a platform to let regulars bet on wine price appreciation. It recently released a way for its customers to invest in individual wines. Previously, Vinovest was more focused on its robo-advisor service in the wine investing category. In short, the company is a wager that more folks want access to alternative investing options, fine wine being one that has usually been out of reach. I bring the Vinovest news up as it appears to be onto something, posting 500% AUM growth in 2021. Per the company and its intrepid spokesperson , Vinovest holds more than 250,000 bottles in user portfolios, which are stored in “custom-built warehouses across the world.” Between the crypto surge, folks buying digital collectibles and more, perhaps wine investing is going to find allocation in more suburban 401(k)s. If that pans out, well, Vinovest’s market bet could bear — fermentable — fruit. |
The rise of defense tech is bringing Silicon Valley back to its roots | Josh Wolfe | 2,022 | 2 | 5 | The timeless quest for national competitive advantage has accelerated with globalization. During the Cold War, the United States and the U.S.S.R. fought an ideological and a military race, but never one over consumer products: No American was interested in buying a Soviet toaster. Now, the lines are blurred; countries are fighting across their entire economies and every domain of warfare for advantage. Technological supremacy in consumer and enterprise products feeds directly into the great power race for air, land, sea, space and cyber. Startup founders and engineers are increasingly recognizing their role in this fight, as well. These people are not George W. Bush-style jingoists, but they do want to support liberal democracy and make sure people on the frontlines have the best tools to do their jobs. That’s a major shift from the last several decades when antiwar sentiment in the Bay Area that originated in the protests over the Vietnam War intensified into antiwar protests against the wars in Afghanistan and particularly Iraq. , we are now seeing a return to Silicon Valley’s original culture of pioneering defense tech to protect the American homeland and its allies from adversaries. Indeed, more and more people want to work exclusively with the Pentagon and our allies on defense tech, particularly as confronting the rise of China has in a polarized Washington. For engineers diving into defense tech, the challenges and opportunities in every domain are extensive. In the air, China is — a technology that the United States is considered years away from obtaining based on intelligence estimates. Given the speed of its travel and the inability of sensors to detect it, a hypersonic missile would render much of America’s current air defense systems ineffective. We’re also seeing the emergence of an entirely new air threat: Swarms of cheap and violent drones that can be deployed rapidly with nary a human operator in sight. U.S. general Frank McKenzie after the warehouse retailer, and we’re likely to see countries with tiny defense budgets capable of overwhelming well-equipped U.S. forces. Similarly at sea, we’re seeing a shift from large and expensive aircraft carriers manned by thousands of sailors to small, cheap, and autonomous vessels. Governments (or non-state actors) can now disrupt critical sea trade lanes in ways that are very difficult to defend against. Meanwhile, beneath the waters, there is a growing capability for adversaries to tap into and disrupt undersea internet cables that carry a growing bulk of the global economy. In space, Russia just a few weeks ago that destroys individual satellites. Such an attack could annihilate GPS and global communications (and the commerce, transportation, and logistics that depends on them), as well as potentially render much of near-earth space unusable for satellites due to the resulting debris. These weapons are hard to detect and even harder to stop with existing defense technologies. Finally, in the cyber domain, despite tens of billions of dollars flooding into the cybersecurity sector over the past decade, companies and governments remain extraordinarily vulnerable to ransom and espionage with large-scale denial of service and information exfiltration initiatives. , we are no closer to preventing or defending against state-directed cyber warfare. All of these problems across all of these domains remain wide open, and the United States has the most to lose — economically, politically and militarily — if it fails to confront them. The upshot is that complex and tough challenges are precisely the kinds of problems that top engineers and startup founders want to work on. There is a growing chorus of criticism — — against Washington bureaucrats just continuing to do business as usual despite the increasingly mounting evidence that our defenses are ill-equipped for the challenges posed by our adversaries. In today’s defense world, we have met the enemy and he is ourselves: startups are immediately stymied by the Pentagon’s antiquated procurement systems. We need to immediately get around this bureaucracy and uncomfortably displace the very comfortable, entitled and entrenched monopolies and oligopolies who don’t have the best technologies but have the best lobbyists. We’ve got to get the big “primes” — as the country’s leading defense contractors are known — out of the way. We would never send our once-great but now trailing, slow-moving, least competitive athletes to represent America in fierce competition in the Olympics. It would make us sure losers. So why are we sitting idly, allowing this to happen in the critical arena of defense? The Defense Department has put in place a variety of programs to bring on board startups. These programs are well-intentioned, but they miss the point: The Pentagon must throw out its procurement playbook and rebuild its defenses for the weapons our enemies actually use today. We live in a world where an F-35 Joint Strike Fighter, , can be outmaneuvered by “Costco drones.” America’s long-time defense superiority has led countries to innovate asymmetrically — and now they are pulling ahead. The good news is that competing asymmetrically is precisely what Silicon Valley and startup founders do every day. Their scrappy ambitions and scarce resources means they repeatedly do more with less. They go up against entrenched incumbents, identify their weaknesses, and exploit them relentlessly to create competitive advantage. We have the technology and increasingly the know-how and the people ready to bolster America’s defense. Now we just need the Pentagon to start demanding more of itself, and to be willing to award large contracts to the most competitively advantaged emerging American startups. While change at the Pentagon is paramount, beyond America, there is an opportunity to help liberal democracies globally with their defenses as well. In Europe, there is an incredible wealth of talent and available technologies that could be applied to the continent’s defense. Yet, its defense systems are a technological Tower of Babel with significant interoperability challenges. Streamlining defense standards for next-generation technologies wouldn’t help just the United States, but many of our allies as well. America today faces the greatest challenge to our competitive advantages in recent memory, with advantages eroding across all domains of warfare and in many economic sectors. Adversaries are poking ever more aggressively for weaknesses to exacerbate and exploit. But at its heart, America’s values and influence still offers us immense soft power: an openness to new ideas, to new people, and to new opportunities. Defending our open values against the encroaching authoritarianism of antagonists like China and Russia isn’t optional. Defense tech is the next big sector for Silicon Valley if for no other reason than every other sector will rely on the United States to secure peace in the years ahead. |
Cloud infrastructure market soared to $178B in 2021, growing $49B in one year | Ron Miller | 2,022 | 2 | 4 | It’s kind of a broken record at this point, but the cloud infrastructure market continues to grow at an astonishing rate. Over the last year, it added almost $50 billion in business, growing to $178 billion this year, according to data. similar numbers. As for the quarter, Synergy reports the market reached $50 billion, up 36% over the prior year. The big three — Amazon, Microsoft and Google — continue to grow at a remarkable rate, even as the market matures, taking advantage of that growth with their market strength. Microsoft and Google are growing faster at similar rates, around 45% for the quarter, while Amazon is growing at just under 40%. The quarterly revenue numbers worked out to around $17 billion for Amazon, $10 billion for Microsoft and , all healthy and growing businesses. The market breakdown by percentage hasn’t changed a ton over the last year, with Amazon leading the way with 33%, followed by Microsoft with 21% and Google with 10%. It’s worth noting that Amazon’s market share has been stubbornly persistent for several years, while Google and Microsoft continue to grow steadily over time, but of course, the market continues to expand and Amazon revenue continues to grow at a decent rate. In fact, Synergy reports that Microsoft, which was at just 11% share 4.5 years ago, has doubled its position in 18 quarters, an impressive rise. Synergy principal analyst John Dinsdale said that he isn’t too concerned, though, that Amazon’s position hasn’t changed in a while. He calls it a nice problem to have. “Well, controlling a third of a huge and rapidly growing market is a very nice ‘rut’ to be in,” Dinsdale said. And while he isn’t about to predict the future, he noted it’s hard to keep growing consistently at a rapid rate. “As a matter of principle, we never project or comment on likely future market share performance — that’s a rubicon that analysts like us should never cross. I will say that math is a powerful force, and the bigger you are, the more difficult it is to maintain aggressive growth. That is just a fact of (corporate) life.” Synergy Research Canalys data was pretty darn close to Synergy’s, with the firm reporting just over $53 billion for the quarter, up 34%. For the year, Canalys set the market at $191.7 billion, up 35% year over year from $142 billion in 2020. For the quarter, it broke down as Amazon with 33%, Microsoft with 22% and Google with 9%. Again, these numbers are close enough to Synergy’s to call it a draw. Both define the market similarly, so it shouldn’t come as a huge surprise. Canalys looks at service and platform as a service, either on dedicated hosted private infrastructure or shared infrastructure. For Synergy, it’s infrastructure and platform services. Both companies leave out SaaS, which is counted as a separate category. The fact is that the market continues to grow at a rapid rate, and if analysts and prognosticators are correct, there is still a ton of room for growth in the cloud. We’re certainly seeing that quarter after quarter in recent years, as the largest players, in particular, reap the benefits of this growth with gaudy revenue numbers. Even at the bottom of the market, there is still plenty of money to be made. While it might not meet the level of Microsoft, Amazon or Google, it can still add up to multibillion-dollar businesses. Chances are, in the coming years,we will continue to see continuing rapid growth. When we reach a point where we don’t, that’ll be the “man bites dog” news event. |
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Reigniting the Pentagon and Silicon Valley partnership | Mike Brown | 2,022 | 2 | 5 | On November 15, 2021 Russia launched an anti-satellite missile into low-earth orbit without warning, successfully destroying a Russian satellite. Projectile debris from this event not only endangered the astronauts aboard the International Space Station, but also could cause severe damage to satellites that support critical infrastructure here on Earth, such as GPS and power grids, for many years to come. Just one month prior, China launched a hypersonic missile that circled the Earth and would be impossible to defend against with current technology. These events are a wake-up call: The United States’ technological leadership is not assured, and the global standards we developed and maintained with our partners and allies are being rewritten, as new technological advancements give rise to new threats to our nation’s security. But these new threats are not insurmountable. In fact, these events should serve as a clarion call for entrepreneurs and investors at the forefront of emerging technology domains, including artificial intelligence, space, cybersecurity and autonomous systems. To meet the rising challenges posed by asymmetric and cyber warfare, we need to work together – Pentagon, academia, and industry – as we did more than 60 years ago to build Silicon Valley and our nation’s technological leadership of today. Government investments helped to create the internet and semiconductors, as well as map the human genome. I came to the Department of Defense after 30 years in the commercial technology sector to help rebuild the ties that underwrote much of our country’s economic strength and global leadership over the past half century. The DoD is actively pursuing a technology modernization agenda that not only reflects the changing nature of warfare but also engenders a series of necessary business process reforms. For example, in commercial space, companies are already deploying small satellites to provide more ubiquitous internet access and pioneer rapid launch capability to deliver payloads to various geospatial layers; self-driving cars are providing transportation options; swarming drones are surveilling oil pipelines and inspecting commercial buildings and infrastructure. These innovations are all dual-use technologies, meaning they have military applications as well. Networking these solutions together is supported by global cloud options that are cost-effective, secure and scalable. Just like companies do, the military needs to harness the insights contained in voluminous data to generate predictive capabilities through AI and machine learning that yield faster and better decision-making. Business process reforms are equally important to improving our defense posture. Most of the DoD’s business processes were established in the 1960s and focused on building large weapons platforms such as tanks, ships and planes. Rapid advancements in the commercial sector, which promise to enhance our military’s technological edge, mean that the Pentagon now needs to buy many more technologies that complement the large weapons platforms we continue to buy. It’s clear the coming decade will be one characterized by intense competition among nations for preeminence in technology. For an increasing number of commercial vendors, this will represent an unprecedented opportunity to tackle complex problems together with the Defense Department. For instance, with assets in air, space, undersea, on land and in cyberspace, the national security apparatus is effectively the largest collection of sensors in the world. To date, however, these sensors are not designed to seamlessly integrate; rather, they are typically built and operated in silos, making it challenging to implement updates and develop a common operating picture. Building an Internet of Things in space—a global sensor network – would provide real-time situational awareness, a resilient communications infrastructure as a backbone for operational decisions— and the basis for an autonomous force of sea, land, air and space systems that are small, numerous and agile. These systems will generate immense amounts of data requiring increased storage, management and analytics, and technology modernization means building better tools to collect information, analyze it, understand it, and make better decisions in the interest of national security. It will also involve more sophisticated protection from cyber vulnerabilities.The physical manifestation of these new capabilities will require greener energy use. Commercial companies are developing these technologies today, and the DoD must increase its capacity to assess and procure these solutions — enhancing our national security and driving commercial prosperity. Executing this vision means more companies than ever before can participate in a once-in-a-generation economic opportunity that likewise enhances national security in the 21st Century. To deliver the best technology to our military, then-Defense Secretary Ash Carter recognized the need to break down institutional barriers and inject fresh ideas, technologies, and methodologies from the commercial sector. In 2015, he announced the opening of the Defense Innovation Unit (DIU) to rebuild this connection. DIU was designed to bring innovative and faster contracting mechanisms to bear, making it easier, more desirable and more profitable to do business with the DoD. At DIU we’ve already seen how powerful this collaboration can be, from providing ongoing investment at key points of hardware and software lifecycles, uninterrupted access to testing facilities, and showing commercial companies a path to linear growth in the defense sector. This collaboration can accelerate a product’s development or stimulate a company’s growth, showing investors access to new markets. But maintaining U.S. leadership in key technologies requires changing the 60-year-old acquisition system. DoD is no longer the first mover, the primary investor, or market maker for many technologies today. DoD needs to become a adapting and integrating commercial technology not developed by the DoD, to solve defense problems. To do this, DIU is advocating action in three areas: These three areas may seem obvious but overcoming long-established processes in defense planning and Congressional approval is not easy. And ensuring we can make the sound business case to technology firms of supporting work in national security is essential since there are large markets to serve outside of defense Accelerating the pace of change and removing barriers cannot be done solely inside the DoD or with a select few commercial companies participating. We need all sides of the triangle of business, academia and government actively engaged, providing different ideas and approaches to accelerate our pace of modernization. Rebuilding the connection between DoD and commercial industry — from exchanging talent, acquiring products, having open communications on key issues — is critical. DoD leadership recognizes that we are living through a technological moment unlike any other in our nation’s history. DIU has a unique and important role to play in bringing commercial technology and methodologies to modernize both critical parts of the military’s infrastructure. Together, like we have done in the past with the birth of Silicon Valley, we can ensure a secure and prosperous future for our nation. |
Veed, an online video editing platform, picks up $35M from Sequoia | Ingrid Lunden | 2,022 | 2 | 2 | Video is the beating heart of the most popular content online these days, and it’s not just because it’s entertaining. It’s also because of how accessible it is: It’s become incredibly easy for anyone, whether you’re technical or not, to make, post or watch video. Today, a London-based startup called that’s built an online-only, web-based platform for all those video creators to edit and publish their work, is announcing $35 million in funding to double down on strong demand. The funding is coming from a single investor, Sequoia, and this is Veed’s first outside money since starting as a bootstrapped business in 2018. Sequoia has picked a promising horse in the startup race. Veed currently has 1 million users and annual recurring revenues of $7 million, a figure that is growing quickly: ARR was $6 million . Veed is sold as a — “tens of thousands” pay for the service, CEO Sabba Keynejad told me — and it is profitable. Veed started with basic cutting/cropping/merging editing tools, but today it covers a really wide range of other features that speak to the many ways video is used today; they include the ability to add in music or other media and manipulate the sound; create video effects; subtitles; and a range of editing tools optimised for specific platforms like YouTube; along with enterprise video features such as screen and webcam recording and creating teleprompter text. Veed will use the funding in part to grow that list with features that will see it lean into content distribution: It plans to add livestreaming and hosting tools next. Video has been an online juggernaut for a while now, with its magnetic pull played out through premium streaming services, user-generated content platforms like YouTube, TikTok and Instagram, through advertising, and more. estimates that in 2021, video accounted for 82% of all online traffic. Video editing tools have gone hand-in-hand with that rise. There are apps for and desktop and mobile users, online platforms either on video or of , and tools embedded directly into social media apps, or , as well as tools available via other . Some, like and , have raised substantial funding; others like ClipChamp are getting snapped up by bigger platforms (in its case, ) and getting incorporated into much larger, . So why does the world need another video platform? It was a question that investors seemed to ask initially, too: Keynejad said the fact that Veed was bootstrapped until now was not because it wanted to build it that way. It was because he and co-founder Timur Mamedov — a computer scientist who tools around as a graffiti artist in his spare time; his work is the background of the picture illustrating this story — couldn’t raise any money. Their attempts to do so included applying and getting rejected from Y Combinator, multiple times. (The Keynejad wrote about their YC experience is funny and charming, worth a read.) And they couldn’t get on the same page with seed funds and angels, either. However, Keynejad said he arrived at the business of building a video editing startup not strictly as a pragmatic entrepreneur looking for an interesting money-making gap in the market, but as someone working in the industry and finding that the available tools were lacking. Keynejad studied design and interaction at Central St Martin’s in London and after that moved into a career putting that training to work at design studios, where he was required to do a lot with online video. As he recalls it, everything he encountered in the market to do his job was “clunky and complex.” This was not just about how to get to grips with using a particular package, or it having (or lacking as the case may be) a feature you would like to use, but also how the service existed in the modern world. If you collaborated with someone else, for example, many of the packages required users to transfer huge files to each other. The non-intuitive nature of a lot of existing video tools was particularly acute, perhaps, for Keynejad himself. He tells me that he grew up with significant dyslexia and was held back for three years trying to pass his English GCSE (one of a set of intense exams students have to take in year 11, aged 15/16, in England to progress to the next stage of school). But if he was conceiving of Veed for the toughest customer — himself — he was also building for a massive market, with an increasing amount of permutations of what online video looked and what it ws intended to do. “I just thought that the range and amount of video content we consume had outpaced the tools we had to make it,” he said. So he got to making the first version of Veed, with the aim of making something that could be used by anyone, regardless of the video creator’s level of experience. Smart choice, given how online video has evolved as a genuinely democratized medium: you’re just as likely to come across highly produced, professional video as you are something from a regular Joe. Key to Veed was building it entirely online: if you collaborated with someone else, all you need to share your work was a URL. Veed “It’s a super broad set of use cases,” Keynejad said, noting that people have edited weddings, birthday videos, professional coaching sessions, internal communications, influencers doing their thing and anything else you might brighten up with a ring light. The funding will also be used to hire more people for Veed to build out the product further. In keeping with the times, Veed won’t be requiring people to work out of London, not least because its own leadership is not: Keynejad left The Smoke for Lisbon this week on a one-way ticket. He told me he plans to stay there for around a month, and then live the life of a digital nomad, working while hopping from city to city for at least five months — ideally hiring people as he moves along, he added. Sequoia is an interesting VC to come in as a first investor in Veed. |
Flip, a chat and HR app for frontline workers, raises $30M as it passes 1M users | Ingrid Lunden | 2,022 | 2 | 2 | of the world’s workforce, , do not spend their days in front of computers, and that has led to a strong disparity when it comes to technology, with some 1% of IT investment targeting them as users. That’s been changing very rapidly with the rise of smartphones and apps, and today, one of the startups that’s seen its business boom as a result of that trend is announcing some funding to jump on the opportunity. , which makes a communications app for frontline workers to chat with each other, to get communications from management and to carry out HR activities like swapping shifts, has raised $30 million. The startup — based out of Stuttgart, Germany, and used primarily in the German-speaking region — will be using the funding to break into new markets, starting with the U.K., CEO and founder Benedikt Ilg said. Notion Ventures and Berlin-based fund HV Capital are co-leading the round, with previous backers Cavalry Ventures and LEA Partners, along with individual backers including Volkswagen chairman Matthias Müller and many others. There are a number of other apps in the market targeting the same sector of the world’s workforce, and the same use case around communications: they include from Meta, from Microsoft, (now owned by Square), , , , and many more. In fact just today , another frontline work app focused mostly on the HR side of the opportunity, announced funding too. But there are three things to be said about what looks like a crowded field. First, it’s a big and fragmented enough market that there will likely be several strong players in the mix for the long haul. Second, there are still a number of ways that each player might evolve and innovate as the market is still fairly new. (One area that has been notable for Flip, Ilg said, is that his app is strictly compliant with GDPR rules, which has helped it win business over others that might claim that they are too, but are in fact not.) Another area is even more basic: making the app easy to use, not just in terms of user interface and experience but actual app size, the space it takes up on one’s phone and the bandwidth it needs to be used. “I worked in production at Porsche before starting Flip, and I know how it feels, the lack of communication with management,” Ilg said. “We are the most simple application in the field, when it comes to downloading and using it, with the least amount of screens. This is the spirit of what we want to build, doing things for end users.” And third, if critical mass is important for success, Flip is actually leaping out into the front. Flip to date has amassed 200 customers, spanning some 1 million users, with the list including McDonald’s, Rossmann, Edeka, Magna and Mahle. In the pandemic — a moment where frontline workers suddenly did appear front and center in people’s consciousness — its revenues have boomed, shooting up six-fold in the last year, Ilg told me. (The startup is not disclosing actual revenue nor valuation.) For those following the space, you might have noticed a story we wrote the other week about how Workplace had been but had held off. Flip’s engagement with the company currently totals some 60,000 people. Given that the fast food giant is already working, publicly, with Flip… it will be interesting to see how the Workplace deal pans out. In any case, it underscores just how much there is left to play for here. The app today is primarily used by employers to communicate to their wider base of employees, people who move around during the day and typically will not be working in a single location. Those people also use the app to communicate with each other, mainly for productivity purposes: to swap shifts or check a payslip, but not to carry out functions directly related to their work. This is an area where rivals like Yoobic have been building features, and Ilg said that Flip is also starting to look at how it might, too. “Flip offers a chance for every deskless employee to truly participate in their own company’s communication process. There is huge potential in actively integrating these employees. We look forward to supporting Flip with our expertise and experience as it expands in the English-speaking market,” said Jos White of Notion Ventures in a statement. |
Scale AI gets into the synthetic data game | Kirsten Korosec | 2,022 | 2 | 2 | Scale AI’s path to becoming a $7.3 billion company was paved in real data from images, text, voice and video. Now, it is using that foundation to get into the synthetic data game, one of the hotter and emerging categories in AI. They announced Wednesday an early access program to , a product that machine learning engineers can use to enhance their existing real-world data sets, according to the company. Scale hired two executives to build out this new division of its business. Scale hired Joel Kronander, who previously headed up machine learning at Nines and was a former computer vision engineer at Apple working on 3D mapping, as its new head of synthetic data. The company also hired Vivek Raju Muppalla as its director of synthetic services. Muppalla was previously director of engineering for AI and simulation at Unity Technologies. Synthetic data is as it sounds: fake data that has been created by machine learning algorithms rather than using information from the real world. It can be a powerful and handy tool for generating data — like medical imaging — when privacy is a top concern. Founder and CEO Alexandr Wang described its new offering as a hybrid approach to data, akin to lab-grown meat. “We start with real data, just like how lab grown meat starts from real animal cells, and then grow and iterate and build the product from there,” he told TechCrunch. By using real-world data as the base to create synthetic data, the company is able to offer a really unique and powerful offering for customers, Wang said, adding that this was a gap they saw in the market. Scale customers saw that gap as well. The company’s push into synthetic data was in response to demand from its customers, Wang told TechCrunch, who said they started building out the product less than a year ago. Autonomous vehicle technology developer Kodiak Robotics, Tractable AI and the U.S. Department of Defense have all tapped Scale for its new synthetic data product, Wang said. Scale, which today employs about 450 employees, views synthetic data as a top priority in 2022, and an area that it will continue to invest in as it builds out its product line. But that doesn’t mean it will take over its real data business. Wang sees synthetic data as a complementary tool that will help developers “get more bang for their buck out of their algorithms and other AI and particularly with edge cases. For instance, autonomous vehicle companies typically use simulation to recreate scenarios from the real world and play it back through to see how the autonomous system will handle it. But real-world data might not provide the scenario they’re looking for. “You don’t run into scenarios in the real world too often where there might be, say 100 bicyclists crossing at once,” Wang explained. “We can start from real-world data and then synthetically add all the bicyclists or all the people and then that way, you can train the algorithm properly.” |
Kenyan insurtech startup Lami enters Malawi, DRC after acquiring Bluewave, eyes rest of Africa | Annie Njanja | 2,022 | 2 | 2 | Kenyan insurtech startup has acquired Bluewave Insurance Agency for an undisclosed amount as it seeks to make insurance covers accessible to more people across Africa. Bluewave insurance, also a Kenyan startup, was founded by Adelaide Odhiambo, who now joins Lami as the head of commercial partnerships. Since its launch in 2016, Bluewave has built an online platform that allows clients to access micro-insurance products through diverse channels, including USSD, SMS, WhatsApp chatbots and web applications. In the new arrangement, Lami will integrate Bluewave’s technology into its core platform, further enhancing its B2B2C capabilities. The deal has also opened up new markets for Lami in Malawi and the Democratic Republic of Congo (DRC), where Bluewave already has operations. By having access to Malawi, for instance, Lami will tap thousands of smallholder farmers, including the 60,000 already on Bluewave’s database. Lami Technologies founder and CEO , during an interview about the acquisition, told TechCrunch that, “One of the things that really made us excited about this opportunity was the fact that we are working towards a very common vision of democratizing access to insurance. Our visions were very much aligned.” “The Bluewave team had created modules (like USSD-based micro insurance products), which we felt could particularly enhance our B2B2C offerings. They’ve done quite a lot of work around claims modules for micro insurance products. All these different things can be integrated into the core Lami platform. We can also continue to build on top of it, and also use parts of our technology to enhance offerings, like our advanced pricing modules, to make that experience much better,” said Abass. Lami is eyeing additional markets in North and West Africa this year. Lami Technologies The acquisition comes at a time when Lami is looking to enter Nigeria and a number of countries in North Africa. Outside Kenya, Lami is in other markets like Uganda and Tanzania through partnerships. “We’re looking at additional markets this year. That’s our core focus and why this acquisition was super-exciting; it gives us the upper hand as we continue to expand,” she said. Innovations and expansion of digital services like Lami’s are driving insurance uptake by allowing micro-payments, flexible sign-ups, fast-turnaround time for claims and access to a wide range of services through mobile phones. In is less than 3%; and if you take out South Africa the coverage drops to 1.2%. It is this gap that drove Abass to build Lami, which was launched in Kenya in 2018. Lami co-designs products with its underwriting partners, extending unique insurance products to their customers, and through its technological infrastructure, facilitates the distribution of insurance products via a B2B2C approach. The startup’s API allows entities like banks to offer digital insurance products to their customers — reaching the masses conveniently. Over the years, Lami has integrated its API with 12 entities in various sectors, including logistics, e-commerce, banking and fintech, extending different products to their users. Among the companies that Lami has existing partnerships with is Sendy, a digital logistics startup, and Kwara, a neobank for credit unions. The partnership with Sendy enables freight carriers in East Africa (Kenya, Uganda and Tanzania) to access transit insurance per-trip basis, while its work with . As technology continues to inspire new products and processes, Abbas projects that the insurance sector is going to face constant disruption geared towards more personalized products. “You’re going to see a lot more data driven pricing that takes into account the risks involved,” she said. “And I think that’s going to really help make products more affordable, because there’ll be more customized products. I think we’re also going to see a lot more use of AI, particularly around claims processing and also for pricing.” |
Annotell raises $24M for tech that tests autonomous vehicle perception systems to improve how they work | Ingrid Lunden | 2,022 | 2 | 2 | As the automotive industry inches slowly ahead on the road to self-driving vehicles, we’re seeing the emergence of startups aiming to fill in some of the technical gaps in autonomous systems as they exist today. In the latest development, , a startup out of Sweden that makes software to assess the performance of autonomous systems’ perception capabilities, and how to improve that, is today announcing that it has raised $24 million to expand its business. Daniel Langkilde, the co-founder and CEO of Annotell, likens what the company does to “a vision exam for cars, for them to get their drivers license, just like you might take a test to determine if you are fit for driving,” he said in an interview. “Annotell’s platform helps you understand the system’s performance and raise it. We guide our customers on how to improve it.” That is to say, Annotell’s products encompass analytics that test and measure the quality of a company’s data, and “ground-truth” production to improve those data sets. The aim, he added, is not perfection but predictability, just as important for the semi-autonomous platforms (e.g. advanced driver assistance systems) that exist already today as for the fully autonomous cars that many are hoping to build for the future. “The system may not always be right, but you need to know what it can or can’t do, in order to use the system safely.” The Series A round is being co-led by Metaplanet — the Estonian VC headed by the co-founder of Skype Jaan Tallinn that most recently also invested in and was an early backer of Google-acquired DeepMind — and NordicNinja — a Japanese-backed deep tech investor. Previous backers Ernström & Co and Sessan AB also participated. Gothenburg-based Annotell has now raised $31 million, and it’s not disclosing valuation, but for some context, its customers include a number of the world’s biggest carmakers, their main suppliers and the big pure-play self-driving car companies. The gap in the market that Annotell is looking to fill is a pretty critical one: Autonomous systems are built on huge troves of driving data and machine learning used to process that information to “teach” those platforms the basics of driving. Using computer vision, those systems in turn can recognize red lights, or a stopping car, or when to make a turn, and so on. The problem is that these systems’ responses are based on the data that they have been fed. Autonomous systems typically can’t “reason” and make the leap to decide how to respond to an unknown variable, such as those that a vehicle will inevitably encounter in the real world. “Machine learning is bad at processing rare but important things,” Langkilde said. Langkilde who co-founded Annotell with Oscar Petersson — both are physicists who specialize in deep learning — said he encountered that problem when he previously worked at a different company, the threat intelligence startup Recorded Future, where he was tasked with gathering intelligence data to feed and teach the platform to better identify threats. Malicious hackers are precisely focused on finding gaps to create vulnerabilities, and that effectively upended a lot of the work his team would do to identify patterns to mitigate future attacks. “It highlighted the limitations to me of brute force machine learning when you are doing mission-critical work,” he said. Autonomous driving systems face much of the same issue, but it’s even more critical to get right, not least because there are lives at stake if something goes wrong. This also brings in more levels of safety and control that companies need to pass through to bring their products to market, and get consumers to trust and subsequently buy and use them. “For people to trust machine learning and AI we have to take safety very seriously,” he said. “There is a huge difference between making the wrong recommendation on a film service and running a stop sign or running into someone. We also take that seriously. That’s why we wanted to focus on the problem.” The extra layers of safety regulation, meanwhile, also point to specific use cases and market opportunities for Annotell: It’s not just about improving systems for its customers, but creating a body of data that agencies and regulators can also rely on to give a particular product the clearance to be used. Annotell’s approach to complementing what machine learning can teach systems is as progressive as autonomous systems are today: in part it tests and formalizes the limitations of systems that by their nature are not designed to be fully autonomous (these are the systems we have today to assist, not replace, drivers). Over time, he said, fully autonomous might also incorporate other kinds of AI approaches, such as the Bayesian Networks that are used to build causal inference algorithms. (A causal AI startup we covered last week was more dramatic, that causal AI was the only hope for self-driving to become a reality, although even then it’s a big leap and will take a lot of time to come to fruition.) For now, though, the startup is focusing its tech on safety of systems with any degree of autonomy already built in, a massive opportunity. |
With a $22B run rate, does it matter if Google Cloud still loses money? | Ron Miller | 2,022 | 2 | 2 | has been chasing competing services from Amazon and Microsoft for so long, you might think it would be getting winded. But keeps on keeping on, yesterday of more than $5.5 billion for the fourth quarter. That was the good news. The bad news was that Google Cloud accrued operating losses worth $890 million at the same time. It may be hard to understand how a business with a run rate greater than $22 billion is losing money, but chief financial officer Ruth Porate explained it in with analysts. It basically comes down to spending money to make money, while also competing with its much more successful rivals. (She refers to Google Cloud as simply Cloud here.) “While Cloud operating loss and operating margin improved in 2021, we plan to continue to invest aggressively in Cloud given the sizable market opportunity we see. We do remain focused on the longer-term path to profitability and over time, operating loss and operating margin should benefit from increased scale,” she said . Those investments are expensive and produce lumpy profit results. For example, while Google Cloud’s operating loss narrowed from when it was over $1 billion, the final quarter of 2021 saw the group lose more money on an operating basis than it did in the , when the figure had declined to a more modest $644 million. Still a lot of money, but a smaller loss all the same. It’s also worth remembering that while the progress that Google Cloud has made in revenue terms is impressive, the division still remains smaller than other Alphabet incomes. YouTube ads is a far larger business, for example, with $8.6 billion in Q4 revenues. Sadly, as Alphabet doesn’t break out YouTube profitability, it’s hard to directly compare the two. , chief analyst at , a firm that keeps close tabs on the cloud industry market, says the loss isn’t worrisome at this stage. “Google Cloud reporting a loss is not a big deal at all. Businesses of this nature require a lot of upfront investment and buildout of infrastructure and often don’t break even for several years,” he told TechCrunch.. “AWS made a loss for many years and was quite clear that it was making a conscious choice to plow cash being generated back into investing in t |
Daily Crunch: With $4M pre-seed round, Casava sets new funding record for African insurtech | Alex Wilhelm | 2,022 | 2 | 2 | Hello and welcome to Daily Crunch for Wednesday, February 2, 2022! Today we’re talking about AI code generation, fintech declines and the creator economy. Yes, it’s a grab bag because there’s just so darn much going on. Read on to catch up! – Today we’re talking crypto, creators, and a full-on of funding rounds. Sound good? Let’s have some fun. From the world of crypto, from on a huge new capital event is illustrative of where we are today: Investors’ latest NFT bet is on a startup called Pixel Vault — a massive NFT collection of superheroes that has the goal of growing into a decentralized Marvel-esque empire. The NFT startup tells TechCrunch it has closed a whopping $100 million in funding from Adam Bain and Dick Costolo’s 01 Advisors and Velvet Sea Ventures. Is it possible to create lasting new IP on the blockchain? Are these investors suddenly into consumer mythology because they want to build a new creative universe, or because they want to turn a quick buck? Matney says in the piece that those more skeptical see NFTs as “a space full of capital-obsessed hucksters who want to choke all of the lasting value from popular culture,” while fans “see a new technological revolution.” At least investors are putting their money where their hopes are. And because everyone now must have a crypto project, Anthony Levandowski – famous for getting into trade-secret trouble and being pardoned by former U.S. President Donald Trump – is . Turning to creators, TechCrunch has two pieces up today that are worth your time. The . And the Equity team – of which I am a member – on the creator economy and platform economics. Enjoy! Now, the funding round rundown! And to close out our startup notes today, . Rarely does my partner’s life – she owns and wears Stoggles on the regular – and this publication intersect, but here we are! / Getty Images You wouldn’t hire a plumber to redo your wiring, and you shouldn’t hire a web3 developer if you’re building a team for your metaverse startup. Investors are swooning over startups in these sectors, but a fat pre-seed check is not a hiring strategy. Making matters more difficult: most developer talent is focused in a few verticals, and any offers you make must compare to incentives from companies like Apple and Microsoft. “Engineers don’t want to only be putting out fires, they want to create and pioneer projects,” says Sergiu Matei, founder of remote talent platform Index. SEAN GLADWELL / Getty Images TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this along to your clients; we’d like to hear about why they loved working with you. |
Facebook isn’t growing anymore | Taylor Hatmaker | 2,022 | 2 | 2 | The biggest social network in the world isn’t getting any bigger. Meta posted its Wednesday, sharing financials that disappointed Wall Street enough to send its stock into a nose dive. Shares of the company, still trading under the ticker symbol FB for now, plunged 20% as the numbers hit. While Meta’s last quarter saw some expected trends play out, including Apple’s iOS privacy changes , it also surfaced the novel fact that Facebook, Meta’s core app, is no longer attracting new users. Facebook’s monthly active users (MAUs) remained flat from the third quarter of 2021 to the fourth at 2.9 billion. Worse, its daily active users (DAUs) fell from 1.93 to 1.929 billion in the same period — a first for Facebook, which is known for a growth-at-all-costs approach. Some of this is intuitive. Facebook is a mature product (to put it gently) and there are only so many humans in markets around the world left for the company to sign up. And the company is putting more emphasis than ever on its “family” of apps, including WhatsApp and Instagram, fresher products that likely still have a ways to go to reach that kind of saturation. The user growth slowdown came in the same quarter that the company formerly known as Facebook announced that it would rebrand as a “metaverse” company, complete with plans to steer its resources toward building immersive virtual experiences. The good news for Meta is that it still owns the world’s biggest social graph. The bad news? Even if a user slowdown was expected, it’s just one more thing making Facebook — and consequently Facebook’s “Family of Apps,” as Meta calls it — look more like a relic from the past rather than a shining vision of the future. |
Homeland Security eyes robot dogs to patrol the southern border | Brian Heater | 2,022 | 2 | 2 | The United States Department of Homeland Security ongoing work with its Science and Technology Directorate exploring the use of quadruped dog robots on the nation’s southern border. Specifically, the department is deploying these Spot-like robots to patrol stretches that might otherwise be inhospitable to human agents. “The southern border can be an inhospitable place for man and beast, and that is exactly why a machine may excel there,” the DHS’s Brenda Long said in a statement tied to the news. “This S&T-led initiative focuses on Automated Ground Surveillance Vehicles, or what we call ‘AGSVs.’ Essentially, the AGSV program is all about…robot dogs.” The program is partnering with Ghost Robots, a Philadelphia-based firm that has, in the past, worked with large corporations like Verizon. More recently the company when one of its robots was seen sporting a remote-controlled sniper rifle (SWORD Defense Systems Special Purpose Unmanned Rifle or SPUR) at a trade show. It’s a line that the best-known quadrupedal robotics firm, Boston Dynamics, hasn’t been willing to cross, despite earlier conversations with DARPA. The stated use for these robots on the border is patrolling. The systems can wander autonomously or be controlled remotely, sending live video feeds to operators. There’s certainly no indication here that these robots would be equipped with any sort of weapons systems of course, in spite of that being the thing that put the company on many people’s radar. For its part, Ghost says it proudly partners with the U.S. government and takes a largely agnostic approach to things like payload. “We don’t make the payloads. Are we going to promote and advertise any of these weapon systems? Probably not,” CEO Jiren Parikh told me in an interview last year. “That’s a tough one to answer. Because we’re selling to the military, we don’t know what they do with them. We’re not going to dictate to our government customers how they use the robots. We do draw the line on where they’re sold. We only sell to U.S. and allied governments. We don’t even sell our robots to enterprise customers in adversarial markets. We get lots of inquiries about our robots in Russia and China. We don’t ship there, even for our enterprise customers.” DHS cites myriad reasons for interest in technology, beyond the often inhospitable nature of the area. “Just like anywhere else, you have your standard criminal behavior, but along the border you can also have human smuggling, drug smuggling, as well as smuggling of other contraband—including firearms or even potentially, WMD,” U.S. Customs and Border Protection Agent Brett Becker says in the post. “These activities can be conducted by anyone from just a lone individual, all the way up to transnational criminal organizations, terrorists or hostile governments—and everything in between.” There’s no specific time frame for deployment noted in the post, but the team is field testing robots equipped with things like night vision and they are being put to work in outdoor spaces and scenarios designed to mimic residential buildings. “Technology such as semi-autonomous drones (air, ground, and even water) are used effectively as force multipliers elsewhere—and robot dogs are no different,” Long said. Given the history of the United States government’s use of drones, however, it might not be the ideal connection for the DHS to draw in singing the praises of putting robots to work in the field. |
Why Facebook and Spotify are getting hammered in after-hours trading | Alex Wilhelm | 2,022 | 2 | 2 | If you own stocks, bad news, you probably just lost money. Social networking giant Meta, better known as Facebook, is off more than 20% in after-hours trading. And Spotify, music streaming impressario and podcasting middleweight, is off more than 15% after the close of trading today. Both sharp declines come in the wake of , which also saw its shares fall, and pretty good results from Alphabet. Alphabet’s strong Q4 performance is starting to look more like an outlier than median-indicator. Let’s talk Meta, and then Spotify, and parse out just what is going on. In the fourth quarter, Facebook revenues of $33.67 billion, leading to operating income of $12.59 billion, and net income of $10.29 billion. The company also posted earnings per share of $3.67. How did those figures compare to analyst expectations? Per , analysts had expected the company to post $33.41 billion in revenue, and earnings per share of $3.84 billion. So Facebook managed solid top line even if it missed on per-share profit. The profit miss was not merely a few cents per share, however; it’s a bigger problem for the firm. To make the point, let’s do some year-over-year comparisons. In Q4 2020 Meta had operating income of $12.76 billion, or about 46% of its revenues in the same period. The latter figure fell to just 37% in its most recent quarter. That’s a dramatic decline in operating profitability to stomach. Inside the rising costs that shed profitability at Meta are its VR or so-called metaverse investments. Reality Labs, what Facebook says includes its “augmented and virtual reality related consumer hardware, software and content,” brought in $877 million in revenue during its most recent quarter, up from $717 million in the 2020 Q4 period. However! Reality Labs’ operating loss was $3.3 billion in Q4 2021, sharply higher than its $2.1 billion in Q4 2020. In short, the metaverse push at Meta is so far not the goldmine that its core business has proved over the years. And that lack of easy profit is harming the company’s overall results. Metaverse is far from the shits-gold-a-verse that the company clearly expects it to become in time. Things get worse for Meta if we look ahead. The company’s CFO said that it expects “first quarter 2022 total revenue to be in the range of $27-29 billion,” which works out to growth of 3% to 11%. Which is not good. Analysts had expected Meta to generate $30.14 billion in Q1 2022 top line, so the company’s guidance is freaking miserable. Down went the stock. Leaving aside the Joe Rogan situation, Spotify is still having a pretty tough week. After falling 5.75% during regular trading, the company has lost a double-digit percentage of its value in after-hours trading. Why? The company to best profit expectations, losing about 50% less per share than the market expected. And its revenues of €2.69 billion were a few bips ahead of expectations for the Q4 2021 period. And yet it’s getting smashed. Why? As with Meta, it’s the future that is the problem. Spotify expects to scale from 406 million monthly active users at the end of 2021 to 418 million in Q1 2022. And it expects to grow its paid user base from 180 million to 183 million during the same three-month period. How off are those figures? SeekingAlpha 185.3 million paid users in Q1 2022, and 422 million monthly actives. So Spotify managed to do well in its last quarter, but investors are far from thrilled about its upcoming performance. We’re seeing more tech companies come afoul of the investing public in recent weeks than I can recall for some time. More meta-analysis is needed, but it does appear that the change in the wind for tech companies is not just something happening to SaaS companies or recent IPOs. A lot of folks are taking stick. |
3 views: What does ‘Line Go Up’ tell us about the state of the NFT art market? | Walter Thompson | 2,022 | 2 | 2 | market is incredibly hot. Collectors spent $22 billion on NFTs in 2021, up from $100 million the year before. Late last month, Canadian videographer Dan Olson released about his strongly held views on web3 and blockchain technology titled “Line Goes Up — The Problem With NFTs.” In a nutshell: Olson asserts that web3’s technological limitations are such that it will never deliver on its vaunted promises. He goes a bit further, essentially describing cryptocurrency as a scheme that creates more problems than it solves, is inherently inefficient, and allows early adopters to fleece later entrants until the system runs out of . I asked John and Alex to share their thoughts on Olson’s video as a point of departure for discussing the state of the crypto industry in general. Here’s where we ended up: It is factual to describe cryptocurrency projects and non-fungible tokens as speculative in nature. It’s also inarguable that early crypto adopters, who enjoy a tremendous advantage over later entrants, are prone to gloss over widely discussed ethical concerns about how much energy is required to produce these digital items and how they are marketed. That’s important, but there’s another issue at work here: Right now, NFT projects are, just barely, minimum viable products blockchain investors are using to validate their assumptions. Non-fungible tokens have all the hallmarks of an MVP: a high barrier to entry that discourages all but the most enthusiastic early adopters, a minimal feature set, fluid use cases, and suggestions of future benefits that will more than offset today’s growing pains. found that about 16% of Americans have bought cryptocurrency so far, which shows how quickly it’s catching on. Publicly traded companies like Nike and Visa are spending millions to get in early on these unregulated, highly speculative investments. Also worth noting: if they had an emergency expense. As an entrepreneur who helped popularized the MVP framework, once wrote, “you’re selling the vision and delivering the minimum feature set to visionaries, not everyone.” NFT auction marketplace OpenSea, home of the Bored Ape Yacht Club, closed last month that valued the company at $13.3 billion. According to CEO Devin Finzer, the platform increased its transaction volume by “over 600x” in 2021, earning hundreds of millions in transaction fees. |
These are the 6 companies in Graham & Walker’s latest accelerator class | Greg Kumparak | 2,022 | 2 | 2 | , an accelerator and venture fund focused on helping female and non-binary founders, has announced the latest batch of companies to enter its accelerator program. I hopped on a call with G&W founder Leslie Feinzaig to hear what’s new with the program and what these six new companies are up to. If you’re unfamiliar with Graham & Walker, you might know it better by its former name: . The group rebranded to Graham & Walker at the end of 2021, alongside an announcement that they’d raised a $10 million fund. Haje wrote up the details of the rebrand — and the thinking behind the new name — . Likewise, you might see G&W’s accelerator program referred to as both “the Graham & Walker Accelerator” and “Ready Set Raise”; the latter was the accelerator program’s name prior to the rebrand, but the classic name still pops up from time to time. The Graham & Walker accelerator is a six week virtual program meant to help the participating founders take their early-but-proven businesses to the next level, and to navigate the complexities of fundraising and storytelling. The companies get one-on-one coaching, investor/mentor access and PR support in exchange for 5% equity. Graham & Walker’s Demo Day for this group is scheduled to take place on March 3rd, 2022. Bilin Academy Online classes for multilingual families looking to strengthen their kids’ grasp of a culture and language, using immersive activities to teach rather than focusing solely on the language itself. It currently offers classes like chess, art, debate and calligraphy, with most classes currently led in Chinese. Blink Date A voice-first dating app. Rather than having you swipe through a thousand profile pictures, they match you with another user for a 10-minute voice-only conversation. After the conversation, a “Glance” feature offers up a handful of pictures that might be the person you spoke to. If all the stars align and both sides are interested in talking more after the voice date/glance, a match is made. Local,Away Love the way people dress in New York, or Seattle, or Paris? Local,Away is building a region-focused fashion platform, allowing influencers (or “styletrotters” as they call them) in a given area the ability to highlight trends, local brands, and make money for finding ‘fits. Obánj A monthly membership program for borrowing high-end jewelry — think Dior, Hermés, etc. Membership costs $49 or $99 a month (for one piece or three pieces of jewelry at a time, respectively); you can keep a piece as long as you want (assuming you keep your membership active), or swap it out with free shipping in both directions. OpenField A tool for organizing efforts to get the word out (think political canvassing, or distributing vaccine information) either by knocking on doors or via phone banking. You tell them where you want to talk to people, and their platform helps divvy up the duties, share conversation-starter scripts, track notes on conversations you’ve had with a household, etc. SaySo An enterprise tool for modifying a speaker’s accent in real time — like, for example, making an accent more subtle when you’re talking on the phone to someone in another region — while preserving “the speaker’s voice and intonation.” |
Anthony Levandowski’s latest moonshot is a peer-to-peer telecom network powered by cryptocurrency | Kirsten Korosec | 2,022 | 2 | 2 | data network — accompanied by the quinfecta of a , Medium post, , dedicated subreddit and Discord channel — quietly launched late Tuesday evening in San Francisco, promising a new way to exchange data anonymously and at high speeds without relying on legacy carriers, and at a cheaper price. The peer-to-peer open source wireless network called Pollen Mobile will incentivize its users with cryptocurrency to run their own mini cell towers and build out the network’s coverage in the Bay Area where the service is initially launching. Anthony Levandowski’s autonomous vehicle technology startup is launching the project. , a polarizing, early pioneer in the autonomous vehicle industry, last year by former President Donald Trump after being sentenced to 18 months in prison on one count of stealing trade secrets. Why is an autonomous vehicle startup creating a decentralized telecom incentivized by cryptocurrency? The catalyst of Pollen Mobile stemmed from Pronto’s need for reliable, affordable mobile connectivity for its autonomous vehicles, Levandowski, who is still CEO of Pronto, told TechCrunch in a text message conversation. Pronto has been using Pollen internally for its AVs for months. “The reason why is simple, we needed reliable, affordable mobile connectivity for our AVs and we couldn’t find it,” he wrote. “So we built our own and realized it could be something others want.” He added later: “Necessity is the mother of invention.” The distributed Pollen Mobile network, which plans to begin its initial launch in the coming days, relies on a network of data transmitters it somewhat oddly calls flowers, bumblebees and hummingbirds — code for radio towers, connectivity validation devices and mobile phones. An FCC rule change in 2020 allowed the company to build its own cell towers and create mini-mobile networks for the sites where its autonomous vehicles operate, according to its . “We got to thinking about all the other things that people don’t like about existing mobile companies. We saw an opportunity to build something truly revolutionary — something that tackles what we see as the “Four Horsemen” of mobile networks,” the Medium blog post states. These “Four Horsemen” are a lack of privacy and anonymity, poor coverage, high costs and no user voice.” Small cell towers called “flowers,” which range from the size of a pizza box to up to six feet tall, provide coverage of between a few blocks up to one mile. These flowers are installed by “flower owners” in their homes or offices and connect to the internet and provide coverage to other Pollen users. Flower operators earn PollenCoin (PCN) from the community of users depending on the coverage area, service quality and amount of data transmitted, according to information the company posted on its Discord channel. Operators pay the upfront cost for the physical data transmitter hardware; the cheapest (and smallest) flower costs $999 while the largest and most powerful transmitter costs more than $10,000. Justifying the high upfront cost means operators taking a leap of faith that the network will succeed and the value of PCN’s fixed supply will increase. Screenshot/Pollen Mobile One of the many open questions for the nascent endeavor is how or if ISPs will respond — the distributed network will be piggybacking onto flower operators’ home internet and will be channeling peer-to-peer data through those networks. The network currently has more than a dozen radio towers operating in the Bay Area, according to the company’s network tracker. Pollen Mobile will ship smaller devices called “bumblebees” that collect data about the strength of the network’s coverage. These devices, which validate “flower” coverage, are also owned by users and can be placed in their car, drone or bike. Bumblebee owners also earn PCN based on the number of unique coverage validations provided each day. Finally, there are the “hummingbirds,” which are the mobile devices that use the Pollen network. Phones will require an eSIM download to connect to the network, and other devices like laptops can connect via a special adapter (called “Wings”), the company said. Users pay for connectivity using PCN. Eventually building out a network of users willing to pay for a data network in its earliest stages will depend on selling the vision of a more anonymous mobile network which doesn’t sell or log customer data. The data-only network also won’t allow for phone calls or SMS messages, and users paying for the service won’t get a phone number. Pollen has so far been operated internally by Pronto as a subsidiary. Levandowski said it will be turned over to a decentralized autonomous organization, or eDAO, and run independently from there. The organization will eventually govern how the network evolves and dictate how and where users are incentivized to build out coverage. “We’re not controlling where flowers go,” Levandowksi told TechCrunch. “We designed the network so that the community and market forces will determine where rewards flow.” |
Travel experiences app Headout survives the Omicron surge, grabs $30M more in funding | Sarah Perez | 2,022 | 2 | 2 | Though the COVID-19 pandemic almost immediately devasted the business of travel booking startup , the company has been able to return to growth as domestic travel rebounded in recent months. The service, which helps consumers book tours, events and other experiences and activities in cities around the world, delivered 800% growth since January 2021 by catering to domestic travel and local demand, as opposed to international. By July, the startup became EBITDA profitable. And last fall, it closed on . Now its existing investors have returned to add more capital to Headout’s latest round. Headout’s new $30 million round was led by prior investor Glade Brook Capital, a firm that has backed other marketplaces like Airbnb, Uber and Instacart. It’s joined by existing investors Nexus Venture Partners, FJ Labs and 500 Startups, among others. “We were not actively raising,” notes Headout co-founder and CEO Varun Khona. “Glade Brook, an investor since September, saw the continued growth that we’ve had and wanted to double down on our investment,” he explains. The company, at this point, has survived challenges that could have otherwise ruined its business. As of the original close on the Series B, Headout’s “business went from doing $250 million+ to negligible scale in a matter of weeks,” during the early days of the pandemic. But instead of closing up shop, the startup pivoted to focus more on domestic travel, catering to people looking to explore their own cities or those nearby. Today, domestic travel accounts for nearly 80% of its business — a flip from its pre-pandemic days. And now, Headout has successfully navigated the Omicron surge, too. Headout users By November 2021, the company had seen about 10x growth compared with the beginning of the year, Khona told TechCrunch. But that growth slowed in December and January as Omicron spread. Over the past few weeks, however, Headout’s business ramped up yet again as the latest COVID variant began to peak. Counterintuitively, perhaps, the pandemic no longer fully quells demand for travel experiences, the founder notes. Sometimes, it even inspires it. “People are sitting on additional cash — and they’re not able to travel internationally — but the desire to travel, to see things, and to do things is as high as it has ever been,” says Khona. “In fact, in some ways, we are noticing that the consumer sentiment or desire to want to spend money and time or experiences is even higher post-COVID,” he shares. “We are now a little bit more aware of the limitations of what life could look like if the things that we love are taken away from us, both in terms of time and access.” Headout won’t detail its monthly active users, revenue run rate or valuation — it’s just “high hundreds of millions,” Khona says. However, the company will disclose that, so far, 10 million people from more than 190 countries have now booked an experience on its platform. Today, Headout’s marketplace offers travel experience bookings in 50 cities worldwide. It generates revenue by working directly with local service providers to digitize their offerings and provide support for last-minute bookings, priced dynamically. Headout takes a commission on the bookings and is dabbling with the idea of a subscription, which it’s now piloting. Its customers tend to be young couples or families, as the average booking size is either two to three persons. They also tend to be city-dwellers, fairly educated and love to travel, of course. With the additional funds, the startup aims to rapidly grow its business. It plans to expand its service to 500 cities in the next 24 months. And in the near term, Headout will grow its 150-person team by another 200 to 250+ people over the next couple of months by hiring across all roles. Khona also sees an opportunity in growing the team via acquisitions, noting that there were a lot of travel and entertainment startups out there that didn’t have the capital to survive the pandemic, but have a lot of great talent. “We’re very keen to look at that and we already are in conversations,” he hints. On the product side, Headout will use some of the capital to improve the experience both for its partners and consumers. For the former, it’s working on better ways to push out last-minute inventory and tools that would allow a tour to showcase the current live location of the guide for those who wanted to join late, for example. And for Headout users, the company is working on discovery improvements it’s not yet ready to detail. Despite the planned growth in the months ahead, Khona doesn’t expect to lose much of the new capital. “Every additional transaction actually improves our bottom line because every transaction on Headout is profitable. Increase in scale equals an increase in our bottom line and our profits,” he says. “We’re not too worried about the burn, per se.” |
Coatue leads a $69,420,000 funding round | Lucas Matney | 2,022 | 2 | 2 | Many crypto detractors contend that the web3 space is buoyed by meme money, so Coatue leading a $69,420,000 Series B in a blockchain startup shouldn’t leave them too surprised. The investment — made in crypto analytics platform — brings the startup’s valuation to $1 billion. The crowd-sourced data platform has grown to become one of the more favored dashboards analyzing movements in the crypto world. Multicoin Capital and Dragonfly Capital also participated in the deal for the 16-employee startup. Blockchains store massive amounts of transaction data and platforms like Dune are looking to help investors pull more insights from that data, analyzing moves on the Ethereum, Polygon, Optimism, Binance Smart Chain and xDAI blockchains. “There’s a ton of insights in crypto data, but without skilled and incentivized analysts coupled with great tooling this information will remain hidden beneath the surface,” a from Dune’s founders reads. “With this financing we’re doubling down on our mission to make crypto data accessible and are committed to bringing a million Dune Wizards to web3.” Coatue’s investment follows an $8 million Series A in Dune Analytics this past August. |
Lamborghini is still figuring out its first EV | Roberto Baldwin | 2,022 | 2 | 2 | CEO Stephan Winkelmann has no time for celebration, despite being at the helm of an automaker that posted an all-time sales record for 2021 — a milestone driven by demand for its ultra luxury Urus SUV. The leader of the Italian supercar maker has more pressing matters than basking in the glory of sales that grew more than 13% from the previous year or nearly selling out its entire 2022 production before January had wrapped up. Instead, Winkelmann is focused on navigating the brand into the world of electrification — a move that seems at odds with a company that’s known more for bombastic engines than efficiencies. Lamborghini has established some targets, notably that it will launch a hybrid vehicle in 2023. From there, however, the EV plan gets murky. Lamborghini is still determining how it will propel its vehicles with electrons instead of gasoline and what the overall experience will be for its customers. “We are looking a lot into the battery technologies and what type of engines you need on board to make a car ready for Lamborghini, but also ready for the decade,” Winkelmann told TechCrunch. “We have the benefit that we don’t have to be the first ones adopting EVs,” Winkelmann said. That means keeping an eye on what’s out there and trying to figure out the future. It’s a tricky landscape, EV technology continues to evolve rapidly. “Maybe we are talking about things which nobody cares about in five years’ time,” the CEO admitted. In its goal to be ahead of the pack, the CEO said that as an automaker they have to admit that they may be wrong on some things. That means making the right decision at the right time and not too far in advance. “We might have a good idea, which turns out not to be right five, six, seven or eight years down the road,” he added. The automaker does have an overall design plan at least. According to Winkelmann, Lamborghini’s first EV will be available in the second half of the decade and will not be a pure supercar like the Aventador and Huracan. Instead, it will likely be a versatile, 2+2, four-seater, two-door coupe with more ground clearance than you would expect from a Lamborghini, not counting the Urus. And of course, it will have the look and feel of a Lamborghini. If a non-supercar Lamborghini seems like blasphemy, this is where we remind you that the automaker sold the Lamborghini Espada GT, a two-door coupe, from 1968 until 1978. Lamborghini Espada GT. Lamborghini Expect the design of the vehicle will be futuristic because it’s an electric car, but also very aligned with the DNA of Lamborghini, according to Winkelmann. The powertrain will also likely bring the performance that Lamborghini owners have associated with the brand, thanks to the awesome power of EV torque. But there’s one crucial element that will be missing. The roar of the engine. “We have to see how this can be exchanged into a new view of what a supercar is all about,” Winkelmann said. Part of the appeal of the Lamborghini is its exhaust note. It’s part of the “look at me” bravado that comes with owning one of the automaker’s vehicles. They do have time to come up with something that fits the brand. But whether it’s an in-car only noise or an exterior sound is unknown. As for the upcoming hybrid vehicles, the first will be the Aventador V12 plug-in hybrid. The adoption of a PHEV powertrain helps the automaker comply with growing regulations that require vehicles to have the ability to drive under electric power in certain cities. The Lamborghini Countach LPI 800-4 has an aspirated V12 engine combined with hybrid supercapacitor technology developed for the Sián. Lamborghini On the combustion-only engines front, 2022 will be the last year in which the automaker introduces a non-electrified vehicle. It’s sort of fitting that the beginning of the automaker’s powertrain evolution will coincide with its 60th anniversary in 2023. The automaker is hoping to manufacture the upcoming plug-in hybrids for as long as possible as a way to appease both regulations and its die-hard fans. If the promise of lower emission synthetic fuels pans out, it would allow supercars to continue to be introduced and produced into the 30s. Eventually, though, Lamborghini and its CEO will have to make a decision about its first and subsequent EVs. “I’m proud in that I am able and honored to be part of this change,” Winkelmann said. But he contends that he understands the weight of what’s to come. “On the other hand, I have a higher responsibility not only for our people here with their families and their future but also to ferry the boat of the brand and the new products into a safe haven and into enthusiastic hands of our customers waiting for us on the other side of the shore.” So while it might be a bit premature to discuss some of the battery and powertrain technologies that’ll be in the upcoming all-electric Lamborghini, with a bit of bravado, he told Techcrunch that we should expect it to be “really incredible and very powerful and very true to the spirit of Lamborghini and we have enough time to do it. I’m very confident this will be a real Lamborghini when it comes out.” |
Sunroom is an alternative creator platform empowering women to cash in | Taylor Hatmaker | 2,022 | 2 | 2 | Founded by alums of Hinge and Bumble, Sunroom is a creator platform that throws out the stuff that makes mainstream social media apps such a hostile place for women. And, ideally, it wants to help them get paid in the process. The app was co-founded by Lucy Mort, former design director at Hinge, and Michelle Battersby, previously a marketing director at Bumble. Sunroom takes the premium monetization model of something like Patreon or OnlyFans and blends it with a social feed, run through a generously Gen Z design filter. For Mort and Battersby, that’s where the similarities end. is designed to provide an alternative to traditional social media apps, one that empowers people who are tired of seeing their content devalued and censored elsewhere. “We just heard so many stories from mostly women and nonbinary creators who really had a hard time on platforms like TikTok and Instagram with the sorts of content they were doing,” Battersby told TechCrunch. “Sometimes it was more body-positive content, sometimes they were doing sexual wellness content and Instagram and TikTok just got to the point where they’re heavily, heavily moderating that content… these creators are shadowbanned, their accounts are taken down without notice, they don’t get the same distribution on algorithms that they typically did.” The app launches today on iOS, stocked with content from a cluster of 100 initial creators who were invited to participate in the launch and monetize their content. The company is also announcing a $3.6 million seed round from investors including Blackbird Ventures, Li Jin, Cyan Banister, Sarah Downey, Peanut CEO & co-founder Michelle Kennedy and Brud co-founder Trevor McFedries. Sunroom co-founders Michelle Battersby and Lucy Mort. Sunroom Sunroom has a women-first ethos but it was also designed with the non-binary community in mind, and the team worked with non-binary creators to hear what wasn’t working for them on apps like Instagram. The founding team doesn’t rule out opening Sunroom to all creators in the future, but for now it’s laser-focused on its core demographic. At launch, a quick stroll through Sunroom touches on topics from body positivity to trauma to sex toys — the kind of stuff that pushes the boundaries on mainstream social apps if it’s allowed to exist there at all. To the team’s credit, the health and body content it hosts at launch seems to intentionally veer away from the kind of dangerous weight loss and dieting messaging that makes apps like Instagram such a toxic place for women in particular. Sunroom is explicitly sex-friendly, a philosophy that’s evident even in its content warnings, which ask users to opt in for “sex-positive or pleasure-positive themes.” The team isn’t trying to make another OnlyFans, but it does hope to lure creators who are tired of dealing with censorship and account bans elsewhere. “It’s just a deep, deep frustration on the part of our content creators with TikTok and Instagram,” Battersby said. “I think we definitely took that on board and integrated that into our content moderation approach and this is the content that we’re welcoming and celebrating on Sunroom.” With only 100 people making content at launch, Sunroom has a tiny pool of content to moderate right now — but that’s by design. The team intends to scale slowly and intentionally, an approach that will make hands-on moderation possible. As far as automated tools goes, Sunroom employs anti-screenshot technology to keep content where it’s shared. “We never want to automate a decision that affects a creator’s paycheck,” Battersby said. “This is an important part of our values and how we’re going to differentiate ourselves. We’ve set this business up to scale with caution.” Sunroom Beyond its values and the fun, feminine aesthetic, Sunroom is all about helping its creators get paid. The team believes that even beyond the other headwinds they face, women and non-binary creators struggle to break down the stigma of making money through their creative work. “… The problem that a lot of your women and nonbinary creators face is sort of an apprehension around monetization or a fear that they’re going to be judged or labeled as a sellout when they ask to be compensated for their content or their time,” Mort said. Sunroom tries to make transactions as comfortable as possible with intentional design choices that “abstract away” the money bit to keep things feeling light and playful. At launch, the app offers creators three revenue streams: monthly subscriptions, tips and reactions (like “cheering” a post using the in-app currency). Sunroom takes a variable cut of those transactions. The fee will typically be 20%, but its founding cluster of creators only pay 10% of their earnings and the company thoughtfully offers Black, indigenous and hispanic creators a more equitable 15% rate. Beyond taking a cut of creator revenue, the team is interested in building out personal finance tools, including banking and investment features to help creators leverage the money they earn on the app. For some creators, Sunroom could be the first place they feel comfortable enough to actually start making money. “The women and nonbinary folks that we’re building for… most of them don’t use a direct audience monetization tool right now,” Battersby said. Both Mort and Battersby see their experience with dating apps as key perspective for how Sunroom approaches its product. For Mort, that’s solving user pain points with thoughtful design choices. At Hinge that meant creating a product that worked for millennial women who were tired of hookup culture, but at Sunroom it’s all about empowering users to cash in on what they care about. For Battersby, it’s about building something for creators that meets the moment. “With Bumble, I think what I really witnessed was a product colliding with a social movement — a lot of Bumble’s success and the rise of that platform really came around the time of the Me Too movement and #BelieveWomen,” Battersby said. “With Sunroom I see great similarities. There is definitely a social movement occuring at the moment, particularly with Gen Z — they’re more sex-positive, they’re more self expressive and I think they’re becoming tired of being silenced or censored online when they speak about issues or causes that are important to them.” |
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