Samsung sent out invites for its August 11 Unpacked event last week. While it’s clear this is going to be packed (somewhat ironically) even by the company’s standards, the event may well be as notable for what it doesn’t include. Namely, a slew of rumors have pointed to Samsung skipping its annual Galaxy Note update.
In a blog post today, the company’s president and head of Mobile Communications Business, TM Roh, writes, “Instead of unveiling a new Galaxy Note this time around, we will further broaden beloved Note features to more Samsung Galaxy devices.” The language isn’t entirely clear what that means for the future of Samsung’s beloved – if occasional erratic – phablet. No Note this event? This year? This … ever?
Samsung offered TechCrunch the following clarification, “We will not be launching new Galaxy Note devices in 2021. Instead, Samsung plans to continue to expand the Note experience and bring many of its popular productivity and creativity features, including the S Pen, across our Galaxy ecosystem. We will share more details on our future portfolio once we are ready to announce.”
Early rumors chalked the lack of a new Note up to supply chain problems that have persisted throughout much of 2020 and 2021. But further speculation has left many wondering whether the company may finally be sunsetting the Galaxy Note series on the eve of its 10th anniversary. Is it possible that the pioneering phablet has run its course, especially as other Samsung flagships get larger and siphon off its biggest features?
What’s clear is that some of the devices announced on the 11th will follow in the footsteps of the Galaxy S21 and bring Note-like features including S-Pen functionality. Likely this means at least the Galaxy Z Fold, confirming earlier rumors that the foldable would be the latest Galaxy device to blur the line between it and the Note. Presumably this also means a further reinforced display for the product. Recent leaks point to a carrying case with a pen holster, rather than baking the slot directly into the Fold’s already complicated design.
“I hope you’ll join us as we debut our next Galaxy Z family and share some foldable surprises — including the first-ever S Pen designed specifically for foldable phones,” Roh writes. The executive also promises “even more refined style, armed with more durable, stronger material” on the new Galaxy Z Flip, while also confirming the arrival of a new Z Fold.
Rounding out the news is a reference to the One UI Watch that appears to confirm that the latest Galaxy Watch will also make a cameo at the upcoming Unpacked.
Reusable rocket startup iRocket has entered into a new partnership with NASA in its quest to reach commercialization in just two years.
The partnership will give iRocket access to testing facilities and engineering support, chiefly at the NASA Marshall Space Flight Center in Huntsville, Alabama. The company is hoping that it will conduct its first rocket engine test – an on-the-ground engine firing test – at the Huntsville site in September.
iRocket is earmarking $50 million over the next five years for the testing and development of its reusable engines and launch vehicle. Access to NASA facilities also means access to test stands – crucial infrastructure that provides controlled conditions for engine testing. iRocket will be able to conduct vacuum testing (which simulates space conditions) at the Glenn Research Center in Ohio and sea level testing at Marshall.
“We’re engaged in very intimate discussions, all the way at the center level, at Marshall Space Flight Center,” iRocket CEO Asad Malik said in a recent interview with TechCrunch.
The engines in question will eventually power iRocket’s inaugural Shockwave launch vehicles, fully reusable, autonomous small launchers capable of carrying payload with a maximum size of around 300 kg (661 lbs.) and 1,500 kg (around 3,300 lbs.). Manufactured via 3D printing, the engines will be powered by methane and liquid oxygen. “Methane is going to be the fuel of choice for deep space missions,” Malik said.
The New York-based startup is also aiming to make the engines hypersonic-capable, an ambitious goal. But iRocket has ambitious plans. Malik wants to turn the company into the premier supplier for both reusable rocket engines and the rockets themselves. Because it’s designing both rocket stages to be reusable as well – a striking difference between it and other rocket developers – Malik said the company could one day not only launch satellites and cargo missions, but also clear space junk or retrieve experiments for biotech companies.
Malik pointed out that the sale of Aerojet Rocketdyne to Lockheed Martin – which is still under review by the Federal Trade Commission – is going to leave a gap in the market. “That’s going to open up the U.S. without an independent rocket supplier at a time when Congress is really pushing hard for us to move away from foreign-bought parts,” he said. “So it’s an opportunity for us to work with the government, the Pentagon, NASA and other partners to develop this next-generation space propulsion capability that we need.”
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Hello and welcome to Daily Crunch for July 26, 2021. Tech news got off to a cracking start this week after the Chinese government spent the weekend rolling out a new regulatory framework for the myriad edtech startups in the country. The Ant IPO was really just the start of the recent blizzard of changes concerning how China’s government runs its economy. The food delivery market was also impacted recently, along with Tencent Music. I noodled a bit here on what the situation may mean for the country’s startups. — Alex
The TechCrunch Top 3 (or so)
Bezos wants U.S. space contracts:After retired U.S. billionaire Jeff Bezos recently went up to zero-g for a few minutes, much snark concerning the wealthy spending their fortunes on a vanity space race was tweeted. The flip of that argument is that there’s real-world applications for all the money that Bezos, Branson and Musk are spending. In this case, Bezos is willing to cut the price of Blue Origin’s lunar lander project just to get access to a NASA contract. This is either a neat way to save taxpayer money or some weird sort of corporate bribe. Your call on that one.
Box wades into the signature wars: The other month, Box, the former startup darling, dropped $55 million on an e-sig company. Now Box is rolling out Box Sign to all its customers for free. The e-sig market is full of big players (DocuSign) and smaller entities (PandaDoc). To see Box offer its e-sig service to existing business customers for no cost means that the software capability is becoming more table stakes than standalone product. Startups take note.
A new alt-food unicorn: NotCo makes plant-based milks and meats. It just carved itself a fresh slice with a $235 million Series D that values the company at $1.5 billion. We’re highlighting this round because it underscores the amount of capital and, we presume, demand that alternative food products are attracting today. What was a dream just a few years ago is building big startups and even some public companies.
Keep your password, but show your face: We don’t often wade into the nuances of the Fifth Amendment, but a judge’s order out of D.C. caught our eye. Alleged insurrectionist Guy Reffitt was arrested three weeks after the January 6 Capitol riot and faces five federal charges. The FBI seized his laptop, which was password-protected. However, prosecutors said it could be unlocked using Reffitt’s face. The government used a “loophole in the Fifth Amendment,” TechCrunch’s Zack Whittaker writes, to compel the use of biometrics to open a Windows laptop.
Kicking off our startup news today, make sure you check out this profile of Olumide Soyombo, a Nigerian angel investor who just put together a new fund. Soyombo’s brand-new firm, which he’s dubbed Voltron Capital, intends to invest all over Africa. It’s a potentially huge market for startups and venture capital, so expect more stories like this. How did it come to be? We’re sure that the check that Soyombo wrote to PayStack before Stripe bought it had something to do with it.
As we head into our regular digest of recent funding rounds, one startup sector that is not struggling to attract capital is facial recognition. Sure, you probably find it creepy that companies and agencies are tracking your face without your consent, but that isn’t stopping the financial class from pumping funds into the companies that comprise the facial recognition market. Zack Whittaker has the story here.
Faster protein sequencing is coming:That’s the news underneath Glyphic Biotechnologies’ new $6 million raise. The company’s tech could massively reduce the time it takes to sequence a protein, possibly unlocking all sorts of things in the health world.
Amazon-backed D2C beauty startup raises more:MyGlamm, an Indian direct-to-consumer company, has added to its capital base to the tune of $47.8 million. The company previously raised a $23.5 million Series C. Now it has lots more capital. Beauty is a huge market; D2C is a popular GTM model. And investors are willing to fund growth. That’s the story here.
Embedded fintech is hot:The embedded fintech space — when “complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products,” per our own Ingrid Lunden — is attracting new capital. This time it’s Solarisbank, a Berlin-based player, which is buying a competitor, Contis, to go along with its new $1.65 billion valuation.
Speaking of embedded fintech, Sila raised money: Yes, we have more on the world of fintech APIs. Sila, a “banking and payment platform,” TechCrunch wrote, just raised a $13 million Series A. The Portland, Oregon-based company was founded in 2018 and has raised $20 million to date.
Queenly raises more:A TechCrunch favorite from the most recent Y Combinator batch, Queenly has raised a seed extension (Seed 2? Early Series A? You can use whatever term you wish!) from Andreessen Horowitz. The company was light on growth details, aside from noting a 20% rise in dresses on its platform since February. The startup is akin to a StockX for formalwear.
Today’s SoftBank investment is Embark Veterinary: While it is often fun to recall some of the more exotic SoftBank investments — RIP Zume — Embark Veterinary wants to use DNA testing to help pets live longer. This we will not mock. As we own dogs, and dogs are very good. The $75 million in Series B values Embark at around $700 million.
Data-driven iteration helped China’s Genki Forest become a $6B beverage giant in 5 years
Many Extra Crunch readers will not have heard of China’s fastest-growing bottled beverage company: Genki Forest is a direct-to-consumer startup that started selling its sodas, milk teas and other products just five years ago.
Today, its products are available in 40 countries and the company hopes to earn $1.2 billion in 2021. After closing its latest funding round, Genki Forest is valued at $6 billion.
Industry watchers frequently compare the upstart to giants like PepsiCo and Coca-Cola, but founder Binsen Tang comes from a tech background, having funded ELEX Technology, a social gaming company that found success internationally.
“China doesn’t need any more good platforms,” Tang told his team in 2015, “but it does need good products.”
Leveraging China’s robust distribution network, lighting-fast manufacturing capabilities and a vast pool of data that enables holistic digitization, Genki Forest sells more than 30% of its products online.
“Everything feels right about the company,” said VC investor Anna Fang. “The space, the founder, the products and the back end … they exemplify the new Chinese consumer brand.“
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Big Tech Inc.
Two quick notes today from the world of Big Tech companies:
Earnings season is upon us: Many, many major tech companies are reporting their financial performance in the next two weeks. TechCrunch will cover the key bits, even if we’re not a public-markets publication. Still, keep your eyes sharp as it’s going to be a deluge of numbers.
Are you all caught up on last week’s coverage of growth marketing? If not, read it here.
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 survey along to your clients; we’d like to hear about why they loved working with you.
Join TechCrunch Managing Editor Danny Crichton for a Twitter Spaces event tomorrow, July 27, at 3:30 p.m. PDT/ 6:30 p.m. EDT. Danny will be joined by Seth Levine, the co-author of “The New Builders: Face to Face with the True Future of Business,” who will stick around for a Q&A after a chat about the book.
TechCrunch Disrupt $99 early-bird passes end Friday
Attention: $99 and under early-bird passes will disappear this Friday, July 30. Make sure you book your pass today and join the original startup conference. Disrupt delivers the best content, learning and networking opportunities for anyone interested in startups and tech. See you there!
Tesla reported Monday an eye-popping $1.14 billion in net income in the second quarter, results that blew past analyst expectations and marked the first time the company’s quarterly profit (on a GAAP basis) has passed the three-comma threshold. The results pushed shares up more than 2.2% in after-hours trading.
Tesla was able to beat expectations and log its eighth straight quarter of profitability even as it grappled with supply chain challenges and losses stemming from its bitcoin investment. Operating income was $1.3 billion, which increased year-over-year from $327 million, due to volume growth and cost reduction, the company said. Those positive results were partially offset by an increase in operating expenses, supply chain challenges, lower regulatory credit revenue and a the aforementioned bitccoin-related impairment of $23 million.
Supply chain challenges, notably the global shortage of semiconductor chips and congestion at ports, were two factors that affected its business in the second quarter. Tesla noted that it will continue to impact operations and its rate of delivery growth in 2021.
“With global vehicle demand at record levels, component supply will have a strong influence on the rate of our delivery growth for the rest of this year,” the company said in its shareholder deck released Monday.
Tesla reported revenue of $11.96 billion, a nearly 100% increase from the $6.04 billion it generated in the second quarter of 2020. Revenue in the second quarter was also higher than last quarter’s total of $10.39 billion. Analysts surveyed by Factset estimated $11.4 billion in revenue and $600 million in profit.
Tesla’s automotive revenue was $10.2 billion in the second quarter. Notably, only $354 million of that automotive revenue came from the sale of regulatory credits, 17% lower than last quarter and the lowest in the past four quarters. Meanwhile, Tesla’s automotive gross margins popped to 28.4%, a historic high for the metric.
Tesla’s Q2 net income of $1.14 billion compared favorably with the $104 million worth net income in the same period last year, a gain just shy of 1,000%. That record-setting number is nearly three times more its Q1 2021 net income of $438 million. Tesla’s adjusted EBITDA in the second quarter was $2.24 billion in the quarter, up from $1.21 billion in the same year-ago period, a gain of roughly 100%.
Quarter-end cash and cash equivalents decreased to $16.2 billion in the second quarter, according to Tesla, which said that decrease was driven mainly by net debt and finance lease repayments of $1.6 billion, partially offset by free cash flow of $619 million.
Earlier this month, Tesla reported its produced 206,421 vehicles in the second quarter. Of those, the company delivered 201,250 vehicles, nearly 9% more than the first quarter of 2021.
In May, the neighborhood crime-watch app Citizen offered its user base $30,000 to track down a suspected arsonist on live video, only to discover that they’d sent a mob of civilians after the wrong guy. Now, Citizen is covertly hiring journalists to livestream on the app at crime scenes for $25 per hour through third-party websites. I’m tired.
Surely, this would be the end for the nascent platform. But like a cockroach after an apocalypse, the app chugged on. It rebranded itself as Citizen, added disclaimers that no one should interfere with a crime scene, reentered the App Store, and continued to raise VC funding. Now, the app is like a crowd-sourced crime blotter — as its App Store page says, “Citizen may notify you of a crime in progress before the police have responded.” But this level of hypervigilance can fuel panic, rather than make people feel safe — not to mention that user-reported crime incidents might be incorrect at best, and racist at worst. The app pulls data from 911 calls, but not all information in those dispatches are verified, which can be cause for false concern.
But Citizen can only function if it has enough of a user base, and its attempts to corral civilians to use the app have gotten more and more desperate. According to SensorTower, the app hit a monthly download high in June 2020, in the wake of widespread Black Lives Matter protests. (So, as the country protested police brutality, 677,000 people responded by downloading a policing app). But the following month, just 207,000 people downloaded the app. Since then, growth has been pretty stagnant — 292,000 people downloaded Citizen in March 2020, and 283,000 people downloaded it in March 2021.
In June, the Daily Dot reported that one specific user named “Landon” was livestreaming from multiple crime scenes in one day, attempting to interview witnesses and first responders — given how often he seemed to stumble upon these crime scenes, it seemed unlikely that he was just an enthusiastic app user. Yesterday, the New York Post reported on another user named “Chris” who livestreamed on Citizen from six emergencies in one day. Citizen confirmed that both Landon and Chris were working for the app as members of its Street Team.
“Citizen has teams in place in some of the cities where the app is available to demonstrate how the platform works, and to model responsible broadcasting practices in situations when events are unfolding in real time. We believe these teams will ultimately help guide our users on how to broadcast in an effective, helpful and safe way,” a Citizen spokesperson told TechCrunch.
Citizen has had Street Teams since the app’s launch; a spokesperson said that they’ve never tried to hide this. But these jobs are not listed on the Citizen website. Instead, they’re listed by a third-party recruiter called Flyover Entertainment on the JournalismJobs board without mention of Citizen. An NYU Journalism website shared a similar listing, which did include the Citizen name. Citizen confirmed to TechCrunch that both of these listings are for the app’s Street Team. Citizen pays $250 per day for a 10-hour shift in LA, and $200 per day for an 8-hour shift in NYC, which comes out to $25 per hour.
“Broadcast journalists have experience in broadcasting safely and responsibly. This is a requisite for our Street Team members,” said the Citizen spokesperson. When asked why these jobs were posted on third-party job boards, but not Citizen’s own website, the spokesperson reiterated that it was because Citizen specifically wanted to find journalists. However, it could presumably also find journalists on its own website.
Surveillance state vigilantism concerns aside, local news is dying, and Citizen is not built to be a substitute for neighborhood journalism. Sure, local newspapers report on crime too, and it’s not as though Citizen is doing something unprecedented by sending reporters to scope out crime scenes. But there’s a difference between reporting news and livestreaming from a crime scene on a surveillance app that only discloses who is a paid worker and who is an average civilian when directly asked. For an app that is modeled on “increasing transparency,” these covert job postings don’t feel so transparent. Plus, for an infrequent freelance gig with no benefits or paid time off that requires established broadcasting skills, $25 per hour is a pretty bad rate.
Now, Citizen’s latest attempt at growth is a paid service for $19.99 per month called Protect, which lets users send their location and a livestream from their camera to a Protect Agent. Citizen says its Protect Agents include former law enforcement officers and 911 operators, who can send an “instant emergency response” in case of emergency. This sort of seems like paying to get a personal 911 operator, which, again, feels like a poor alternative to policing, an already poor system.
Maybe Silicon Valley-bred tech companies aren’t the answer to the United States’ centuries-long crises of police brutality, racial profiling and surveillance. Maybe a better way to reduce crime is to ensure that all people have access to health care, jobs and affordable housing. Who knows!
TechCrunch previously called the Duolingo debut a bellwether of sorts for the larger U.S. edtech ecosystem; if Duolingo can price and trade well, investors in private companies may be more willing to invest, given a more proven and attractive exit market. On the other hand, if Duolingo prices weakly or trades poorly, the company could place a wet blanket atop the startup edtech world.
The fact that Duolingo is raising its IPO price range indicates that we are more likely on the path for a strong offering than a weak one.
For edtech companies that have hit unicorn status — like Masterclass, Course Hero, Quizlet and Outschool — it’s good news. For reference, those companies have raised $461.4 million, $97.4 million, $62 million and $130 million, respectively, per Crunchbase data.
What’s Duolingo worth?
The terms of the company’s IPO have not changed, aside from its proposed price. So, Duolingo is still selling 3.7 million shares in its debut, and some 1.41 million shares will be sold by existing equity holders. The company’s underwriters also reserved their right to buy 765,916 shares of the company’s stock at IPO price in the 30 days following its debut.
At the upper and lower bands of the company’s IPO price, its simple valuation excluding underwriter shares now lands between $3.41 billion and $3.59 billion. Inclusive of its greenshoe offering, those numbers rise to $3.48 billion and $3.67 billion.
Recall that when private, Duolingo’s November 2020 Series H valued the company at just over $2.4 billion. So long as Duolingo prices in its range, it will provide investors with a nice bump in the value of their investment. Duolingo was valued at just $1.6 billion in mid-2020, indicating that it has more than doubled in value since that investment.
The whole human proteome may be free to browse thanks to DeepMind, but at the bleeding edge of biotech new proteins are made and tested every day, a complex and time-consuming process. Glyphic Biotechnologies accelerates the critical but slow sequencing step, potentially cutting drug development times down by a huge amount, and the startup just raised a $6 million seed to bring its clever solution to market.
Proteins are at the heart of many new treatments and products; the ubiquitous and infinitely varied chains of amino acids twist into shapes that interact with cells, substances in the body, and other proteins, doing everything from interpreting DNA to controlling access to secure areas (“sorry, no potassium allowed”).
In the drug discovery and biotech world, proteins represent unlimited possibility — the right one could clamp onto cancer cells, facilitate natural healing processes, or prompt the creation of helpful substances. But finding and testing novel molecules is not easy — and a big part of that is sequencing, which confirms the exact makeup of the protein you’re trying to test.
Right now there are several large companies doing good business in the protein discovery world, and generally the process involves identifying the amino acid at the end of the protein chain, then snipping it off, identifying the next one, and so on until you’ve done the whole thing.
The trouble with this approach is that the protein’s shape or the molecular properties of the next amino acid in line can interfere with the process of binding to and identifying the one on the very end. As a result there’s a certain amount of uncertainty and a lack of unreliability inherent to the process.
Glyphic Biotechnologies changes that by adding a step where the target amino acid is detached first and then tethered nearby using a novel molecule called ClickP developed by one of the co-founders. A single stationary amino acid attached to a known molecule is much, much easier to identify, and when it’s done, the process repeats as before.
It’s briefly stated but the advance is significant. Current techniques in the antibody discovery space produce and inspect on the order of tens of thousands of proteins per week per (very expensive) machine. It sounds like a lot but with proteins essentially innumerable, it’s just a drop in the bucket. Even running 24/7 this rate doesn’t come close to satisfying demand.
Glyphic’s approach, utilizing ClickP and single-molecule microscopy (like that used by DNA sequencing giant Illumina), should be capable of millions to tens of millions per week, possibly climbing to billions in time. Even at the most conservative estimate you’re talking about orders of magnitude in improvement — those tens of thousands in the other techniques include lots of (perhaps mostly) repeat or junk information due to their use of B cell cultivation to produce the antibodies in question.
Image Credits: Glyphic Biotechnologies
Not only that, but because the ClickP process avoids the problem of interference from the next amino acid in the chain, it has way, way higher specificity and confidence. So you wouldn’t just be sequencing a hundred or a thousand times as many proteins, you’d be far more sure about the results.
At first Glyphic would be processing samples sent to them, but ultimately their tech could live in other labs as their competitors do now. Going from service to hardware sales and support is the current roadmap.
If everything works as advertised, Glyphic could be the new standard in protein sequencing just as demand skyrockets in the biotech world. To do so, though, it needs just a bit more time in the incubator.
The process they pioneered was the result of work done by co-founders Joshua Yang (CEO) and Daniel Estandian (CTO) at the lab of MIT’s Ed Boyden (on the team as “scientific founder”).
CTO Daniel Estandian, left, and CEO Josh Yang. Image Credits: Glyphic Biotechnologies
Yang explained that what stands between them and potential industry dominance is a mere matter of chemical engineering.
“My co-founder [Estandian] developed ClickP himself. The chemistry works,” he told me. “But as a spinout of an academic lab, we didn’t develop all 20 binders, because it would have bankrupted the lab. This isn’t an ‘off-the-shelf’ molecule.”
These binders are a bit like adapters that make the process work for each of the 20 amino acids. It takes time and money to engineer them, so they decided to show the system off with a handful first in order to get the cash to make the rest. “It’s really just about putting the time into getting them out there,” said Yang.
The $6.025 million seed round should finance the company through this early stage as it builds its platform. It was led by OMX ventures (which previously invested in 10X Genomics and Twist Bioscience), with participation from Osage University Partners, Wing VC, Artis Ventures, Cantos Ventures, Civilization Ventures, and Axial VC, and has an angel investor in Mammoth Biosciences CEO Trevor Martin.
Glyphic will be making its first home at Bakar Labs, the freshly inaugurated new Berkeley biotech incubator. There it will stay until it’s ready to take the next big step, likely hardware manufacturing next year on the back of an A round to be raised then. 2022 should then also see the company’s first paid services. And the antibody market, as large as it is, is only the beginning.
“Antibodies are just a starting point, as numerous applications can benefit from protein sequencing,” Josh explained in an email after we spoke. “Another high value area is in industrial biotechnology, where protein-sequencing-based screening of evolved enzymes can help identify enhanced or novel functions (e.g., better laundry detergents, waste-water treatment). Development of diagnostic tests would also benefit because, the more proteins you can sequence and identify in a sample set, the increased likelihood you can identify rare yet important biomarkers and/or develop a robust panel of biomarkers that together can detect or predict disease.”
A company like Glyphic may seem like a perfect target to get snapped up by one of the more deep-pocketed competitors out there, but Yang said they’re confident enough to ride it out.
“The activity in this space is insane. My co-founder and I really want to be the next Illumina or 10X Genomics — we really want to be that leader in proteomics.” And unless the competition has a few cards hidden up their sleeves, Yang’s ambition seems like a distinct possibility.
Ben Boissevain has 30 years of corporate finance experience at firms including White & Case and Barclays Bank, and 20 years of experience in the tech sector.
Despite the plentiful headlines about mega billion-dollar M&A transactions, record IPOs and the rapid growth of SPACs, small deals will continue to be the most likely exit for the vast majority of tech startups. In the over 30 years I’ve worked on M&A at White & Case, Barclays and my current firm Ascento Capital, I have seen too many startups that are not prepared for an exit via a merger or sale. This article will provide specific recommendations on how to prepare your startup for M&A.
While it is good to strive for a billion-dollar-plus sale, a successful IPO or a SPAC deal, it is practical to prepare your startup for a smaller transaction.
Global M&A hit record highs in the second quarter with a total deal value of $1.5 trillion, but smaller transactions vastly outnumber mega billion-dollar deals. The U.S. saw a total of 16,672 deals in the year ended June 31, but only 583, or 3% of that number, were valued at more than a billion dollars (FactSet). The IPO market is healthy again, but M&A still represents 88% of exits: So far this year, there were 503 IPOs and 5,203 deals, according to the CB Insights Q2 2021 State of Venture Report. After the SEC announced in early April that it was considering new guidance on SPAC IPOs, the rate of new SPAC issuances fell by around 90%.
While it is good to strive for a billion-dollar-plus sale, a successful IPO or a SPAC deal, it is practical to prepare your startup for a smaller transaction.
Here are a few recommendations that will prepare your startup for an M&A exit:
Track M&A in your subsector
Set up an alert on Google News for M&A activity in your subsector. For example, if your startup is in the IoT subsector, search for “IoT acqui” and this will pick up news stories on acquisitions in the IoT space. Save the search so you can go to Google News on a regular basis. Also track your closest competitors on Google News, particularly to see who is selling their company.
Prepare a list of likely acquirers
Prepare a list of the companies or firms most likely to buy your startup. This list should include domestic and international companies, businesses in non-tech industries, private equity firms and their portfolio companies, as well as VC-backed companies. Track these likely acquirers on Google News as well.
Consider executing a parallel track
Consider approaching the top 10 likely acquirers when you are raising the next round of capital. If your startup gets M&A offers and VC term sheets at the same time, this will provide your board of directors choices on the path ahead. Knowing the M&A activity in your startup’s subsector and the 10 most likely acquirers will impress VCs and increase the chances of being funded.
Lucid Group (formerly Lucid Motors) will be expanding its factory in Casa Grande, Arizona, by 2.7 million square feet, CEO Pete Rawlinson said Monday just hours after the company officially went public with a $4.5 billion injection of capital.
The company also said it has 11,000 paid reservations for its flagship luxury electric sedan, the Lucid Air.
Part of the expansion will be used to accommodate the manufacturing of Project Gravity, the mysterious title given to the automaker’s forthcoming luxury electric SUV, a Lucid spokesman told TechCrunch. Not much is known about Gravity at this point, other than that it’s scheduled to be available from 2023 and that it will use the same battery platform as the Air. Patent drawings submitted to the European Union Intellectual Property Office, first noticed by a member of the Lucid Forum, reveal little more than the renderings on Lucid’s website.
The company is also planning on bringing more of the component production in-house, including major pieces such as the body panel stampings, the spokesman added. These parts were being handled by an external supplier.
The Casa Grande City Council approved the plans to expand the nearly 1 million-square-foot space in March. The first phase of the factory, which cost around $700 million to construct, went up in a record 12 months after breaking ground. Lucid has said that it wants to expand production capacity from around 30,000 vehicles per year to up to 400,000.
Lucid has had a long, sometimes tenuous road to the public market. The company first set its sights on bringing an electric sedan to production as early as 2018, but it quickly hit funding challenges that pushed this timeline further and further back. Lucid received major funding in 2018 with a $1 billion investment from Saudi Arabia’s sovereign wealth fund, which continued to be its largest shareholder throughout Lucid’s merger with special purpose acquisition company Churchill Capital IV Corp.
That merger hit a bit of a hiccup last week when the company failed to garner a sufficient number of votes on a key proposal — likely due to the rise of retail traders and malfunctioning spam filters, executives said in an investor call.
Lucid, which will now operate under the name Lucid Group, is listed under the ticker symbol LCID.
Five weeks after Lordstown Motors issued a warning that it might not have enough funds to bring its electric pickup truck to market, a hedge fund managed by investment firm Yorkville Advisors has agreed to buy $400 million worth of shares over a three-year period, according to a regulatory filing posted Monday.
The tumult within Lordstown Motors, which has resulted in the resignation of its CEO and CTO, has put the company at risk of failing. This new agreement could allow Lordstown to continue by providing the much-needed capital required to produce its first electric vehicle. If approved by shareholders, hedge fund YA II PN will be able to purchase 35.1 million shares, or about 19.9% of outstanding shares.
The capital provides a lifeline to Lordstown, which has struggled in recent months. The hedge fund, which is able to buy the shares at $7.48 a share, could also benefit financially if the stock price rises.
Lordstown Motors is an offshoot of former CEO Steve Burns’ other company, Workhorse Group, a battery-electric transportation technology company that is also publicly traded. Workhorse holds a 10% stake in Lordstown Motors.
The Ohio automaker was founded in 2019, and within a year reached a deal to merge with special purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion. The company had planned to begin production of its Endurance pickup truck starting in the second half of 2021 at the former GM Assembly Plant in Lordstown, Ohio.
Those plans faltered and a series of missteps and allegations of fraud compounded the company’s problems.
In March 2021, Hindenburg Research, the short-seller firm whose report on Nikola Motor led to a Securities and Exchange Commission investigation and the resignation of its founder, said it had taken a short position on Lordstown Motors. Hindenburg said at the time that its short position was based on a company that has “no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.”
Hindenburg disputed that the company booked 100,000 pre-orders for its electric pickup truck, a stat shared by Lordstown Motors in January. The short seller said that “extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.”
Two months later, Lordstown reported in its first-quarter earnings that production volumes of the Endurance would likely be half — from around 2,200 vehicles to just 1,000 — due to a lack of funding.
Beth Esponnette is the co-founder and executive chair of unspun, a startup that makes custom-fit jeans from a body scan using machine learning and 3D weaving.
Elizabeth Holmes’ raspy, deep voice helped her raise more than $700 million for her now-defunct company, Theranos. When I step into any boardroom for a pitch, I can hear her croaking her favorite line: “I hope that less people will have to say goodbye too soon to people that they love.”
Sitting across from a venture partner, I wonder if they might feel more compelled by my words if I cut my hair short (really short), or grew a beard, or removed my pregnant belly. Would they take out their checkbook if I were more aggressive in what I promised? Would they be more interested in getting to know my business and me better if I passionately slammed the table?
Actually, very likely.
Holmes adopted a ridiculously low voice to get her startup off the ground in a world full of men. She promised impossible pinprick tests to detect hundreds of diseases and collected influential investors like Henry Kissinger, George Shultz, James Mattis and Betsy DeVos. She wore a Steve Jobs uniform — including the Issey Miyake turtleneck — and built a team of 800 brilliant people. Did she go overboard with her lies? Yes. But she’s not the only one. The Silicon Valley and venture landscape only exacerbated whatever beliefs she already had in her company and inclinations to promise the moon.
Last week at a virtual hearing, she pushed to keep a huge database of information protected from the government. Before that, she claimed to have made $100 million in revenue in 2014, when it was really $100,000. These things, among others, are hands-down inexcusable. But I still believe that she thought she was doing the right thing taking the universal advice of Silicon Valley: “Fake it till you make it.”
She once said, borrowing from previous thought leaders: “This is what happens when you work to change things, and first they think you’re crazy, then they fight you and then all of a sudden you change the world.” I wonder if she just thinks she’s now on part two.
Raising money to start a company is about two things: having connections and making an appearance. Connections are difficult to make when you’re a woman: “Only about 12% of decision-makers at VC firms are women, and most firms still don’t have a single female partner.”
And even if you have connections, building relationships can be a bit weird: My cofounders end up being text buddies with our investors, while I hear news of things in passing. We hit a peak of 2.8% of funding going to women-led startups in 2019, but in 2020, that dropped again to 2.3%, possibly because investors reverted to their standard habits of keeping their cards close during uncertain times. Furthermore, investors generally have expectations that are aligned with male tendencies. For example, identical slides and scripts that are read by men and women are judged very differently, with men overwhelmingly rated higher. Holmes’ deep voice, although off-putting, probably made her more convincing.
It’s not easy to replicate the fundraising success that Holmes had, though. If other women tried to emulate this, they’d likely be penalized: In general, forward men are viewed positively as assertive, while forward women are viewed as emotionally unstable. This is confusing because, inversely, if women retreat to stereotypically feminine behaviors, they are viewed as weak. Hillary Clinton got stuck in this during her presidential race — criticized for being aggressive and cold when stereotypically masculine traits and pegged as weak when showing stereotypically feminine traits.
To make matters worse, it turns out that in pitches, women are asked more preventative questions about potential loss and risk, while men are asked more promotional questions about upside and gains. Women can work around this by answering any preventative question in the positive. Holmes knew this deep down and played into it. That was the only way for her to win.
I am absolutely no “holmie,” but I do understand firsthand her need to role-play. I’ve been overlooked; hell, I’ve even been told to change my product line (bras) because venture capitalists won’t get it. And they didn’t. I gave in.
I don’t want to defend her, and I can’t. It’s so easy to drop a line at a party or a board meeting about how obnoxious she was in her venture, but what irks me is that we focus on her specifically as the problem, completely bypassing the environment that created her. I remember soaking up John Carreyrou’s tantalizing book thinking, “Wow, I’ll never do that,” as I started my company. But as I have seen the pressures and the biases, I can see how the system shaped Holmes.
Why don’t we judge the biased system we created as much as we judge the person it destroyed? She sticks out like a sore thumb because, well, how many Elizabeth Holmeses are there out there? These problems are so ingrained in the system itself, though, that as David Foster Wallace alluded to in the water speech, we can’t see them and we probably aren’t ready to repair them.
The next time someone jokes at a cocktail party about Holmes’ baritone voice, just remind them how dumb is it that we give more money to people with deep voices.
Former TechCrunch COO NedDesmond is now Senior Operating Partner at SOSV, which has invested in unspun.
A federal judge in Washington, D.C., has ordered a man accused of participating in the U.S. Capitol riot on January 6 to unlock his laptop “with his face” after prosecutors argued that the laptop likely contains video footage that would incriminate him in the attempted insurrection.
Guy Reffitt was arrested in late January, three weeks after he participated in the riot, and has been in jail since. He has pleaded not guilty to five federal charges, including bringing a firearm to the Capitol grounds and a charge of obstructing justice. His Windows laptop was one of several devices seized by the FBI, which investigators said was protected with a password but could be unlocked using Reffitt’s face.
Prosecutors said forensic evidence suggested that the laptop contained gigabytes of footage from Reffitt’s helmet-worn camera that he allegedly used to record some of the riot. Prosecutors asked the court if it could compel Reffitt to sit in front of the computer to unlock it.
The government took advantage of a loophole in the Fifth Amendment, which grants anyone in the U.S. the right to remain silent, including the right to not turn over information that could implicate them in a crime, such as a password. But some courts have ruled that those protections don’t extend to a person’s physical attributes that can be used in place of a password, such as a face scan or fingerprint.
In Reffitt’s indictment, the FBI said as much, arguing that compelling Reffitt to unlock his computer by sitting in front of it “would not run afoul of the defendant’s Fifth Amendment right against self-incrimination.”
Courts across the U.S. are still divided on the reading of the Fifth Amendment and whether it applies to the compelled use of a person’s biometrics. The U.S. Supreme Court isn’t likely to address the issue any time soon, rejecting two petitions in as many years to rule on the matter, leaving it largely up to the states to decide.
We’ve seen helmets and AI that can spot brain tumors, but a new hard hat can actually treat them, too.
As part of the latest neurological breakthrough, researchers used a helmet that generates a magnetic field to shrink a deadly tumor by a third. The 53-year-old patient who underwent the treatment ultimately died due to an unrelated injury, but an autopsy of his brain showed that the procedure had removed 31% of the tumor mass in a short time. The test marked the first noninvasive therapy for a deadly form of brain cancer known as glioblastoma.
The helmet features three rotating magnets connected to a microprocessor-based electronic controller operated by a rechargeable battery. As part of the therapy, the patient wore the device for five weeks at a clinic and then at home with the help of his wife. The resulting magnetic field therapy created by the helmet was administered for two hours initially and then ramped up to a maximum of six hours per day. During the period, the patient’s tumor mass and volume shrunk by nearly a third, with shrinkage appearing to correlate with the treatment dose.
The inventors of the device — which received Food and Drug Administration approval for compassionate use treatment — claim it could one day help treat brain cancer without radiation or chemotherapy.
“Our results … open a new world of non-invasive and nontoxic therapy … with many exciting possibilities for the future,” said David S. Baskin, corresponding author and director of the Kenneth R. Peak Center for Brain and Pituitary Tumor Treatment in the Department of Neurosurgery at Houston Methodist Neurological Institute. Details of the procedure have been published in the peer-reviewed journal Frontiers in Oncology.
Editor’s note:This post originally appeared on Engadget.
MyGlamm, a direct-to-consumer beauty brand in India that sells most of its products through its own website, app and retail touch points, said on Monday it has raised $71.3 million in a financing round as the Mumbai-headquartered firm looks to scale its business across the South Asian market.
The startup had raised $23.5 million in its four-times subscribed Series C financing round from Amazon, Ascent Capital, Wipro in March this year. On Monday, it said it has added an additional $47.8 million as part of the round — which is now closed.
Accel led the investment in the new tranche while existing MyGlamm investors — Bessemer Venture Partners, L’Occitane, Ascent, Amazon, Mankekar family, Trifecta and Strides Ventures — also participated, Darpan Sanghvi, founder and chief executive of MyGlamm, told TechCrunch in an interview.
Sanghvi started MyGlamm in 2017 after pivoting his previous venture. He recalled the struggle he faced raising money for a direct-to-consumer brand, which were not as popular in the world’s second largest internet market just five years ago. To make matters worse, MyGlamm was also among the last direct-to-consumer startups to kick off its journeys at the time.
The startup today operates as a house of brands in the beauty and personal care spaces. “We operate across makeup, skincare, haircare, bath and body, and personal care. Unlike other brands, we have been able to successfully build a master brand across categories,” he said over a video call.
“The reason we have been able to build this is because we are truly direct to consumers. This allows us to communicate very directly with them,” he said, adding that most other firms in the industry are too reliant on third-party marketplaces for their sales.
He attributed the recent growth of the startup, which sells over 800 SKUs across categories (up from 600 in March), to its newfound user acquisition strategy. In August, the startup acquired POPxo, a startup that has built a community around content, influencers and commerce and serves over 60 million monthly active users.
“The content to the commerce engine has become our biggest moat,” he said. “We are acquiring 250,000 new users each month without spending any real money.”
POPxo, which is run by Priyanka Gill, engages with nearly 300,000 users each month, gathering their feedback and ideas for new products. Gill said in a video call that “in this line of business, CAC (cost of customer acquisition) is the game and POPxo has solved this problem,” she said, adding that POPxo, which is run like a fairly independent business, is on track to reach over 100 million users by March next year.
The startup also has 15,000 point-of-sale touch points in the physical world across India. The physical presence, which accounts for 40% of the revenue it generates today, “has been crucial to scale in the country,” Sanghvi said.
“We believe that the time is ripe for building out digital first CPG brands with a deep focus on content-to-commerce,” said Anand Daniel, Partner at Accel, in a statement.
“COVID has only cemented this belief. The unique combination of content coupled with a compelling product line gave us the conviction to lead this round in MyGlamm. We are excited to partner with Darpan, Priyanka and the MyGlamm team and look forward to building out the next generation CPG giant,” he said.
The startup plans to deploy the fresh funds to expand its product development, data science and technology research teams. It is also working to expand its offline presence and broadening the digital reach of POPxo.
The new investment comes at a time when Indian startups are raising record capital and a handful of mature firms are beginning to explore the public markets. Last week, Tribe Capital’s investment crowned BlackBuck as India’s 16th unicorn this year, compared to 11 last year and six in 2019. Food delivery startup Zomato made a stellar stock market debut last week and financial services firms MobiKwik and Paytm have also filed for their IPOs. Insurance aggregator service PolicyBazaar and online beauty e-commerce firm Nykaa are also expected to file their paperworks for IPO in the coming weeks.
Polestar plans to launch in nine more markets this year, doubling its global presence as it seeks to sell more of its electric sedans.
The company, which is the electric performance vehicle brand under Volvo Car Group, said it is also planning to double the number of retail stores to 100 locations and add more service centers by the end of the year. Some of the retail locations will be temporary pop-up stores. The Swedish automaker has more than 650 so-called “service points” in Polestar markets and wants to exceed 780 by the end of 2021.
This pace of expansion doesn’t appear to be waning. Polestar CEO Thomas Ingenlath said in a statement that the company aims to expand at a similar rate in terms of new markets in 2022. “This continued pace, combined with new retail concepts, will support our goal to exceed our owners’ expectations,” he added.
Today, Polestar has one primary product: the all-electric Polestar 2. But it has plans to add more to its portfolio in the coming years. The automaker announced in June that it would manufacture its first all-electric SUV in the United States. The SUV, which is called the Polestar 3, will be assembled at a plant shared with Volvo Cars at a factory in Ridgeville, South Carolina.
The Polestar 3 follows the all-electric Polestar 2 sedan and the hybrid grand tourer Polestar 1. Production of Polestar 3 is expected to begin globally in 2022.
As Polestar scales up, it’s keen to find new ways to reach customers. The main strategy is to add more retail stores and expand in existing markets or into new ones. The company said Monday it is also experimenting with a new concept called Polestar Destinations. These “destinations” act just likes its “Polestar Spaces” stores, but are larger and located outside of urban centers. These destination stores will also act as centers where customers can pick up their vehicles, which can be ordered and paid for online.
The company is also adding 60 more test drive locations by the end of 2021 to provide additional access to Polestar 2 vehicles.
All of this expansion is being supported by an influx of $550 million that Polestar raised in April in an external round led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment. SK Inc., the South Korean global conglomerate, and a range of other investors also participated in that round.
While this was Polestar’s first external round, the company suggested at the time that it wouldn’t be the last.
Box released its new native e-signature product Box Sign on Monday, providing e-signature capability and unlimited signatures as part of Box’s business and enterprise plans at no additional cost.
The launch comes five months after the Redwood City, California-based company agreed to acquire e-signature startup SignRequest for $55 million.
Box CEO Aaron Levie told TechCrunch the company is already securing content management for 100,000 businesses, and Box Sign represents “a breakthrough product for the company” — a new category in which Box can help customers with business processes.
“We are building out a content cloud that powers the lifecycle of content so customers can retain and manage it,” Levie said. “Everyday, there are more transactions around onboarding a customer, closing a deal or an audit, but these are still done manually. We are moving that to digital and enabling the request of signatures around the content.”
Here’s how it works: Users can send documents for e-signature directly from Box to anyone, even those without a Box account. Places for signature requests and approvals can be created anywhere on the document. All of this integrates across popular apps like Salesforce and includes email reminders and deadline notifications. As with Box’s offerings, the signatures are also secure and compliant.
Levie considers the market still early as less than one-third of organizations use e-signature due to legacy tool limitations and cost barriers, revealing massive future opportunities. However, that may be changing: Box worked with banks during the pandemic that were still relying on mailing, scanning and faxing documents to help them adapt to digital processes. It also surveyed its customers last year around product capabilities, and the No. 1 “ask” was e-signature, he said.
He mentioned major players DocuSign and Adobe Sign — two products it will continue to integrate with — among the array of technology within the space. He said that Box is not trying to compete with any player, but saw a need from customers and wanted to proceed with an option for them.
The e-signature offering also follows the hiring of Diego Dugatkin in June as Box’s new chief product officer. Prior to joining, Dugatkin was vice president of product management for Adobe Document Cloud and led strategy and execution for Adobe’s suite of products, including Adobe Sign.
“Our strategy has been for many years to expand our portfolio and power more advanced use cases, as well as a vision to have one platform to manage everything,” Levie said. “Diego has two decades of tremendous domain experience, and he will make a massive dent in powering this for us.”
In addition to the e-signature product, Box also introduced its Enterprise Plus plan that includes all of the company’s major add-ons, as well as advanced e-signature capabilities that will be available later this summer, the company said.
Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.
Hey so maybe y’all missed it, but we shared some exciting news this week.
Transportation Secretary Pete Buttigieg will join us for a fireside chat at Disrupt 2021, where we plan to dig into some of the thorniest questions around transportation and how to ensure that moving from Point A to Point B is a universal right, not a privilege. The upshot: If it involves technology that moves people and packages, we aim to talk about it.
What do you want us to address?
Also, this is my way of telling y’all to buy a ticket to Disrupt. There are a lot of great speakers, including writer, director, actor and Houseplant co-founder Seth Rogen, Twitter CISO Rinki Sethi, Calendly founder and CEO Tope Awotona, Mirror co-founder and CEO Brynn Putnam, Evil Geniuses CEO Nicole LaPointe Jameson and Andreessen Horowitz General Partner Katie Haun, Duolingo CEO and co-founder Luis von Ahn and Coinbase CEO Brian Armstrong — to name a few.
Do you live in a city with shared e-scooters and e-bikes that you never really ride even though you think it’s a cool concept? Maybe you think paying $10 to go three miles is ridiculous, or you don’t want to touch the sticky handlebars that someone may have previously coughed on. You’ve considered buying your own, but it ain’t cheap and you’re not ready for that kind of commitment … But wait! From the depths of this stream of consciousness a new business model emerges: micromobility subscriptions.
The premise is that customers pay a somewhat affordable fee for a monthly rental of a higher quality e-scooter or e-bike. It’s delivered to their door and assembled for them. If it breaks down, someone will ship them a new one. And customers can cancel anytime. It’s truly made for the 21st century city dweller, adding nicely to their collection of meal kit, vitamins, video streaming, music streaming, book reading, meditation app, digital trainer and outfit subscriptions.
Enough about the customer. Investors and companies are seeing the value in either building a business around the micromobility subscriptions model or adding it as another line to an existing business. They say it’s easy to scale, provides a good return on investment and costs less per mile to operate. And for those who actually care about sustainability, it allows the operator to control the vehicle’s end of life in a way that sales don’t.
The reason I’m harping on about this model is because I wrote about it for ExtraCrunch this week. It’s behind a paywall, but here are some highlights from the piece:
Shawn Carolan, managing director at Menlo Ventures, which invested in e-scooter subscription/sales company Unagi, is bullish on the micromobility subscription model. He says most people would rather pay a low monthly fee rather than a higher upfront fee.
“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”
Menlo Ventures bet that customers would also take better care of high-quality scooter they get to “own” for a time, which translates to a longer lifetime for hardware — something the dockless shared model consistently struggles with. Having an additional route to micromobility will broaden the market, positioning it as a SaaS business, which achieves a higher multiple.
So what’s next for the subscription model? Startups looking to go this route need to work on providing the best possible service in order to retain customers.
“The job to be done is reliability,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “Maintenance and repairs is still a nascent sector, but for people who want to have a reliable option for travel and don’t know or care about how to maintain their brakes or gears, it’s a really good option. Proper servicing will open up micromobility to a far wider group, especially when paired to safe infrastructure and favorable transport policies.”
Ireland gets on the e-scooter bandwagon
In other news, this week Ireland launched its first e-scooter trial across five campuses of Dublin City University. Berlin-based Tier will work with Irish and DCU-based Luna to equi
p e-scooters with computer vision tech that will be able to detect pavement lines and pedestrians. This is similar to what Drover is doing with Spin, which has just launched its visually updated scooters in Santa Monica.
The Insight SFI Research Centre for Data Analytics and Smart DCU, a district of Smart Dublin, will also collaborate on the pilot research. E-scooters are still illegal to ride on Irish roads, but there is proposed legislation in the works to change that.
Superpedestrian’s scooters are not backing vision
E-scooter company Superpedestrian acquired Navmatic, a startup that helps micromobility operators locate vehicles and correct their movements in real time. With access to Navmatic’s super fusion tech, Superpedestrian has created an advanced safety system called Pedestrian Defense that can detect unsafe riding behaviors and stop them in real time.
Navmatic’s technology basically allows the scooter to detect the rider’s micro-movements and through those plus other data picked up from sensors can determine things like if the scooter is going down the wrong way on a one way street or riding on the pavement.
The Rad Power RadRover 6 Plus was launched this week, the latest model of the company’s flagship bike.
It’s the e-bike for people who come to the world of biking from a car-centric background somewhat reluctantly, but get hooked to the smooth, sturdy ride, user-friendly design and really affordable price. This totally rad bike is only $1,999, and it’s built to last.
I talked to the bike manufacturer’s chief product officer, Redwood Stephens, and he explained how Rad Power’s business model is all about reducing friction for the customer, from the way you order your vehicle to the packaging it arrives in to the big obvious ON button. And this method appears to be going quite well for the company. In February it raised $150 million in funding, probably the most any e-bike company in America has ever raised.
— Rebecca Bellan
Deal of the week
Rivian scored another $2.5 billion in a private funding round of returning investors. The round was led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in the round, according to Rivian.
Rivian has raised an eye-popping $10.5 billion to date. The company didn’t share a post-money valuation, but earlier this year when it had announced a $2.65 billion raise TechCrunch learned that its valuation was $27.6 billion.
As the money comes in, the pressure is increasing for the company to deliver its consumer and commercial products. Rivian recently delayed deliveries of its R1T truck and R1S SUV from this summer to September due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips. The company also confirmed it plans to open a second U.S. factory.
My other “deal of the week” involves a deal that almost wasn’t. I’m speaking of Lucid Motors of course, which had to extend the deadline to approve its merger with special purpose acquisition company Churchill Capital IV because not enough retail investors showed up to cast their vote. (They were able to approve the merger on Friday).
The hiccup occurred on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger — proposal two, which would revise the company’s charter so that Lucid could receive key financing. That proposal requires a higher number of votes than the others — and it must be approved for the merger to take place — so a lack of votes ended up halting the entire process. The lack of shareholders was blamed on retail investors’ unfamiliarity with the SPAC process and, unbelievably, spam filters gone awry.
The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs.
Other deals that got my attention this week …
ChargePoint acquired European charging software company has·to·be for €250 million ($295 million) in cash and stock, the electric vehicle charging network’s first acquisition since it became a publicly traded company. Through the deal, ChargePoint gains more than just 125 employees and the company’s operating software, which manages more than 40,000 networked ports in Europe. The acquisition will give ChargePoint a boost in its pursuit to gain market share beyond North America, as well as VW Group as a strategic partner.
Magna International, the Canadian auto parts maker, is going to acquire its rival Veoneer, which had spun off from safety equipment supplier Autoliv in 2018, for about $3.8 billion in cash, Automotive News reported. (This also qualifies for my “deal of the week.”) The acquisition is going to give Magna a major boost, particularly in the area of driver assistance technologies business.
Magna will buy out Veoneer’s outstanding shares for $31.25 each, and the acquisition represents an enterprise value of $3.3 billion including debt, the companies said in a joint statement. Magna also said it will capture about $100 million in annual cost savings by 2024.
Miles, a universal rewards platform and app that allows anyone with a smartphone to earn miles for all of their travel, raised $12.5 million in Series A funding round led by Scrum Ventures, with participation from TransLink Capital and Japan Airlines (JAL Innovation Fund), TechNexus Venture Collaborative, Aioi Nissay Dowa Insurance (MS&AD), Synapse Partners and several other prominent individual investors. The raise brings Miles’ total funding to $20 million, with other notable investors including JetBlue Technology Ventures, Liil Ventures, Porsche Ventures, Panasonic, SAIC, Sony Innovation Fund, Urban Us (VC), and Gabe Klein (Co-founder CityFi).
Rodo, an e-commerce startup focused on buying and selling vehicles, raised $18 million in a Series B financing round led by Holman Enterprises and Evolution VC Partners. The round also included existing investor IAC along with Kevin Hart’s HartBeat Ventures as well as auto industry veterans RML Automotive vice chairman Mack McLarty, McLarty Diversified Holdings Chairman and CEO Franklin McLarty and Ken Schnitzer, the former chairman of Park Place Automotive Group. Rodo, which has raised a total of $45 million to date, plans to use the funds to scale its dealership network nationwide and invest in marketing and customer acquisition.
Sonatus, the California-grown automotive software company, raised $35 million in a Series A round that attracted high-profile technology and automotive industry companies including Hyundai Motor Group’s Kia Corporation, SAIC Capital and LG Electronics. Silicon Valley VC Translink Capital led the round, with other investors including Marvell Technology, UMC Capital and Wanxiang Group Company.
Tesla said it will secure nickel from the commodity production giant BHP. The companies didn’t disclose the amount of mineral that will be supplied, just that it will come from BHP’s Nickel West division mines in Western Australia. The two companies also agreed to work together to increase battery supply chain sustainability and to identify ways to decrease carbon emissions from their respective operations using energy storage paired with renewable energy.
Uber Freight, the logistics business spun out of Uber in 2018, acquired TransPlace for $2.25 billion from private equity group TPG Capital. It’s one of those upstream meets downstream type of deals. The union will fold one of the largest managed transportation and logistics networks into Uber Freight’s platform, which connects truck drivers with shippers that need cargo delivered. Uber Freight’s brokerage will continue to operate independently from Transplace’s services, the company said.
This deal marks a ramping up of Uber Freight’s business as it aims to carve out market share in its existing markets and an expansion in Mexico. Uber Freight also sees the acquisition as a means to accelerate the company’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022.
Welcome back to Policy Corner!
EV rebates and tax credits are a well-known incentive mechanism to encourage Americans to make the switch to electric, but people looking for micromobility incentives have historically been out of luck. A new bill introduced in the Senate is looking to change that. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would give consumers a refundable 30% tax credit on the purchase of an electric bicycle, up to $1,500.
Qualifying bikes must be under $8,000 dollars and reach a max speed of no more than 28 miles per hour. So that means a huge swath of the market would be eligible for the credit. A sister bill was introduced to the House earlier this year. If it passes in both parts of Congress, it would then head to President Biden’s desk.
There’s an interesting interview with Rep. Earl Blumenauer, one of the legislators who introduced the bill in the House. (Just a note, it was conducted by The Scenic Route, a vertical of e-bike seller Rad Power Bikes.) The Congressman talks about how e-bike incentives could fit into the larger goals of the massive infrastructure bill currently being mulled by lawmakers.
“I was talking to the Secretary of Transportation yesterday about the opportunities we have with this big infrastructure package and this is one of those elements that ties in with what we’re doing with the tax system,” Blumenauer said. “It reduces traffic congestion, there’s less pollution to contend with, and it eases the problem of parking.”
I live in Austin, where the hills have dissuaded me from cycling around — yet, the majority of my car trips are less than four miles. I’ve often thought that an electric bike would be a good way to use my car less. I’m sure many other Americans feel similarly.
— Aria Alamalhodaei
Notable news and other tidbits
As per ushe, there is a lot to get to this week. When will the news cycle slow down?
Argo AI and its backer and customer Ford had the big AV story of the week. The two companies announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin. I get deep into the details in the story, but the tl;dr includes Lyft taking a 2.5% stake in Argo, which now has a valuation of $12.4 billion.
The first Ford self-driving vehicles, which are equipped with Argo’s autonomous vehicle technology, will become available on Lyft’s app in Miami later this year. Austin will follow next year, with the remaining U.S. cities being added to the Lyft app in 2023 and beyond. Argo currently tests in Detroit, Palo Alto, Pittsburgh and Washington, D.C.
Jody Kelman, who heads up Lyft’s Autonomous, the company’s self-driving deployment business unit, answers the why we should care question: “It’s the biggest deployment certainly that we’re doing and that I think anyone else is doing. One thousand cars across six markets is a big leap forward in terms of scaled commercialization.”
Mobileye expanded its autonomous vehicle testing program to New York City as part of its strategy to develop and deploy the technology. If you’re not watching Mobileye, you should be — even those who don’t agree with the company’s approach.
New York City joins a number of other cities, including Detroit, Paris, Shanghai and Tokyo, where Mobileye has either launched testing or plans to this year. Mobileye launched its first test fleet in Jerusalem in 2018 and added one in Munich in 2020.
Waymo is expanding into AV hub Pittsburgh. The company will start by hiring around a dozen engineers, a source familiar with the move told TechCrunch, and they’ll co-locate in Google’s existing offices in the Bakery Square district. As of Thursday, only around three open positions for the Pittsburgh area were listed on Waymo’s website, but the company will be adding more roles soon.
Notably, some of the new team will come from Pittsburgh-based RobotWits, a tech startup focused on autonomous vehicle decision-making. Waymo acquired RobotWits’ IP rights and some members of its engineering and technical team as well as the company’s founder and CEO Maxim Likhachev are joining Waymo.
Arrival, the commercial electric vehicle company, has been chosen to build electric buses for the City of Anaheim, California. The Federal Transportation Administration awarded Anaheim a $2 million grant in 2019. The city’s transportation network announced the plan to partner with Arrival to achieve its goal of running California’s first all-electric bus fleet by 2025.
Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years. TechCrunch’s Rebecca Bellan digs into what is driving this trend and provides a roundup of the latest deals.
GM said it will add a full-size electric pickup truck to its GMC lineup, the latest in a string of EV product announcements by the automaker in the past year as it pushes to deliver more than 1 million electric vehicles globally by 2025. GM didn’t provide much more, but we can expect it to follow the GMC Hummer EV pickup that is coming late this year.
Tesla CEO Elon Musk said the automaker will allow other electric vehicles to access its global network of chargers later this year. Musk has been chattering about this idea for years now; what made me take it a skosh more seriously is that he attached a timeline to this. My prediction is that Tesla owners will push back.
Speaking of Musk, the technoking said the automaker will ‘most likely’ resume accepting bitcoin as a form of payment once the mining rate for the cryptocurrency reaches 50% renewables. He made the comments at a virtual panel discussion hosted by the Crypto Council for Innovation. You might recall that Tesla started accepting bitcoin as a form of payment in February, the same time that the company purchased a historic $1.5 billion in bitcoin — before reneging on its decision just three months later, citing environmental concerns.
Mercedes-Benz laid out a €40 billion ($47 billion) plan to become an electric-only automaker by the end of the decade. To be clear, Mercedes did give itself some wiggle room in that ambitious goal, noting that it will be “ready to go all electric by the end of the decade, where markets allow.” This could mean that some combustion engine Mercedes, which are already equipped with 48-volt mild hybrid systems, will be produced and sold beyond the decade.
This target is driving Mercedes to become more vertically integrated, secure its supply chain and retraining its workforce. For instance, the automaker noted that it has acquired U.K.-based electric motor company YASA, and has determined it will need battery capacity of more than 200 gigawatt hours. To hit meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.
In-car tech and ADAS
GM is rolling out three major upgrades including automatic lanes changes and towing support to its hands-free driver assistance system Super Cruise and making it available in six vehicles, including the 2022 all-new GMC Hummer EV pickup truck.
Speaking of Super Cruise, GM isn’t OK with Ford naming its own ADAS BlueCruise. GM and its self-driving vehicle subsidiary Cruise, filed a lawsuit against Ford claiming that the BlueCruise name is too similar to its Super Cruise trademark and Cruise’s trademark, The Hill reported.
Ride-hailing, car-sharing and other stuff
Getaround was fined nearly $1 million by the Washington, D.C. Office of the attorney general for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”
People makin’ moves
Aurora has hired Yanbing Li as its new senior VP of engineering, according to a posting on LinkedIn. Yanbing comes from Google, where she lead the enterprise services platform organization in Google Cloud.
Joby Aviation announced its board of directors and it contains some high-profile transportation folks, including Zoox CEO Aicha Evans, Dr. James Kuffner, CEO of Toyota’s Woven Planet Holdings,·Reid Hoffman, LinkedIn Co-Founder and Co-Lead Director of Reinvent Technology Partners, Google general counsel Halimah DeLaine Prado and Dipender Saluja the managing director of Capricorn Investment Group.
Of course, the board also includes Joby founder and CEO JoeBen Bevirt, Founder and executive chairman Paul Sciarra.
Velodyne Lidar lost its CEO, the latest in a series of issues and internal drama that have cropped up since the sensor company struck a deal to merge with special purpose acquisition company Graf Industrial Corp. CEO Anand Gopalan, who was previously CTO, announced he is leaving the lidar company at the end of July.
A team of top executives that includes COO Jim Barnhart, CFO Drew Hamer, Chief People Officer Kathy McBeath and Chief Commercial Officer Sinclair Vass will run the company as a search for a new chief executive is conducted. The company didn’t disclose why Gopalan was leaving.
Xos, the electric truck company that is set to go public via SPAC merger later this summer, announced nominees for the board that will represent the combined company. Beyond Xos co-founders Dakota Semler and Giordano Sordoni, the list includes: Burt Jordan, the former VP of global purchasing operation and supply chain sustainability at Ford, S. Sara Mathew, the former chair and CEO at Dun & Bradstreet Corporation, George Mattson, who co-dounded NextGen Acquisition Corporation, and Ed Rapp, the former group president for resource industries and former CFO at Caterpillar Inc.
Queenly, a resale marketplace for formalwear, announced on Friday that it has grown its seed round to $6.3 million in a financing round led by Andreessen Horowitz’s Connie Chan. The financing event brings Queenly’s total venture raised to date at $7.1 million.
Queenly sees itself as a “StockX” for formalwear, but has its own hold on the resale market for luxury goods. The startup gets consumers to list their used dresses – whether it be from weddings, proms, or pageants – on the platform to sell at a discounted price to others. Sellers then make about 80% of the listed price when a dress is sold, while buyers get a unique dress that wouldn’t have been worn gain anyways.
In a statement, A16z’s Chan said that she experienced “firsthand how unique but underserved the formalwear market is by technology.” The investor noted how fit is less important because people often rely on alterations, but uniqueness matters. She also credited the experience that the Queenly co-founders Trisha Bantigue and Kathy Zhou both have at pageants, which has made its way into the end-product.
Sure enough, the co-founders have put much of their energy into an algorithm designed to help buyers find the best dress for them, with search capabilities that are meant to be more inclusive of size and skin color than competitors like retail stores and Poshmark.
“These are just some things that we know because we’re women, and we know how to build this product for women,” Zhou said in a previous interview. “As opposed to if this was a male founder, they would not know that that would even be something that women would search for.”
The resale marketplace comes with its own challenges, the biggest of which can often be quality assurance. For dresses priced at $300 or less, Queenly gets proof photos of condition and then allows sellers ship directly to buyers. Dresses above $300 are routed through the company’s own operation, where a qualiy assurance team more closely checks for the condition of the dress.
Queenly graduated from Y Combinator in Winter 2021, in the thick of the coronavirus pandemic. Despite the lack of in-person events, the co-founders said that they had half a million in sales, thanks to Zoom weddings, Twitch pageants and socially-distant graduations. Queenly also got small fancy dress businesses, looking for a digital solution to get ubuyers, to list their inventory on the site.
The growth helped the startup raise while still in the accelerator, landing $800,000 from investors including Mike Smith, former COO of Stitch Fix, Thuan Pham, former CTO of Uber, and Kelly Thompson, former COO of Samsclub.com and Walmart.com. The company then closed the first bit of its seed round at $2.3 million, bringing on Dragon Capital along with other investors.
Now, three months later, Queenly has extended that seed round by a few million. The company declined to disclose its new valuation or sales volume, but did say that number of dresses on Queenly’s platform have grown from 50,000 in February to 60,000 now, in July. Queenly also landed a partnership, per Forbes, with the Miss USA organization, which will help grow its footprint through contestants uploading their dresses to the platform. Of course, dresses aren’t synonymous with sales – but with millions more, the startup could be equipped to turn that reach into real dollars.
The Exchange spent a little time on Friday ruminating on the impact of then-rumored regulation in China targeting its edtech sector. News that the Chinese government intended to crack down further on the education technology market hit shares of public, China-based edtech companies. It was a mess.
Then over the weekend, the rumors became reality, and the impact is still being felt today in the global markets.
But there’s more. China is also bringing new regulatory pressure on food-delivery companies and Tencent Music. More precisely, we’ve seen successive market-dynamic-changing moves from the Chinese government in the last few days, coming as 2021 had already proved to be a turbulent environment for China-based technology companies.
The Exchange explores startups, markets and money.
Today we have to do a little bit of work to understand precisely what is going on with the various regulatory changes. Why? Because the Chinese venture capital market is a key player in the global venture scene. And Chinese startups have gone public on both Chinese, Hong Kong and U.S. exchanges; there’s a lot of capital tied up in companies impacted today — and possibly tomorrow.
For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far. And upstart tech companies in sectors less likely to be targeted by central authorities may become more attractive to investors than they were before the regulatory onslaught kicked off. But on the whole, it feels like the risk profile of doing business in China has risen. That could curb the pace at which capital is invested, cut valuations and lower interest in the Chinese startup market from private-market investors able to invest globally.
Let’s parse what’s changed, examine market reactions and then consider what could be next. We want to better understand today’s Chinese startup market and what its new form could mean for existing players and future performance.
The edtech clampdown did not start last week. China’s edtech sector started to rack up penalties and fines in June, which led to what the Asia Times called “warning bells” in the sector. From there, things went from penalties to punishing regulatory changes.
Embedded finance — the process by which some of the more complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products for end users — has become a huge cornerstone of how fintech is built today. Now, one of the earlier and bigger movers in the space is announcing a major round of growth funding to build out its own.
Solarisbank, a Berlin startup that provides a range of financial services by way of some 180 APIs that others use to build end-user-facing products (including basic banking and card services, lending, payments, and know-your-customer services) has raised €190 million ($224 million) in a Series D that values the company at €1.4 billion ($1.65 billion) and announced the acquisition of one of its competitors in the space, Contis.
Decisive Capital Management, a Swiss firm that has also backed insurtech startup Wefox, led the round, with Pathway Capital Management, CNP (Groupe Frère) and Ilavska Vuillermoz Capital also participating, in addition to and previous backers Yabeo Capital, BBVA, Vulcan Capital and HV Capital.
The round comes about a year after its last round of $67.5 million, but as a sign of the times, what is perhaps more notable is that the company’s valuation has nearly quintupled since then (it was $360 million in June 2020).
This latest round is going to be used for expansion. CEO Roland Folz said in an interview that the Contis acquisition — which underscores a wider consolidation trend in fintech — will help it better cover all of Europe and start to make its first early moves into Asia. There are no plans right now to add the U.S. to that list, he said.
He added that the combined entity will be making revenues in the “triple-digit euros” — that is, hundreds of millions; it posted net revenues of €35 million in 2020 — and will be in a position to go public next year, if it chooses to.
In the meantime, it’s hoping to double down on the huge shift we’re seeing in the world of financial services, where consumers and businesses are opting for newer and more modern banking experiences as they migrate away from slower, less flexible and sometimes more expensive incumbents.
“Europe is an ideal space for us to work in,” said Folz. “We believe that in Europe there are roughly 800 million bank accounts and some 400 million of those will change ‘ownership,’ where traditional banks will be swapped out with non-traditional banks. … If we look at the five- to 10-year perspective, we want to make sure a significant proportion of those accounts will be on our platform.”
SolarisBank counts Trade Republic, American Express, BP, Samsung and Vivid among its customers, powering basic banking, know-your-customer checks, lending, digital wallet and other services related to finance for companies that can, in turn, focus their energies on building more user-friendly customer experiences or other services altogether. It’s been growing at a rate of 40%-60% annually, Folz added, and it has some 50 “partners” (as it calls its customers) in all, covering some 2 million customer accounts.
Contis, meanwhile, is a substantial business in its own right, with some 200 customers covering more than 2 million users and €9.9 billion in transactions annually.
Solarisbank was founded five years ago out of the Berlin-based startup incubator and investor finleap, with Ramin Niroumand, a founder of finleap, essentially the “founder” of Solarisbank, too. (Currently and more formally, he is also chairman of its advisory board.)
Embedded finance is all the rage at the moment, and a number of startups today are providing fintech-as-a-service or banking-as-a-service tools to third parties. Other notable names in the same segment of the market include Railsbank, which also announced funding earlier this month; Rapyd, which raised a big round at a $2.5 billion valuation earlier this year; Unit, another banking-as-a-service startup picking up funding and growing; FintechOS, which really does what its name says (and is also currently raising money); and the startup 10x, which ironically is targeting incumbents.
Solarisbank believes its particular approach to this gap in the market gives it more flexibility and mileage: Unlike its rivals, the bulked-up Solarisbank will have banking licenses for Europe and e-money licenses in Lithuania and the U.K., with its tech stack living on AWS, giving it an opportunity to build more services, scale and keep better margins in the process — a critical detail in what is essentially an economy of scale play.
It also believes that its diverse customer base — covering not just obvious fintech companies like neobanks, but a variety of others, like Samsung, that are building financial services (in its case, a digital wallet) — gives it more staying power to cater to whatever segment of that base is growing most at any given time. As Niroumand points out, around 70% of its revenues come from some 30% of its customers. “It’s quite a diverse clientele we are serving,” he said.
The company is currently active in Germany, France, Italy and Spain but says it can cover the whole European Economic Area with passporting.
“With the combined entity, we are looking at numbers that no one else is even close to remotely,” added Folz.
The market opportunity, combined with Solarisbank’s approach and its current customer base, is what attracted investors.
“We are experiencing a paradigm shift in banking, where customers expect financial services to adapt to their specific needs,” Thomas Schlytter-Henrichsen, a partner at Decisive Capital Management, said in a statement. “Technology is the key to enable this transformation and Solarisbank’s powerful banking-as-a-service platform positions it perfectly for this new banking era. We are both inspired by the team and thrilled to work together on its mission.”
Tick tock, early-stage startup fans: If you plan to attend TechCrunch Disrupt 2021 (September 21-23), time is running out to score a pass to the world’s leading conference dedicated to tech startups — for less than $100. The early bird sale ends this week, so buy your pass here before the deal expires on July 30 at 11:59 pm (PT).
And if you’re part of the tech startup ecosystem — or aspire to be — why the heck wouldn’t you dive headlong into three days dedicated to the art and science required to build and scale successful startups? Just listen to what three past attendees said about their Disrupt experience.
Disrupt is a great sweet spot, and highly valuable, for anyone in the idea stage all the way through to having raised some angel money. Soak up the pitch deck teardowns and the VC presentations. They’re telling you what they’re looking for, what motivates them, what pushes them to contact you for a meeting. And that’s exactly what every startup raising capital needs to know. — Michael McCarthy, CEO, Repositax.
“TechCrunch has created a great venue that brings together all the different people within the startup ecosystem. It’s a place where new startups can present, attendees can learn from top industry experts and who knows? One day they might be the person speaking on the Disrupt stage. It’s a great event overall.” — JC Bodson, founder and CEO of Arbitrage Technologies
“The connections I made at Disrupt offer long-term benefits. Investors willing to put forth capital, engineers offering tech expertise and manufacturers to help me streamline. Fostering these relationships will help me grow my company and my bottom line.” — Felicia Jackson, inventor and founder of CPRWrap.
Disrupt is the place to be to learn, connect, collaborate and keep tabs on rapidly changing trends. Here’s just one example of the timely topics and world-class experts we have on tap. Don’t forget to check out the agenda.
Saving the World: COVID-19 changed everything. It not only threatened our individual health and wellbeing, but it also shook industries and economies across the globe. The same could be said about the COVID-19 vaccines. Hear from BioNTech Cofounder and CEO, Ugur Sahin on the process of rapidly developing the world’s most sought-after vaccine, alongside Pfizer, and the long-term potential of mRNA-based therapies. Sahin will be joined by Ursheet Parikh of Mayfield Fund to discuss what’s next for startups in this rapidly evolving industry.
Pro Tip: We’ll add new speakers, events and discounts in the run up to Disrupt — sign up for updates so you don’t miss out.
Jeff Bezos, the billionaire founder of Blue Origin, is offering to knock up to $2 billion off the cost of developing a lunar lander and to self-fund a pathfinder mission in exchange for a NASA contract.
The specific contract in question relates to developing a lunar lander for the Human Landing System program, which aims to return humans to the moon for the first time since the Apollo days. NASA announced in April 2020 that Blue Origin, SpaceX and Dynetics were chosen for the initial phase of the contract, and it was thought that the competition would likely be whittled down to two final companies to build lunar landers. As TechCrunch’s Darrell Etherington notes, it’s not uncommon for NASA to select two vendors, as it did when it awarded both Boeing and SpaceX contracts under its Commercial Crew program.
But a year later, in a move that veered from historical practice, NASA announced it had selected just one company for the contract: SpaceX. That company, headed by Elon Musk, proposed a $2.89 billion plan for its lander – around half of Blue Origin’s $5.99 billion proposal. Bezos is now offering to cut that price tag by $2 billion.
In a document obtained by The Washington Post explaining the rationale behind selecting a sole vendor for the HLS contract, NASA admits that it’s “current fiscal year budget did not support even a single [contract] award.” In response, SpaceX updated its payment schedule so it would fit “within NASA’s current budget.” That the agency has severe budgetary constraints is no secret: Congress approved just $850 million for the HLS program in fiscal year 2021, far short of the $3.4 billion NASA requested.
Enter Bezos’ open letter to NASA Administrator Bill Nelson, which addresses the budget issue directly. He writes that the proposed incentives would remedy “perceived near-term budgetary issues” with the Human Landing System Program, which caused NASA to select a single company instead of two.
“Instead of investing in two competing lunar landers as originally intended, the Agency chose to confer a multi-year, multi-billion-dollar head start to SpaceX,” Bezos says in the letter. “That decision broke the mold of NASA’s successful commercial space programs by putting an end to meaningful competition for years to come.”
This is not the first time that Blue Origin has publicly questioned NASA’s decision to go with just one vendor. The company, along with Dynetics, filed protests with the Government Accountability Office just one week after the award was announced. Blue Origin argued that the contract requirements did not give companies an ability to “meaningfully compete.” GAO must rule on the protest by August 4.
Blue Origin and Dynetics are not the only entities to support two contract awards. The Senate recently passed a bill that would, among other things, require NASA to select two companies for the HLS lander – and the extra funds to do so, SpaceNews reported. Not every lawmaker was happy about the inclusion of the extra funding, however: Senator Bernie Sanders called it a “Bezos bailout,” but was ultimately unsuccessful in getting the extra funding stripped from the bill.
“We stand ready to help NASA moderate its technical risks and solve its budgetary constraints and put the Artemis Program back on a more competitive, credible, and sustainable path,” Bezos said.
Aditi Shekar’s path to entrepreneurship was a very intentional one, and while it wasn’t quite a childhood dream, it was the real-world version of the goals she did have as a kid. Fast forward to today, and Aditi’s company Zeta is on a rocket ship ride in fintech, having recently jumped from being a money management and virtual advisor app for couples, to an actual financial solutions provider built from the ground up with shared financial management in mind.
On this week’s episode of Found, me and TechCrunch Managing Editor Jordan Crook sit down with Aditi to talk about where she gets her endless drive and determination, to why she loves financial management (I’m trying to get her zeal to wear off on me, tbh). We also get into why Zeta makes so much sense in the context of a field of legacy financial solutions that generally don’t acknowledge that the way we manage and think about money, especially as it relates to the dynamics between multiple people, has changed significantly over the course of the past several decades.
Aditi definitely isn’t afraid to get real about what’s required to be an entrepreneur and dedicate yourself to a vision you really believe in. And as usual, me and Jordan end up feeling deeply inadequate and ashamed about our life choices — but in a fun way.
We loved our time chatting with Aditi, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at email@example.com. And please join us again next week for our next featured founder.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.
Ever wake up to just a massive wall of news? That was us this morning, so we had to pick and choose. But since this show is about getting you caught up, we decided to focus on the largest, broadest new information that we could:
Asian stocks were down, European shares are lower, and American equities are set to open underwater. Bitcoin had a great weekend, however.
China’s edtech crackdown continued over the weekend, with the country’s ruling party setting new rules for online tutoring companies; they can no longer go public and will be forced to become non-profit entities. Chinese edtech stocks around the world fell.
China’s larger tech crackdown continued over the weekend and into the week, with new moves against the present-day business models of both food delivery companies, and Tencent Music. The former must ensure minimum incomes, while the latter must give up exclusive rights deals. Shares fell.
Spotify is taking a cue from social networks like Facebook which deliver a constant stream of notifications under a “bell” icon in the mobile app, with the goal of keeping users engaged with the latest content. This morning, Spotify introduced what it’s calling the “What’s New” feed, which will deliver an ongoing series of updates to mobile app users which are focused on new releases.
According to the company, the What’s New feed will serve as another way for Spotify users to keep up with all the new music and podcasts that are released from the shows and artists that you follow on the service. In other words, it’s a personalized feed based on what you listen to, not a universal feed or one you more explicitly customize by making specific selections.
The feed will be discoverable under the new “bell” icon that will appear at the top of the Home tab alongside the Recently Played and Settings icons on the top right.
Image Credits: Spotify
The feed will be also updated in real-time, Spotify says, and will display a blue dot when there are new songs and episodes that have arrived since you last opened the app. Before, you could find information about new releases in various place in the app, including your Home tab and in hubs on the app’s Search page.
While the feature may be useful as it gives you a single place to look in the Spotify app for everything that’s new, the use of a “notifications” feature that leverages dots is also a psychological trick that people today understand can make apps more addictive. Dots express a sense of urgency — making you feel as if you need to click to see what’s new or even just to clear the dot. In fact, there was such a backlash against the overabundance of these dots inside social apps that even Facebook a couple of years ago rolled out tools that let you turn its annoying red notification dots off. (To be fair, Facebook hasn’t fully embraced red dot removal — the default is still set to “on” and there are plenty of notification dots all over its website today).
So while a seemingly minor addition to the Spotify app, it’s actually a quite calculated one — and one that steps back from the humane technology movement that emerged in recent years as a way to counter the overuse of growth hacks and other tricks to make apps more addictive.
Now, many companies are moving away from addictive features. Apple, for example, has added consumer-facing tools that put users back in control of when apps can notify them, including with the upcoming iOS 15 release which lets you bundle notifications into daily summaries for less important apps or switch into “Focus” modes for when you need fewer distractions. TikTok, meanwhile, inserts videos that remind you when you’ve been watching for too long. Instagram added a message at the end of your feed to let you know when you were “all caught up.”
Spotify, with the launch of a more attention-grabbing notifications feature, is doing the opposite — it wants to increase user engagement, even if it understands that it may be sacrificing some sense of user comfort and enjoyment in the process.
What’s New is rolling out to all users globally on iOS and Android over the next few weeks.
Now that you have that COVID dog, Embark Veterinary wants to help him or her be in your life for a long time by offering DNA testing with the goal of curbing preventable diseases and increasing the lifespan of dogs by three years within the next decade.
The Boston-based dog genetics company raised $75 million in Series B funding in what the company is calling “the biggest Series B for a pet startup to date.” SoftBank Vision Fund 2 was the lead investor and was joined by existing investors F-Prime Capital, SV Angel, Slow Ventures, Freestyle Capital and Third Kind Venture Capital.
The new round boosts Embark’s total funding to $94.3 million since the company was founded in 2015, according to Crunchbase data. It also gives it a post-money valuation of $700 million, Embark founder and CEO Ryan Boyko told TechCrunch.
Boyko has been a dog lover all his life, and also interested in biology and evolution. Dogs, in particular, are fascinating to him because of their variety: they can be bred to be two pounds or 200 pounds, and come in all shapes and sizes. His interest led him to study dogs in order to understand their evolution.
“I began to think about health problems, and honestly, dogs are a better system for using genetics to better their health than humans,” Boyko said. “You can breed them, so genetics has as much power to cause health problems as it can improve quality and life.”
Embark’s dog DNA test retails for $199 and enables dog owners, breeders and veterinarians to personalize care plans based on a dog’s unique genetic profile. It can test for over 350 breeds and 200 genetic health risks, as well as physical traits. Similar to a 23andMe test, test users can learn characteristics about breed, health and ancestry.
For example, the test could show that a healthy dog may have a gene that predisposes them to slipped discs. If the dog has that, then weight management would be an important factor in their care regime, as would not allowing them to jump off the couch. Another common genetic risk is HUU, or Hyperuricosuria, which is elevated levels of uric acid in urine that could lead to bladder stones due to the way dogs process minerals. By changing the dog’s diet, it could reduce the risk for developing the stones, which are painful and expensive to treat, Boyko said.
The test’s technology revolves around proprietary genotyping technology that analyzes more than 200,000 genetic markers, currently two times more information than any other dog DNA test on the market, Boyko said. This gives Embark the world’s largest database of canine health and biological information, enabling the company to provide insights into certain conditions and make new discoveries about health risks, traits and breeds.
Embark aims to become the standard of care for dog owners and vets. It grew 235% between 2019 and 2020 and saw five times the sales over the past two years. To support that growth, the company intends to use the new funding to bring on key hires and expand its database. Boyko anticipates adding more than 100 employees between 2021 and 2022.
Lydia Jett, partner at SoftBank Investment Advisers, told TechCrunch that this was her first pet-based investment, and what Embark is doing brings advances to a category right now where people care about their pets enough that they want to do something that will expand their value of life.
Jett said the management team being dedicated to DNA-based analytics is the future, and Embark is starting this big curve when it comes to pets and the convergence of real emotional ties to pets and the ability to improve their lives.
“This company is a driver of change to happen,” she added. “We are the largest consumer investor in the world, and Embark is very much aligned with what we are seeing across our portfolio that consumers are revisiting priorities and choices. That is a major trend, but still early in the cycle of personalization for their pets.”
The loss of a loved one is perhaps one of the most traumatic things a person can experience.
When it comes to memorializing someone after their death, most people think of planning funerals and/or picking out caskets or tombstones. And those things are typically done with the help of a funeral home.
Enter Austin-based Eterneva, which is building a rare direct to consumer brand in the end-of life-space. The four-year-old startup creates diamonds from the cremated ashes or hair of people and pets. It’s a highly unusual business but one that seems to be resonating with people seeking a way to keep a piece of their loved ones close to them after their death.
Since its inception, Eterneva has seen triple-digit growth in sales — including in 2020, when it more than doubled its revenue, according to CEO and co-founder Adelle Archer. And today, the company is announcing an “oversubscribed” $10M Series A led funding round led by Tiger Management with participation from Goodwater Capital, Capstar Ventures, NextCoast Ventures and Dallas billionaire Mark Cuban. (For the unacquainted, Tiger Management is the hedge fund and family office of Julian Robertson from which Tiger Global Management descended.)
Archer and co-founder Garrett Ozar launched Eterneva in the first quarter of 2017 after working together at BigCommerce. The company’s origin story is a very personal one for Archer. Her close friend and business mentor, Tracey Kaufman, was diagnosed with pancreatic cancer and ended up passing away at the age of 47. With no next of kin, Kaufman left her cremated ashes to her aunt, best friend and Archer.
“We started looking into different options but all the websites we landed on were so lackluster, somber and overwhelming,” Archer recalls. “Tracey was the most amazing person, and I felt like when you lose remarkable people, you needed better options to honor and memorialize them.”
At the time, Archer was working on a lab-grown diamond startup. Over dinner with a diamond scientist during which she was discussing her mentor’s death, the scientist said, “Well, you know Adele, there is carbon in ashes, so we could get the carbon out of Tracey’s ashes and make a diamond.”
The thought blew Archer’s mind.
“I knew that I had to do that, 100%. Tracy was such a vibrant person, it suited her so perfectly,” she said. “And I’d have a part of her with me all the time.”
Image Credits: Eterneva; Co-founders Garrett Ozar and Adelle Archer
It was the first diamond ever created by Eterneva, and it gave Archer a chance to be a customer of her own product, which she believes has helped in building an experience for her other customers. Soon, she became “fully focused” on the idea, which she viewed as a way to give grieving people “brightness and healing and a beautiful way to honor their loved ones.”
Since inception, Eterneva has created nearly 1,500 diamonds for over 1,000 customers. It can do colorless or nearly any color including black, yellow, blue, orange and green. The entry price for an Eterneva diamond is $2,999 and that goes up based on the size and color. Pets make up about 40% of Eterneva’s business.
“We view ourselves as the complete opposite tone of everything else in this space,” Archer said. “A lot of people are trying to solve planning and logistics around the end of life. We’re about helping people move forward, and building a platform for the celebration of life.”
The process to create the diamond is intricate, according to Archer, taking 7 to 9 months. The intent is to bring the customer along the journey by sharing the process with them at each stage through videos and pictures.
“We do it in parallel with their processing grief, which is super isolating,” Archer said. “They are usually in a different place with their grief than when they first started.”
One of the plans with the new capital is to enable more people to participate in person with the process such as, starting the machine work, or telling the jeweler stories about their loved one and coming up with a custom design that might have little details that represent aspects of their loved one’s life.
The company also plans to use the money to scale their funeral home channel program nationwide via Enterprise partnerships and scaling its operations and capacity in Austin so it can keep up with demand.
Eterneva is banking on the fact that more and more “people don’t want traditional funerals anymore.”
“They want personalization and meaning,” said Archer. “We plan to evolve the platform with different products and services down the road.”
Prior to the Series A, Eterneva has raised a total of $6.7 million from angels and institutions. Its seed round was a $3 million financing led by Austin-based Springdale Ventures in 2020. Mark Cuban first became an investor in the company when Archer and Ozar appeared on Shark Tank. Cuban took a 9% stake in the company in exchange for a $600,000 investment. Despite claims that the company was a scam, Cuban has stood by the science behind it and put money in the latest round as well.
Via email, he told TechCrunch he views an Eterneva diamond as “a unique, socially responsible way to stay connected to loved ones.”
“There is still so much upside and growth in their future,” Cuban wrote. “So I doubled down.”
He went on to describe the creation of diamond from the hair or ashes of a loved one as “such an intense personal commitment.”
“Eternava takes a very emotional and difficult and helps people walk through their journey in a trusted way that I don’t think anyone else can come close to,” Cuban added.
Sila announced Monday it raised $13 million in Series A funding for its banking and payment platform that gives software teams tools to build the next generation of financial products and services.
Revolution Ventures led the round and was joined by existing investors Madrona Venture Group, Oregon Venture Fund and Mucker Capital, as well as Wise co-founder Taavet Hinrikus. The funding brings the total investment to date for Portland, Oregon-based Sila to $20 million.
The company was founded in 2018 by Shamir Karkal, Angela Angelovska, Isaac Hines and Alex Lipton to simplify digital payments and storage in a regulatory compliant way and build on blockchain technology. CEO Karkal has a long history in the fintech space, co-founding Simple, an app unifying various accounts into one accessible bank card, in 2009. It was acquired by BBVA in 2014 for $117 million and shuttered earlier this year.
Karkal told TechCrunch that the idea for Sila was born out of frustration while starting another bank. He saw a need for financial application development, but was hindered by a banking system “still stuck in the 20th century.” He thought consumers expected a different level of service, which is why many flock to fintechs.
However, whenever a business tried to connect existing banking systems, fintechs and cryptocurrency innovators, as it built and scale, would always run into technology and compliance issues, Karkal said.
“The problem with working with banks, is that you have to figure out how to integrate with their mainframe,” he added. “In the process, you end up having to also be compliance experts just to be able to do it.”
Whereas it took Karkal three years to get bank processes set up for other companies, it took Sila 18 months. Its banking APIs enable developers to create their own digital wallets, replacing the need to integrate with legacy financial institutions. Sila also has partnerships with fintech platforms, including Plaid, Alloy, Lithic and Arcus to move money, and is backed by Evolve Bank and Trust.
Sila can now get customers up-and-running in six to eight weeks. And unlike competitors that focus almost exclusively on e-commerce, most of Sila’s customers are doing regulated payments within the fintech, insurtech, commercial real estate and cryptocurrency spaces that tend to be more complex from a compliance basis, Karkal said.
Since the company launched its platform, business was building steadily, and took off in the second half of 2020. The company raised a $7.7 million seed round earlier in the year. In the last 12 months, Sila grew its revenue 10 times and customers’ end users grew over 500% in the last seven months.
Sila will use the new funding to increase headcount, target additional partners and expand product features, including its Ethereum MainNet stablecoin issuance and interoperability between FedWire and the Nacha Automated Clearing House network.
“There is a massive wave of fintechs emerging in the U.S., and we have barely scratched the surface,” Karkal said. “Places like India, Africa and Latin America could accelerate at the same time because they are mainly starting from zero. We are here to ‘arm the rebels’ and help those innovators build applications to give all end users a much better financial experience.”
As part of the investment, Clara Sieg, partner at Revolution Ventures, is joining the company’s board. She told TechCrunch she met the company’s co-founders through the Portland ecosystem.
Revolution tends to look at fintech startups from a consumer angle. Recognizing that the problem with building infrastructure meant dealing with banks, the firm set out how to find a company building the pipes to solve it, she said.
In the landscape of fintech, she considers Dwolla to be a competitor to Sila. Last week, the company raised $21 million to continue developing its API that allows companies to build and facilitate fast payments, specifically with a focus on ACH. However, it comes down to actually signing up customers, and that competitive landscape is pretty thin, Sieg added.
“Sila is building an easy way for people to program money and taking a regulatory eye to things,” Sieg said. “When Shamir was building Simple, he could see how challenging it was for incumbents to provide the tools developers need to embed financial services, and this is why we have confidence in his ability to win.”
When you are a coffee lover, taste matters, and Spinn is brewing up some fresh funding in the way of a $20 million funding round, led by Spark Capital, to bring connected coffee to new customers through its hardware-enabled coffee marketplace.
Joining Spark in the round were Amazon’s Alexa Fund, Bar 9 Ventures and existing investors. It gives the Los Angeles-based company a total of $37 million in funding to date, CEO Roderick de Rode told TechCrunch. He isn’t defining this round, but said Spinn previously raised both Series A and B rounds.
“SPINN is doing for coffee what Dyson did for vacuums and what Nest did for homes, rethinking technology and connectivity for better results,” said Kevin Thau, general partner at Spark Capital, in a written statement. “Their approach, from machine design to roaster assortment, is elevating the entire industry and delivering what consumers seek today: delicious tasting coffee brewed to their personal preferences, with the smallest impact on the planet.”
Spinn debuted its centrifugal brewing method at TechCrunch’s Startup Battlefield in 2016. The connected coffee maker uses centrifugal force to spin, instead of press, coffee grounds. De Rode says this results in a cup of coffee tasting how it was intended by the roaster. The machines can be controlled via voice command from Amazon’s Alexa or a single tap on the machine or from a mobile app.
A survey released in April by National Coffee Association USA found that the global pandemic was the driver for 85% of Americans drinking at least one cup of coffee at home, up 8% from January 2020. Nearly 60% of Americans drink coffee every day, and one-quarter purchased a new home coffee machine over the past year.
In addition to Spinn, other startups are coming out with machines aimed at making a better cup; for example, Osma is a new coffee-making technique to make a strong espresso-like drink at any temperature, including icy cold.
Spinn itself has three coffee makers to choose from that retail for $479 to $799, according to its website. The machines don’t require any filters or coffee pods and make a variety of styles, including espresso, Americano, drip and cold brew.
The marketplace offers over 1,500 different kinds of coffee from more than 500 artisan roasters around the world. Customers add their coffee choices to a playlist of sorts, which can be specifically curated to ship or scheduled randomly, de Rode said. Drinkers can leave reviews and get recommendations, as well as take a quiz to match with various coffees.
He plans to use the new funding to further grow and develop its patented brewing technologies, and complete delivery of outstanding pre-orders.
Though de Rode wouldn’t go into specifics about Spinn’s growth metrics, he said there has been triple-digit growth from home users. He aims to do for coffee what Vivino did with wine: provide educational content about the coffee options and the roasters themselves.
“The coffee industry is becoming a food thing just like wine,” de Rode said. “People want to understand the different kinds of beans to make more sophisticated choices. We try to bridge the gap between the coffee shop and home.”
If efforts by states and cities to pass privacy regulations curbing the use of facial recognition are anything to go by, you might fear the worst for the companies building the technology. But a recent influx of investor cash suggests the facial recognition startup sector is thriving, not suffering.
Facial recognition is one of the most controversial and complex policy areas in play. The technology can be used to track where you go and what you do. It’s used by public authorities and in private businesses like stores. But facial recognition has been shown to be flawed and inaccurate, often misidentifies non-white faces, and is disproportionately affects communities of color. Its flawed algorithms have already been used to send innocent people to jail, and privacy advocates have raised countless concerns about how this kind of biometric data is stored and used.
The pushback against facial recognition didn’t stop there. Since the start of the year, Maine, Massachusetts, and the city of Minneapolis have all passed legislation curbing or banning the use of facial recognition in some form, following in the steps of many other cities and states before them and setting the stage for others, like New York, which are eyeing legislation of their own.
In those same six or so months, investors have funneled hundreds of millions into several facial recognition startups. A breakdown of Crunchbase data by FindBiometrics shows a sharp rise in venture funding in facial recognition companies at well over $500 million in 2021 so far, compared to $622 million for all of 2020.
About half of that $500 million comes from one startup alone. Israel-based startup AnyVision raised $235 million at Series C earlier this month from SoftBank’s Vision Fund 2 for its facial recognition technology that’s used in schools, stadiums, casinos, and retail stores. Macy’s is a known customer, and uses the face-scanning technology to identify shoplifters. It’s a steep funding round compared to a year earlier when Microsoft publicly pulled its investment in AnyVision’s Series A following an investigation by former U.S. attorney general Eric Holder into reports that the startup’s technology was being used by the Israeli government to surveil residents in the West Bank.
Paravision, the company marred by controversy after it was accused of using facial recognition on its users without informing them, raised $23 million in a funding round led by J2 Ventures.
And last week, Clearview AI, the controversial facial recognition startup that is the subject of several government investigations and multiple class-action suits for allegedly scraping billions of profile photos from social media sites, confirmed to The New York Times it raised $30 million from investors who asked “not to be identified,” only that they are “institutional investors and private family offices.” That is to say, while investors are happy to see their money go towards building facial recognition systems, they too are all too aware of the risks and controversies associated with attaching their names to the technology.
Although the applications and customers of facial recognition wildly vary, there’s still a big market for the technology.
Many of the cities and towns with facial recognition bans also have carve outs that allow its use in some circumstances, or broad exemptions for private businesses that can freely buy and use the technology. The exclusion of many China-based facial recognition companies, like Hikvision and Dahua, which the government has linked to human rights abuses against the Uighur Muslim minority in Xinjiang, as well as dozens of other startups blacklisted by the U.S. government, has helped push out some of the greatest competition from the most lucrative U.S. markets, like government customers
But as facial recognition continues to draw scrutiny, investors are urging companies to do more to make sure their technologies are not being misused.
In June, a group of 50 investors with more than $4.5 trillion in assets called on dozens of facial recognition companies, including Amazon, Facebook, Alibaba and Huawei, to build their technologies ethically.
“In some instances, new technologies such as facial recognition technology may also undermine our fundamental rights. Yet this technology is being designed and used in a largely unconstrained way, presenting risks to basic human rights,” the statement read.
It’s not just ethics, but also a matter of trying to future-proof the industry from inevitable further political headwinds. In April, the European Union’s top data protection watchdog called for an end to facial recognition in public spaces across the bloc.
“As mass surveillance expands, technological innovation is outpacing human rights protection. There are growing reports of bans, fines, and blacklistings of the use of facial recognition technology. There is a pressing need to consider these questions,” the statement added.
NotCo, a food technology company making plant-based milk and meat replacements, wrapped up another funding round this year, a $235 million Series D round that gives it a $1.5 billion valuation.
Tiger Global led the round and was joined by new investors, including DFJ Growth Fund, the social impact foundation, ZOMA Lab; athletes Lewis Hamilton and Roger Federer; and musician and DJ Questlove. Follow-on investors included Bezos Expeditions, Enlightened Hospitality Investments, Future Positive, L Catterton and Kaszek Ventures.
This funding round follows an undisclosed investment in June from Shake Shack founder Danny Meyer through his firm EHI. In total, NotCo, with roots in both Chile and New York, has raised more than $350 million, founder and CEO Matias Muchnick told TechCrunch.
Currently, the company has four product lines: NotMilk, NotBurger and NotMeat, NoticeCream and NotMayo, which are available in the five countries of the U.S., Brazil, Argentina, Chile and Colombia.
NotCo’s proprietary artificial intelligence technology, Giuseppe, matches animal proteins to their ideal replacements among thousands of plant-based ingredients. It is working to crack the code in understanding the molecular components and food characteristics in the combination of two ingredients that could mimic milk, but in a more sustainable and resourceful way — and that also tastes good, which is the biggest barrier to adoption, Muchnick said.
“Our theory is that there is a crazy dynamic among people: 60% who are already eating plant-based are not happy with the taste, and 30% of those who drink cow’s milk are waiting to change if there is a similar taste,” he added. “Our technology is based in AI so that we can create a different food system, as well as products faster and better than others in the space. There are 300,000 plant species, and we still have no idea what 99% of them can do.”
In addition to a flow of investments this year, the company launched its NotMilk brand in the United States seven months ago and is on track to be in 8,000 locations across retailers like Whole Foods Market, Sprouts and Wegmans by the end of 2021.
Muchnick plans to allocate some of the new funding to establish markets in Mexico and Canada and add market share in the U.S. and Chile. He expects to have 50% of its business coming from the U.S. over the next three years. He is also eyeing an expansion into Asia and Europe in the next year.
NotCo also intends to add more products, like chicken and other white meats and seafood, and to invest in technology and R&D. He expects to do that by doubling the company’s current headcount of 100 in the next two years. Muchnick also wants to establish more patents in food science — the company already has five — and to explore a potential intelligence side of the business.
Though NotCo reached unicorn status, Muchnick said the real prize is the brand awareness and subsequent sales boost, as well as opening doors for quick-service restaurant deals. NotBurger went into Burger King restaurants in Chile 11 months ago, and now has 5% of the market there, he added.
Sales overall have grown three times annually over the past four years, something Muchnick said was attractive to Tiger Global. He is equally happy to work with Tiger, especially as the company prepares to go public in the next two or three years. He said Tiger’s expertise will get NotCo there in a more prepared manner.
“NotCo has created world class plant-based food products that are rapidly gaining market share,” said Scott Shleifer, partner at Tiger Global, in a written statement. “We are excited to partner with Matias and his team. We expect continued product innovation and expansion into new geographies and food categories will fuel high and sustainable growth for years to come.”
Meet Sproutl, a marketplace for gardeners living in the U.K. The startup founded by former Farfetch executives has raised a $9 million seed round. It wants to make gardening more accessible by providing a curated list of items, relevant advice as well as inspiration.
Index Ventures is leading the round in the startup with Ada Ventures and several business angels also participating. The funding round originally closed in April of this year.
“A few years ago, we bought a flat in London with a tiny little garden. We were both working full time in quite intense jobs with young kids. I went online assuming that I would be able to sort out this garden space. And I didn’t know a lot about gardening. And I just didn’t find anything that spoke to me as a new gardener. It felt like what was available was more for more knowledgeable people,” co-founder and CEO Anni Noel-Johnson told me.
If you’ve ever tried to search for gardening videos on YouTube, you may have end up on long-winded videos with instructions that don’t make any sense to you. Similarly, there are not a lot of e-commerce websites focused on gardening specifically.
And yet, the market opportunity is quite big. There are millions of gardeners in the U.K. There are also quite a few independent garden centers, nurseries and shops with a turnover of several millions of pounds per year. More importantly, they generate the vast majority of their sales in store. Some of them have never sold anything online.
Sproutl is teaming up with those businesses so that they can find new customers across the U.K. Those third-party sellers list their items on Sproutl while the startup takes care of logistics, packaging sourcing and delivery.
On the marketplace, customers can buy indoor and outdoor plants, pots, gardening essentials and outdoor living products. Partners currently include Rosebourne, Polhill, Millbrook, Middleton, Bellr, Fertile Fibre and Horticus.
Anni Noel-Johnson, the CEO of the company, was the VP of Trading and Strategy at Farfetch. Sproutl CTO Andy Done also worked at Farfetch at some point as Director of Data Engineering.
Hollie Newton is also going to be a key team member at Sproutl. She previously wrote a best-selling gardening book called ‘How to Grow’. She’s now the Chief Creative Officer at Sproutl.
This is key to understanding Sproutl’s growth strategy. The company plans to provide a ton of content on all things related to your garden — the startup has already released a jargon buster. You might end up on Sproutl the next time you’re looking for gardening advice on Google.
And it’s also going to differentiate the platform from all-encompassing e-commerce platforms, such as Amazon. Other e-commerce companies focused on one vertical in particular, such as ManoMano, have been quite successful. With the right focus, Sproutl could quickly build a loyal customer base as well.
Olumide Soyombo is one of the well-known active angel investors in Nigeria tech startups and Africa at large. Since he began angel investing in 2014, Soyombo has invested in 33 startups, including Stripe-owned Paystack, PiggyVest, and TeamApt.
Today, the investor is announcing the launch ofVoltron Capital, a Pan-African venture capital firm he co-founded with Abe Choi, a U.S.-based entrepreneur and investor.
Voltron will be deploying capital to roughly 30 startups, mostly in pre-seed and seed-stage across Africa, in a bid to “address the severe lack of access to early-stage funding for African tech companies.” The ticket sizes will range from $20,000 to $100,000, focusing on startups in Nigeria, Kenya, South Africa, and North Africa.
Soyombo is one of the few founder-cum-investors on the continent, despite his company not being the traditional VC-backed startup the world has become accustomed to. In 2008, he started Bluechip Technologies with a friend, Kazeem Tewogbade as an enterprise company that provides data warehousing solutions and enterprise applications to banks, telcos, insurance firms. Some of its biggest clients include OEMs like Oracle.
Non-traditional startup founder to an angel investor
Six years later, the pair decided to venture into tech, a relatively nascent industry in Nigeria at the time and began investing in startups via LeadPath, an early-stage firm they launched in Lagos, Nigeria. The idea was to invest $25,000 and take the startups through a three-month accelerator program culminating in a Demo Day. The plan was to run LeadPath like Y Combinator but it didn’t take off as planned.
“In 2014, three months after we found out that there was no investor to put them in front of. So you’d have to write another check yourself,” Soyombo said humorously over the phone. “We quickly saw that the accelerator model didn’t work, so we started investing individually. It’s funny how things have changed since then.”
LeadPath became a special purpose vehicle (SPV) for the pair to carry out their angel investing deals. And over the years, Soyombo has launched several SPVs for the same purpose. So, why do things differently now by creating a fund? Soyombo walks me through one of the processes he has used to fund deals over the years to answer this question.
As an influential figure in Nigeria’s tech ecosystem, Soyombo has access to almost any important deal in the market. “I get the privilege of seeing many deals before most people see them. I’ve built that network within the startup ecosystem and reputation as an angel always ready to help. So obviously, that helped me see many deals very quickly,” he said. Often, his deal flows are filled with startups seeking six-figure pre-seed to seed investments. Say, for instance, a founder is looking to raise $300,000, Soyombo can typically invest $50,000 of his own money. And based on his perception of the startup’s growth prospects, he can choose to bring his friends and acquaintances on board to fill the round.
This informal approach is what Soyombo wants to make formal via a structured format where each individual or organisational LPs gets access to his deal flow simultaneously. The investor believes companies will get capital quicker this way. And the interesting bit is that his work in corporate Nigeria has allowed him to access non-traditional capital which means some of the investors that use Soyombo’s deal flows are outside the typical Nigerian tech investing landscape.
He sees his job as someone bridging the gap of angel investing between his corporate friends and colleagues who have not typically invested in tech and startups that need their money.
“There’s a bit of FOMO now,” he said. “People, including high net worth individuals, tell me to carry them along anytime I’m investing, and then I have startups looking for capital as well. But then again, I’m not trying to get a full job by managing a full fund which is why we’ve structured it this way.”
Anyone familiar with the happenings in African tech these past few months knows the two events that have caused this FOMO: Paystack’s exit to Stripe and Flutterwave’s unicorn status. Soyombo was an early investor in the former, marking his solitary primary exit alongside two secondaries within a portfolio that have cumulatively raised over $70 million. Thus, it’s not hard to see why Soyombo isn’t having a hard time convincing non-traditional investors, including HNIs (who are notoriously risk-averse when it comes to tech investing), to write checks in startups.
“All of a sudden, everyone is interested in what’s happening in the space. The HNIs that would’ve thrown money into real estate are looking for startups. We even see older HNIs telling their children to invest on their behalf, so it’s an easier conversation to have. Most of them want to diversify their portfolio by having a piece of that pie,” he said, pointing to Paystack and Flutterwave successes.
Abe Choi (Co-founder, Voltron)
Voltron Capital will be managed on AngelList. Its investors cut across HNIs and executives from banks, telcos, among other sectors, each investing aminimum of $10,000. Voltron is similar to a typical seven-figure fund targeting pre-seed and seed-stage startups in Africa, yet it’s quite different in the way it chooses to back founders. The fund remains an embodiment of Soyombo’s investment stance, which is “founders-first regardless of the industry.”
“I’m going to continue backing interesting entrepreneurs. If Odunayo of PiggyVest was building a healthtech or edtech company, I’ll still back that company,” he said, referring to the $1 million investment he made three years ago in one of Nigeria’s widely celebrated fintechs. “So I think the investability of sectors, for me, is driven by quality entrepreneurs that are going to solve problems in that area.”
A large chunk of these investments goes into late-stage deals, which is typical of most tech ecosystems globally. But Africa stands out because early-stage startups find it more difficult to raise investments compared to other regions. For instance, IFC reported that 82% of African tech startups cite access to seed funding and a lack of angel investors as major problems they face. Without early-stage funding, many of the startups primed to drive this growth are missing out on vital capital to support their early operations and generate revenue, which is a key requirement for securing later rounds of funding and a larger scale.
Voltron, in its little capacity, wants to fill this gap in the best way it can. Besides listing local investors as LPs, Soyombo says startups will be able to access foreign capital too. Choi is the key to making that happen. Personally, Choi has invested in 15 startups (exiting two); therefore, his experience and network in the U.S. will be crucial in sourcing foreign capital into the continent.
Soyombo believes Stripe acquisition of Paystack has made foreign investors take notice of African startups. He humorously references Paul Graham’s tweet after the acquisition as another reason why foreign investors’ interests have also piqued. The tweet from the Y Combinator co-founder read: “Investors who ignore Nigeria now have to ask themselves: What do I know that Patrick Collision doesn’t?”
That said, the investor holds that the pace at which the African tech ecosystem is maturing should excite anyone. The quality of founders on the continent is improving and will continue in that manner because there are more problems to solve, he continued.
“Also, as our startups mature, we’ll see people leaving to set up theirs. We want the next wave of African tech success stories to not only make an impact on the continent but to be truly global; through Abe’s strategic connections to the USA, we’re confident we can provide our portfolio with the best possible opportunities to achieve this through our US and global network.”
China’s e-commerce and industrial ecosystem is as different from the Western world as its culture. The country took decades to earn its reputation as the Factory of the World, but it now boasts a supply chain and manufacturing ability that few countries can match.
Creative use of the country’s networked manufacturing and logistics hubs make mass production both cheap and easy. Clothing, electronics, toys, automobiles, musical instruments, furniture — you name it and you’ll find a manufacturer in China who can turn your intangible concept into mass-manufacturable reality in mere days. And they’ll do it for cheaper than anywhere else in the world.
It was just a matter of time until an intrepid Chinese entrepreneur with a tech background decided to take on Coca-Cola and PepsiCo.
China is also home to one of the world’s largest e-commerce and tech ecosystems. Hundreds of startups dot the landscape, and the amount of money being raised and spent on innovating around the country’s industrial heft is mind-boggling.
So it was just a matter of time until an intrepid Chinese entrepreneur with a tech background decided to take on Coca-Cola and PepsiCo. The tech revolution hasn’t yet affected the bottled beverage industry quite as much as it has others. Incumbent giants therefore could lose a sizable chunk of market share if a company could just manage to weave together China’s manufacturing proficiency and agility with the modern tech startup philosophy of “moving fast and breaking stuff.”
Genki Forest, a Chinese direct-to-consumer (D2C) bottled beverage startup, is one such contender. A philosophy centered around iteration informed by data, quick turnarounds and a laser focus on taking advantage of China’s huge e-commerce ecosystem has helped this company’s revenues rise rapidly since it started five years ago. Its sugar-free sodas, milk teas and energy drinks sell in 40 countries and generated revenue of about $450 million in 2020. The company aims to reach $1.2 billion this year.
If anything, Genki Forest’s valuation has shot up even faster. It recently completed its fourth VC round that values it at a whopping $6 billion, triple the price it fetched a year earlier, and it has so far raised at least half a billion dollars.
It’s striking how closely Genki Forest’s operations resemble that of a tech startup. So we thought we should take a closer look and see what this company’s graph can tell us about the new wave of Chinese D2C entrepreneurship looking to take over the globe.
Finding a bigger wave to ride
The bottled beverage industry wasn’t what Genki Forest’s founder, Binsen Tang, initially set out to tackle. His first startup was a successful casual, mostly mobile gaming outfit known as ELEX Technology. It was nowhere near record-breaking, though — some 50 million users logged on to a few popular games in over 40 countries worldwide, including one of the first versions of Happy Farm, a predecessor to Zynga’s Farmville. But Tang wasn’t satisfied and eventually sold ELEX Technology to a publicly listed company for about $400 million in 2014.
Tang would walk away with a few important lessons. He’d learned by now that Chinese products were already competitive globally, whether people realized it or not, and that and geographic arbitrage was real, Happy Farm being the perfect example of this. Lastly, he now knew that it was far more important to choose the right “racetrack” (as Chinese investors and entrepreneurs like to put it) than to have a great product.
Picking the right race to win was perhaps the most important takeaway. It’s also an idea that sets Chinese entrepreneurs apart from their Western counterparts — the most worthwhile endeavors are in identifying the largest and most rewarding market at hand, regardless of one’s previous expertise. It was what led Zhang Yiming to create ByteDance, and Lei Jun to found Xiaomi.
That very philosophy led Tang to build Genki Forest. After selling ELEX Technology, Tang didn’t go back to the business that netted him his first pot of gold. As much as he had benefited from the rise of the mobile internet, he thought there was a far bigger opportunity building a consumer brand and applying the lessons he learned from programming to the manufacture of tangible products.
He soon set up his own investment fund, Challenjers Capital, convinced that the next big tech opportunity in China was in tech’s application to everyday consumer products. He soon began to invest in everything from ramen and hotpots to bottled beverages.
China’s quickly expanding e-commerce ecosystem and the plethora of D2C businesses flourishing on Alibaba and JD.com would also influence his decision to sell directly to his target audience rather than take the traditional route. But to truly understand his motivations, we need to take a look at the extremely unique D2C environment in China and how it has changed over the years.
What’s different about Chinese D2C?
“China doesn’t need any more good platforms,” Tang told his team in an internal email in 2015, “but it does need good products.” Tang was talking about how the age of building infrastructure for e-commerce in China was largely over; it was now time to create brands that could take advantage of the advanced distribution network that had been laid out.
Other investors noticed as well. Albus Yu, principal at China Growth Capital, told me that his fund had stopped making investments in independent consumer-facing platforms or marketplaces for a while. “2014 might have been the last year it was economically feasible to start such a business due to the soaring cost of acquiring customers and the strength of incumbents,” he said.
Indeed, 2015 was the year when CACs began to exceed or at least rival ARPUs for Alibaba and JD.com.
In China, that distribution network was present across the digital and physical worlds. Online, there was immense market power concentrated in the hands of just two players: Alibaba and JD.com, which used to have, and still maintain, 80% or above in market share.
In fact, the dominance of Alibaba, in particular, was so overwhelming that for years, VCs invested not in D2C, but in “Taobao brands,” since that was the only channel one needed to conquer in order to make it.
Customer acquisition was therefore straightforward — throw everything into advertising on Alibaba’s Tmall platform, especially during its annual flagship shopping festival, Singles’ Day. Even today, garnering a top spot in one of the category leaderboards remains a surefire way to build brand awareness, investor interest, as well as sales records.
Physically, the Chinese market also differs greatly from much of the developed West. Years of heavy investment in logistics by the private sector, accelerated by government support and infrastructure buildout, means that delivery costs have come down significantly over the years, even dipping below $0.40 per package wholesale as of this year. Innovations such as return insurance have also sped up customer adoption.
By 2016, China was shipping 30 billion packages a year, already accounting for 44% of global shipments. That number has been doubling every three years and is expected to exceed 100 billion this year. And the low cost of delivery is one of the biggest reasons for China’s outsized e-commerce market — the largest globally and estimated to reach $2.8 trillion in 2021, more than triple that of the No. 2, the U.S.
Express parcels sit stacked at a logistic base of e-commerce giant Suning before the 618 Shopping Festival. Image Credits: VCG
Present-day China also presents another edge: Proximity to an advanced, flexible manufacturing network and supply chain for the vast majority of consumer products, and the ability to outsource almost everything to them.
The original equipment manufacturers of years past have long since evolved into original design manufacturers. An expected consequence of being “the Factory of the World” for so many years, making goods for some of the best brands in the world, is that some of the knowledge was bound to transfer.
It may be difficult for outsiders to understand just how strong China’s networked manufacturing hubs are these days. What used to take weeks now takes mere days, the lead times shortened drastically by software, robots and other advancements. For example, Chinese cross-border ultra-fast-fashion company Shein has compressed design-to-ship timelines to as little as seven days.
And it’s definitely not just for making crop tops. The turnaround can be astonishingly fast even when manufacturing completely unfamiliar goods, such as when electric vehicle maker BYD turned its factory into the world’s largest face mask plant in just two weeks when the COVID-19 pandemic struck last year.
Companies leverage this manufacturing flexibility and agility for more than just speed. Chinese cosmetics upstart Perfect Diary uses it to launch twice as many SKUs as foreign competitors. In addition, the quick turnaround allows agile brands to take advantage of that most ephemeral of IP, memes.
It’s not to say that the Chinese supply chain is inaccessible to foreign entrepreneurs. Best-selling mattress maker Zinus, for example, is founded by a South Korean, but its products are manufactured in China and sold mostly on Amazon to U.S. customers.
It’s just that very few non-Chinese companies have figured out how to tap as deeply into the supply chain as this new crop of Chinese D2C brands, which can require years of working not just alongside but physically inside the factories, building trust and know-how. Shein, for example, watches carefully what other brands are making by staying close to the factories.
The China opportunity
Before global sensations such as TikTok weakened the mantra, “copy to China” used to be a dominant characterization of Chinese startups. In December 2015, when Tang registered the Genki Forest trademark, that was still very much a relevant strategy.
As college students at Berkeley, Spencer Kimball and Peter Mattis created a successful open-source graphics program, GIMP, which got the attention of Google. The duo ultimately joined Google, and even personally got kudos from Sergey Brin and Larry Page. Kimball and Mattis quickly rose to prominence within the company, and then chose to leave it all behind to start what would eventually become CockroachDB. Years later, Cockroach Labs has over 250 employees and has received investments from the likes of Benchmark, GV, Index Ventures and Redpoint totaling more than $350 million, according to Crunchbase. The company is now on route to what some think is an “inevitable IPO.”
The story of CockroachDB, from its origin to its future, was told in a four-part series in our latest EC-1:
I’m biased, but it’s a must-read that gets into tensions that any startup founder can relate to: from navigating heavyweight competitors, to growing past free tiers, to maintaining your users’ attention. It’s the eighth EC-1 we’ve published to date, which my colleague and TC Managing Editor Danny Crichton estimates puts us at 90,000 words all about startup beginnings, product development, marketing and more.
In the rest of this newsletter, we’ll get into that WeWork book, bite-sized entrepreneurship and some SPACs. Follow me on Twitter @nmasc_. Or don’t, it’s your choice!
The Cult of We
Adam Neumann (WeWork) at TechCrunch Disrupt NY 2017. Image Credits: TechCrunch
Here’s what to know: Not much has changed. Jokes aside, Brown shared his notes on how the current boom in startup financings has a worrisome air of frenzy and fluff. He also chatted about how sometimes the most illuminating question can be a simple one: What makes you a tech company?
TikTok kept popping up throughout the week. Index Ventures, for example, noted how the firm’s TikTok account has amassed an impressive following and is a channel to talk to the younger generations. Nothing like some short-form videos to stay hip and relatable while raising $3 billion in one go.
Here’s what to know: While TikTok has certainly changed the world, I worry when I see the allure of bite-sized content get edtech’d. Bite-sized content can be a nifty way to spread content, but it isn’t one-size-fits-all. Duolingo, which priced its IPO this week, still struggles to show meaningful learning outcomes and optimizes more for motivation than comprehension. This tension is a key note for companies like Numerade and Sololearn, which both raised this week, to not overly TikTok learning materials.
It’s been awhile since I’ve used that acronym in Startups Weekly. That said, special purpose acquisition vehicles are still very much a thing and are still very much worth paying attention to.
Here’s what to know: Lucid Motors’ SPAC merger was just approved. Reporter Aria Alamalhodaei writes that the move came after executives extended the deadline to vote to merge by one day after not enough investors showed up. “The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs,” she writes.
If you haven’t already, please fill out TC’s ongoing growth marketing survey. We’re using these recommendations of top-tier growth marketers around the world to shape our editorial coverage and to build out TechCrunch Experts.
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year
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.
This Week in Apps took a little vacation this month, so we’re back this week with a big round-up of all the news we missed — and then some. And a super-sized section of apps getting funded, too! Let’s play some catch-up…
ATT isn’t killing mobile game performance. An Apptopia report found that Apple’s launch of App Tracking Transparency has so far had no clear impact on mobile game download performance or monetization performance. The firm says this could be the result of any number of factors, including publishers using fingerprinting techniques (despite not being permitted), increased ad budgets on large networks like Facebook, increased spend on user acquisition, use of IDFV (vendor identifier) by larger publishers or higher than expected opt-in rates than was predicted.
Image Credits: Apptopia
Image Credits: Apptopia
iOS 14.7 launched, adding support for Apple Card Family with combined credit limits, a Home app with support for multiple timers on HomePod, support for the MagSafe Battery Pack, Podcast app enhancements and more. iPadOS 14.7 also became available, offering bug fixes, security updates, as well as the same Apple Card Family and HomePod support.
Meanwhile, the iOS 15 beta 3added the ability to update your device using Software Update even if less than 500 MB of storage is available. This could be a big deal for getting users onto the most recent version of iOS, which has in the past been more difficult when users’ phone storage is nearly full.
Apple added the ability to assign tax categories to apps and in-app purchases on App Store Connect. The categories are based on the app’s content — like videos, books, news, etc. — and allow Apple to administer taxes at the specific rates that apply to that type of application or purchase.
Apple expanded Ultra Wideband functionality in the Apple Watch Series 6, iPhone 11 and 12 to more countries, including Argentina, Pakistan, Paraguay and the Solomon Islands. Some countries don’t allow the technology still, and it must be disabled, including Armenia, Azerbaijan, Belarus, Indonesia, Kazakhstan, Kyrgyzstan, Nepal, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.
Apple asked Judge Gonzalez Rogers to consider three other antitrust cases that have since been decided since the start of Epic Games’ antitrust lawsuit, which is now being deliberated. The cases include a recent decision by the courts to throw out the FTC lawsuit against Facebook.
Android beta 3 came out. The new release dropped a month after beta 2, and includes features like scrolling screenshots, face detect auto-rotate, more Material You theme options and new icons, the ability to disable Assistant corner swipe activation, tweaks to features like one-handed mode and internet toggles and changes to the camera, Chrome, toggles, launcher and more.
Android phones’ backup system was upgraded to “Backup by Google One,” an improvement that now backs up photos, videos and MMS messages with more granular control, in addition to the app data, SMS messages, call logs and device preferences the old system covered.
Google won’t enforce the original September 30, 2021 deadline that would have required all Play Store apps to switch over to the Play Billing IAP system. The company will now allow developers to request an extension for adopting the new policy, in the wake of the big antitrust lawsuit filed by AGs across 36 U.S. states and D.C.
Epic Games filed an update in its antitrust lawsuit against Google over its Play Store policies, but most of the information it contains has been redacted. From the visible tidbits, Epic discusses Google’s relationship with Apple and its agreement to pay between $8 and $12 billion to be the default search provider; as well as Epic’s plans to launch Fortnite on the Samsung Galaxy Store.
Verizon joined AT&T and T-Mobile in preloading the Android Message app as the default texting app on all Android phones it sells, meaning that now all three major U.S. carriers support RCS — the next-gen standard to replace SMS — as the default Android experience.
Amazon got the recently launched app Fakespot pulled from the App Store. An extension of the fake review-spotting website, Fakespot app was taken down because it was wrapping the Amazon website without permission, which Amazon successfully argued could be exploited to steal customer data. Amazon also said Fakespot injected code into its website, which opened up an attack vector. Apple said it gave Fakespot time to correct its issues before the takedown.
Snap called out its AR advances during its Q2 earnings where the company postedrecord revenue and the largest user growth in four years. The company’s Cartoon 3D Style Lens went viral in the quarter on other social networks, including TikTok, generating 2.8 billion impressions on Snapchat alone. Snap also partnered with Disney on location-based Lenses for Walt Disney World’s 50th anniversary. The company is now working on shopping features that could potentially allow users to try on clothes using AR.
Popular investment app Robinhood is targeting its IPO valuation up to $35 billion in a filing released on the 19th. The company first filed to go public in early July after raising billions earlier in the year. The fintech giant expects to debut between $38 and $42 per share.
Fintech giant Revolut launched a travel booking feature called Stays, which allows users to book hotels and other accommodations in its app, in a move to become more of a “super app” that offers multiple services through one interface.
Venmo removed the app’s global, public feed as part of its major redesign. The public feed put user privacy at risk, and follows a number of complaints about Venmo’s oversharing throughout the years. Recently, Venmo’s privacy leaks led BuzzFeed News to uncover President Biden’s Venmo account.
Twitter CEO Jack Dorsey said bitcoin will be a “big part” of Twitter’s future. On the company’s earnings call, the exec spoke for the first time about how he envisions bitcoin can integrate with Twitter’s products, including commerce, subscriptions and other new additions like the Twitter Tip Jar and Super Follows. The company posted the fastest revenue growth since 2014 in a pandemic rebound, but user growth slightly declined.
Instagram confirmed it’s testing a new feature called Limits that would allow users to lock down their accounts in a moment of crisis. Found in privacy settings, users could quickly toggle on options to limit the ability for new followers or accounts who don’t follow you to comment or message you. The Limits could be applied for a set period of time you specify, in terms of days or even weeks.
Facebook launched a new tool available to U.S. Facebook Groups that allows users to ask for prayers. The prayer request tool could help drive engagement on the platform by turning into a product something users were already doing. Facebook’s head of faith partnerships told Reuters COVID gave new urgency to the building of the feature.
TikTok ads get more tools and upgrades. TikTok partnered with Vimeo to integrate the latter’s video tools with the TikTok platform. The deal gives SMBs the tools they need to create effective video ads via Vimeo’s AI-driven production tool, Vimeo Create, and the ability to publish ads directly into TikTok’s Ad Manager. The companies also collaborated on custom video templates optimized for TikTok. The video app also launched Spark Ads, which allow brands to use existing posts from influencers in their ad campaigns.
Instagram added new controls that allow users to limit “sensitive” content in the app’s Explore tab. The feature appears in the settings menu and lets users choose to allow or limit content that could be “upsetting or offensive,” or “limit even more.”
Instagram also began testing a new “collab” feature in India and the U.K. that lets users invite another account as a collaborator on posts or Reels. If the other person accepts, both accounts will appear in the header of the post or Reel.
Twitter is killing Fleets, its misguided effort to offer its own version of “Stories” in an app where content flows so quickly it effectively already feels “ephemeral,” even if the posts don’t auto-delete. Twitter hoped Stories would give hesitant users a place they felt comfortable posting, but that didn’t happen. The feature will be removed on August 3.
Tumblr’s community lashed out at the company’s new subscription feature, now in beta, that would allow bloggers to get paid for their content. The system, called Post+, offers the ability to paywall content, which subscribers can pay for at price points of $3.99, $5.99 or $9.99 per month. But some angry Tumblr users didn’t like the idea of paying, or at least, not being able to pay the blogger directly without the company taking a cut. They harassed and even sent death threats to one early tester. (Perhaps it’s time to move to Substack?)
WhatsApp is testing multi device support that works without the phone. The company recently rolled out a limited public beta that will allow users to use the service on up to four non-phone devices without having the registered phone switched on or otherwise connected to the internet.
Facebook Messenger introduced “soundmojis,” which are, as you’d expect, emojis that include sound. The sounds include laughter and applause as well as those sourced from pop culture — like snippets from Netflix’s “Bridgerton,” movies like “F9,” and various musicians. It also later added a search bar for emoji reactions, and a recently used emojis section.
Streaming & Entertainment
Clubhouse opens to all. The pandemic’s favorite audio chat app Clubhouse this week exited beta and become publicly available to everyone. That means users no longer need to know someone with an invite in order to sign up. The app continues to grow thanks to its Android release. In June, the app was installed 7.7 million times across iOS and Android. It also just launched an in-app messaging feature called Backchannel to allow users to chat both one-on-one and in groups as they host or listen.
Apple Music updated its Android app to add support for Spatial Audio and Lossless Audio. The Dolby Atmos-powered Spatial Audio feature requires a compatible phone, however, and even some Pixel devices don’t qualify.
TikTok found to drive music discovery. A recent study of around 1,500 TikTok users found that 75% discovered artists on the video app, and 63% said TikTok was a source for music they hadn’t heard before.
Spotify partnered with Facebook-owned Giphy to connect users to artists’ music through GIFs. The new GIFs will allow users to click a button to hear the artist’s songs on Spotify directly. The GIFs can be found in the Giphy mobile app or on the web.
Triller, the one-time TikTok rival that has since expanded into PPV events, has now moved into long-form video, including both prerecorded and live shows. As part of this effort, Triller livestreamed the Essence Festival of Culture on its app.
YouTube added the ability for users to directly pay creators for their videos through a new feature called Super Thanks. This is YouTube’s fourth Paid Digital Good alongside Super Chat, Super Stickers and channel subscriptions, and is the first that lets fans tip creators for uploads instead of just livestreams.
HBO Max partnered with Snap to allow Snapchat users to stream a selection of free episodes inside the Snapchat app with their friends. That means users can both stream and chat with others as they watch, and even react with Bitmoji.
Top gaming title and award winner Genshin Impact released its 2.0 update on Android devices. This update brings cross-save functionality for all platforms, a brand-new region called Inazuma and the new Thunder Sojourn event, as well as new characters, stories and weapons.
Facebook bypassed building a native iOS app for its cloud gaming service and instead launched to the web at fb.gg. The company did not want to go the App Store route due to Apple’s restrictions on apps that offer app stores of sorts and its commissions on in-app purchases.
Health & Fitness
A poll suggests around 20% of U.K. adults have now deleted the NHS COVID app, most because they want to avoid orders that would have them self-isolate. Among younger users ages 18 to 34, more than one-third had removed the app.
Duolingo said it aims to be valued as much as $3.41 billion in its U.S. IPO, with 5.1 million shares that will be offered between $85 and $95 each, raising more than $485 million at the top end of the range.
Amazon’s Kindle app launched a serialized fiction store called Kindle Vella, which will allow readers to unlock episodic, self-published stories via in-app purchases that range from $2 for 200 tokens to up to $15 for 1,700 tokens. The Wattpad-like feature is only available on the Kindle iOS app for the time being.
Google’s iOS search app now lets you choose an option to delete your last 15 minutes of search history — perfect for those times when you forgot to launch an incognito tab.
Government & Policy
China has given 145 apps until July 26 to take corrective measures over what authorities said was their illegal collection of user information by misleading customers or by requesting excessive permissions. Apps from Amazon, ByteDance, NetEase, Tencent and others are among those being called out by Beijing in the crackdown.
China’s most popular fitness app, Keep, backed by SoftBank and Tencent, pulled its U.S. IPO after Chinese regulators announced an investigation into data security concerns at ride-hailing app Didi. The move indicates that China’s probe is having larger impact on the stock market, as China’s biggest podcasting platform, Ximalaya, also recently canceled its U.S. IPO.
Facebook escaped an EU ban on its use of WhatsApp customer data but will face an investigation of its new terms of service that sparked customer outrage. The European Data Protection Board said the new practices must be examined in a “swift” fashion by the EU privacy watchdog.
A Catholic priest was outed by way of his phone’s location data found in a data set from a data vendor. This data is commonly aggregated and sold by data vendors, and can then be analyzed for timestamped location data. The signals collected on the priest’s phone were gathered from Grindr, and tracked to his home and other bars and clubs.
Reports found that military-grade spyware developed by Israeli firm NSO Group and licensed to governments for tracking terrorists and criminals was used to hack the phones of journalists, activists, politicians and other business executives, whose phones appeared on a list of 50,000 numbers. Amnesty International has now provided a toolkit that can help people identify if their phones had been among those targeted.
Funding and M&A
Voice-based social app Zebra raised $1.1 million in a pre-seed roundfor its messaging app that pairs photos with voice chat. Reddit co-founder Alexis Ohanian’s early-stage venture firm Seven Seven Six led the round.
Sololearn raised $24 million led by Drive Capital for its Duolingo-like coding education app. The app delivers short bursts of bite-sized content and offers a community of helpers and influencers, not formal teachers.
Belarus-based video editing app VOCHI raised $2.4 million in a late-seed round after growing its app to over 500,000 MAUs and achieving a $4 million+ annual run rate in a year’s time. The company now has 20,000 paid subscribers for its advanced filters and video effects, but makes 60% of its effects catalog available for free.
Instant grocery delivery app Gopuff is raising $750 million at a $13.5 billion valuation, according to an SEC filing, but sources say the fundraise is higher — $1 billion at a $15 billion valuation.
Investment app Titan raised $58 million in Series B funding led by Andreessen Horowitz (a16z), valuing the business at $50 million. The Robinhood rival has 30,000 users and is also backed by General Catalyst, BoxGroup, Ashton Kutcher’s Sound Ventures and a group of professional athletes and celebrities including Odell Beckham Jr., Kevin Durant, Jared Leto and Will Smith.
Fitness app HealthifyMe raised $75 million in Series C funding from LeapFrog and Khosla Ventures to grow its user base in India, Southeast Asia and North America. The app has around 1,500 trainers and coaches on the platform, with plans to add 1,000 more to support its expansion.
Free-to-play games publisher Tilting Point raised $235 million to fund its business of acquiring users for partnered games, or what the company refers to as its “progressive publishing model.” The company borrows from its line of credit to fuel advertising for games that show promise, allowing them to grow users and revenues, and then shares in the growth that it achieves.
Virtual and in-person care app Carbon Health raised $350 million at a valuation of $3.3 billion in a round led by Blackstone’s Horizon platform. The company has 80 clinics across the U.S.
Yoobic raised $50 million in Series C funding for its chat and communications app aimed at frontline service workers. Highland Europe led the round. The startup works with 300 brands across 80 countries.
Travel rewards app Miles raised $12.5 million in Series A funding in a round led by Scrum Ventures that included Japan Airlines, Translink Capital and others. The app aims to offer travel rewards, with a focus on clean transportation.
Salesforce’s deal to acquire workplace communication app Slack officially closed. The $27.7 billion deal was first announced in December 2020.
Fortnite and Unreal Engine maker Epic Games bought New York-based Sketchfab, a 3D model sharing platform.
Fintech app M1 Finance raised $150 million in a SoftBank-led Series E, valuing the business at $1.45 billion. The app offers automated investing, borrowing and banking/spending accounts, and has grown to $4.5 million assets under management.
Mobile.dev raised $3 million in seed funding from Cowboy Ventures and others for its service that aims to catch bugs and errors in apps before they launch. The two-person team includes a former Uber engineer and has already bagged Reddit as a client.
On-demand coworking space app Deskimo gets Y Combinator backing for its app currently available in Singapore and Hong Kong that helps remote workers find alternative spaces to work at times, like the occasional meeting.
London-based financial “super app” Revolut raised $800 million in Series E funding co-led by Softbank Vision Fund 2 and Tiger Global, valuing the business at $33 billion. This makes Revolut the most valuable fintech in the U.K.
Indian startup Inshorts, maker of a news aggregator app and a social media app called Public, raised $60 million in a new round led by Vy Capital, valuing the business at $550 million.
Miami’s Play2Pay raised $13 million in Series A funding led by Telesoft Partners to convert mobile user engagement into bill payments. The company offers a way for consumers to lower their bills by playing mobile games, watching videos and competing in challenges and surveys.
South Korea’s largest travel app Yanolja Co. raised $1.7 billion in funding from SoftBank. The app began as a hotel booking service and has since expanded to include transportation and leisure activities.
Venezuela-based delivery app Yummy raised $4 million to expand its delivery operations across Latin America. Backers included Y Combinator, Tinder co-founder Justin Mateen, Canary, Hustle Fund, Necessary Ventures and the co-founders of TaskUs. The company has connected with over 1,200 merchants and completed over 600,000 deliveries. It now plans to move into ridesharing.
Tumblr and WordPress.com owner Automattic acquired the popular podcast app Pocket Casts, which had sold to a combined group comprised of WNYC, NPR, WBEZ and This American Life back in 2018. The app went up for sale in January, after NPR reportedly lost $800,000 on it the year prior.
Israeli AI-driven health app Sweetch raised $20 million in Series A round led by Entreé Capital. The app encourages users to change their behaviors using AI smarts, after learning about your lifestyle through mobile sensors. The app is distributed through health organization partners, not the App Store.
Skate City: Tokyo
Apple Arcade has added a handful of reimagined classic games in recent days, including an updated version of Alto’s Odyssey, called Alto’s Odyssey: The Lost City, which adds a new locale and other features. This week, Apple Arcade added a new version of Snowman’s popular game, Skate City. The expansion coincides with the start of the Olympic Games in Tokyo, and includes 21 new challenges, 30 new goals, new soundtracks and more. Another classic, Tetris Beat, is on the way soon.
Image Credits: HalloApp
Two early WhatsApp employees have launched a private social networking app called HalloApp on both iOS and Android. The ad-free app is somewhat similar to WhatsApp as it also allows for encrypted, private chats with friends and family, including group chats. The app also features a Home feed with posts from friends. The company plans to eventually monetize via subscriptions if it gains traction.
Image Credits: Anyone
Audio app Anyone launched its “marketplace for advice” app on iOS and Android after previously operating in a closed beta. The app allows users to pay for access to busy people whose advice they’d like to seek out, but limits calls to just five minutes. (Advice givers can opt to donate the money to charity, if they don’t want to profit from the help they’re giving.) The company claims to vet advisors before they’re allowed to offer calls, in order to keep the advice on the platform high-quality.
Image Credits: Streamlabs
Streamlabs, a maker of livestreaming software, launched a new iOS app that allows creators to easily turn their Twitch clips into a format that works on TikTok, Instagram Reels, YouTube Shorts and Facebook. The app works by allowing streamers to enter the URL of a clip, selecting the output format (landscape, vertical or square) and choosing a pre-loaded layout. You can also crop the clip, blur the background and select from different layouts depending on which frames you want to feature. The app is free with a subscription of $4.99/mo or $49.99/yr to remove the watermark and add more features, including higher-quality exports.
There are scam apps… Then there's The League dating app which charges a mind-boggling $999.99/week for a VIP subscription! Literally had to double check to make sure it wasn't a typo. pic.twitter.com/pPzKXtsQe3
Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.
Despite the geopolitical headwinds for foreign tech firms to enter China, many companies, especially those that find a dependable partner, are still forging ahead. For this week’s roundup, I’m including a conversation I had with Prophesee, a French vision technology startup, which recently got funding from Kai-Fu Lee and Xiaomi, along with the usual news digest.
Spotting opportunities in China
Like many companies working on futuristic, cutting-edge tech in Europe, Prophesee was a spinout from university research labs. Previously, I covered two such companies from Sweden: Imint, which improves smartphone video production through deep learning, and Dirac, an expert in sound optimization.
The three companies have two things in common: They are all in niche fields, and they have all found eager customers in China.
For Prophesee, they are production lines, automakers and smartphone companies in China looking for breakthroughs in perception technology, which will in turn improve how their robots respond to the environment. So it’s unsurprising that Xiaomi and Chinese chip-focused investment firm Inno-Chip backed Prophesee in its latest funding round, which was led by Sinovation Venture.
The funding size was undisclosed but TechCrunch learned it was in the range of “tens of million USD.” It was also the first investment that Kai-Fu Lee has made through Sinovation in Europe. As Prophesee CEO Luca Verre recalled:
I met Dr. Kai-Fu Lee three years ago during the World Economic Forum … and when I pitched to him about Prophesee, he got very intrigued. And then over the past three years, actually, we kept in touch and last year, given the growing traction we were having in China, particularly in the mobile and IoT industry, he decided to jump in. He said okay, it is now the right timing Prophesee becomes big.
The Paris-based company wasn’t actively seeking funding, but it believed having Chinese strategic investors could help it gain greater access to the complex market.
Rather than sending information collected by sensors and cameras to computing platforms, Prophesee fits that process inside a chip (fabricated by Sony) that mimics the human eyes, a technology that is built upon neuromorphic engineering.
The old method snaps a collection of fixed images so when information grows in volume, a tremendous amount of computing power is needed. In contrast, Prophesee’s sensors, which it describes as “event-based,” only pick up changes in the environment just as the photoreceptors in our eyes and can process information continuously and quickly.
Europe has been pioneering neuromorphic computing, but in recent years, Verre saw a surge in research coming from Chinese universities and tech firms, which reaffirmed his confidence in the market’s appetite.
We see Chinese OEMs (original equipment manufacturers), particularly Xiaomi, Oppo and Vivo pushing the standard of quality of image quality to very, very high … They are very eager to adopt new technology to further differentiate in a way which is faster and more aggressive than Apple. Apple is a company with an attitude which to me looks more similar to Huawei. So maybe for some technology, it takes more time to see the technology mature and adopt, which is right very often but later. So I’m sure that Apple will come at certain point with some products integrating event-based technology. In fact, we see them moving. We see them filing patents in the space. I’m sure that will come, but maybe not the first.
Though China is striving for technological independence, Verre believed Prophesee’s addressable market is large enough — $20 billion by his estimate. Nonetheless, he admitted he’d be “naive to believe Prophesee will be the only one to capture” this opportunity.
WeRide bought a truck company
One of China’s most valuable robotaxi startups has just acquired an autonomous trucking company called MoonX. The size of the deal is undisclosed, but we know that MoonX raised “tens of millions RMB” 15 months ago in a Series A round.
While WeRide is focused on Level 4 self-driving technology, it is also finding new monetization avenues before its robotaxis can chauffeur people at scale. It’s done so by developing minibusses, and the MoonX acqui-hire, which brings the company’s founder and over 50 engineers to WeRide, will likely help diversify its revenue pool.
WeRide and MoonX have deep-rooted relationships. Their respective founders, Tony Han and Yang Qingxiong, worked side by side at Jingchi, which was later rebranded to WeRide. Han co-founded Jingchi and took the helm as CEO in March 2018 while Yang was assigned vice president of engineering. But Yang soon quit and started MoonX.
Han, a Baidu veteran, gave Yang a warm homecoming and put him in charge of the firm’s research institute and its new office in Shenzhen, home to MoonX. WeRide’s sprawling headquarters is just about an hour’s drive away in the adjacent city of Guangzhou.
AI surveillance giant Cloudwalk nears IPO
Cloudwalk belongs to a cohort of Chinese unicorns that flourished through the second half of the 2010s by selling computer vision technology to government agencies across China. Together, Cloudwalk and its rivals SenseTime, Megvii and Yitu were dubbed the “four AI dragons” for their fast ascending valuations and handsome funding rounds.
Of course, the term “AI dragon” is now a misnomer as AI application becomes so pervasive across industries. Investors soon realized these upstarts need to diversify revenue streams beyond smart city contracts, and they’ve been waiting anxiously for exits. Finally, here comes Cloudwalk, which will likely be the first in its cohort to go public.
Cloudwalk’s application to raise 3.75 billion yuan ($580 million) from an IPO on the Shanghai STAR board was approved this week, though it can still be months before it starts trading. The firm’s financials don’t look particularly rosy for investors, with net loss amounting to 720 million yuan in 2020.
Also in the news
Speaking of the torrent of news in autonomous driving, vehicle vision provider CalmCar said this week that it has raised $150 millionin a Series C round. Founded by several overseas Chinese returnees in 2016, CalmCar uses deep learning to develop ADAS (Advanced Driver Assistance System) used in automotive, industrial and surveillance scenarios. German auto parts maker ZF led the round.
Baby clothes direct-to-consumer brand PatPat said it has raised $510 million from Series C and D rounds. The D2C ecosystem leveraging China’s robust supply chains is increasingly gaining interest from venture capitalists. Brands like Shein, PatPat, Cider and Outer have all secured fundings from established VCs. Founded by three Carnegie Mellon grads, PatPat counts IDG Capital, General Atlantic, DST Global, GGV Capital, SIG China and Sequoia China among its investors.
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by what the weekday Exchange column digs into, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.
Hello everyone, I hope you had a lovely week. I turned 32 after experiencing sleep-destroying heartburn. So, a little good and a little bad. But that didn’t stop the markets. Nope. Not a bit. Which means we have a lot to talk about, including falling insurtech stocks and what the situation might mean for startups, and a raft of IPOs. This will be fun!
Before we get into the nitty-gritty of our chats with newly public companies Kaltura, Couchbase and Enovix, let’s talk insurtech.
In the last year or so we’ve seen a number of insurtech startups go public, including Root (auto insurance), Metromile (car insurance), and Lemonade (rental insurance). Here’s a quick digest of how their performance looks today:
Root: $7.72 per share, 71.4% down from its $27 per share IPO price.
Metromile: $7.26 per share, down 64.4% from its post-combination highs.
Lemonade: $86.97 per share, up 199.9% from its IPO price of $29 per share.
Recall that Root and Metromile began to trade after Lemonade, so their declines are not over a longer time horizon, but a shorter interval. Which makes the situation all the more interesting.
What’s going on? Well, two of the three insurtech public offerings (SPACs, IPOs, etc.) are sharply underwater. That doesn’t bode incredibly well for Hippo, which is pursuing its own SPAC-led combination that should be wrapping up in short order. The huge declines don’t seem bullish for insurtech startups, who will have to answer private-market investor doubts concerning their value.
Does Lemonade’s strong post-IPO performance allay concerns? It’s tricky. The company has been busy expanding into new markets, including auto insurance. The company did take a somewhat material hit from the Texas freeze earlier this year — per its most recent earnings report — but past those two data points it’s not entirely clear what the company is doing that the other two are not. But investors are stoked about Lemonade, and not Root and Metromile. Figuring out why that’s the case, and why their startup is more Lemonade than the other two, is going to be key for the many insurtech startups still scaling toward their own IPOs.
It’s IPO season
The Exchange has been busy on the phones these last two weeks, talking to CEOs of companies going public to try and learn from their recent experiences. So, what follows are notes from calls with folks at Kaltura, Couchbase and Enovix. Enjoy!
The Exchange spoke with Kaltura CEO Ron Yekutiel, who said that the company’s IPO’s timing was impacted by the early-2021 public market turmoil. That was not a surprise, but it was good to get confirmation regardless.
That freeze was partially caused by the Archegos implosion, per Yekutiel. That makes sense, but was news to us.
Yekutiel said that his company wasn’t thrilled about the delay — going public is the only fundraise that you pre-announce, he noted — but added that investors his company had already spoken to the first-time around were still enthused about Kaltura on its second run at an IPO.
Per the CEO, Kaltura’s preliminary Q2 results showed investors that what it was talking about earlier in the year was coming true. He also stressed uptake in new products as key to the company’s continued growth.
The CEO was happy with how his company priced and traded during its first day, snagging a flat 20% uptick in value upon trading. He noted that more would have been excessive, and less would have been un-good.
Regarding the lower valuation that Kaltura priced at compared to its March-era IPO price range, Yekutiel said that you don’t get a third chance to make a first impression and that his company wanted to get the offering done. So they did. Points for not getting lost in their own head.
Kaltura is up 17.5% from its $10 per-share IPO price as of the time of writing.
One anecdote, if I may. Kaltura won an early TechCrunch40 — the precursor to the TechCrunch50 event, itself a predecessor to today’s TechCrunch Disrupt conference series — thanks to a single vote cast via physical token. Yekutiel still has that token, and showed it to us during our chat. Neat!
The Exchange spoke with noSQL database company Couchbase’s CEO Matt Cain. Couchbase priced at $24 per share, above its $20 to $23 per-share IPO price range.
Today it’s worth $33.20, rising 9.2% in today’s trading as of the time of writing.
Cain was talking from a pretty strict script — a pretty standard situation amongst newly public CEOs worried about fucking up and going to jail — so we didn’t get the precise answers we were looking for. But we still managed to learn a few things, including that Couchbase was yet another company that found the meeting density made possible by remote roadshows to be accretive.
The CEO was focused on discussing the scale of the opportunity ahead of Couchbase, namely the world of operational databases. It’s hard to find a bigger market, he argued, which made investors excited about what his company might be able to accomplish. Our read here is that there’s probably plenty of surface area for startups in the database world, if the market is as big as Cain reckons it is.
We wanted to learn a bit more about how public-market investors view open-source powered companies, but didn’t get too much from him on the matter. Still, the company’s IPO is a pretty damn strong one, implying that being OSS-built isn’t exactly a detriment to a company hoping to exit.
The Exchange wanted to chat with newly public company Enovix because it debuted via a SPAC. Why does that matter? Because there are other battery-focused companies looking to go public via SPACs. So, the chat was good background for later work.
And we love talking to public companies. Who doesn’t?
Asked if combination-and-trade-under-new-ticker-symbol day was like an IPO to his firm, Rust said that it was. Fair enough.
The company’s combination date for its SPAC slipped from Q2 to Q3, we noticed. Why was that? Some SEC changes regarding accounting, in short. Not a big deal was our impression from the chat, but one that did cause a slight delay to Enovix’s trading date.
Why go public via a SPAC? Cash, but also the particular sponsor of their combination, which Rust said was a key resource in terms of operational knowledge. The company has also hired from its SPAC sponsor’s network, which felt notable. (Hey look, actual investor value-add!)
Asked why his company is worth less than the impending SES SPAC, another battery company that has yet to generate revenue, Rust said that the value of his company in its SPAC deal was a negotiation, and that if the company is successful, whether it was valued at $1.1 billion or $1.4 billion wouldn’t really matter.
What’s fun about Enovix is that it is not starting with its impending battery tech aimed at EVs. Instead, it’s targeting high-end electronics. Why? Quick cycles to get batteries into hardware and possible pricing power. It does intend to get into EVs in time, however.
The company is worth $17.33 per share, giving it what Yahoo Finance describes as a $2.5 billion valuation. That’s a good markup from what it expected and could bode well for SES’s own, future debut.
Yo, that was a lot. Thanks for sticking with me. And thanks for reading The Exchange’s little newsletter. You can catch up on all our work here if you want some long-form reads on the global venture capital market, edtech and other topics. Stay cool!
Sequoia’s Mike Vernal has worn many hats. He was VP of product and engineering at Facebook for eight years before getting into investment. His portfolio includes Houseparty, Threads, Canvas, Citizen, PicsArt and more, and he continues to invest in companies across a broad spectrum of stages and verticals, including consumer, enterprise, marketplaces, fintech and more.
Vernal joined us at TechCrunch Early Stage: Marketing and Fundraising earlier this month to discuss how founders should think about product-market fit, with a specific focus on tempo. He covered how to organize around the pace of iteration, how to design with customer feedback loops in mind and how Sequoia evaluates companies with regard to tempo.
Be explicit and be greedy at every single step along the way about getting feedback.
What is tempo?
Vernal breaks down tempo into two separate ingredients: speed and consistency.
It’s not just about going fast (which can often lead to some recklessness). It’s about setting a pace and staying consistent with that pace.
One of the very best compliments an angel can bestow on a founding team and include in an introduction to us is, “They’re just really fast,” or “She’s a machine.” What does that mean? It doesn’t mean fast in the kind of uncontrolled, reckless, crashing sense. It means fast in a sort of consistent, maniacal, get-a-little-bit-better-each-day kind of way. And it’s actually one of the top things that we look for, at least when evaluating a team: how consistently fast they move. (Timestamp: 2:26)
Vernal went on to say that tempo is directly correlated to goals and objectives and key results (OKRs). Building a feedback loop into those OKRs and determining the tempo with which to attack them is critical, especially during the process of finding product-market fit.
Finding product-market fit is not a deterministic process. Most of the time, it requires iteration. It requires constant adaptation. My mental model is that it’s actually just a turn-based game with an unknown number of steps, and sometimes either the clock or the money or both run out before you get to finish the game. It’s kind of like a game of chess. So what is your optimal strategy? (Timestamp: 4:25)
Feedback is your friend
As Vernal explained, finding product-market fit is all about feedback, and that must be an ongoing, built-in part of the process. He outlined how founders can go about designing with that in mind.
We know how much you love a good startup pitch-off. Who doesn’t? It combines the thrill of live, high-stakes entertainment with learning about the hottest new thing. Plus, you get to hear feedback from some of the smartest folks in the industry, thus learning how to absolutely crush it at your next pitch meeting with a VC.
With all that in mind, we’re introducing a special summer edition of Extra Crunch Live that’s all pitch-off, all the time.
On August 4, Extra Crunch Live will feature startups exhibiting in the Startup Alley at TechCrunch Disrupt 2021 in September. Those startups will pitch their products/businesses to a pair of expert VC judges, who will then give their live feedback.
Extra Crunch Live is usually a combination of an interview with a founder/investor duo and an audience pitch-off. But as it’s summer, and Disrupt is right around the corner, we thought it would be fun to bring you even more pitches and even more feedback.
On August 4, our expert VC judges will be Edith Yeung from Race Capital and Laela Sturdy of CapitalG. Register here for free!
Edith Yeung started out as an investor at 500 Startups and is now a general partner at Race Capital. She’s an expert on both the China and Silicon Valley investment landscape and has made more than 50 investments, with a portfolio that includes 50 startups, including Lightyear/Stellar (valued $1.2 billion), Silk Labs (acquired by Apple), Chirp (acquired by Apple), Fleksy (acquired by Pinterest), Human (acquired by Mapbox), Solana, Oasis Labs, Nebulas, Hooked, DayDayCook, AISense and many more.
Laela Sturdy is a 10x unicorn operator-turned-investor whose investments are worth nearly $200 billion. She joined CapitalG, the investment arm of Alphabet, in 2013, and her portfolio includes Stripe, UiPath, Duolingo, Gusto, Webflow and Unqork, among many others.
As a special thank you, all attendees of this episode of Extra Crunch Live will be entered into a random drawing for a chance to win one of three free tickets to TechCrunch Disrupt 2021. Following the event, we’ll randomly select three winners and send details on how to redeem their passes. Do you need to submit any additional information to enter the drawing? Nope. All you need to do is register for Extra Crunch Live by clicking here and attend the event on August 4.
To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.
Hello and welcome to Daily Crunch for July 23, 2021. It’s been an interesting week for the crypto faithful. One eye-catching piece of news came from Twitter and Square CEO Jack Dorsey, who said that bitcoin will be a “big part” of the company’s future. In his view it’s the internet’s “native currency.” Kinda? I would have picked a more modern chain, but that’s just me. — Alex
The TechCrunch Top 3
Indian IPOs are a go:After much selling and waiting, the Zomato IPO took flight in India to great effect. Shares of the food delivery unicorn went up sharply, marking a successful flotation for the growth-oriented unicorn. For other richly valued Indian unicorns, it’s just about the best news that you could imagine. More, please.
Snap is very much not dead:Lost amidst all the Facebook and TikTok brouhaha is the fact that Snap is still growing its user base (some) and revenue scale (more). The company still consumes cash and has huge share-based compensation costs, but it reported the sort of growth that delights investors. So, up went its shares.
China cracks down on edtech: The changing climate for startups and tech giants in China took a new twist this week when news broke that the Chinese Communist Party may force tutoring companies in the country to go nonprofit. That hit a number of stocks, and, we presume, was a pretty bad day for the country’s larger edtech venture and startup ecosystem.
Paystand is building Venmo for businesses:Want to send a bloc of cash as a company? The process can suck. Happily Paystand just raised $50 million for its work on the matter. TechCrunch’s Christine Hall told Daily Crunch that she picked up the round because the company is “not only taking on the business-to-business payment space, but is also utilizing blockchain technology as its engine.”
Former Minter wants to be king:That’s our first read of the startup Monarch, founded by Val Agostino, who was the first PM at Mint.com. What does Monarch do? Helps folks manage their financial futures. Sure, other companies do that, but most of them are garbage. Have you used the Fidelity website lately?
Lucid Motors discovers the weaknesses of democracy: The EV company had to extend its voting deadline to approve its SPAC deal after not enough folks voted. Per TechCrunch, the “hiccup occurred on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger.” That particular item required more votes. Regardless, it now has the votes and will go public.
Susan Su on how to approach growth as your startup raises each round
If you are methodical in your approach to building a larger customer base, it is not difficult to foster steady growth.
Marketers who shift with whichever way the wind is blowing — or blindly follow someone else’s idea of best practices — are less likely to be successful.
“The not-so-secret secret here is that the key to great retention is really simple,” said growth expert Susan Su recently at TechCrunch Early Stage: Marketing and Fundraising.
“It is building a product that solves a real and especially persistent problem for people.”
In a conversation with Managing Editor Eric Eldon, Su delved into several issues, including tips for how founders should discuss growth with their investors and her methods for developing a sample qualitative growth model.
“I firmly believe that every founder should try their hand at growth,” said Su.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Big Tech Inc.
GM recalls the Bolt. Again: If you own a 2017-to-2019-era Bolt, it may catch fire. So you’ll want to take part in the current recall. The first to happen since November of 2020 we hasten to add. Still the news underscores that EV tech is coming to maturity, even if some earlier attempts at such vehicles are riding the struggle bus.
Taboola goes shopping:Fresh off its SPAC combination, Taboola announced that it is buying “Connexity, a marketing technology company that operates a retail- and e-commerce-focused advertising network” for $800 million. You can do this more easily if you are public. Buy things, that is. Shares in the online effluent provider were up sharply in today’s trading.
Folks still using Tumblr not stoked that Tumblr wants a future:A few days back Daily Crunch was generally positive about Tumblr’s move to introduce paywalls for creators who wanted them. Why not position the venerable company toward the burgeoning creator economy and help folks make a few bucks? Well, users are pissed. It’s a somewhat standard internet mess, but that doesn’t make it any less befuddling.
Testimonial: “Jonathan was truly transformative at Policygenius. Prior to his arrival, we were running a smart but disjointed marketing effort. Our messaging was inconsistent, and our approach to understanding channel efficacy was weaker than it could have been. Jonathan brought a growth mindset to the team, and built a hypereffective org in a short amount of time.”
Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years.
It’s no longer just about securing a supply of cells. The string of partnerships and joint ventures show that automakers are taking a more active role in the development and even production of battery cells, .
Automakers are taking a more active role in the development and even production of battery cells.
And the deals don’t appear to be slowing down. Just this week, Mercedes-Benz announced its $47 billion plan to become an electric-only automaker by 2030. Securing its battery supply chain by expanding existing partnerships or locking in new ones to jointly develop and produce battery cells and modules is a critical piece of its plan.
Mercedes, like other automakers, is also focused on developing and deploying advanced battery technology. In addition to setting up eight new battery plants to supply its future EVs, the German automaker said it was partnering with Sila Nano, the Silicon Valley battery chemistry startup that it has previously invested in, to increase energy density, which should in turn improve range and allow for shorter charging times.
“This follows a trend that we’ve seen of automakers realizing how critical the battery is and taking more control of the production of the cells in order to ensure their own supply,” Sila Nano CEO Gene Berdichevsky said in a recent interview. “Like if you’re VW, and you say, ‘We’re going to go 50% electric by whatever year,’ but then the batteries don’t show up, you’re bankrupt, you’re dead. Their scale is so big that even if their cell partners have promised them to deliver, automakers are scared that they won’t.”
In addition to its partnership with Northvolt, VW is also in talks with suppliers to secure more direct access to supplies like semiconductors and lithium so it can keep its existing plants running at full speed.
Now the rest of the industry is moving to work with battery companies, to share knowledge and resources and essentially become the manufacturer.
Getaround was fined nearly $1 million by the Washington D.C. Office of the Attorney General for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”
The AG’s office started investigating the company early last year, after it received reports of vehicle thefts of cars listed on the Getaround platform. The settlement, released Friday, requires the company to pay the city $950,000, in addition to implementing other changes, including paying restitution to customers whose vehicles were stolen or damaged while it was listed for rent on Getaround’s platform.
Getaround, the winner of TechCrunch’s Startup Battlefield at Disrupt NYC in 2011, lets individual car owners rent their vehicles by the hour or day via its website and app. The site, much like competitor Turo or home rental analog Airbnb, mediates this exchange (and takes a cut off the top). The company’s attracted a lot of interest from investors, most recently raising a $140 million Series E that brought its total venture funding to $600 million.
The settlement is what’s known as an “assurance of voluntary compliance,” and it’s not an admission of guilt. The settlement document makes clear that Getaround denies it violated any consumer protection or tax laws.
“Gig economy companies must abide by the same rules as their brick-and-mortar counterparts,” Attorney General Karl Racine said in a statement. “They must provide clear and accurate information to consumers, especially about the safety of their services, and they must pay their fair share of taxes like everyone else does.”
The AG’s office claims that Getaround operated without a license in the district, misrepresented its service, and made “untrue or misleading representations” about the safety of its car rental services. As part of the settlement, the company must create a written policy for user complaints regarding vehicle damage or theft, including a way for users to report any issues. It also must clearly disclose limitations of its safety features, such as its “Enhanced Security” software feature, which Getaround says on its website can immobilize your car when it’s not being used. Getaround must also more clearly state the terms and conditions for insurance coverage.
The AG’s office also claimed that Getaround misled consumers by creating fake owner profiles for vehicles that it owned and operated. The company must now disclose its fleet cars clearly in listings.
A Getaround spokesperson told TechCrunch that the company “categorically disagrees” with the AG’s allegations.
“With regard to safety and security, as the Attorney General acknowledges, as soon as Getaround was notified of security issues affecting certain cars in the District, the company took immediate corrective action,” the spokesperson said. “As is its practice, Getaround will continue to compensate car owners who have filed valid claims for loss or damage. Finally, Getaround never disputed liability for the taxes it is paying pursuant to this settlement. Getaround will continue to pay applicable taxes to the District and in every jurisdiction in which it operates.”
The company spokesperson went on to say that “while the Attorney General is focused on scoring political points, Getaround remains focused on connecting safe, convenient, and affordable cars with District residents who need them to live and work.”
Early-stage startups tend to claim that their go-to-market strategy is fully operational. In reality, GTM is a stark numbers game, and even with a solid plan in place, it can be easily foiled by common problems like turf battles and poor communication.
Finding GTM fit is a milestone for any startup that includes everything from expanding the engineering team to launching your first media buy. But how do you know when you’ve reached that magic moment?
High churn means customers aren’t delighted, low gross margins mean poor unit economics, and that so-called magic number?
“You can calculate it by taking new ARR divided by your marketing and sales spending,” Nahm writes. “But keep in mind that the magic number is a lagging indicator, and it may take you a few quarters to see a positive result.”
Full Extra Crunch articles are only available to members Use discount code ECFriday to save 20% off a one- or two-year subscription
If you are methodical in your approach to building a larger customer base, it is not difficult to foster steady growth.
Marketers who shift with whichever way the wind is blowing — or blindly follow someone else’s idea of best practices — are less likely to be successful.
“The not-so-secret secret here is that the key to great retention is really simple,” said growth expert Susan Su recently at TechCrunch Early Stage: Marketing and Fundraising. “It is building a product that solves a real and especially persistent problem for people.”
In conversation with Managing Editor Eric Eldon, Su delved into several issues, including tips on how founders should discuss growth with investors, and her methods for developing a sample qualitative growth model.
“I firmly believe that every founder should try their hand at growth,” said Su.
Thanks very much for reading Extra Crunch this week!
Few startups go to market with the exact product their founders first envisioned.
Today, Tractable is known for developing tech that allows drivers to upload photos of their vehicles after a collision so its AI can assess the damage. Its first paying customer, however, used Tractable to inspect plastic pipe welds.
And as fate would have it, that customer also fired them just as the founders were raising their first round.
“We struck gold with car insurance,” says co-founder Alex Dalyac, as it was “a huge and inefficient market in desperate need of modernization.”
In an Extra Crunch guest post, he shares several takeaways from the last six years spent scaling a unicorn that have value for founders of all stripes. Step one?
“Search for complementary co-founders who will become your best friends,” advises Dalyac.
Startups and investors are turning to micromobility subscriptions
Image Credits: Bryce Durbin
“Amid the chaos of the COVID-19 pandemic and the murky path to profitability for shared electric micromobility, an increasing number of companies have turned to subscriptions,” Rebecca Bellan writes in a roundup about the future of micromobility.
“It’s a business model that some founders and investors argue hits the profit center sweet spot — an approach that appeals to customers who are wary of sharing as well as paying upfront to own a scooter or e-bike, all while minimizing overhead costs and depreciation of assets.”
After noting that Robinhood anticipates a decline in revenue in the third quarter as a result of slowing crypto trading, Alex Wilhelm got to thinking about what that forecast means for Coinbase.
“The now-public unicorn has lived through crypto ups and crypto downs,” he writes. “A decline in consumer interest in the next few months or quarters is not a huge deal, assuming one keeps a long enough perspective and the crypto-infused future that its fans expect comes to pass.”
Dear Sophie: Should we look to Canada to retain international talent?
Image Credits: Bryce Durbin/TechCrunch
I handle people ops as a consultant at several different tech startups. Many have employees on OPT or STEM OPT who didn’t get selected in this year’s H-1B lottery.
The companies want to retain these individuals, but they’re running out of options. Some companies will try again in next year’s H-1B lottery, even though they face long odds, particularly if the H-1B lottery becomes a wage-based selection process next year.
Others are looking into O-1A visas, but find that many employees don’t yet have the experience to meet the qualifications. Should we look at Canada?
Caryn Marooney, a Silicon Valley communications professional turned venture capitalist, spoke extensively on storytelling at TechCrunch Early Stage: Marketing and Fundraising.
Throughout her time in Silicon Valley, she helped companies like Salesforce, Amazon, Facebook and more launch products and sharpen their messaging. In 2019, she left Facebook, where she was VP of technology communication, and joined Coatue Management as a general partner.
Marooney uses the acronym RIBS to describe her basic strategy for startup messaging: Relevance, Inevitability, Believability and keeping it Simple.
For The Exchange, Alex Wilhelm and Anna Heim looked at Canada’s VC market in the first half of 2021, and if you’ve been reading their work, you know what’s coming.
Canada, like the rest of the globe, was absolutely scorching in the first half.
“Canada’s venture capital results now rival those of the entire Latin American region, with exits and mega-deals coming in roughly on par in the second quarter, and a similar number of total venture capital rounds in the period,” they write.
Greylock’s Mike Duboe explains how to define growth and build your team
With more venture funding flowing into the startup ecosystem than ever before, there’s never been a better time to be a growth expert.
At TechCrunch Early Stage: Marketing and Fundraising earlier this month, Greylock Partners’ Mike Duboe dug into a number of lessons and pieces of wisdom he’s picked up leading growth at a number of high-growth startups, including StitchFix. His advice spanned hiring, structure and analysis, with plenty of recommendations for where growth teams should be focusing their attention and resources.
Thanks to sprawling fulfillment centers, seamless logistics networks and ubiquitous internet access, consumers in many regions can now order groceries and a new set of cookware during breakfast and reasonably expect everything to arrive in time for dinner.
In Latin America, a lack of technology infrastructure makes delivery operations complex, and these supply chains are often managed with spreadsheets, paper and pen.
Algorithms that manage delivery routes or automatically dispatch drivers “are almost unheard of in the Latin America retail logistics sector,” says Bob Ma, an investor at WIND Ventures.
But thanks to growing consumer demand and expanding investment in last-mile delivery startups, Ma says the region is at a turning point.
Since Latin America’s middle class has grown 50% in the last decade and e-commerce constitutes just 6% of all retail, several unicorns have emerged in recent years, with more waiting in the wings.
It takes a really specific consumer to buy an Android phone, yet use Apple Music. But the small overlap in that venn diagram may be getting bigger. Last month at WWDC, Apple unveiled a free update for Apple Music subscribers that added lossless audio streaming and spatial audio with support for Dolby Atmos. Now, Android users can access these features too.
Last year, Google shut down its Google Play Music app (RIP) with the intent for users to migrate to YouTube Music. Some longtime Android fans are still unpleased about that decision and don’t feel that YouTube Music is up to par — but for audiophiles, these Apple Music updates might be what it takes to get them to switch. However, not all Android devices support Atmos yet.
Apple Music isn’t the only streaming platform ramping up its audio quality. On the same day that Apple announced its upgraded audio features at WWDC, Amazon Music also announced that it would support lossless streaming and spatial audio with Atmos functionality. Like Apple, Amazon offers these enhancements at no extra cost for subscribers. Spotify plans to launch a lossless audio feature as well called HiFi, but it will be a premium add-on, rather than a free upgrade like Apple Music or Amazon Music. YouTube Music doesn’t yet offer a comparable feature.
Currently, Spotify leads the streaming industry with 158 million paid subscribers. For comparison, Apple Music had 60 million subscribers in June 2019, and Amazon Music had 55 million in January 2020, but both companies haven’t shared updated numbers since then; YouTube Music has at least 20 million paid users. Even on consumer-grade headphones, you can hear the difference between a lossless FLAC file and a compressed mp3 — but if you’re such a keen audiophile that you need to listen to master-quality audio, just get Tidal.
Alex Ruzh is the CEO and co-founder of memoryOS, an edtech startup developing AI-powered gamified software teaching people how to remember anything.
Here at memoryOS, we have a saying we repeat often: “Most of the Kickstarter happens before the actual Kickstarter.”
Preparation is the key. But even if you understand that most of the work is done in advance, you should still prepare yourself for some sleepless nights after the launch date. The usual startup mantra will apply to your crowdfunding campaign just as well: Measure, analyze and adjust along the way.
As you may know, crowdfunding fits some B2C products better than it does others. So to give you our product context here, memoryOS is a gamified app that teaches memorization skills with the help of virtual mind palaces and interactive microlessons taught by our co-founder, two-time World Memory Champion, Jonas von Essen.
Before becoming the most funded app on Kickstarter and getting it 6,400% funded (and carrying it further to the Indiegogo platform right after), we spent countless hours researching down the rabbit hole of crowdfunding tips and tricks. We also had calls with several top-tier crowdfunding project creators who were kind enough to answer our questions and share bits of knowledge from their experience.
We’re sharing our approach (and secrets) to building a successful crowdfunding campaign because we know just how tough it can be to launch your own product. So here is a complete 10-step guide:
Find a unique idea
You should have a unique idea for a product that would solve at least one problem for your target audience. The proven approach is to set two major hypotheses right at the start and then work on getting them tested:
Does your product work and solve the problem as intended, and is it better than what’s out there? This is usually referred to as the “proof of concept” stage.
Are there enough people who are willing to pay for your product for you to build a sustainable business?
You will need to build a base prototype to test the first hypothesis and, if it works, you can then work on turning it into an MVP or a short demo version for your future commercial product. You can then get people to test it for free and prepay for the full version.
Getting people to actually back their interest with their wallet means you already have customers, not merely enthusiasts, and it significantly increases the chances of a successful project.
Yes, it’s important that you get people to pay a minimum reservation deposit at this point and receive their commitment to pay the remaining amount for the full product later on. Getting people to actually back their interest with their wallet means you already have customers, not merely enthusiasts, and it significantly increases the chances of a successful project.
Get user feedback
As soon as you have something to test, conduct short surveys to better understand your customers by gathering and analyzing the reasons why and for what purpose(s) they would want your product.
Here at memoryOS, we called the first couple thousand of our leads and had many insightful conversations to help us connect to our audience on a more personal and emotional level.
Once you have a demo or prototype for the users to test, make sure to add a feedback form right at the end of their experience (or gather feedback using Google Forms for surveys, or via email inquiries).
Rivian announced Friday that it has closed a $2.5 billion private funding round led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc.
Third Point, Fidelity Management and Research Company, Dragoneer Investment Group, and Coatue also participated in the round, according to Rivian.
“As we near the start of vehicle production, it’s vital that we keep looking forward and pushing through to Rivian’s next phase of growth,” Rivian CEO RJ Scaringe said in a statement.“ This infusion of funds from trusted partners allows Rivian to scale new vehicle programs, expand our domestic facility footprint, and fuel international product rollout.”
D1 Capital Partners founder Dan Sundheim said the firm is excited to increase its “investment in Rivian as it reaches an inflection point in its commercialization and delivers what we believe will be exceptional products for customers.”
Rivian has raised roughly $10.5 billion to date. The company did not share a post-money valuation.
The electric automaker, which now employs 7,000 and is preparing to deliver its R1T pickup truck in September, last raised funds in January. That round brought in $2.65 billion from existing investors T. Rowe Price Associates Inc., Fidelity Management and Research Company, Amazon’s Climate Pledge Fund, Coatue and D1 Capital Partners. New investors also participated in that round, which pushed Rivian’s valuation to $27.6 billion, a source familiar with the investment round told TechCrunch at the time.
The news comes just a day after Rivian confirmed it plans to open a second U.S. factory. It also follows Rivian’s decision to delay deliveries of its R1T truck and R1S SUV from this summer to September due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips.
“It’s about focusing on the metric that directly reflects the value that your company and products bring to your customers,” growth marketer Maya Moufarek told us in an interview for one of our most popular marketing articles of the week. “For Airbnb, that may be the number of nights booked; for Spotify, minutes listened to. It’s all about simplifying your strategy into something that is digestible, memorable and applicable.”
In the interview, Moufarek speaks about the importance of Sean Ellis’ North Star metric, how she audits her clients, brand building and more.
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In growth marketing, creative is the critical X factor: Self-proclaimed “growth marketing nerd” and current Uber growth team member Jonathan Martinez breaks down how to be successful with creative testing. Martinez discusses how to do this when faced with the current privacy restrictions.
Testimonial: “Jonathan was truly transformative at Policygenius. Prior to his arrival, we were running a smart but disjointed marketing effort. Our messaging was inconsistent, and our approach to understanding channel efficacy was weaker than it could have been. Jonathan brought a growth mindset to the team, and built a hypereffective org in a short amount of time.”
Startups developing so-called deep tech often find it challenging to raise capital for various reasons. At TechCrunch Early Stage: Marketing and Fundraising, two experienced investors spoke on the subject and advised startups facing a challenging fundraising path.
Pae Wu and Garrett Winther are both partners at SOSV and run the fund’s programs around biotech and hardware. SOSV doesn’t shy away from startups building complex technology, and because of this, Wu and Winther are well placed to advise on fundraising. They presented three key points targeting startups fundraising for deep tech applications, but the points are applicable to startups of any variety.
Before giving advice, the two acknowledged the nuances across the deep tech ecosystem and each industry. Their presentation is focused on general guidance applicable to nearly every startup.
Finding the right investor
The first point on Wu and Winther’s presentation sounds a bit self-serving but is based on solid advice. When building a deep tech startup, find the right investor, they said. This is general advice for startups, but according to these two, it’s even more important when building a company that might take longer for the investor to see a return.
In deep tech, it’s essential to think about founder-investor fit. And what we mean by this is understanding why an investor is even in VC in the first place. And what it is that’s driving you, the founder, to do what you do.
And so we look at this fit as a Venn diagram between founders who have a near maniacal devotion to wanting to solve a core systemic problem and investors that thrive on the unique risk profile that comes in deep tech. Because with deep tech, we’re talking about both technical risk, where maybe that insight that is core to the company merely proves that we’re no longer having to break any laws of physics to do whatever it is you’re trying to do. So there’s a big technical risk. (Timestamp: 6:09)
We, as investors, love to see methodical founders who can see the first step that will converge at the right moment of technical and business milestones.
Set obtainable goals
Breakthrough technology hardly came from sudden breakthroughs. As explained in this presentation, it’s critical to set obtainable goals that lead to the desired outcome.
GM is issuing a second recall for 2017 to 2019 Bolt EVs over potential fire issues. The company says it plans to replace defective batteries, but until it can do so it’s advising Bolt customers to limit their charging up to 90 percent, and not to go below 70 miles of range. It’s also reiterating a recommendation from last week against parking indoors and leaving the car’s to charge overnight unattended. This latest recall follows a similar one from last November, where GM recalled more than 68,000 Bolts.
The company also suggests that Bolt customers visit their nearest Chevy EV dealer to get the advanced diagnostics software, which should alert them ahead of any future battery issues. Hyundai, which also sources batteries from LG Chem like GM, ended up replacing more than 75,000 batteries for its Kona EV.
While it may sound alarming — GM’s recalls were triggered by five Bolt fires between 2017 and 2019 — it’s worth noting that gas cars typically cause around 150 fires a day, according to a FEMA report. Still, EV makers need to prove they can responsibly deal with potential issues before they can hurt more people (and before it leads to more negative sentiment towards electric vehicles).
Editor’s note:This post originally appeared on Engadget.
Electric aviation startup Wisk Aero’s request for a preliminary injunction against rival Archer Aviation was denied by a federal judge Thursday, the latest in an ongoing legal battle over whether Archer stole trade secrets in developing its flagship Maker aircraft.
A full written opinion has not yet been published. In a tentative ruling filed earlier this week, Judge William Orrick said Wisk’s “evidence of misappropriation is too equivocal to warrant a preliminary injunction.” Wisk filed for the injunction in May; if it had been approved, it would have effectively put an immediate halt to Archer’s operations.
Wisk submitted to the court 52 trade secrets it alleges were stolen and used by Archer, and the injunction would have prevented Archer from using any of them until a final decision was issued in the suit. It’s an extraordinary request and it makes sense that Orrick would need to see more certain evidence of misappropriation.
“There are some arguable indications of misappropriation, but given how equivocal the evidence is, Wisk is not entitled to the extraordinary remedy of an injunction,” he said in the tentative ruling. “Because the merits are so uncertain, Wisk has also not adequately shown irreparable injury based on misappropriation. And the balance of hardships favors Archer because, without solid evidence of misappropriation, an injunction would gravely threaten its business.”
Wisk says the judge’s decision on the injunction has no bearing on the outcome of the case “and does not exonerate Archer in the least.”
“We brought this lawsuit based on strong indications of theft and use of Wisk’s IP, and the initial limited evidence gathered through the court process to date only confirms our belief that Archer’s misappropriation of Wisk’s trade secrets is widespread and pervades Archer’s aircraft development,” Wisk continued. “Following today’s ruling, Wisk will be allowed to begin collecting evidence in earnest.”
Wisk was established in 2019 as a joint venture between Kitty Hawk and Boeing, but its history with electric aviation stretches back much further. The company was originally founded in 2010 as Levt, which eventually merged with sister company Kitty Hawk. Wisk says it (as Kitty Hawk) zeroed in on a fixed-wing, 12-rotor design in 2016. It’s this design that’s the centerpiece of its debut aircraft, Cora.
Archer, by contrast, is newer to the field. Much of Wisk’s original complaint, filed in April, is predicated on the speed with which Archer is bringing its air taxi service to market. Archer also recruited many former Wisk engineers – including former employee Jing Xue, whom Wisk says downloaded nearly 5,000 files before his departure from the company, which it alleges he handed over to Archer.
When he was cross-examined, Xue pled the Fifth Amendment, invoking his right to not self-incriminate, citing an ongoing federal investigation.
Archer says Wisk has not brought forward any substantive evidence of the central claim of the lawsuit: that Archer received and used Wisk trade secrets. Wisk’s allegations are based on “conspiracy theories and outright misrepresentations,” Archer’s Deputy General Counsel Eric Lentell said.
“It is clear to us from Wisk’s actions in this case that after recognizing Archer’s momentum and pace of innovation, Wisk began abusing the judicial and criminal justice system in an attempt to slow us down to compensate for its own lack of success,” Archer co-founders Brett Adcock and Adam Goldstein said.
The court will hold a scheduling conference on August 11, where the judge will outline next steps for the case. A date for the trial has not been set.
The case is filed in the California Northern District Court under case no. 3:2021cv02450.
If you’ve started using Snapchat more regularly this year, you’re not alone. At yesterday’s Q2 earnings call, Snap CEO Evan Spiegel announced that the platform grew both revenue and daily active users at the highest rates it has achieved in the last four years. Snapchat now has 293 million daily active users, growing 23% since last year.
Snap went public in 2017 with a $24 billion valuation, but not long before then, the ephemeral photo sharing app experienced a massive hiccup: Instagram cloned their then-unique Stories feature. After Instagram Stories launched, Snapchat’s growth slowed by 82%. Then, when Snapchat redesigned its app’s interface, Kylie Jenner tweeted that she didn’t use the app anymore, causing the company’s valuation to drop by $1.2 billion.
sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.
But Snapchat held on and made a comeback. Its revenue reached an all-time high of $911 million in Q4 of 2020, then went down to $770 million the following quarter. Now, Snapchat’s revenue in Q2 of 2021 surpasses its previous high to reach $982 million.
The app’s Q2 growth could be attributed to the return of advertisers who scaled back their spending during the height of the pandemic, as well as the retention of users that flocked to the app while in lockdown. Like many social media platforms, Snapchat grew its revenue and user base during the pandemic, but this isn’t just a matter of re-engaging users with an app that they grew out of. As TikTok exploded on the scene and the creator economy boomed, Snapchat kept up by creating Spotlight, a TikTok clone, and investing in the applications of augmented reality.
“We made significant progress with our augmented reality platform this quarter,” Spiegel said. “More than 200 million Snapchatters engage with AR every day on average, and over 200,000 creators use Lens Studio to build AR Lenses for our community.”
Last month, Snapchat went viral for its Cartoon 3D Style Lens, which makes you look like a character in a Pixar movie. Spiegel specifically mentioned this lens as a feature that “highlighted the power of Lenses to go viral both inside and outside of Snapchat.” But beyond fun face filters, Snapchat has been using AR to woo ecommerce partners. The app has developed AR experiences for Walt Disney World, Smile Direct Club, Zenni Optical, e.l.f. Cosmetics, Ralph Lauren, and more. This includes try-on capabilities for watches, jewelry, eyewear, handbags, makeup, and even clothing. At its Partner Summit in May, Snapchat revealed an update that lets users scan friends’ outfits to find shopping recommendations for similar styles.
“We have a lot more work ahead to build out our technology and increase AR adoption, but we are thrilled with the results that our partners are seeing as we invest in our long-term camera opportunity,” said Jeremi Gorman, Snap’s Chief Business Officer. “We are confident in our long-term opportunity, and are excited to double down on shopping and commerce via augmented reality.”
In March, Snap acquired Fit Analytics, a Berlin-based startup that helps shoppers find the right-sized apparel and footwear when shopping online. Combined with Snap’s investment in AR, could we eventually use AR to see which size of clothing to order? The application of that sort of technology would need to be handled sensitively, especially as the rates of eating disorders in teens are on the rise.
Beyond ecommerce, Snapchat has sought out strategic partnerships with entertainment companies like HBO Max and Universal Music Group and doubled down on its Spectacles, glasses that create AR experiences. Of course, Facebook is working on AR glasses too. But for both companies, Snap’s recent successes show the rising adoption and value of AR experiences.
Monarch, a subscription-based platform that aims to help consumers “plan and manage” their financial lives, has raised $4.8 million in seed funding.
Accel led the round, which also included participation from SignalFire, and brings the Mountain View-based yet fully distributed startup’s total funding since its 2019 inception to $5.5 million.
Co-founder and CEO Val Agostino was the first product manager on the original team that built Mint.com. There, he said, he saw firsthand that Americans with a greater understanding of financial matters “needed software solutions that went beyond just tracking and budgeting.”
“They needed help planning their financial future and understanding the tradeoffs between competing financial priorities,” he said.
Monarch aims to help people address those needs with software it says “makes it easy” for people to outline their financial goals and then create a detailed, forward-looking plan toward achieving them.
“We then help customers track their progress against their plan and automatically course correct as their financial situation changes, which it always does,” Agostino said.
Monarch came out of private beta in early 2021 with apps for web, iOS and Android, and is priced at $9.99 per month or $89.99 per year. The startup intentionally opted to not be ad-supported or sell customers’ financial data.
These approaches are “misaligned with users’ financial interests,” Agostino said.
“We felt that a subscription business model would best support that ethos and align our users’ interests with our own,” he added. Since launching publicly, Monarch has been growing its paid subscriber base by about 9% per week.
Image Credits: Monarch
Monarch launched during the pandemic, the uncertainty of which carried over into people’s financial lives, believes Agostino.
“As a result, we saw a lot of people make use of Monarch’s forecasting features to compare different ‘what if ‘scenarios such as switching jobs or moving to a different city or state,” he said.
Earlier this month, TechCrunch reported on a company with a similar mission, BodesWell, teaming up with American Express on a financial planning tool for its cardholders. Agostino said that Monarch is similar to BodesWell in that both startups help customers map a financial plan and future.
“The difference is that Monarch also has a full suite of PFM tools, such as budgeting, reporting and investment analysis,” he said. “The benefit to the consumer is that because Monarch is connected to your entire financial picture, we can help you actually stay on track with your financial plan and/or update the plan in real time if needed.”
Accel’s Daniel Levine said that until he came across Monarch, he was “somehow still a Mint customer despite its obsolescence.”
Over the past decade, the landscape for financial products has expanded dramatically, with more people having brokerage and crypto accounts, for example, Levine said.
In his view, Monarch stands out for a couple of reasons. For one, it’s a subscription product.
“One thing I always hated about Mint was when it would suggest the objectively wrong credit card for me,” Levine said. “It has all of my transaction data, it should tell me the card with the best rewards for me. Monarch is set up to never compromise what’s best for the user in favor of advertising.”
Secondly, Monarch’s aim is to serve as the infrastructure for its customers. To do that, it needs to monitor all of someone’s finances.
“They need to track checking, credit cards, brokerage, real estate and crypto,” he said. “Monarch is committed to doing that. It’s an incredibly painful problem and even though Monarch is a new entrant in the space, I think they’ve clearly separated themselves on that dimension.”
News that China’s government may force domestic tutoring-focused companies to go non-profit is taking a huge bite out of the value of several technology companies. Bloomberg notes that the value of companies like New Oriental Education & Technology Group and TAL Education are tumbling in light of the news, which would constitute merely the latest salvo against tech companies in the autocratic country.
New Oriental’s Hong Kong-listed shares fell 44.22% in after-hours trading after the non-profit news broke, while NYSE-shares of TAL are off an even sharper 51.75% in pre-market trading. With Yahoo Finance listing a roughly $13.8 billion market cap for TAL ahead of its impending declines at the market open, billions of equity value are about to get deleted. The list goes on: China Online Education Group is off 39.97% in after-hours trading, for example.
The Exchange explores startups, markets and money.
A new decision by China’s government to exert more control over a sector of its domestic economy should not surprise. And we shouldn’t be shocked that online tutoring is in the country’s targets; today’s news is a follow-up to prior regulatory action in the sector from earlier in the year.
As China has become synonymous with edtech startup in recent years, the news impacts more than just public companies. The expected rules change may also hit a host of private, venture-backed companies.
For example, what will happen to Yuanfudao? The company was valued at $15.5 billion last year, offering what TechCrunch described as “live tutoring, an online Q&A arm and a math problem-checking arm.” Will the company see its wings clipped?
All this comes on the same day that shares in Zomato began to float, with the Indian online food delivery company seeing its shares close up nearly 65% in their first day’s trading. TechCrunch has viewed the Zomato IPO as a possible bellwether for the larger Indian startup market, and the results augur well for other growth-focused, loss-making unicorns in the country.
Shareholders approved Friday EV startup Lucid Motors’ merger with special purpose acquisition company Churchill Capital IV, after the companies extended the deadline by one day because not enough retail investors showed up to cast their vote.
The issue is an unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs.
The issue came on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger — proposal two, which would revise the company’s charter so that Lucid could receive key financing. That proposal requires a higher number of votes than the others – and it must be approved for the merger to take place – so a lack of votes ended up halting the entire process.
The lack of shareholders was blamed on retail investors’ unfamiliarity with the SPAC process and, unbelievably spam.
Churchill chairman Michael Klein raised the possibility that some of the emails sent to shareholders were accidentally sent to voters’ spam folders. While it may seem incredible that something as low-tech as a Gmail spam filter might interrupt a multi-billion dollar business merger, it seems that may have occurred in this case.
“We simply need more votes,” Klein said on an investor call Thursday. Lucid Motors CEO Peter Rawlinson was also direct: “I need you to vote for proposal two.”
“We recognize that for many of you, this voting process may be new or not standard,” Klein continued. He later thanked the many individual shareholders but urged those “participating from the new platforms, the new apps,” to vote. “They may not necessarily the directing you clearly to the voting service.”
The number of amateur or so-called “retail traders” has exploded since the start of the pandemic, largely thanks to apps like Robinhood, which leverages gamification strategies to encourage users to buy and sell stocks from anywhere. The pinnacle of this phenomenon will likely be remembered by history in the explosive rise in prices of stocks for failing companies like GameStop and AMC entertainment, engineered by an army of retail traders on the subreddit r/wallstreetbets. Retail investors account for around 10% of the U.S. equity trading volume, according to a report from Morgan Stanley, down from a high of 15% last September.
But if the rise in the price of meme stocks shows us anything, it’s that retail traders are a powerful force. The Morgan Stanley report notes that “retail investors tend to prefer companies in sectors they are likely to be familiar with as consumers, such as Consumer Discretionary, Communication Services, and Technology.” This could be why the Churchill SPAC was high on many retail investors’ radars.
In a highly-awarded post on the subreddit r/SPACs, a Reddit user urgers new retail shareholders to participate in voting: “This is not normal. SPACs have never had to beg shareholders to act in their own best interest before.
You MUST vote. A non-vote does NOT count as a YES. A non-vote is just a non-vote.”
While Lucid’s merger hold-up is a very different scenario than that of meme stock trading, it’s yet another reminder that retail investors are continuing to shape markets.
Andrew Steele is an investor at Activant Capital. He focuses on fintech and e-commerce infrastructure and is based in New York.
COVID-19 cemented e-commerce into everyone’s daily habits in 2020, and as we look ahead, B2B e-commerce is quickly becoming the next frontier for founders and investors. The pandemic pushed businesses online, and the emergence of B2B marketplaces and e-commerce infrastructure is fueling a new wave of growth that’s estimated to reach $3.6 trillion in annual GMV by 2024.
But one major component remains missing from the stack: checkout, which has the opportunity to be the ultimate enabler for B2B e-commerce more broadly.
Historically, B2B e-commerce has been held back by deeply entrenched behaviors and a lack of cloud-based infrastructure.
The challenge of B2B e-commerce
Historically, B2B e-commerce has been held back by deeply entrenched behaviors and a lack of cloud-based infrastructure. While the market is quickly evolving, there are nuances to B2B purchases that make the path to purchase more complex than in consumer e-commerce. Broadly speaking, these constraints fall into three buckets:
Payments: PayPal unlocked the early days of consumer e-commerce, and Stripe’s ease of integrating card payments has powered the last decade. But in B2B, the challenge has always been that sellers don’t want to pay a 3% surcharge — so much so that they’d rather suffer through the pain of physical checks and accounts payable. In 2018, 60% of B2B payment flows were conducted via checks, and the persistence of nondigital payments has been a major bottleneck to e-commerce.
Permissions: Most B2B transactions go through contracting and procurement, which requires multiple parties to sign off on each transaction. This creates friction in the path to purchase, as the seller can’t tell if the buyer is authorized. Rather than being able to hit buy, buyers often need to fill out a form so a salesperson can get in touch. This can slow the transaction from seconds to weeks.
Credit: The majority of B2B transactions are completed on some form of credit, be it working capital loans, factoring, or in the form of days payable. Credit applications are typically completed on paper forms (or at best hosted PDFs) that armies of people at internal credit departments review. For context, there are over 1,000 employees at John Deere with “credit” in their job descriptions. This costs a lot and results in sensitive information being shared on paper documents, which further slows the transaction.
The net result of these constraints is the inability to make instant online purchases, like we’re used to as consumers. It’s a combination of fintech problems that require a platform rather than a series of point solutions.
Why is checkout the answer?
While the term “checkout” may not seem particularly novel, modern checkout is a distinctly new category in fintech combining digital payments, identity, fraud, credit and much more. It creates a powerful network, the type that can not only build trust but enable one-click transactions at scale.
Alphabet’s public-facing history with robotics has, thus far, been a spotty one. Most notably, Google X’s big acquisition push culminated in its selling Boston Dynamics to Softbank (who eventually flipped it to Hyundai). Alphabet/Google’s subsequent approach has been less flashy and focused on more immediate robotic tasks.
Unveiled today through the X blog, Intrinsic certainly fits the bill. In fact, it’s kind of an ideal take for Google. Effectively, the latest branch of the X Development tree is concerned with software for industrial robotics – those big, heavy machines that are perhaps not as nimble as many manufacturers would like.
Image Credits: Intrinsic
The post is penned by Wendy Tan-White, a VP of Moonshots at Alphabet, who now has the title of Intrinsic CEO. Of the company’s origins, the cofounder of SAAS website builder Moonfruit writes,
Over the last few years, our team has been exploring how to give industrial robots the ability to sense, learn, and automatically make adjustments as they’re completing tasks, so they work in a wider range of settings and applications. Working in collaboration with teams across Alphabet, and with our partners in real-world manufacturing settings, we’ve been testing software that uses techniques like automated perception, deep learning, reinforcement learning, motion planning, simulation, and force control.
There’s a vibrant community of startups out there looking to augment big, heavy robotics, including the likes of Veo, Symbio and Covariant. Often times, these companies focus on one specific element, like Veo’s safety protocols from human-robotic interactions. Fittingly, Intrisic appears to be shooting the moon here, so to speak, with plans to take a number of different issues at once.
Image Credits: Intrinsic
“We’re developing software tools designed to make industrial robots (which are used to make everything from solar panels to cars) easier to use, less costly and more flexible, so that more people can use them to make new products, businesses and services,” Tan-White writes.
Certainly Google has the capital and ability to attract talent to make some headway there, even if there are a number of competitors who have a head start. ThoughIntrinsic isn’t exactly brand new, either. The company has apparently been working in customary Google X stealth mode for a five-and-a-half years per the post — it clearly wanted something to show for its efforts before announcing itself to the world.
The news also marks Intrinsic’s debut as an “independent” Alphabet company, leaving the moonshot area behind as it seems partners in automotive, healthcare and electronics to help prove out its technologies.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
We were smaller team this week, with Natasha and Alex together with Chris to sort through yet another summer frenzy of a week.
This time around we actually recorded live on Twitter Spaces, which was a first for the podcast. If you missed it, it’s probably because we didn’t promote the taping since it was just an experiment. Good news, though, is that it went well, and we’re going to some more live tapings of the show with the entire crew on the mics. Make sure to follow the show on the Big Tweet to ensure that you can come hang with us next week. We’ll also do some Q&A at the end, if we’re in good moods.
Until then, let’s live in the present. Here’s what we got into in today’s show:
Open-source framework startup Serverless Stack announced Friday that it raised $1 million in seed funding from a group of investors that includes Greylock Partners, SV Angel and Y Combinator.
The company was founded in 2017 by Jay V and Frank Wang in San Francisco, and they were part of Y Combinator’s 2021 winter batch.
Serverless Stack’s technology enables engineers to more easily build full-stack serverless apps. CEO V said he and Wang were working in this space for years with the aim of exposing it to a broader group of people.
While tooling around in the space, they determined that the ability to build serverless apps was not getting better, so they joined Y Combinator to hone their idea on how to make the process easier.
Here’s how the technology works: The open-source framework allows developers to test and make changes to their applications by directly connecting their local machines to the cloud. The problem with what V called an “old-school process” is that developers would upload their apps to the cloud, wait for it to run and then make any changes. Instead, Serverless Stack connects directly to the cloud for the ability to debug applications locally, he added.
Since its launch six months ago, Serverless Stack has grown to over 2,000 stars on GitHub and was downloaded more than 60,000 times.
Dalton Caldwell, managing director of YC, met V and Wang at the cohort and said he was “super impressed” because the pair were working in the space for a long time.
“These folks are experts — there are probably just half a dozen people who know as much as they do, as there aren’t that many people working on this technology,” Caldwell told TechCrunch. “The proof is in the pudding, and if they can get people to adopt it, like they did on GitHub so far, and keep that community engagement, that is my strongest signal of staying power.”
V has earmarked the new funding to expand the team, including hiring engineers to support new use cases.
Serverless initially gravitated toward specific use cases — APIs are now allowing its community to chime in and it is using that as a guide, V said. It recently announced more of a full-stack use case for building out APIs with a database and also building out the front end frameworks.
Ultimately, V’s roadmap includes building out more tools with a vision of getting Serverless Stack to the point where a developer can come on with an idea and take it all the way to an IPO using his platform.
“That’s why we want the community to drive the roadmap,” V told TechCrunch. “We are focused on what they are building and when they are in production, how they are managing it. Eventually, we will build out a dashboard to make it easier for them to manage all of their applications.”
Paystone, a payments and integrated software company, secured another strategic investment this year, this time $23.8 million ($30 million CAD) from Crédit Mutuel Equity, the private equity arm of Crédit Mutuel Alliance Fédérale.
The Canada-based company got its start in 2008 as the payment processing company Zomaron, and rebranded itself as Paystone in 2019. Today it provides electronic payments and customer engagement technology to businesses, particularly those that provide services, CEO Tarique Al-Ansari told TechCrunch.
“Paystone is on a mission to help businesses grow, and we were enthralled by their commitment to that mission and their focus on service-oriented verticals,” said Léa Perge, investor at Crédit Mutuel Equity in Canada, via email.
While most of the company’s peers focus on product companies, Al-Ansari saw how underserved the service side was: their needs are different, and unlike retail, aren’t looking to sell online. Rather, they need an online presence and digital marketing to engage with customers, but their focus is being findable and having content that tells people why they should do business with them.
Paystone provides the marketing through content, help with reviews and with loyalty and rewards programs. However, rather than reward for spending, Paystone rewards for behavior. Refer a friend, get a reward. Write a review, get a reward. Al-Ansari calls it “payments as a benefit.” Referrals and reviews are how businesses become more findable, and the more content that’s out there, the more it helps people consider the business trustworthy, he added.
The new funding gives Canada-based Paystone total funds raised in 2021 of $78.8 million in a mix of debt and equity. It raised $54.9 million in January, funds that were barely touched as of yet, Al-Ansari said.
Though he wasn’t actively seeking new funds, Al-Ansari had been speaking with Crédit Mutuel Equity, which used to be CIC Capital Canada, prior to the pandemic, and their deal was put on hold.
Crédit Mutuel Equity came back with similar interest, and taking into account the kind of talent Paystone wanted to go after and its acquisition strategy — the company has already acquired five companies — Al-Ansari decided to take the additional funds. He said it gives the company options to hire more and double down on building the company, as well as enough capital to look for more acquisitions.
This year, Paystone entered the U.S. market for the first time and will do a proper launch later this year. The company has over 30,000 merchant locations on its platform throughout North America, and Al-Ansari expects that to grow by 5,000 this year. The company has 150 employees currently, and another 50 are expected to come on board by the end of the year.
In addition, Al-Ansari expects growth to accelerate for the rest of the year. The company processes around $6 billion in credit card payments and is on track to bring in $55.7 million in revenue this year. It is cash flow positive, residuals from the company’s origins of being bootstrapped, he said.
“We want to become the go-to destination for service businesses to set up a digital presence to accept payments and provide loyalty and rewards,” Al-Ansari said. “We will do this by solidifying our market position and growing our platform with the tools that customers want.”
Your startup might rely on clever growth tactics to get off the ground, but you need more than spreadsheets if you want to turn viral spikes into a real business. You need a qualitative growth model to guide the strategy that you can use to tell your story to your team and investors.
Growth marketing expert Susan Su sat down with us at TechCrunch Early Stage: Marketing and Fundraising this month to share pointers for young companies that are trying to raise money after initial market traction. In the presentation below, she maps out a growth strategy from seed through Series A and B rounds and details how your milestones, budgets, investor updates and other measures change as you advance.
The not-so-secret secret here is that the key to great retention is really simple. It is building a product that solves a real and especially persistent problem for people.
Throughout the process, “aqualitativemodeltellsthestoryofgrowththatyoucanuseatearlystagesandreallyallthroughoutyourcompanylifecycle,” she explains. “Aquantitativemodelorquantitativegrowthaccountingchartsthenumericalcourseforhowyouactuallydeliveragainstthatnarrativeandbecomesmorerelevantatlaterstageswhenyouactuallyhaverealnumbers.
Formerly a strategic growth adviser to companies at Sound Ventures, a growth marketing lead focused on startups at Stripe, and the first hire and head of growth at Reforge, Su just became a partner investing in climate tech for early-stage fund Toba Capital. She also writes a popular newsletter on climate investing and runs a six-week course for other investors on the topic.
Here’s more about growth, and how to talk about it with investors, from her presentation:
So here’s a sample qualitative growth model that I built for one of our portfolio companies with some modifications for anonymity. At the bottom, we have our linear inputs that form the foundation of awareness — in other words, traffic or leads that feed into our growth machine.
Once those leads come in, we have our acquisition loops, working to turn that non-repeatable spiky linear traffic (aka TechCrunch traffic, if you get so lucky as to be written up in TechCrunch) into scalable, repeatable acquisition. You cannot repeat the TechCrunch effect.
For this sample business, I happened to spec out five different acquisition loops — I was really ambitious. Many companies will struggle to identify this many. But the key to being able to scale is to have multiple viable acquisition loops, not just one single thing that works.
It’s pretty easy for individuals to send money back and forth, and there are lots of cash apps from which to choose. On the commercial side, however, one business trying to send $100,000 the same way is not as easy.
Paystand wants to change that. The Scotts Valley, California-based company is using cloud technology and the Ethereum blockchain as the engine for its Paystand Bank Network that enables business-to-business payments with zero fees.
The company raised $50 million Series C funding led by NewView Capital, with participation from SoftBank’s SB Opportunity Fund and King River Capital. This brings the company’s total funding to $85 million, Paystand co-founder and CEO Jeremy Almond told TechCrunch.
During the 2008 economic downturn, Almond’s family lost their home. He decided to go back to graduate school and did his thesis on how commercial banking could be better and how digital transformation would be the answer. Gleaning his company vision from the enterprise side, Almond said what Venmo does for consumers, Paystand does for commercial transactions between mid-market and enterprise customers.
“Revenue is the lifeblood of a business, and money has become software, yet everything is in the cloud except for revenue,” he added.
He estimates that almost half of enterprise payments still involve a paper check, while fintech bets heavily on cards that come with 2% to 3% transaction fees, which Almond said is untenable when a business is routinely sending $100,000 invoices. Paystand is charging a flat monthly rate rather than a fee per transaction.
Paystand’s platform. Image Credits: Paystand
On the consumer side, companies like Square and Stripe were among the first wave of companies predominantly focused on accounts payable and then building business process software on top of an existing infrastructure.
Paystand’s view of the world is that the accounts receivables side is harder and why there aren’t many competitors. This is why Paystand is surfing the next wave of fintech, driven by blockchain and decentralized finance, to transform the $125 trillion B2B payment industry by offering an autonomous, cashless and feeless payment network that will be an alternative to cards, Almond said.
Customers using Paystand over a three-year period are able to yield average benefits like 50% savings on the cost of receivables and $850,000 savings on transaction fees. The company is seeing a 200% increase in monthly network payment value and customers grew two-fold in the past year.
The company said it will use the new funding to continue to grow the business by investing in open infrastructure. Specifically, Almond would like to reboot digital finance, starting with B2B payments, and reimagine the entire CFO stack.
“I’ve wanted something like this to exist for 20 years,” Almond said. “Sometimes it is the unsexy areas that can have the biggest impacts.”
As part of the investment, Jazmin Medina, principal at NewView Capital, will join Paystand’s board. She told TechCrunch that while the venture firm is a generalist, it is rooted in fintech and fintech infrastructure.
She also agrees with Almond that the B2B payments space is lagging in terms of innovation and has “strong conviction” in what Almond is doing to help mid-market companies proactively manage their cash needs.
“There is a wide blue ocean of the payment industry, and all of these companies have to be entirely digital to stay competitive,” Medina added. “There is a glaring hole if your revenue is holding you back because you are not digital. That is why the time is now.”
Taboola, the company that operates a popular grid-based advertising and content recommendation network across media properties, today announced an acquisition to expand its reach further into e-commerce, its first big move since going public in June by way of a SPAC: it is paying $800 million in a combination of cash and stock to buy Connexity, a marketing technology company that operates an retail- and e-commerce-focused advertising network. Connexity has been owned by Symphony Technology Partners since 2011.
The deal — coming in the form of $260 million from cash on hand, $300 million from committed debt financing and approximately $240 million through the issuance of ordinary shares to the seller — will supersize and further diversify Taboola, which currently has a market cap of about $1.9 billion (that’s according to Google Finance; Taboola says the share count is off and it’s actually $2.35 billion) and is in hot competition with another content recommendation network operator, Outbrain: the two were set to merge operations but eventually went their own ways, and Outbrain itself went public this month.
Taboola said it expects the combined company to have gross profit of over $500 million for the fiscal year ended March 31, 2021 (ex- traffic acquisition costs, or TAC), with $185 million of adjusted EBITDA for the period, with both figures growing 20% in 2021 versus 2020.
Connexity was originally called Shopzilla before rebranding, and it has over the years amassed a number of related businesses, including Become.com, Skimlinks and PriceGrabber. (Even Connexity itself was an acquisition made by Shopzilla when it was primarily a shopping search engine.) Together, it’s helped the company build out what has become a sizable network focused around the business of e-commerce.
While Taboola focuses on content recommendations and advertising that runs alongside that, and Connexity is more squarely focused on the business of e-commerce, the two have something in common. They both position themselves as viable alternatives to the big players in advertising and discovery, giving publishers and retailers another way of making revenues and finding new customers without selling out data and a cut to the Googles, Facebooks and Amazons of this world.
While keeping the landscape competitive and providing viable alternatives to beleaguered publishers sounds like a noble enough effort, there are of course potential drawbacks. Taboola’s approach has long incurred a lot of criticism for disseminating click-bait and other garbage links, and some might have an issue with the concept of now a deeper move into e-commerce and selling merchandise along side that. Some in the media industry (and within the world of journalism in particular) has long aimed to keep commercial and other vested interests at arms length from its content, and so it will be worth watching to see how and if that effort shifts as publishers continue to look for profit.
Adam Singolda, the CEO and co-founder of Taboola, very much understands the challenges that publishers face, and he sees his company as building solutions to address that. He told TechCrunch that when Taboola went public, part of its sell to investors was that it would move into newer “types” of recommendations, covering new segments, that would also further scale the bigger operation, and this is a part of that strategy.
“We believe the future of the open web is e-commerce,” he added.
Taboola today has 9,000 digital property partners, 13,000 direct advertisers and 500 million daily active users on its platform, where publishers can use the content recommendation format to recirculate their own content as well as that of other publishers and advertisers on the Taboola network.
For Connexity’s part, it covers various activities like affiliate links, influencer marketing, in-stream advertising, shopping search ads, and more. Its customers include 1,600 direct merchants, and 6,000 publishers ((Walmart, Wayfair, Skechers, Macy’s, eBay and Otto are some of the most high profile of these). And in total, it says its network has some 40,000 retail-oriented publishers that can select from a pool of 750 million product offers, and an audience of 100 million shoppers.
And in a very fragmented e-commerce world rife with challenges in keeping online consumers’ attention, it says its various activities have generated over 800 million shopping leads and in 2020 more than $2 billion in sales for its customers.
That is still a relatively small part of the pie, though. eMarketer estimates that the e-commerce media market is worth some $35 billion in the U.S. alone.
Added to that, Taboola’s bet is that the publishers it already works with are going to be getting deeper into this space as part of their own drive to maximize more revenues per visitor/reader and make their own business models more viable (alongside diversifying into paid content, paywalls, alternative advertising formats like sponsored content, events, and so on).
“62% of US publishers expect ecommerce to be one of their biggest revenue channels,” Singolda said. “I strongly believe every publisher’s leadership these days have e-Commerce as a top 3 thing they want to get into in a big way.”
Connexity is a fairly multichannel offering today — a byproduct of all the acquisitions it has made into adjacent technologies — and Taboola plans to keep it all, with “massive cross sell and upselling opportunities, bringing eCommerce to every publisher on the open web, driving higher yields, going global with e-Commerce, empowering editorial teams what to write about around e-Commerce,” Singolda said.
Connexity on its own is a substantial business, and the shift to more e-commerce in the wake of the global Covid-19 pandemic has put a focus on the different tools it has in its armory to capture attention and convert ordinary site visitors into browsers and then into shoppers. It says that in 2019 it generated $151 million of revenue, $63 million of ex-TAC gross profit and $28 million of adjusted EBITDA in 2019, with that figure increasing to $172 million of revenue, $78 million of ex-TAC gross profit and $38 million of adjusted EBITDA in 2020.
Shares in Zomato, a Gurgaon-based food delivery company and first of India’s consumer tech startups to go public, closed up 64.7% in its debut day of trading in Mumbai, delivering a key insight into the appetite investors have for the world’s second largest internet market’s burgeoning startup ecosystem.
Zomato’s shares traded all day above the issue price of 76 Indian rupees ($1) and surged as high as 138.9 Indian rupees ($1.87). The 12-year-old firm ended day one of trading on BSE in Mumbai at 125.2 Indian rupees ($1.68), securing a market cap of $13.2 billion, up from about $5 billion valuation it had attained in private markets during the startup’s fundraise earlier this year.
Friday’s milestone of Zomato has equally been significant for the rest of the industry as startup founders and investors closely watched the performance. India’s Twitter timeline on Friday was flooded with well wishes and celebratory messages from industry colleagues.
Ashish Dave, India head of Mirae Asset, a backer of Zomato, said the listing and performance of Zomato today has delivered the missing piece of liquidity in Indian startup ecosystem.
“This validates that we can generate large IPOs, which then makes our startups more attractive for global LPs. It also gives Indian investors a chance to participate in the India tech journey rather than from watching it from sidelines,” he told TechCrunch, adding that retail investors of this generation will finally find a way to get in on the action with the brands they recognize and have grown with.
Really reading this… what a day for the ecosystem. Thank you @deepigoyal and @zomato fuelling all our dreams
"But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have" https://t.co/sM1Z2Q1sES
Home run for @zomato IPO and a fantastic moment for the Indian startup ecosystem. Congratulations to the founders, investors, and the team! Hope to see many more such celebrations as more startups reach the IPO pitstop before taking off on more daring rides.
Zomato chief executive Deepinder Goyal was quick to reciprocate. In a blog post, Goyal wrote, “Today is a big day for us. A new Day Zero. But we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem. Jio’s prolific growth has set all of us up for unprecedented scale. Flipkart, Amazon, Ola, Uber, Paytm – have also over the years, collectively laid the railroads that are enabling companies like ours to build the India of the future.”
“They say it takes a village to raise a child, and we are no exception. Hundreds of people have selflessly played a part in making Zomato what it is today.”
Indian tech startups have raised a record amount of capital this year as some high-profile investors have doubled down in the South Asian market. Swiggy, Zomato’s chief rival in India, said earlier this week it had raised $1.25 billion from SoftBank’s Vision Fund 2 and Prosus among others at a valuation of $5.5 billion.
A handful of other firms are also preparing to publicly list within a few months. Financial services startups Paytm and MobiKwik filed for their initial public offerings earlier this month. Online insurance aggregator Policybazaar is expected to file its paperwork within a few weeks.
“I don’t know whether we will succeed or fail – we will surely, like always, give it our best. But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have, and build something way more incredible than what we can dream of,” wrote Goyal.
Meet Kitchenful, a new German startup backed by Y Combinator that wants to make it easier to cook at home by taking care of menu ideas and grocery shopping. The service is currently available in early access in Germany with a focus on Berlin and Munich.
When you sign up to Kitchenful, you first have to set your preferences and goals. You can choose vegan, vegetarian, dairy-free and gluten-free options, but you can also focus on slow carbs recipes, a diet focused on healthy fats, etc.
After that, you get a meal plan for the coming week. You can review and customize each meal. For instance, if you plan to have guests, you can add a couple of persons to your Tuesday dinner. You can also remove vegetables if you usually buy your vegetables at a farmers market.
Once you’re ready to order, a virtual grocery basket is automatically generated for the user. You can review, add something that isn’t on the list, such as household items, and confirm.
Kitchenful then transfers your list of items to a major supermarket near you. The startup doesn’t fulfill orders directly — they rely on partners for that part of the process. That’s why Kitchenful describes itself as a grocery concierge service.
“Our main revenue stream is a concierge fee which we collect directly from our users for creating personalized weekly menus, handling the basket creation process, providing personalized cooking instructions for the recipes as well as leftover ideas. Additionally, we receive a commission from our supermarket partners per generated order,” Kitchenful co-founder and CEO Christian Schiller told me.
This isn’t Schiller’s first experience in food delivery. He previously spent four years as Vice President of Product at HelloFresh, a popular meal-kit company.
Kitchenful is just getting started. It has raised $1 million from Y Combinator, N26 co-founder and CEO Valentin Stalf, Souq co-founder Samih Toukan, HighSnobiety’s David Fischer, DurstExpress MD Maik Ludewig, and Mendeley co-founder Victor Henning.
The company has already established partnerships with REWE in Germany, Walmart and Kroger in the U.S. By partnering with supermarkets, Kitchenful can offer a great variety of products at supermarket prices.
It’s a different take on meal kits with a different approach to logistics, so it’s going to be interesting to see if Kitchenful becomes a popular alternative to both grocery delivery and meal-kit services.
GM is rolling out three major upgrades including automatic lanes changes and towing support to its hands-free driver assistance system Super Cruise and making it available in six vehicles, including the 2022 all-new GMC Hummer EV pickup truck.
While GM has steadily improved Super Cruise since its introduction in 2017, for years it has been limited to its luxury Cadillac brand. The improvements and additional vehicles mark the automaker’s willingness — and perhaps readiness — to sell owners of its Chevrolet- and GMC-branded pickup trucks on the technology.
When GM launched Super Cruise, it was only available in one Cadillac model — the full-size CT6 sedan — and restricted to divided highways. That began to change in 2019 when GM announced plans to expand where Super Cruise would be available. Now the system can be activated on more than 200,000 miles of roads in the United States.
And GM is planning to expand even further. By 2023, GM aims to bring Super Cruise to 22 vehicles, including the upcoming EVs Cadillac Lyriq and GMC Hummer SUV.
The company said Friday it is adding automatic lane changes that function without a driver prompt to Super Cruise. This feature in the enhanced Super Cruise will be available in the 2022 Cadillac Escalade, Cadillac CT4, Cadillac CT5, Chevrolet Silverado, GMC Hummer EV Pickup and GMC Sierra. GM has also developed and will launch a new feature that will allow drivers to engage the hands-free assistance system while trailering their boat or camper. This trailering feature will be available only in 2022 model year vehicles that have towing capability. Finally, GM has upgraded its in-car navigation to show drivers the highways where Super Cruise can be used.
Super Cruise uses a combination of lidar map data, high-precision GPS, cameras and radar sensors, as well as a driver attention system, which monitors the person behind the wheel to ensure they’re paying attention. Unlike Tesla’s Autopilot driver assistance system, users of Super Cruise do not need to have their hands on the wheel. However, their eyes must remain directed straight ahead.
The automatic lane change feature in Super Cruise will still require the driver to keep their eyes on the road. When the system is engaged, the driver no longer needs to engage the turn signal to indicate a desire to change lanes. Instead, the system, if engaged, will make the lane change on its own after alerting the driver. The system will move the vehicle to other lane to pass a slower vehicle.
The driver-prompted automatic lane change will be the default when the vehicle is towing a boat, camper or trailer.
All of these upgrades are possible thanks to GM’s newish digital vehicle platform called VIP, or vehicle intelligent platform, which provides more electrical bandwidth and data processing power, enabled engineers to add to Super Cruise’s capabilities. Vehicles equipped with this VIP electrical architecture can add features Super Cruise via over-the-air software updates. That means certain 2021 models, specifically the Cadillac Escalade, will get these new upgrades.
There are a couple of vehicles, namely the 2022 Chevrolet Bolt EUV, that have a different version of Super Cruise because it is not equipped the VIP. As a result, the Bolt EUV won’t get these upgrades.
Twitter CEO Jack Dorsey confirmed to investors that bitcoin will be a “big part” of the company’s future, as he sees opportunities to integrate the cryptocurrency into existing Twitter products and services, including commerce, subscriptions, and other new additions like the Twitter Tip Jar and Super Follows.
Dorsey has been a staunch bitcoin advocate for years, but how it would be put into action on Twitter’s platform had not yet been spelled out in detail. However, Dorsey has often publicly touted the cryptocurrency, saying it reminds him of the “early days of the internet” and that there wasn’t “anything more important” in his lifetime for him to work on.
Today, Dorsey also dubbed bitcoin one of three key trends for Twitter’s future, along with A.I and decentralization — the latter which Twitter is pursuing through its “Bluesky” initiative.
He touted bitcoin to investors on Twitter’s second quarter earnings call, saying it could help the company move faster in terms of its product expansions, while explaining that it was the “best candidate” to become the “native currency” of the internet.
Oh man, Jack Dorsey says he thinks Bitcoin is key to Twitter's future. Says it will "ensure people and companies can freely trade goods and services anywhere on the planet"
“If the internet has a native currency, a global currency, we are able to able to move so much faster with products such as Super Follows, Commerce, Subscriptions, Tip Jar, and we can reach every single person on the planet because of that instead of going down a market-by-market-by-market approach,” Dorsey explained. “I think this is a big part of our future. I think there is a lot of innovation above just currency to be had, especially as we think about decentralizing social media more and providing more economic incentive. So I think it’s hugely important to Twitter and to Twitter shareholders that we continue to look at the space and invest aggressively in it,” he added.
A Twitter rep confirmed this is the first time that Dorsey has spoken publicly about how Twitter could integrate bitcoin into its product lineup.
Dorsey also pointed out Twitter would not be alone in pursuing a crypto strategy, noting that Facebook was backing the digital currency Diem.
“There’s an obvious need for this, and appreciation for it. And I think that an open standard that’s native to the internet is the right way to go, which is why my focus and our focus eventually will be on bitcoin,” he noted.
Overall, Twitter delivered strong earnings in a pandemic rebound which saw the company posting its fastest revenue growth since 2014, according to CNBC, which drove Twitter shares 9% higher in extended trading. The company pulled in Q2 revenue of $1.19 billion versus the $1.07 billion Wall St. expected, a majority ($1.05 billion) from its advertising business. It also saw earnings per share of 20 cents versus the 7 cents expected.
However, monetizable daily active users (mDAUs) — Twitter’s own invented metric meant to fluff up often flat monthly user growth — were only at 206 million, an 11% year-over-year increase, while analysts were counting on 206.2 million. The company blamed the decline on a slower news cycle and end of shelter-in-place in many U.S. communities, which may have impacted Twitter usage during the quarter.
The Tumblr community often refers to itself as the Wild West of the internet, and they’re not wrong. A text post with over 70,000 notes puts it best: “Tumblr is my favorite social media site because this place is literally uninhabitable for celebrities. No verification system, no algorithm that boosts their posts, it’s a completely lawless wasteland for them.”
But like any social media company, Tumblr needs to keep itself afloat in order for its users to continue sharing esoteric fan art, incomprehensible shitposts, and overly personal diary entries hidden beneath a “Read More” button. Yesterday, Tumblr announced the limited beta test of its Post+ subscription feature, which — if all goes as planned — will eventually let Tumblr users post paywalled content to subscribers that pay them $3.99, $5.99 or $9.99 per month.
Image Credits: Tumblr
Tumblr is far from the first social media platform to seek revenue this way — Twitter is rolling out Super Follows and a Tip Jar feature, and this week, YouTube announced a tipping feature too. Even Instagram is working on its own version of Twitter’s Super Follows that would let users create “exclusive stories.” But on a website with a community that prides itself as being a “completely lawless wasteland” for anyone with a platform (save for Wil Wheaton and Neil Gaiman, who are simply just vibing), the move toward paywalled content was not welcomed with open arms.
Monetization is a double-edged sword. It’s not considered uncool for a Tumblr artist to link to a third-party Patreon or Ko-fi site on their blog, where their most enthusiastic followers can access paywalled content or send them tips. So Post+ seems like an obvious way for Tumblr to generate revenue — instead of directing followers to other websites, they could build a way for fans to support creators on their own platform while taking a 5% cut. This isn’t unreasonable, considering that Twitter will take 3% revenue from its new monetization tools, while video-centric platforms like YouTube and Twitch take 30% and 50%, respectively. But Tumblr isn’t Twitter, or YouTube, or Twitch. Unlike other platforms, Tumblr doesn’t allow you to see other people’s follower counts, and no accounts are verified. It’s not as easy to tell whether the person behind a popular post has 100 followers or 100,000 followers, and the users prefer it that way. But Post+ changes that, giving bloggers an icon next to their username that resembles a Twitter blue check.
A Tumblr Post+ creator profile
Tumblr rolled out Post+ this week to a select group of hand-picked creators, including Kaijuno, a writer and astrophysicist. The platform announced Post+ on a new blog specific to this product, rather than its established staff blog, which users know to check for big announcements. So, as the most public user who was granted access, the 24-year-old blogger was the target of violent backlash from angry Tumblrites who didn’t want to see their favorite social media site turn into a hypercapitalist hellscape. When Kaijuno received death threats for beta testing Post+, Tumblr’s staff intervened and condemned harassment against Post+ users.
“We want to hear about what you like, what you love, and what concerns you. Even if it’s not very nice. Tell us. We can take it,” Tumblr wrote on its staff blog. “What we won’t ever accept is the targeted harassment and threats these creators have endured since this afternoon. […] all they’re doing is testing out a feature.”
Before making their post, a representative from Tumblr’s staff reached out to Kaijuno directly to check in on them regarding the backlash, but there’s only so much that Tumblr can do after a user has already been threatened for using their product.
“I felt like the sacrificial lamb, because they didn’t announce Post+ beforehand and only gave it to a few people, which landed me in the crosshairs of a very pissed-off user base when I’m just trying to pay off medical bills by giving people the option to pay for content,” Kaijuno told TechCrunch. “I knew there’d be some backlash because users hate any sort of change to Tumblr, but I thought that the brunt of the backlash would be at the staff, and that the beta testers would be spared from most of it.”
Why do Tumblr users perceive monetization as such a threat? It’s not a question of whether or not it’s valuable to support creators, but rather, whether Tumblr is capable of hosting such a service. Multiple long-time, avid Tumblr users that spoke to TechCrunch referenced an incident in late 2020 when people’s blogs were being hacked by spam bots that posted incessant advertisements for a Ray-Ban Summer Sale.
“Tumblr is not the most well-coded website. It’s easy to break features,” Kaijuno added. “I think anything involving trusting Tumblr with your financial information would have gotten backlash.”
Tumblr users also worried about the implications Post+ could have on privacy — in the limited beta, Post+ users only have the ability to block people who are subscribed to their blog if they contact Tumblr support. In cases of harassment by a subscriber, this could leave a blogger vulnerable in a potentially dangerous situation.
“Ahead of our launch to all U.S.-based creators this fall, Post+ will allow creators to block subscribers directly,” a Tumblr spokesperson told TechCrunch.
Still, the Extremely Online Gen Z-ers who now make up 48% of Tumblr know that they can’t expect the platform to continue existing if it doesn’t pull in enough money to pay for its staff and server fees. In 2018, Tumblr lost almost one-third of its monthly page views after all NSFW content was banned — since then, the platform’s monthly traffic has remained relatively stagnant.
Image Credits: SimilarWeb
A former Tumblr employee told TechCrunch that the feature that became Post+ started out as a tip jar. But higher-ups at Tumblr — who do not work directly with the community — redirected the project to create a paywalled subscription product.
“I think a Tip Jar would be a massive improvement,” said the creator behind the Tumblr blog normal-horoscopes. Through the core audience they developed on Tumblr, they make a living via Patreon, but they don’t find Post+ compelling for their business. “External services [like Patreon] have more options, more benefits, better price points, and as a creator I get to choose how I present them to my audience.”
But a paywalled subscription service is different in the collective eyes of Tumblr. For a site that thrives on fandom, creators that make fan art and fanfiction worry that placing this derivative work behind a paywall — which Post+ encourages them to do — will land them in legal trouble. Even Archive of Our Own, a major fanfiction site, prohibits its users from linking to sites like Patreon or Ko-Fi.
“Built-in monetization attracts businesses, corporate accounts, people who are generally there to make money first and provide content second,” said normal-horoscopes. “It changes the culture of a platform.”
Across Tumblr, upset users are rallying for their followers to take Post+’s feedback survey to express their frustrations. The staff welcomes this.
“As with any new product launch, we expect our users to have a healthy discussion about how the feature will change the dynamics of how people use Tumblr,” a Tumblr spokesperson told TechCrunch. “Not all of this feedback will be positive, and that’s OK. Constructive criticism fuels how we create products and ultimately makes Tumblr a better place.”
Tumblr’s vocal community has been empowered over the years to question whether it’s possible for a platform to establish new revenue streams in a way that feels organic. The protectiveness that Tumblr’s user base feels for the site — despite their lack of faith in staff — sets it apart from social media juggernauts like Facebook, which can put e-commerce front and center without much scrutiny. But even three years after the catastrophic porn ban, it seems hard for Tumblr to grow without alienating the people that make the social network unique.
Platforms like Reddit and Discord have remained afloat by selling digital goods, like coins to reward top posters, or special emojis. Each company’s financial needs are different, but Tumblr’s choice to monetize with Post+ highlights the company’s lack of insight into its own community’s wishes.
Arrival, the commercial electric vehicle company that is shaking up the traditional auto production line with AI-run microfactories, has been chosen to build electric buses for the City of Anaheim, California.
The U.K.-based company said Anaheim, which operates transit services to and from Disneyland and other local attractions, would be the first customer for its lightweight-battery bus. Arrival will start with five 40-foot buses, but did not respond to requests for more information about when the buses would launch and when to expect more additions to the fleet.
The buses for Anaheim will be built in Arrival’s first U.S. microfactory in Rock Hill, South Carolina. Arrival’s other microfactory is in Charlotte, North Carolina, but the startup aims to have 31 microfactories all over the country by the end of 2024.
Arrival’s partnership with Anaheim Transportation Network also includes workforce development programs, according to a statement from the EV company. Local community colleges with electrical and mechanical engineering programs will be able to give eligible students internships to gain experience working with zero-emission transportation.
“The Arrival Bus will change the face of public transportation when it hits the roads,” said Mike Ableson, CEO of Arrival Automotive. “Our first order from a U.S. transit operator is just the beginning.”
Arrival, which recently went public via a SPAC merger, already has a number of notable partnerships. Last year, it signed an agreement with UPS to roll out an initial order of 10,000 electric delivery vehicles through 2024. In May the company partnered with Uber to create a purpose-built EV for ride-hailing, and just last week, the company announced an initial order of 3,000 EVs from LeasePlan, a Dutch “car-as-a-service” company.
The global pandemic highlighted inefficiencies and inconsistencies in healthcare systems around the world. Even co-founders Mayank Banerjee, Matilde Giglio and Alessandro Ialongo say nowhere is this more evident than in India, especially after the COVID death toll reached 4 million this week.
The Bangalore-based company received a fresh cash infusion of $5 million in seed funding in a round led by Khosla Ventures, with participation from Founders Fund, Lachy Groom and a group of individuals including Palo Alto Networks CEO Nikesh Arora, CRED CEO Kunal Shah, Zerodha founder Nithin Kamath and DST Global partner Tom Stafford.
Even, a healthcare membership company, aims to cover what most insurance companies in the country don’t, including making going to a primary care doctor as easy and accessible as it is in other countries.
Banerjee grew up in India and said the country is similar to the United States in that it has government-run and private hospitals. Where the two differ is that private health insurance is a relatively new concept for India, he told TechCrunch. He estimates that less than 5% of people have it, and even though people are paying for the insurance, it mainly covers accidents and emergencies.
This means that routine primary care consultations, testings and scans outside of that are not covered. And, the policies are so confusing that many people don’t realize they are not covered until it is too late. That has led to people asking doctors to admit them into the hospital so their bills will be covered, Ialongo added.
Banerjee and Giglio were running another startup together when they began to see how complicated health insurance policies were. About 50 million Indians fall below the poverty line each year, and many become unable to pay their healthcare bills, Banerjee said.
They began researching the insurance industry and talking with hospital executives about claims. They found that one of the biggest issues was incentive misalignment — hospitals overcharged and overtreated patients. Instead, Even is taking a similar approach to Kaiser Permanente in that the company will act as a service provider, and therefore, can drive down the cost of care.
Even became operational in February and launched in June. It is gearing up to launch in the fourth quarter of this year with more than 5,000 people on the waitlist so far. Its health membership product will cost around $200 per year for a person aged 18 to 35 and covers everything: unlimited consultations with primary care doctors, diagnostics and scans. The membership will also follow as the person ages, Ialongo said.
The founders intend to use the new funding to build out their operational team, product and integration with hospitals. They are already working with 100 hospitals and secured a partnership with Narayana Hospital to deliver more than 2,000 COVID vaccinations so far, and more in a second round.
“It is going to take a while to scale,” Banerjee said. “For us, in theory, as we get better pricing, we will end up being cheaper than others. We have goals to cover the people the government cannot and find ways to reduce the statistics.”
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Hello and welcome to Daily Crunch for July 22, 2021. Today we have a lot of news for you, but with a notable twist. Normally we have lots of startup news and a few notes from Big Tech companies. Today we have a lot from both, so strap in.
Gopuff is raising again: TechCrunch broke the news today that Gopuff, the SoftBank-backed delivery company, is raising more capital. Our sources say $1 billion at around a $15 billion valuation. Axios confirmed the news. The potential funding will follow in the wake of lots of capital raised for instant-delivery grocery around the world.
Canada’s venture capital market is hotter than the sun:TechCrunch’s exploration of the global, U.S, Indian, European and Latin American startup markets continued today with a look at North North America. It turns out that Canadian startups are enjoying one hell of a year when it comes to landing big venture rounds.
The internet went down. Here’s why: Akamai’s DNS system hit a pothole today, taking down a pretty big chunk of the internet. Lots of stuff broke, including the Couchbase website right as your humble servant was prepping to chat with its CEO about its recent IPO (more here). Things are back to normal now, but don’t forget that the internet is not a series of tubes. It’s a series of leaky tubes held together with duct tape.
Mindtech raises $3.25M for synthetic human watching:No really, that’s what it does. The U.K.-based company’s service wants to train CCTV cameras on digital humans, saving customers from knotty privacy issues. This is one of those times when venture capital dollars appear to be flowing to an actually kinda wild idea?
Sendlane wants you to spend more:Sendlane, now flush with $20 million in new capital, wants to help its customers use data on their customers to help keep shoppers loyal and spend more. I would call this slightly creepy but then I would sound like the luddite that I am.
Magic raises $27M to get rid of passwords:Magic, a startup that will spend its life trying to live up to its name, just raised a huge amount of money to pursue its vision of a less password-focused future. Its tech allows developers to “implement a variety of passwordless authentication methods with just a few lines of code,” TechCrunch reports.
What has a five-letter name and 3 billion more dollars?Sadly, it’s not you or me. It’s Index! The venture capital firm has put together new funds worth just under $3 billion, a big chunk more money than it raised, er, a year ago. Hot Startup Summer is being made possible by Hot Zero Interest Rate Policy Decade, which in turn is helping fuel Hot Bored Cash Season, leading to every venture capital firm raising enough money to cause their GPs to lose sleep. Fun!
Last-mile delivery in Latin America is ready to take off
Thanks to sprawling fulfillment centers, seamless logistics networks and ubiquitous internet access, consumers in many regions now order groceries and a new set of cookware during breakfast and can reasonably expect everything to arrive in time for dinner.
In Latin America, a lack of technology infrastructure makes delivery operations less complex — products are delivered from a retailer’s loading dock to a customer’s front door — but these supply chains are often managed with spreadsheets, paper and pen.
Algorithms that manage delivery routes or automatically dispatch drivers “are almost unheard of in the Latin America retail logistics sector,” says Bob Ma, an investor at WIND Ventures.
But thanks to growing consumer demand and expanding investment in last-mile delivery startups, Ma says the region is at a turning point.
Since Latin America’s middle class has grown 50% in the last decade and e-commerce constitutes just 6% of all retail, several unicorns have emerged in recent years, with more waiting in the wings.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Big Tech Inc.
Let’s start with transportation news and then talk about the rest of Big Tech.
Daily Crunch asked TechCrunch transportation guru and generally sterling person Kirsten Korosec just why there was so much news today from her beat. “I have no idea why, just make it stop,” she joked, before adding that she “can say that with so many automakers making commitments to move to all electric lines, we can expect more announcements about how they plan to ensure they have battery capacity and other raw materials.”
Here’s the news:
Rivian sets sights on second factory: Fresh off production delays, EV company Rivian is planning for the future in the form of another factory. The company admitted to being in the process of looking for a second plant. Our read? This electric car thing is not slowing down.
Uber buys Transplace for $2.25B:Rounding out our mobility rundown, Uber is making moves with its checkbook, this time buying Transplace, a digital logistics company, for a few billion. The effort will fit into Uber’s larger freight aspirations. The company has said that it intends to reach adjusted profitability this year.
And from the rest of the world of giant tech companies:
Spotify and Giphy team up:Er, have you wanted GIFs in your music player? Well, good news if so: Spotify has “a new partnership with online GIF database GIPHY to enable discovery of new music through GIFs.” Cool?
Microsoft buys CloudKnox:Microsoft’s push to provide cash returns to every cybersecurity-focused venture capitalist continued today, with the Redmond-based software giant buying CloudKnox. It’s the fourth deal this year for a smaller cybersecurity-focused startup from Microsoft.
Visa buys Currencycloud:Visa, likely still stinging slightly from its inability to buy fintech API provider Plaid, is busy buying other companies. This time it’s Currencycloud, which builds other fintech APIs. Jokes aside, the deal will bring the smaller company’s remittance and currency-transfer tech into Visa for just under $1 billion.
Earlier this month, Cowboy Ventures’ Ted Wang joined us at TechCrunch Early Stage: Marketing and Fundraising, where he spoke about executive coaching and why he encourages founders in his portfolio to have a CEO coach. Wang, who has an executive coach himself, sees coaching as a key way to drive sustained personal growth, a factor that he believes separates the middling CEOs from the best ones.
Why CEOs need coaching
Just like professional athletes at the top of their game still need coaching, executives can need external validation and comment on where they are and aren’t delivering, Wang says. These insights can be tough for executives to catch on their own and might require a level of honesty that can be challenging for a CEO to expect from anyone involved with their company.
Roger Federer — the famous tennis player who has won 20 Grand Slam events — he has a coach, but he doesn’t just have a coach, he has a coach for tennis. I’m pretty sure Roger knows the rules of the game and all the different strokes he needs to hit, so why would he have a coach? The answer is really that it’s about having a second set of eyes; when you’re in the moment … it’s hard to be able to see yourself and assess yourself. (Timestamp: 4:52)
Coaches can help entrepreneurs reflect and reframe the things being communicated with them.
A good example — you might be at a board meeting and one of your board members is being critical of your VP of marketing, and one way to think of that is “Oh, OK, here are some things we need to solve for this person,” but another point of view that a coach might open your eyes to, is actually maybe this person thinks you’re not hiring the right people. (Timestamp: 8:59)
While advisers can help startups navigate tactical situations, therapists may be more focused on helping clients navigate emotional states and improve themselves. Coaching exists in a very nebulous gray area between startup advisers and licensed therapists, Wang says, but coaching is more focused on improving yourself as a business leader rather than solving a particularly vexing startup issue.
When you’re in the moment … it’s hard to be able to see yourself and assess yourself.
TechCrunch Disrupt 2021, the world’s original and most epic conference dedicated to tech startups, takes place September 21-23. Are you ready to take full advantage of this opportunity-packed event? Start right now and buy a Disrupt pass for less than $100. But don’t wait — the early-bird prices disappear on July 30 at 11:59 pm (PT).
Experience the full range of the global tech startup culture. Disrupt draws thousands of attendees from around the world, ready to learn, network, inspire and inform. You’ll hear from the leading voices across the tech spectrum — people like Coinbase CEO Brian Armstrong, Pear VC’s Mar Hershenson and Accel’s Arun Matthew. And even a few tech-savvy celebrity founders (we’re looking at you, Seth Rogan).
Head to the Disrupt Stage for compelling interviews, panel discussions and presentations. And if you’re hot for tips, strategies and advice you can put to work in your startup right away, head on over to the Extra Crunch Stage. Our virtual platform makes it easy to pop in and out as your schedule permits, and you’ll have three months of video-on-demand access to all presentations when the event ends. You won’t miss a thing.
Startup Alley, our legendary expo area, is already sold out. Do not miss this collection of innovative startups showcasing their impressive tech and talent. Stop by their virtual booths, schedule 1:1 video meeting, ask for a product demo. You might just find a new collaborator, the perfect solution to a nagging problem or a promising addition to your investment portfolio.
Pro Tip: Every Startup Alley exhibitor will take part in one of our pitch feedback breakout sessions. It’s not only an opportunity to learn about the company — the feedback they receive from the Team TechCrunch can help you improve your own pitch.
Of course, Startup Battlefield is where the best-of-the best take the virtual stage to pitch for glory, global exposure and, oh yeah, $100,000 in equity-free prizemoney. It’s the startup world’s best launch pad and, since its inception, 922 companies have collectively raised $9 billion and generated 117 exits. Here’s how Rachael Wilcox, a creative producer at Volvo Cars, described watching Startup Battlefield at Disrupt 2020.
“The Startup Battlefield translated easily to the virtual format. You could see the excitement, enthusiasm and possibility of the young founders, and I loved that. You could also ask questions through the chat feature, and you don’t always have time for questions at a live event.”
Tune in to watch this thrilling throw-down. You never know — this year’s cohort might produce a future unicorn or two.
VOCHI, a Belarus-based startup behind a clever computer vision-based video editing app used by online creators, has raised an additional $2.4 million in a “late-seed” round that follows the company’s initial $1.5 million round led by Ukraine-based Genesis Investments last year. The new funds follow a period of significant growth for the mobile tool, which is now used by over 500,000 people per month and has achieved a $4 million-plus annual run rate in a year’s time.
Investors in the most recent round include TA Ventures, Angelsdeck, A.Partners, Startup Wise Guys, Kolos VC, and angels from other Belarus-based companies like Verv and Bolt. Along with the fundraise, VOCHI is elevating the company’s first employee, Anna Bulgakova, who began as head of marketing, to the position of co-founder and Chief Product Officer.
According to VOCHI co-founder and CEO lya Lesun, the company’s idea was to provide an easy way for people to create professional edits that could help them produce unique and trendy content for social media that could help them stand out and become more popular. To do so, VOCHI leverages a proprietary computer-vision-based video segmentation algorithm that applies various effects to specific moving objects in a video or to images in static photos.
“To get this result, there are two trained [convolutional neural networks] to perform semi-supervised Video Object Segmentation and Instance Segmentation,” explains Lesun, of VOCHI’s technology. “Our team also developed a custom rendering engine for video effects that enables instant application in 4K on mobile devices. And it works perfectly without quality loss,” he adds. It works pretty fast, too — effects are applied in just seconds.
The company used the initial seed funding to invest in marketing and product development, growing its catalog to over 80 unique effects and more than 30 filters.
Image Credits: VOCHI
Today, the app offers a number of tools that let you give a video a particular aesthetic (like a dreamy vibe, artistic feel, or 8-bit look, for example). It can also highlight the moving content with glowing lines, add blurs or motion, apply different filters, insert 3D objects into the video, add glitter or sparkles, and much more.
In addition to editing their content directly, users can swipe through a vertical home feed in the app where they can view the video edits others have applied to their own content for inspiration. When they see something they like, they can then tap a button to use the same effect on their own video. The finished results can then be shared out to other platforms, like Instagram, Snapchat and TikTok.
Though based in Belarus, most of VOCHI’s users are young adults from the U.S. Others hail from Russia, Saudi Arabia, Brazil and parts of Europe, Lesun says.
Unlike some of its video editor rivals, VOCHI offers a robust free experience where around 60% of the effects and filters are available without having to pay, along with other basic editing tools and content. More advanced features, like effect settings, unique presents and various special effects require a subscription. This subscription, however, isn’t cheap — it’s either $7.99 per week or $39.99 for 12 weeks. This seemingly aims the subscription more at professional content creators rather than a casual user just looking to have fun with their videos from time to time. (A one-time purchase of $150 is also available, if you prefer.)
To date, around 20,000 of VOCHI’s 500,000 monthly active users have committed to a paid subscription, and that number is growing at a rate of 20% month-over-month, the company says.
Image Credits: VOCHI
The numbers VOCHI has delivered, however, aren’t as important as what the startup has been through to get there.
The company has been growing its business at a time when a dictatorial regime has been cracking down on opposition, leading to arrests and violence in the country. Last year, employees from U.S.-headquartered enterprise startup PandaDoc were arrested in Minsk by the Belarus police, in an act of state-led retaliation for their protests against President Alexander Lukashenko. In April, Imaguru, the country’s main startup hub, event and co-working space in Minsk — and birthplace of a number of startups, including MSQRD, which was acquired by Facebook — was also shut down by the Lukashenko regime.
Meanwhile, VOCHI was being featured as App of the Day in the App Store across 126 countries worldwide, and growing revenues to around $300,000 per month.
“Personal videos take an increasingly important place in our lives and for many has become a method of self-expression. VOCHI helps to follow the path of inspiration, education and provides tools for creativity through video,” said Andrei Avsievich, General Partner at Bulba Ventures, where VOCHI was incubated. “I am happy that users and investors love VOCHI, which is reflected both in the revenue and the oversubscribed round.”
The additional funds will put VOCHI on the path to a Series A as it continues to work to attract more creators, improve user engagement, and add more tools to the app, says Lesun.
Check out the Startup Alley companies that will exhibit at TechCrunch Disrupt 2021 in an episode dedicated to the art of the pitch. Expert VCs will give their live feedback to quick elevator pitches. Hear about the hottest new startups and learn a thing or two about how to nail your own pitch.
Image Credits: Race Capital / CapitalG
Jory Bell (Playground Global) + Jen Nwankwo (1910 Genetics)
After the last year+, VC money has been pouring into biotech companies, and 1910 Genetics is no different. Hear from founder and CEO Jen Nwankwo and investor Jory Bell, from Playground Global, about how to fundraise in the bio/health tech sector and use that financing to your advantage.
Image Credits: Playground Global / 1910 Genetics
Stephanie Zhan (Sequoia Capital) + Nick Fajt (Rec Room)
Sequoia is one of, if not the, biggest names in VC. On this episode of ECL, hear from Sequoia partner Stephanie Zhan and Rec Room CEO Nick Fajt about how the two came together for the startup’s seed round, why Zhan also led the Series A and how it has gone on to raise nearly $150 million in funding.
Image Credits: Rec Room / Sequoia Capital
Aileen Lee (Cowboy Ventures) + Rachel Carlson (Guild Education)
Aileen Lee is one of the most sought-after and well-respected VCs in the country. Hear the Cowboy Ventures founder and GP talk through her criteria for investment and how Guild Education’s Rachel Carlson met, and even exceeded, that criteria. The founder/investor duo will also give their live feedback on startup pitches from the audience.
Image Credits: Cowboy Ventures / Guild Education
As a reminder, Extra Crunch Live is all about helping founders build better venture-backed businesses. We do that by (duh!) talking to founders and the investors who finance them. Extra Crunch Live also features the ECL Pitch-off, where founders in the audience can come on our virtual stage to pitch their wares to our expert guests and learn how to crush their pitch.
Extra Crunch Live is accessible to anyone and everyone, but accessing the content on-demand is reserved exclusively for Extra Crunch members. If you aren’t yet a member, join here now!
Bob Ma is an investor at WIND Ventures, where he invests in energy, retail and mobility startups. Prior to joining WIND, he was an investor at Soma Capital, where he invested venture capital globally across the consumer and enterprise sectors.
In the United States, same-day and next-day Amazon Prime deliveries have become the de facto standard in e-commerce. People want convenience and instant gratification, evidenced by the fact that an astonishing ~45% of U.S. consumers are Amazon Prime members.
E-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
The holdout: Latin America
Venture capitalists have been investing heavily in last-mile delivery over the past five years on a global scale, but Latin America (LatAm) has lagged behind. Over $11 billion has been invested globally in last-mile logistics over the past decade, but Latin America only saw about $1 billion over the same period (Source: PitchBook and WIND Ventures research).
Within this, only about $300 million was in Spanish-speaking Latin America — a surprisingly small amount for a region that has 110 million more consumers than in the U.S.
Brazil-based Loggi accounts for about 60% of last-mile VC investment in Latin America, but it only operates in Brazil. That leaves major Spanish countries like Mexico, Colombia, Chile and Argentina without a leading independent last-mile logistics company.
In these countries, about 60% of the last-mile delivery market is dominated by small, informal companies or independent drivers using their own trucks. This results in inefficiencies due to a lack of technologies such as route optimization as well as a lack of operating scale. These issues are quickly becoming more pronounced as e-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
Retailers are missing an opportunity to give customers what they want. Customers today expect free, reliable same- or next-day delivery — on-time, all the time, and without damage or theft. All of these are challenging in LatAm. Theft, in particular, is a significant problem, because unprofessional drivers often steal products out for delivery and then sell them for a profit. Cost is a problem, too, because free same- and next-day deliveries are simply not available in many places.
Operational and technological roadblocks abound
Why does Latin America lag when it comes to the last mile? First, traditional LatAm e-commerce delivery involves multiple time-consuming steps: Products are picked up from the retailer, delivered to a cross-dock, distributed to a warehouse, delivered to a second cross-dock, and then finally delivered to the customer.
By comparison, modern delivery operations are much simpler. Products are picked up from the retailer, delivered to a cross-dock, and then delivered directly to the customer. There’s no need for warehousing and an extra pre-warehouse cross-dock.
And those are just the operational challenges. Lack of technology also plays a significant role. Most delivery coordination and routing in LatAm are still done via a spreadsheet or pen and paper.
Dispatchers have to manually pick up a phone to call drivers and dispatch them. In the U.S., computerized optimization algorithms dramatically cut both delivery cost and time by automatically finding the most efficient route (e.g., packing the most deliveries possible on a truck along the route) and automatically dispatching the driver that can most efficiently complete the route based on current location, capacity and experience with the route. These algorithms are almost unheard of in the Latin America retail logistics sector.
Two Democratic senators introduced a bill Thursday that would strip away the liability shield that social media platforms hold dear when those companies are found to have boosted anti-vaccine conspiracies and other kinds of health misinformation.
The Health Misinformation Act, introduced by Senators Amy Klobuchar (D-MN) and Ben Ray Luján (D-NM), would create a new carve-out in Section 230 of the Communications Decency Act to hold platforms liable for algorithmically-promoted health misinformation and conspiracies. Platforms rely on Section 230 to protect them from legal liability for the vast amount of user-created content they host.
“For far too long, online platforms have not done enough to protect the health of Americans,” Klobuchar said. “These are some of the biggest, richest companies in the world and they must do more to prevent the spread of deadly vaccine misinformation.”
The bill would specifically alter Section 230’s language to revoke liability protections in the case of “health misinformation that is created or developed through the interactive computer service” if that misinformation is amplified through an algorithm. The proposed exception would only kick in during a declared national public health crisis, like the advent of Covid-19, and wouldn’t apply in normal times.
“Features that are built into technology platforms have contributed to the spread of misinformation and disinformation, with social media platforms incentivizing individuals to share content to get likes, comments, and other positive signals of engagement, which rewards engagement rather than accuracy,” the bill reads.
The bill also makes mention of the “disinformation dozen” — just twelve people, including anti-vaccine activist Robert F. Kennedy Jr. and a grab bag of other conspiracy theorists, who account for a massive swath of the anti-vax misinformation ecosystem. Many of the individuals on the list still openly spread their messaging through social media accounts on Twitter, Facebook and other platforms.
Section 230’s defenders generally view the idea of new carve-outs to the law as dangerous. Because Section 230 is such a foundational piece of the modern internet, enabling everything from Yelp and Reddit to the comment section below this post, they argue that the potential for unforeseen second order effects means the law should be left intact.
But some members of Congress — both Democrats and Republicans — see Section 230 as a valuable lever in their quest to regulate major social media companies. While the White House is pursuing its own path to craft consequences for overgrown tech companies through the Justice Department and the FTC, Biden’s office said earlier this week that the president is “reviewing” Section 230 as well. But as Trump also discovered, weakening Section 230 is a task that only Congress is positioned to accomplish — and even that is still a long shot.
While the new Democratic bill is narrowly targeted as far as proposed changes to Section 230 go, it’s also unlikely to attract bipartisan support.
Republicans are also interest in stripping away some of Big Tech’s liability protections, but generally hold the view that platforms remove too much content rather than too little. Republicans are also more likely to sow misinformation about the Covid-19 vaccines themselves, framing vaccination as a partisan issue. Whether the bill goes anywhere or not, it’s clear that an alarming portion of Americans have no intention of getting vaccinated — even with a much more contagious variant on the rise and colder months on the horizon.
“As COVID-19 cases rise among the unvaccinated, so has the amount of misinformation surrounding vaccines on social media,” Luján said of the proposed changes to Section 230. “Lives are at stake.”
Waymo, Google’s former self-driving car project that’s now an independent business unit under Alphabet, is expanding its presence in the eastern U.S. The company said Thursday it would be opening offices in Pittsburgh, joining a growing suite of companies developing and testing autonomous vehicle technology in the Steel City.
The company will start by hiring around a dozen engineers, a source familiar with the move told TechCrunch, and they’ll co-locate in Google’s existing offices in the Bakery Square district. As of Thursday, only around three open positions for the Pittsburgh area were listed on Waymo’s website, but the company will be adding more roles soon.
Some of the new team will come from Pittsburgh-based RobotWits, a tech startup focused on autonomous vehicle decision-making. That includes RobotWits’ founder and CEO Maxim Likhachev, and other members of its engineering and technical team. While Waymo did not technically acquire the startup, it did acquire RobotWits’ IP rights, the source said.
There are no current plans to deploy the so-called Waymo Driver, its autonomous driving platform, in Pittsburgh, the source added. Instead, the new team will work on motion planning development, real-time route planning and developing Driver. Thus far, Driver has seen deployment in the Phoenix, Arizona metro area. Its Waymo Via trucking and cargo service will be deployed in a test run with trucking logistics company J.B. Hunt Transport Services in Texas.
AV tech rivals Aurora, Motional, Argo AI have already established offices in the city; combined with talent at Carnegie Melon University, the city has established itself as a bona fide hub for autonomous engineering development. Pittsburgh is also home to many smaller AV startups, including Locomation, which is working on autonomous trucks.
Waymo’s Pittsburgh location will join its network of offices in Mountain View, San Francisco, Phoenix, New York, Dallas, and Hyderabad, India.
Instagram head Adam Mosseri confirmed the company is testing a new feature called “Limits,” which would give users the ability to temporary lock down their accounts when they’re being targeted by a flood of harassment. The announcement of the new feature was made today during a video where Mosseri condemned the recent racism that took place on Instagram’s platform following the Euro 2020 final, and noted the company was working on improvements to both internal and customer-facing tools to help address this problem.
The company had previously commented on and condemned the racist abuse, which had seen England footballers Bukayo Saka, Marcus Rashford and Jadon Sancho viciously harassed by angry fans making racist comments after the team’s defeat earlier this month. Mosseri explained at the time the company was using technology to try to prioritize user reports, and it mistakenly marked some reports as benign comments instead of referring them to human moderators. One of the possible complications was that many of the harassing comments were using emoji, which Instagram’s systems may have struggled to understand given emoji can have different meanings in different contexts.
Today, Mosseri again acknowledged Instagram’s mistake and noted it has since fixed the issue. He said Instagram had been proactively sweeping the footballers’ comments, but hadn’t anticipated the wave of user reports.
He also pointed out that Instagram receives millions of user reports per day and even getting 1% of them wrong leads to tens of thousands of problematic posts that remain on the platform in error.
Mosseri then mentioned several user-facing tools that could help people deal with harassment more directly on their own accounts to prevent abuse. This includes Instagram’s tools like Block and Restrict. The latter is tool that allows users to approve a user’s comments before anyone else sees them or read someone’s messages without sending read receipts. Another more recently added tool called Hidden Words lets users block certain keywords in both comments and direct messages.
He added that the Limits feature could have helped the footballers, as it would have offered simple settings to limit unwanted comments and reactions.
The feature had been spotted earlier this month by social media consultant Matt Navarra, who shared screenshots of how it worked, but Instagram had yet to formally announce it.
In the images that were shared, users with the feature would find a new section called Limits in Instagram’s privacy controls that explained that they could temporarily limit comments and messages from specific groups of followers.
Users could then toggle on or off groups to limit, including recent followers and accounts that are not following you, as these could include accounts that were spam or those created just to harass you. As is often the case, when there’s a flood of incoming abuse, it will not come from an account’s longtime followers, but rather from newcomers who have sought out the account just to harass them.
The feature will also allow users to set a duration for the Limits in terms of a number of days or even weeks.
An Instagram spokesperson also confirmed the feature worked as the images show, noting it would be a tool that would help people manage “intense instances of harassment or abuse.”
“Maybe you’re in high school and you are going through a breakup or you just switched schools. Or maybe you are a professional footballer and you’re receiving a lot of harassment,” explained Mosseri, when detailing how Limits could be useful in different situations. “Whatever it is, we know that people sometimes are in temporary moments of real risk of pain, and we want to give them tools to protect themselves in those situations,” he added.
Instagram declined to say when the feature would become publicly available, but noted it’s being tested on mobile in select countries for the time being.
Absci Corp., a Vancouver company behind a multi-faceted drug development platform, went public on Thursday. It’s another sign of snowballing interest in new approaches to drug development – a traditionally risky business.
Absci focuses on speeding drug development in the preclinical stages. The company has developed and acquired a handful of tools that can predict drug candidates, identify potential therapeutic targets, and test therapeutic proteins on billions of cells and identify which ones are worth pursuing.
“We are offering a fully-integrated end-to-end solution for pharmaceutical drug development,” Absci founder Sean McClain tells TechCrunch. “Think of this as the Google index search for protein drug discovery and biomanufacturing.”
The IPO was initially priced at $16 per share, with a pre-money valuation of about $1.5 billion, per S-1 filings. The company is offering 12.5 million shares of common stock, with plans to raise $200 million. However, Absci stock has already ballooned to $21 per share as of writing. Common stock is trading under the ticker “ABSI.”
The company has elected to go public now, McClain says, to increase the company’s ability to attract and retain new talent. “As we continue to rapidly grow and scale, we need access to the best talent, and the IPO gives us amazing visibility for talent acquisition and retention,” says McClain.
Absci was founded in 2011 with a focus on manufacturing proteins in E.Coli. By 2018, the company had launched its first commercial product called SoluPro – a biogeneered E.Coli system that can build complex proteins. In 2019, the company scaled this process up by implementing a “protein printing” platform.
Since its founding Absci has grown to 170 employees and raised $230 million – the most recent influx was a $125 million crossover financing round closed in June 2020 led by Casdin Capital and Redmile Group. But this year, two major acquisitions have rounded out Absci’s offerings from protein manufacturing and testing to AI-enabled drug development.
In January 2021, Absci acquired Denovium, a company using deep learning AI to categorize and predict the behavior of proteins. Denovium’s “engine” had been trained on more than 100 million proteins. In June, the company also acquired Totient, a biotech company that analyzes the immune system’s response to certain diseases. At the time of Totient’s acquisition, the company had already reconstructed 4,500 antibodies gleaned from immune system data from 50,000 patients.
Absci already had protein manufacturing, evaluation and screening capabilities, but the Totient acquisition allowed it to identify potential targets for new drugs. The Denovium acquisition added an AI-based engine to aid in protein discovery.
“What we’re doing is now feeding [our own data] into deep learning models and so that is why we acquired Denovium. Prior to Totient we were doing drug discovery and cell line development. This [acquisition] allows us to go fully integrated where we can now do target discovery as well,” McClain says.
These two acquisitions place Absci into a particularly active niche in the drug development world.
To start with, there’s been some noteworthy fiscal interest in developing new approaches to drug development, even after decades of low returns on drug R&D. In the first half of 2021, Evaluate reported that new drug developers raised about $9 billion in IPOs on Western exchanges. This is despite the fact that drug development is traditionally high risk. R&D returns for biopharmaceuticals hit a record low of 1.6 percent in 2019, and have rebounded to only about 2.5 percent, a Deloitte 2021 report notes.
Within the world of drug development, we’ve seen AI play an increasingly large role. That same Deloitte report notes that “most biopharma companies are attempting to integrate AI into drug discovery, and development processes.” And, drug discovery projects received the greatest amount of AI investment dollars in 2020, according to Stanford University’s Artificial Intelligence Index annual report.
More recently, the outlook on the use of AI in drug development has been bolstered by companies that have moved a candidate through the stages of pre-clinical development.
In June, Insilico Medicine, a Hong Kong-based startup, announced that it had brought an A.I-identified drug candidate for idiopathic pulmonary fibrosis through the preclinical testing stages – a feat that helped close a $255 million Series C round. Founder Alexander Zharaonkov told TechCrunch the PI drug would begin a clinical trial on the drug late this year or early next year.
With a hand in AI and in protein manufacturing, Absci has already positioned itself in a crowded, but hype-filled space. But going forward, the company will still have to work out the details of its business model.
Absci is pursuing a partnership business model with drug manufacturers. This means that the company doesn’t have plans to run clinical trials of its own. Rather, it expects to earn revenue through “milestone payments” (conditional upon reaching certain stages of the drug development process) or, if drugs are approved, royalties on sales.
This does offer some advantages, says McClain. The company is able to sidestep the risk of drug candidates failing after millions of R&D cash is poured into testing and can invest in developing “hundreds” of drug candidates at once.
At this point, Absci does have nine currently “active programs” with drugmakers. The company’s cell line manufacturing platforms are in use in drug testing programs at eight biopharma companies, including Merck, Astellas, and Alpha Cancer technologies (the rest are undisclosed). Five of these projects are in the preclinical stage, one is in Phase 1 clinical trials, one is in a Phase 3 clinical trial, and the last is focused on animal health, per the company’s S-1 filing.
One company, Astellas, is currently using Absci’s discovery platforms. But McClain notes that Absci has only just rolled out its drug discovery capabilities this year.
However, none of these partners have formally licensed any of Absci’s platforms for clinical or commercial use. McClain notes that the nine active programs have milestones and royalty “potentials” associated with them.
The company does have some ground to make up when it comes to profitability. So far this year, Absci has generated about $4.8 million in total revenue – up from about $2.1 million in 2019. Still, the costs have remained high, and S-1 filings note that the company has incurred net losses in the past two years. In 2019, the company reported $6.6 million in net losses in 2019 and $14.4 million in net losses in 2020.
The company’s S-1 chalks up these losses to expenditures related to cost of research and development, establishing an intellectual property portfolio, hiring personnel, raising capital and providing support for these activities.
Absci has recently completed the construction of a 77,000 square foot facility, notes McClain. So going forward the company does foresee the potential to increase the scale of its operations.
In the immediate future, the company plans to use money raised from the IPO to grow the number of programs using Absci’s technology, invest in R&D and continue to refine the company’s new AI-based products.
Rivian, the Amazon-backed electric automaker that aims to be the first to bring an EV pickup truck to market, plans to open a second U.S. manufacturing factory, sources told TechCrunch, confirming an earlier report from Reuters.
Rivian wouldn’t elaborate on when it planned to build the factory, but did confirm it was in the process of identifying a site for a second plant. Reuters reported that the factory, dubbed Project Tera, would also include battery cell production, a detail that would drive up the cost and size of the factory.
“While it’s early in an evolving process, Rivian is exploring locations for a second U.S. manufacturing facility,” spokesperson Amy Mast said in an emailed statement. “We look forward to working with a supportive, technology-forward community in order to create a partnership as strong as the one we have with Normal, Illinois.”
The news comes a week after Rivian CEO RJ Scaringe sent a letter to customers that the company was pushing back deliveries of its long-awaited R1T electric pickup truck and R1S SUV several more months due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips. The R1T deliveries will begin in September with the R1S to follow “shortly,” Scaringe wrote in the message.
Rivian plans to assemble its consumer products — the R1T, R1S — as well as the commercial delivery vans slated for Amazon at its factory in Normal, Illinois. That factory, which once produced the Mitsubishi Eclipse through a joint venture between Mitsubishi and Chrysler Corporation, has been completely updated and expanded.
The Normal factory has two separate production lines producing vehicles. One is dedicated for the R1 vehicles and other line is for its commercial vans. Amazon ordered 100,000 of these vans, with deliveries starting in 2021.
The automaker has raised more than $8 billion from a diverse set of backers that includes Ford, Cox Automotive, T. Rowe Price Associates Inc., Fidelity Management and Research Company, Amazon’s Climate Pledge Fund, Coatue and D1 Capital Partners. That capital will be needed to keep its 7,000-person workforce running and while building an assembly factory, a project that will cost at least $1 billion if it follows industry estimates.
Playdate, the adorable whimsy-and-nostalgia-box/handheld game system built by Panic (with some help from Teenage Engineering), has taken one more big step toward reality: it has an official pre-order date. And it’s soon!
The company announced this morning that pre-orders for the handheld will go live on July 29th at 10 a.m pacific.
Looking to get one from the first batch? Here’s the other stuff you need to know:
The handheld will cost $179, and they’ll be selling an optional case accessory for $29. They’re offering both as a bundle for $199, saving you a couple bucks if you already know you want both. No word yet on when the previously announced docking station will go on sale.
It sounds like the actual ship date still isn’t fully locked in, but Panic says the first batch (20,000 units or so) should start going out “towards the end of the year,” with additional units going out in 2022. The company stresses that they’re not capping pre-orders so they can’t really “sell out”, but ordering earlier means getting it sooner.
Pre-orders will be capped at two per person.
Panic first announced the Playdate in 2019. Games on the Playdate are released in “seasons”; in season one, two new titles will be released each week for twelve weeks. As experimental as it is charming, Panic is pretty open about what to expect of the titles. From their product page: “Some are short. Some are long. Will you love them all? Probably not. Will you have a great time trying them? Absolutely.”
Denis Mars is the CEO and co-founder of Proxy, which designs and builds privacy-first, human-led, identity technologies.
Over the years, I’ve had a front-row seat to the future of technology.
In my role at Y Combinator as director of admissions, I saw hundreds of startup pitches. Many shared a particular attribute: They followed the path of quickly growing users and monetizing the data extracted from the user.
As time went on, I began to see the full picture of what our technologies were creating: A “Minority Report” world where our every move is tracked and monetized. Some companies, like Facebook, lived by the mantra “move fast, break things.” Not only did they break things, they failed us by propagating disinformation and propaganda that, ultimately, cost some people their lives.
And that happened because of a growth-at-all-costs mindset. Some of the biggest consumer-facing Silicon Valley companies in the 21st century flourished by using data to sell ads with little or no consideration for user privacy or security. We have some of the brightest minds in technology; if we really wanted to, we could change things so that, at the very least, people wouldn’t have to worry about privacy and the security of their information.
We could move toward a model where people have more control over their own data and where Silicon Valley explores innovations in privacy and data security. While there are multiple long-term approaches and potential new business models to explore, there are ways to approach a privacy-first mindset in the near term. Here are a couple of ways to start moving toward a future in which people can have control over their data.
Workplace applications should lead the charge in enabling more secure identity technologies
We need to approach technology by consciously designing a future where technology works for humans, businesses and society in a secure and ethical way.
Approaching technological growth without understanding or considering the consequences has eroded trust in Silicon Valley. We must do better — and we can start in the workplace by better protecting personal data through self-sovereign identity, an approach that gives people control and ownership over their digital identity.
Using the workplace as a starting point for better privacy and security of people’s digital identities makes sense because many technologies that have been widely adopted — think personal computers, the internet, mobile phones and email — started out in the workplace before they became household technologies, thereby inheriting the foundational principles. With a return to office life on the horizon, there’s no better time than now to reexamine how we might adopt new practices in our workplaces.
We could move toward a model where people have more control over their own data and where Silicon Valley explores innovations in privacy and data security.
So how would employers do this? For starters, they can use the return to office as an impetus for contactless access and digital IDs, which protect against physical and digital data breaches, the latter of which are becoming more common.
Employees could enter offices through their digital IDs, or tokenized IDs, which are stored securely on their phones. They will no longer need to use plastic cards with their personal information and photo imprinted on them, which are easy to fake or duplicate, improving security for both the employer and employee.
Contactless access isn’t a big leap nowadays, either. The pandemic primed us for digital identification — because the use of contactless payment accelerated due to COVID, the change to contactless ID will be seamless for many.
Invest in critical privacy-centric infrastructure
Tokenized identification puts the power in the user’s hands. This is crucial not just for workplace access and identity, but for a host of other, even more important reasons. Tokenized digital IDs are encrypted and can only be used once, making it nearly impossible for anyone to view the data included in the digital ID should the system be breached. It’s like Signal, but for your digital IDs.
As even more sophisticated technologies roll out, more personal data will be produced (and that means more data is vulnerable). It’s not just our driver’s licenses, credit cards or Social Security numbers we must worry about. Our biometrics and personal health-related data, like our medical records, are increasingly online and accessed for verification purposes. Encrypted digital IDs are incredibly important because of the prevalence of hacking and identity theft. Without tokenized digital IDs, we are all vulnerable.
We saw what happened with the Colonial Pipeline ransomware attack recently. It crippled a large portion of the U.S. pipeline system for weeks, showing that critical parts of our infrastructure are extremely vulnerable to breaches.
Ultimately, we need to think about making technology that serves humanity, not vice versa. We also need to ask ourselves if the technology we create is beneficial not just to the user, but to society in general. One way to build technology that better serves humanity is to ensure that it protects users and their values. Self-sovereign identity will be key in our future as other technologies arise. Among other things, we will see our digital wallets house far more than just credit cards, making the need for secure digital IDs more critical. Most importantly, people and companies just need control over their own data, period.
Given the broader general awareness of privacy and security in recent years, employers must take the threat of personal-data vulnerability seriously and lead the way in self-sovereign identity. Through the initial step of contactless access and digital IDs in the workplace, we can begin to inch closer toward a more secure future, at least in terms of our own data and identity.
With more venture funding flowing into the startup ecosystem than ever before, there’s never been a better time to be a growth expert.
At TechCrunch Early Stage: Marketing and Fundraising earlier this month, Greylock Partners’ Mike Duboe dug into a number of lessons and pieces of wisdom he’s picked up leading growth at a number of high-growth startups, including StitchFix. His advice spanned hiring, structure and analysis, with plenty of recommendations for where growth teams should be focusing their attention and resources.
How to define growth
Before Duboe’s presentation kicked off, he spent some time zeroing in on a definition of growth, which he cautioned can mean many different things at many different companies. Being so context-dependent means that “being good at growth” is more dependent on honing capabilities rather than following a list of best practices.
Growth is something that’s blatantly obvious and poorly defined in the startup world, so I do think it’s important to give a preamble to all of this stuff. First and foremost, growth is very context dependent; some teams treat it as a product function, others marketing, some sales or “other.” Some companies will do growth with a dedicated growth team; others have abandoned the team but still do it equally well. Some companies will goal growth teams purely on acquisition, others will deploy them against retention or other metrics. So, taking a step back from that, I define growth as a function that accelerates a company’s pace of learning.
Growth is everyone’s job; if a bunch of people in the company are working on one problem, and it’s just someone off in the corner working on growth, you probably failed at setting up the org correctly. (Timestamp: 1:11)
While growth is good, growing something that is unsustainable is an intense waste of time and money. Head of growth is often an early role that founders aim to fill, but Duboe cautioned early-stage entrepreneurs from focusing too heavily on growth before nailing the fundamentals.
I’ve seen many companies make the mistake of working on growth prior to nailing product-market fit. I think this mistake becomes even more common in an environment where there’s rampant VC funding, so while some of the discipline here is useful early on, I’d really encourage founders to be laser-focused on finding that fit before iterating on growth. (Timestamp: 2:29)
Where to focus growth energy
The bulk of Duboe’s presentation focused on laying out 10 of the “most poignant and generalizable” lessons in growth that he’s learned over the years, with lessons on focus, optimization and reflection.
Lesson 1: Distill your growth model (“business equation”)
Growth modeling and metric design — I view as the most fundamental part of growth. This does not require a growth team so any good head of growth should require some basic growth model to prioritize what to work on. (Timestamp: 3:09)
The first point Duboe touched on was one on how to visualize your growth opportunities using models, using an example from his past role leading growth at Tilt, where his team used user state models to determine where to direct resources and look for growth opportunities.
Lesson 2: Retention before acquisition
The second lesson is to prioritize retention before driving acquisition, a very obvious or intuitive lesson, but it’s also easy to forget given it’s typically less straightforward to figure out how to retain users versus acquiring new ones. (Timestamp: 4:19)
Retention is typically cheaper than acquiring wholly new users, Duboe noted, also highlighting how a startup focusing on retention can help them understand more about who their power users are and who exactly they should be building for.
Lesson 3: Embrace ideas from all corners, but triage
Bringing on new ideas is obviously a positive, but often ideas need guidelines to be helpful, and setting the right templates early on can help team members filter down their ideas while ensuring they meet the need of the organization.
Tesla will secure nickel from the commodity production giant BHP, the automaker’s latest move to secure direct sources of raw materials that are projected to surge in demand before the decade is out.
BHP’s Nickel West division will supply an undisclosed amount of the mineral from its mines in Western Australia. The two companies also agreed to work together to increase battery supply chain sustainability and to identify ways to decrease carbon emissions from their respective operations using energy storage paired with renewable energy.
Nickel is a key mineral in lithium-ion batteries, and a cornerstone of Tesla’s next-gen battery chemistry. While many lithium-ion batteries have cathodes made from nickel, manganese and cobalt, Tesla is taking a different tack. At Tesla’s Battery Day 2020, Musk said the automaker would invest in a nickel-rich, cobalt-free cathode for some models, citing greater energy density.
Tesla also hasn’t been shy about its own intention to increase battery cell production in the coming decade, aiming to produce 100 gigawatt hours of batteries by 2022, to a staggering 3 terawatt hours per year by 2030.
To that end, the company is moving fast to secure purchase agreements with leading nickel producers. Earlier this year, the automaker announced a partnership with a nickel producer in the French Pacific territory New Caledonia. Just a few months later, Tesla chairperson Robyn Denhlm confirmed that the company was looking to purchase around $1 billion per year in battery minerals from Australia alone.
Musk has repeatedly urged miners to produce more nickel. On an investment call last July, he told producers, “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.” At Battery Day, he reiterated his position: “In order to scale, we really need to make sure that we’re not constrained by total nickel availability,” he said. “I actually spoke with the CEOs of the biggest mining company in the world and said, ‘Please make more nickel, it’s very important.’”
But finding an environmentally friendly nickel source is a challenge. Some of that has to do with issues endemic to present-day recovery and smelting techniques; others are more directly manageable by mining companies. For example, nickel mining operations in Indonesia, the world’s largest producer of the metal, have come under fire for their reliance on coal and their waste disposal techniques.
BHP claims its operation is one of the most sustainable in the world, and Tesla’s decision to partner with it could be seen as something of a confirmation of that fact. The commodity producer in February said up to 50% of the electricity to power one of its nickel refineries would come from solar energy resources.
The vast majority of the world’s nickel supply is currently consumed by the steel industry. While nickel demand in the EV and energy storage sectors is currently relatively small, the International Energy Agency estimates that will increase more than 4,000% over the next 20 years – from 81 metric tons in 2020 to 3,352 metric tons by 2040.
Nickel West has historically been a tiny fraction of BHP’s overall business, dwarfed by its iron ore, copper and petroleum businesses. The commodity producer tried to sell Nickel West a number of times since around 2015, but it appears to have changed its tune with the forecasted groundswell of demand from the EV and energy storage sectors.
Industry analysts Benchmark Minerals estimated the deal with Tesla could be worth up to 18,000 tons of nickel annually.
Imagine a world where no one’s privacy is breached, no faces are scanned into a gargantuan database, and no privacy laws are broken. This is a world that is fast approaching. Could companies simply dump the need for real-world CCTV footage, and switch to synthetic humans, acting out potential scenarios a million times over? That’s the tantalizing prospect of a new UK startup that has attracted funding from an influential set of investors.
UK-based Mindtech Global has developed what it describes as an end-to-end synthetic data creation platform. In plain English, its system can imagine visual scenarios such as someone’s behavior inside a store, or crossing the street. This data is then used to train AI-based computer vision systems for customers such as big retailers, warehouse operators, healthcare, transportation systems and robotics. It literally trains a ‘synthetic’ CCTV camera inside a synthetic world.
That last investor is significant. In-Q-Tel invests in startups that support US intelligence capabilities and is based in Arlington, Virginia…
Mindtech’s Chameleon platform is designed to help computers understand and predict human interactions. As we all know, current approaches to training AI vision systems require companies to source data such as CCTV footage. The process is fraught with privacy issues, costly, and time-consuming. Mindtech says Chameleon solves that problem, as its customers quickly “build unlimited scenes and scenarios using photo-realistic smart 3D models”.
An added bonus is that these synthetic humans can be used to train AI vision systems to weed out human failings around diversity and bias.
Mindtech CEO Steve Harris
Steve Harris, CEO, Mindtech said: “Machine learning teams can spend up to 80% of their time sourcing, cleaning, and organizing training data. Our Chameleon platform solves the AI training challenge, freeing the industry to focus on higher-value tasks like AI network innovation. This round will enable us to accelerate our growth, enabling a new generation of AI solutions that better understand the way humans interact with each other and the world around them.”
So what can you do with it? Consider the following: A kid slips from its parent’s hand at the mall. The synthetic CCTV running inside Mindtech’s scenario is trained thousands of times over how to spot it in real-time and alert staff. Another: a delivery robot meets kids playing in a street and works out how to how to avoid them. Finally: a passenger on the platform is behaving erratically too close to the rails – the CCTV is trained to automatically spot them and send help.
Nat Puffer, Managing Director (London), In-Q-Tel commented: “Mindtech impressed us with the maturity of their Chameleon platform and their commercial traction with global customers. We’re excited by the many applications this platform has across diverse markets and its ability to remove a significant roadblock in the development of smarter, more intuitive AI systems.”
Miles Kirby, CEO, Deeptech Labs said: “As a catalyst for deeptech success, our investment, and accelerator program supports ambitious teams with novel solutions and the appetite to build world-changing companies. Mindtech’s highly-experienced team are on a mission to disrupt the way AI systems are trained, and we’re delighted to support their journey.”
There is of course potential for darker applications, such a spotting petty theft inside supermarkets, or perhaps ‘optimising’ hard-pressed warehouse workers in some dystopian fashion. However, in theory, Mindtech’s customers can use this platform to rid themselves of the biases of middle-managers, and better serve customers.
Gopuff, the “instant” grocery delivery startup that has been on an acquisition and expansion tear in the last several months to scale its business, is also racing to raise money to fuel those efforts. Documents uncovered by Prime Unicorn Index and shared with TechCrunch show that the startup has filed papers in Delaware to raise up to $750 million in a Series H round of funding — at a valuation of $13.5 billion if all shares are issued. While the company is not commenting on the filing, a well-placed source tells us that it’s actually closing as a $1 billion raise at a $15 billion valuation.
As with all Delaware filings, they only tell part of the story, so the company might ultimately raise more or less before the round closes. (And in this case it looks like “more.”)
For some funding context, it was only in March that Gopuff raised $1.15 billion at an $8.9 billion valuation. And that round came just months after a $380 million round (at a $3.8 billion) valuation. With Gopuff’s instant grocery model comes instant funding, it seems: together the three rounds would total around $2.5 billion in funding in the space of 10 months. (Investors in the company’s previous rounds have included Accel, D1 Capital Partners, Fidelity Management and Research Company, Baillie Gifford, Eldridge, Reinvent Capital, Luxor Capital, and SoftBank.)
Much like the investment race in the transportation-on-demand market, a large part of the fundraising in instant grocery seems to be aimed at scaling as fast as possible to build technological, operational and customer moats.
So for Gopuff, some of the money it’s raised so far has been used to expand organically. That is, it’s investing to acquire new customers and build out its infrastructure — riders, “dark” stores stocked with their products, and most recently “Gopuff kitchens” — within the 650+ cities in the U.S. where it already operates its $1.95 flat fee “in minutes” delivery service. It will likely be doing so at a particularly fast pace, considering that others like DoorDash are also moving in to compete in earnest around the same model for quick deliveries of a limited selection of food and drinks, home essentials, and over-the-counter medication.
But alongside that, some of the cash it is amassing is also being used for acquisitions. So far, these have been limited to the U.S. and to expand Gopuff’s breadth in that market. It bought alcohol retailer BevMo for $350 million in November 2020; and in June of this year Gopuff acquired logistics tech company rideOS for $115 million.
The next stage of that acquisition process looks like it may be focused on snapping up similar companies in key markets where Gopuff wants to be in the future, particularly internationally, as it works to fill out a reported ambition of reaching $1 billion in revenues this year (3x last year’s numbers).
In June, there were rumors around that Gopuff had approached Flink, an instant grocery player in Germany. While that has not gone anywhere (yet?), well-placed sources have told us — and, it seems, others — that Gopuff is also casting its international eye on England, engaging in discussions to acquire two different instant delivery companies based out of London, first Fancy back in February, and more recently, Dija.
Gopuff also declined to coment on Dija but we have multiple, well-placed sources telling us it’s in the works.
London is a hugely competitive market for instant grocery delivery at the moment — not least because it is dense and often hard to get around, has demonstrated a strong consumer appetite for on-demand delivery services, and has a population of younger people with a decent amount of disposable income to pay a little more for convenience.
That speaks of opportunity, but also possibly too many hopefuls as well. In addition to Dija and Fance, we have Turkey’s Getir, backed by Sequoia and a number of others on an ambitious international roll at the moment; Gorillas (like Flink, from Berlin); Zapp; and Weezy — all offering “instant” grocery delivery. And these are just the standalone, newer startups. Still to come: established restaurant delivery players like Deliveroo that might also throw their hats into the ring.
Perhaps unsurprisingly, given that field, we’ve heard that Dija has been struggling to raise more money, and that led to the startup looking for buyers as an alternative.
That is a trend that’s playing out elsewhere too: In Spain Getir earlier this month acquired Blok, another new instant player that was struggling to get investors on board. We confirmed with well-placed sources that Dija had also talked with Getir in this context (that didn’t go anywhere) before Gopuff entered the picture. There will likely be more of these.
“It’s going to be a bloodbath,” is how one big investor recently described the instant grocery market to me.
Given that online grocery remains a relatively minor part of the market — even with the pandemic and its habit-changing impact on e-commerce, it’s still under 10% of sales, even in the most adoption-friendly cities — there is still a lot to play for in “instant” groceries. But if this latest round shows us anything, it’s that the most promising of these delivery companies will continue raising a lot more money to position themselves as consolidators within it.
Mercedes-Benz laid out Thursday a 40 billion-euro ($47B) plan to become an electric-only automaker by the end of the decade, a target that will push the company to become more vertically integrated, train its workforce and secure the batteries needed to power its products.
Mercedes has provide some wiggle room in that ambitious goal, noting that it will be “ready to go all electric by the end of the decade, where markets allow.” This could mean that some combustion engine Mercedes, which are already equipped with 48-volt mild hybrid systems, will be produced and sold beyond the decade.
“We have a very clear plan to rapidly scale BEVs; we want to get on this journey to a BEV (battery electric) only world,” Daimler AG and Mercedes-Benz AG CEO Ola Källenius said during a media call after the announcement. “We want to be the people that make that happen, not just let it happen for us and go with the flow, but really taking initiative. And we believe also that the luxury segment, where we belong, has all the hallmarks of being a leading segment for this transition.”
The company has already taken some action, announcing Thursday it acquired UK-based electric motor company YASA and has determined it will need battery capacity of more than 200 gigawatt hours. To hit meet those needs, Mercedes plans to set up eight battery factories with partners to produce cells.
The new plants, one of which will be located in the United States, is on top of the company’s already planned network of nine factories that will be dedicated to building battery systems. The company said it will team up with new European partners to develop and efficiently produce future cells and modules. That “European partners” designation is strategic and one that Mercedes says will ensure the region “remains at the heart of the auto industry.”
Mercedes said it has partnered with Sila Nano, the Silicon Valley battery materials startup that raised $590 million earlier this year, to help it improve its next generation of batteries. Specifically, SilaNano is helping Mercedes increase energy density by using silicon-carbon composite in the anode, which should boost range and allow for shorter charging times.
Mercedes is also looking into solid-state battery technology and said it is in talks with partners to develop batteries with even higher energy density and safety.
The plan unveiled Thursday piggybacks on previous goals to build and sell more EVs. Back in 2017, Mercedes said it would electrify — which means gas-hybrid, plug-in hybrid or battery electric — its entire lineup by 2022. The German automaker said Thursday that by next year it will offer battery-electric vehicles in every segment that it serves.
Its EV-only plan will accelerate from there. By 2025, the company said its three newly launched vehicle architectures will be electric-only. The company said it expects that all-electric and hybrids will make up 50% of its sales that’s up from its previous guidance of 25%. Customers will also be to choose an all-electric alternative for every model the company makes.
Källenius said the company’s goal marks a “profound reallocation of capital.” He stressed that the company’s profitability targets would be safeguarded and met despite this hefty investment and shift away from the internal combustion engine.
To meet this target, Mercedes is launching three electric-only architectures which will form the basis of all of its new vehicles. It’s so-called MB.EA platform will be used for its medium to large passenger cars, while AMG.EA will underpin its performance Mercedes-AMG cars and the VAN.EA will be dedicated architecture for electric passenger minivans and light commercial vehicles. The company has already announced its “electric first” compact car architecture, known as MMA, will launch in vehicles by 2024.
India’s central bank is considering launching a digital currency, according to a top executive, giving a clear indication of its intentions for the first time after previously stating that it was studying the idea.
T Rabi Sankar, the deputy governor of Reserve Bank of India, said at a conference today that the central bank is considering introducing the nation’s digital currency in a “phased” manner while legal changes are made to the South Asian nation’s foreign-exchange rules and IT laws.
The digital currency, which will be backed by sovereign, will lower the economy’s reliance on cash, enable cheaper and smoother international settlements, and protect people from the volatility of privacy cryptocurrencies, he said.
“Every idea has to wait for its time, and the time for CBDC [central bank digital currency] is near. We have carefully evaluated the risks,” he told an audience at a conference held by think-tank Vidhi Centre for Legal Policy.
Sankar said the central bank’s “endeavor is that as we move forward [with the plan],” so that India’s digital currency “can reiterate its leadership position in payment systems of the world.”
The top executive’s remarks follows European Central Bank saying last week that it will begin a 24-month “investigation phase” that, if successful, could lead to the creation of a digital euro by 2025.
Also last week, China’s central bank said its digital yuan trial had reached $5.3 billion in transaction value by the end of June.
“Central banks have increased their attention on digital currencies,” said Sankar. “CBDC will be in the arsenal of most if not all central banks in the world. A calibrated and nuanced approach will be considered at the drawing board as well as with stakeholder consultations,” he said, adding that the central bank has been exploring the benefits and risks of issuing a sovereign CBDC for “quite some time.”
“We have studied specific-purpose CBDCs proposed by different central banks around the world for wholesale and retail segments. The launch of a general-purpose CBDC for population scale is being considered, and RBI is working towards a phased introduction strategy and examining use cases with little or no disruption of India’s banking and monetary systems,” he said. “However, conducting pilots in wholesale and retail segments may be a possibility in near future.”
In his remarks, Sankar also hinted that the central bank hasn’t changed its stand on private cryptocurrencies such as bitcoin.
In 2018, an Indian government panel recommended banning all private cryptocurrencies and proposed up to 10 years of jail time for offenders. The panel also suggested the government to explore a digital version of the fiat currency and ways to implement it.
At the time, RBI said the move was necessary to curb “ring-fencing” of the country’s financial system. It had also argued that bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.
“They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic,” Sankar said today.
The 2018 notice from the central bank sent a panic to several local startups and companies offering services to trade in cryptocurrency. Nearly all of them have either since closed shop, or pivoted to serve other markets.
In the agenda published on the lower house website earlier this year, a legislation sought to “prohibit all private cryptocurrencies in India,” but allow “for certain exceptions to promote the underlying technology [blockchain] of cryptocurrency and its uses.”
I did a bit of a double-take on this one: $100 million is a big number at any point, but two-and-a-half months after a $56 million round is pretty wild. At the very least, we know Path Robotics is ready to put its money where its mouth is — and that Tiger Global likes what it sees in the welding robotics firm.
The “pre-emptive” Series C brings its total funding to $171 and leapfrogs it toward the top of the most well-funded construction robotics companies. There’s a lot of room here, of course. The global construction market is in the tens of trillions of dollars, annually. And one of the beauties of the industry is precisely how many flanks there are to attack it from.
Image Credits: Path Robotics
Path’s particular funding…well, path, points to ambitions beyond welding. But that’s a good place to start, with a massive labor shortage of around 400,000 jobs in the U.S. alone by 2024. Tiger Global partner Griffin Schroeder pulls the curtain back a touch, stating:
Path’s innovative approach to computer vision and proprietary AI software allows robots to sense, understand and adapt to the challenges of each unique welding project. We believe this breakthrough technology can be adopted for many other applications and products beyond just welding, to serve their customers holistically.
I do think there’s a risk of taking on too much too fast for a startup — even one as well-funded as Path.
Image Credits: ADUSA Distribution
Verve Motion’s funding round just barely missed the cutoff for roundup inclusion last week. It’s tough when your lead-in is a $100 million round, but $15 million’s certainly nothing to scoff at. A spinout of some of the really interesting work being done at Conor Walsh’s lab at Harvard’s Wyss Institute and the John A. Paulson School of Engineering and Applied Sciences, Verve Motion is one of a number of startups in the exoskeleton/exosuit category.
There are two largely distinct audiences for this tech: people with mobility issues and the blue-collar labor force. For now, at least, Verve is targeting the latter, with its soft exosuits designed to help reduce workplace injuries from activities like repetitive lifting. Honestly, it fits the dull, dirty, dangerous paradigm pretty well.
Less fun news out of OpenAI, which quietly disbanded its robotics team. The move actually came last October, but Venture Beat reported on it last week. The team was probably best known for its Rubik’s Cube-solving robotics hand — a fascinating project, but apparently a bit of a dead end. Quoting a spokesperson:
After advancing the state of the art in reinforcement learning through our Rubik’s Cube project and other initiatives, last October we decided not to pursue further robotics research and instead refocus the team on other projects. Because of the rapid progress in AI and its capabilities, we’ve found that other approaches, such as reinforcement learning with human feedback, lead to faster progress in our reinforcement learning research.
And in the department of horribly butchering a funny thing Mark Twain once said, reports of Pepper’s death are…if not exaggerated, than at least disputed by the source. What remains clear is that the robotic face of Softbank wasn’t doing what the firm had hoped, and at the very least, it has decided to go back to the drawing board.
In addition to continuing refurbished sales of the signage-holding humanoid bot, Softbank Robotics CMO Kazutaka Hasumi told Reuters, “We will still be selling Pepper in five years.” It’s hard to know what to make of that. As far as these things go, Pepper wasn’t a particularly useful robot, in spite of it having a solid pedigree owing to Softbank’s acquisition of French firm, Aldebaran.
At the very least, the company is mulling over some kind of redesign. That alone seems unlikely to move the needle much.
A large chunk of the internet dropped offline on Thursday. Some of the most popular sites, apps and services on the internet were down, including UPS and FedEx (which have since come back online), Airbnb, Fidelity, and others are reporting Steam, LastPass, and the PlayStation Network are all experiencing downtime.
Many other websites around the world are also affected, including media outlets in Europe.
What appears to be the cause is an outage at Akamai, an internet security giant that provides networking and content delivery services to companies. At around 11am ET, Akamai reported an issue with its Edge DNS, a service that’s designed to keep websites, apps and services running smoothly and securely.
DNS services are critically important to how the internet works, but are known to have bugs and can be easily manipulated by malicious actors. Companies like Akamai have built their own DNS services that are meant to solve some of these problems for their customers. But when things go wrong or there’s an outage, it can cause a knock-on effect to all of the customer websites and services that rely on it.
Akamai said it was “actively investigating the issue,” but when reached a spokesperson would not say if its outage was the cause of the disruption to other sites and services that are currently offline. Akamai would not say what caused the issue but that it was already in recovery.
“We have implemented a fix for this issue, and based on current observations, the service is resuming normal operations. We will continue to monitor to ensure that the impact has been fully mitigated,” Akamai told TechCrunch.
It’s not the first time we’ve seen an outage this big. Last year Cloudflare, which also provides networking services to companies around the world, had a similar outage following a bug that caused major sites to stop loading, including Shopify, Discord and Politico. In November, Amazon’s cloud service also stumbled, which prevented it from updating its own status page during the incident. Online workspace startup Notion also had a high-profile outage this year, forcing the company to turn to Twitter to ask for help.
Continuing our global look into the torrid pace of venture capital investment in the second quarter, today we turn to Canada. While many markets have posted impressive results, like the United States setting the pace for new all-time records in dollars invested into startups, Canada’s numbers stand out.
The country, now famous in the startup world for giving birth to Shopify, has already crushed prior yearly records for venture investment thus far in 2021. Indeed, CB Insights data indicates that Canadian startups this year have already raised more than double their 2020 totals.
The same data set indicates that Canada’s venture capital results now rival those of the entire Latin American region, with exits and megadeals coming in roughly on par in the second quarter, and a similar number of total venture capital rounds in the period.
That caught our attention.
The Exchange explores startups, markets and money.
The Exchange reached out to a number of venture capitalists to expand our perspective on the Canadian market beyond the data points. Matt Cohen, a Toronto-based investor at Ripple Ventures, told The Exchange that “Canada is in a venture explosion” today, leading to results that are “unprecedented” for the country.
Taking the data and investor notes in aggregate, Canada’s startup industry seems to be benefiting from both domestic and international trends, a wide genre focus and more than one hub. Let’s talk aboot it.
A venture capital blowout
In the first half of 2021, Canadian startups raised $6.3 billion across 414 deals, per CB Insights data. Both numbers compare favorably to Canada’s 2020 results, when 617 deals led to $2.9 billion in total capital raised by Canadian startups. Canada has already bested its previous record in venture dollars invested ($4.3 billion, 2019), and is on pace to beat its all-time deal count as well (720, 2018).
By itself, the second quarter’s outsize results are even more extreme than its H1 2021 results might have led you to expect, amazingly. Observe the following chart from the same data set:
Image Credits: CB Insights
Canadian startups just had their single best quarter ever in both deal volume and dollar volume terms. Furthermore, the country boosted capital raised by nearly 10x from its local minimum in Q4 2020.
Notably, no Canadian startup deal in the quarter was worth more than $500 million; indeed, Trulioo’s $394 million Series D was the largest. From there the list includes $300 million for ApplyBoard’s Series D and Vena’s $242 million Series C. We read that list of results as indicative of an investing landscape in Canada that is not dominated by a handful of companies raising billion-dollar rounds. That’s good news, mind you: The data implies that the Canadian startup market is not being bolstered by one or two standout companies, but rather performing well more generally.
The myriad emerging and longer-term transportation technologies promise to change how people and packages move about the world or within their own neighborhoods. They also present myriad regulatory and policy hurdles that lawmakers, advocates and even investors and industry executives are attempting to navigate.
At the center — at least in the United States — sits Secretary of Transportation Pete Buttigieg. The small-town mayor in Indiana turned presidential candidate and now cabinet member under the Biden administration oversees public transport, highway safety and nascent technologies like autonomous vehicles. The Harvard graduate, Rhodes Scholar at Oxford University and former U.S. Navy officer is in a position to bring complexity or clarity to the future of transportation.
At Disrupt 2021, Secretary Buttigieg will join us for a fireside chat where we’ll dig into some of the thorniest questions around transportation and how to ensure that moving from Point A to Point B is a universal right, not a privilege. We’ll ask Buttigieg about micromobility and public transit, President Biden’s push for the federal government to use electric vehicles, autonomous vehicle guidance and new regulatory requirements around reporting vehicle crashes when an advanced driver assistance and automated driving system is engaged — a move that could spur a new wave of startups and benefit some in-car technologies.
The upshot: If it involves technology that moves people and packages, we aim to talk about it.
Secretary Buttigieg is just one of the many high-profile speakers who will be on our Disrupt Stage and the Extra Crunch Stage. During the three-day event, writer, director, actor and Houseplant co-founder Seth Rogen will be joined by Houseplant Chief Commercial Officer Haneen Davies and co-founder and CEO Michael Mohr to talk about the business of weed, Duolingo CEO and co-founder Luis von Ahn will discuss gamifying education and prepping for a public offering and Coinbase CEO Brian Armstrong will dig into the volatile world of cryptocurrency and his company’s massive direct listing earlier this year.
Other speakers include Twitter CISO Rinki Sethi, Calendly founder and CEO Tope Awotona, Mirror co-founder and CEO Brynn Putnam, Evil Geniuses CEO Nicole LaPointe Jameson and Andreessen Horowitz General Partner Katie Haun.
Sendlane, a San Diego-based multichannel marketing automation platform, announced Thursday it raised $20 million in Series A funding.
Five Elms Capital, Blueprint Equity and others invested in the round to give Sendlane total funding of $23 million since the company was founded in 2018.
Though the company officially started three years ago, co-founder and CEO Jimmy Kim told TechCrunch he began working on the idea back in 2013 with two other co-founders.
They were all email marketers in different lines of business, but had some common ground in that they were all using email tools they didn’t like. The ones they did like came with too big of a price tag for a small business, Kim said. They set out to build their own email marketing automation platform for customers that wanted to do more than email campaigns and newsletters.
When two other companies Kim was involved in exited in 2017, he decided to put both feet into Sendlane to build it into a system that maximized revenue based on insights and integrations.
In late 2018, the company attracted seed funding from Zing Capital and decided in 2019 to pivot into e-commerce. “Based on our personal backgrounds and looking at the customers we worked with, we realized that is what we did best,” Kim said.
Today, more than 1,700 e-commerce companies use Sendlane’s platform to convert more than 100 points of their customers’ data — abandoned carts, which products sell the best and which marketing channel is working — into engaging communications aimed at driving customer loyalty. The company said it can increase revenue for customers between 20% and 40% on average.
The company itself is growing 100% year over year and seeing over $7 million in annual recurring revenue. It currently has 54 employees right now, and Kim expects to be at around 90 by the end of the year and 150 by the end of 2022. Sendlane currently has more than 20 open roles, he said.
That current and potential growth was a driver for Kim to go after the Series A funding. He said Sendlane became profitable last year, which is why it has not raised a lot of money so far. However, as the rapid adoption of e-commerce continues, Kim wants to be ready for the next wave of competition coming in, which he expects in the next year.
He considers companies like ActiveCampaign and Klaviyo to be in line with Sendlane, but says his company’s differentiator is customer service, boasting short wait times and chats that answer questions in less than 15 seconds.
He is also ready to go after the next vision, which is to unify data and insights to create meaningful interactions between customers and retailers.
“We want to start carving out a new space,” Kim added. “We have a ton of new products coming out in the next 12 to 18 months and want to be the single source for customer journey data insights that provides flexibility for your business to grow.”
Two upcoming tools include Audiences, which will unify customer data and provide insights, and an SMS product for two-way communications and enabled campaign-level sending.
Caryn Marooney, Silicon Valley communications professional turned venture capitalist, spoke extensively on storytelling at TechCrunch Early Stage: Marketing and Fundraising. During her talk, she broke down messaging into four critical parts.
Marooney knows what she’s talking about: Throughout her time in Silicon Valley, she helped companies like Salesforce, Amazon, Facebook and more launch products and maintain messaging. In 2019, she left Facebook, where she was VP of technology communication, and joined Coatue Management as a general partner.
The presentation is summarized below and lightly edited for readability. Marooney breaks down her method into the acronym of RIBS: Relevance, Inevitability, Believability and keeping it Simple. A video of her presentation is also embedded below and contains 20 minutes of Q&A where she answers audience questions and covers a lot of ground.
‘The gift of editing is critical. Do not just write all your ideas and get very excited about what you think and ship it.’
Why should anyone care? Does anyone care? That’s the point Marooney is making here. The message must be relevant to the audience before anything else.
The very first thing is why anyone should care. And it’s important to remember that as a startup, you’re in a situation where nobody knows you. And nobody thinks, “Oh, I should really care about this. So you need to be very specific about who your audiences are and why they should care and why it matters to them. Early on, too. Relevance is usually to a very small audience, and you earn the right every day to expand that audience.
So, for example, when I was first working with Salesforce, it was a very narrow set of salespeople, for small- and medium-sized businesses, there was always the sense that it was going to be a cloud provider for companies of every size, but you have to start somewhere. And when you’re starting somewhere, you can paint the bigger picture. But you have to be specific about the benefits to your smaller audience. (Timestamp: 1:48)
In addition to talking about Tesla, Marooney uses the counter-example of the Segway, which shows a great idea alone is not enough. Even though Segways were introduced as a world-changing mode of transportation, in 2021, Segways are mainly only used by mall cops and tourists.
With a couple of generations of wireless earbuds under its belt, OnePlus finally has the AirPods Pro — and the rest of the premium market — in its sights. As part of an event today that also includes the launch of its budget Nord 2, the company officially announced the OnePlus Buds Pro.
The top-line feature here is adaptive noise canceling, which uses a trio of on-board mics to filter out ambient sound up to 40 dBs. The company says the tech compares favorably to more standard active noise cancelling, which offers a set level of filtering. The buds are powered by a pair of 11mm dynamic drivers, with support for Dolby Atmos.
All told, battery life is up to 10 hours on the buds (sans noise cancelling) and 38 with the case (ditto). The case will charge wireless with third-party Qi pads, or the system can get 10 hours of life with 10 minutes plugged in.
Image Credits: OnePlus
At $150, they’re $100 cheaper than the AirPods, though the number everyone is looking at here is almost certainly the $99 price tag Nothing announced for its upcoming Ear (1) buds. OnePlus did manage, however, to beat its co-founder’s new company to the punch by a full week.
Coincidence? You be the judge. (Honestly, it’s probably a coincide, given that the Ear (1) were delayed, but I digress.)
The price tag puts them more directly in line with the recently announced Beats Studio Buds, along with Google’s Pixel Buds and Samsung’s Galaxy Buds Pro — that is to say, somewhere in the middle of the pack. Design-wise, they appear most similar to the AirPods Pro, albeit with a metallic stem popping out from the bottom of the black or white buds.
I was fairly underwhelmed by the company’s first fully wireless set, the OnePlus Buds. To the company’s credit, they were extremely aggressively priced, at $70, in keeping with the release of the original Nord handset. The OnePlus Buds Pro will arrive in the U.S. and Canada on September 1.
Thoma Bravo-owned Sophos has announced it’s acquiring Braintrace, a cybersecurity startup that provides organizations visibility into suspicious network traffic patterns. Terms of the deal were not disclosed.
Braintrace, which was founded in 2016 and has raised $10 million in funding, has developed a network detection and response (NDR) solution that helps organizations to easily inspect network traffic to identify and filter out suspicious activity. It does this using remote network packet capture (RNCAP) technology, which provides visibility into network traffic patterns, including encrypted traffic, without the need for man-in-the-middle decryption. It also provides visibility into cloud network traffic, a task that typically needs to be carried out on-site, and supports all of the major cloud providers including AWS and Microsoft Azure.
The deal will see Sophos integrate Braintrace’s NDR technology into its own adaptive cybersecurity ecosystem, which underpins all of its security products and services. The technology will also help Sophos collect data from firewalls, proxies and VPNs, allowing it to look for network traffic that contains instructions for malware like TrickBot, and attackers that misuse Cobalt Strike, as well as pre-empting other malicious traffic that might lead to ransomware attacks
Braintrace’s developers, data scientists and security analysts have joined its global Sophos’ managed threat response (MTR) and rapid response teams as part of the deal.
Commenting on the deal, which Sophos claims will make it one of the largest and fastest-growing managed detection and response (MDR) providers, the company’s CEO Joe Levy said: “We’re excited that Braintrace built this technology specifically to provide better security outcomes to their MDR customers. It’s hard to beat the effectiveness of solutions built by teams of skilled practitioners and developers to solve real-world cybersecurity problems.”
Bret Laughlin, co-founder and CEO of Braintrace, added: “We built Braintrace’s NDR technology from the ground up for detection and now, with Sophos, it will fit into a complete system to provide cross-product detection and response across a multi-vendor ecosystem.”
It’s not too late to enjoy an epic pitch-off of global proportion. The Extreme Tech Challenge (XTC) Global Finals start today, July 22 at 9:00 am (PT). Register here for free, get instant access and tune in to see seven phenomenal startups — each one tackling some of the world’s most daunting social and environmental challenges.
The day also includes a keynote address from Beth Bechdol, the deputy director-general, Food and Agriculture Organization (FAO) of the United Nations, and five panel discussions ranging from powering clean energy startups to going green. Here are just two examples, and be sure to check out the event agenda so you don’t miss a minute.
Powering the Future Through Transformative Tech: XTC’s co-founders Young Sohn, Chairman of the Board at HARMAN International, and founding Managing Partner at Walden Catalyst, and Bill Tai, Partner Emeritus at Charles River Ventures jump into the breakthrough tech innovations that are transforming industries to build a radically better world. How can business, government, philanthropy, and the startup community come together to create a better tomorrow? Hear from these industry veterans and thought leaders about how technology can not only shape the future, but also where the biggest opportunities lie, including some exciting news about XTC and the FAO of the United Nations.
Cutting Out Carbon Emitters with Bioengineering: Bioengineering may soon provide compelling, low-carbon alternatives in industries where even the best methods produce significant emissions. By utilizing natural and engineered biological processes, we may soon have low-carbon textiles from Algiknit, lab-grown premium meats from Orbillion and fuels captured from waste emissions via LanzaTech. Leaders from these companies will join our panel to talk about how bioengineering can do its part in the fight against climate change.
The main event is, of course, the pitch competition. More than 3,700 startups applied, and these are the seven finalists who will compete one last time for the title of XTC 2021 champion.
In addition to choosing the winner of XTC 2021, the esteemed judges will announce the winners of the COVID-19 Innovation award, the Female Founder award, the Ethical AI award and the People’s Choice award.
The deal, the terms of which were not disclosed, is the latest cybersecurity acquisition by Microsoft, which just last week announced that it’s buying threat intelligence startup RiskIQ. The firm also recently acquired IoT security startups CyberX and Refirm Labs as it moved to beef up its security portfolio. Security is big business for Microsoft, which made more than $10 billion in security-related revenue in 2020 — a 40% increase from the year prior.
CloudKnox, which was founded in 2015 and emerged from stealth two years later, helps organizations to enforce least-privilege principles to reduce risk and help prevent security breaches. The startup had raised $22.8 million prior to the acquisition, with backing from ClearSky, Sorenson Ventures, Dell Technologies Capital, and Foundation Capital.
The company’s activity-based authorization service will equip Azure Active Directory customers with “granular visibility, continuous monitoring and automated remediation for hybrid and multi-cloud permissions,” according to a blog post by Joy Chik, corporate vice president of identity at Microsoft.
Chik said that while organizations were reaping the benefits of cloud adoption, particularly as they embrace flexible working models, they often struggled to assess, prevent and enforce privileged access across hybrid and multi-cloud environments.
“CloudKnox offers complete visibility into privileged access,” Chik said. “It helps organizations right-size permissions and consistently enforce least-privilege principles to reduce risk, and it employs continuous analytics to help prevent security breaches and ensure compliance. This strengthens our comprehensive approach to cloud security.”
In addition to Azure Active Directory, Microsoft also plans to integrate CloudKnox with its other cloud security services including 365 Defender, Azure Defender, and Azure Sentinel.
Commenting on the deal, Balaji Parimi, CloudKnox founder and CEO, said: “By joining Microsoft, we can unlock new synergies and make it easier for our mutual customers to protect their multi-cloud and hybrid environments and strengthen their security posture.”
Spotify announced this morning a new partnership with online GIF database GIPHY to enable discovery of new music through GIFs. No, the GIFs themselves won’t play song clips, if that’s what you’re thinking. Instead, through a series of new Spotify-linked GIFs, there will be an option to click a button to be taken to Spotify directly to hear the artist’s music. At launch, artists including Doja Cat, The Weeknd, Post Malone, Nicki Minaj, The Kid LAROI, Conan Gray, and others will have Spotify-linked GIFs available on their official GIPHY profile page. More artists will be added over time.
The idea behind the new integration is to help connect users with Spotify music from their everyday communications, like texts, group chats, and other places where GIFs are used. This is similar to Spotify’s existing integrations with social media apps like Snapchat and Instagram, where users can share music through the Stories and messages they post. Essentially, it’s a user acquisition strategy that leverages online social activities — in this case, sharing GIFs — while also benefiting the artists through the exposure they receive.
You can find the new Spotify-linked GIFs on the artist’s page on GIPHY.com or through GIPHY’s mobile app. The supported GIFs will include a new “Listen on Spotify” button at the bottom which will appear alongside the GIF when it’s shared. When clicked, users are redirected from the GIF to the artist’s page on Spotify where they can stream their music or browse to discover more songs they want to hear.
Image Credits: Spotify/GIPHY
Spotify says the feature is part of a broader partnership it has with GIPHY, which will later focus on bringing a more interactive listening experience to users.
Earlier this year, Facebook and Spotify had also teamed up on a new “Boombox” project that allows Facebook users to listen to music hosted on Spotify while browsing through the Facebook app. This is powered by a “miniplayer” that allows anyone who comes across the shared music to click to play the content while they scroll their feed.
Spotify says the new feature will be available to users globally from verified GIPHY artists’ pages.