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Report: NYC and Arlington, VA win the contest for Amazon’s split East Coast headquarters

New York City and Arlington, Virginia have reportedly won Amazon’s lengthy and highly-publicized pageant for the locations of its new headquarters, beating out 238 other contestants. According to the Wall Street Journal, which broke the news, an official announcement may come as early as Tuesday.

The offices will be located in Long Island City, across the East River from Manhattan, and Crystal City, a neighborhood in Arlington, which is a 15-20 minute drive from Washington D.C.

Last week, more than a year after the Seattle-based company began asking cities to submit proposals for its second headquarters, nicknamed HQ2, reports emerged that Amazon planned to open two new locations, instead of just one, catching candidates off guard. WSJ reported that the Amazon decided to split a total of 50,000 employees between two new offices because the company believes it can recruit better candidates that way, while also avoiding the traffic, housing, and other potential infrastructure headaches of adding tens of thousands of new employees to one area.

Nonetheless, when it became clear that New York City and Arlington, Virginia were among the top contenders, residents of both areas began to worry about Amazon’s impact on housing costs and commutes, with New Yorkers wondering if the beleaguered New York City subway can handle 25,000 potential new riders. Long Island City community groups have also called on Amazon to pay a “gentrification tax” to help keep local residents from being priced out of their neighborhood by its employees.

As for the other cities that were potential contenders (the 20 finalists included Indianapolis, Denver, Dallas, and Nashville), Steve Case, co-founder of AOL, said on Twitter that he believed the work they put into Amazon’s competitive bidding process can be repurposed to build new startup ecosystems.

My statement on @Amazon’s #HQ2 decision: pic.twitter.com/Ty7220jgFa

— Steve Case (@SteveCase) November 13, 2018

TechCrunch has contacted Amazon for comment.

Growing pains at venture-backed Moogsoft lead to layoffs

Eight months after bringing in a $40 million Series D, Moogsoft‘s co-founder and chief executive officer Phil Tee confirmed to TechCrunch that the IT incident management startup had shed 18 percent of its workforce, or just over 30 employees.

The layoffs took place at the end of October; shortly after, Moogsoft announced two executive hires. Among the additions was Amer Deeba, who recently resigned from Qualys after the U.S. Securities and Exchange Commission charged him with insider trading.

Founded in 2012, San Francisco-based Moogsoft provides artificial intelligence for IT operations (AIOps) to help teams work more efficiently and avoid outages. The startup has raised $90 million in equity funding to date, garnering a $220 million valuation with its latest round, according to PitchBook. It’s backed by Goldman Sachs, Wing Venture Capital, Redpoint Ventures, Dell’s corporate venture capital arm, Singtel Innov8, Northgate Capital and others. Wing VC founder and long-time Accel managing partner Peter Wagner and Redpoint partner John Walecka are among the investors currently sitting on Moogsoft’s board of directors.

Tee, the founder of two public companies (Micromuse and Riversoft) admitted the layoffs affected several teams across the company. The cuts, however, are not a sign of a struggling business, he said, but rather a right of passage for a startup seeking venture scale.

“We are a classic VC-backed startup that has sort of grown up,” Tee told TechCrunch earlier today. “In pretty much every successful company, there is a point in time where there’s an adjustment in strategy … Unfortunately, when you do that, it becomes a question of do we have the right people?”

Moogsoft doubled revenue last year and added 50 Fortune 200 companies as customers, according to a statement announcing its latest capital infusion. Tee said he’s “extremely chipper” about the road ahead and the company’s recent C-suite hires.

Moogsoft’s newest hires, CFO Raman Kapur (left) and COO Amer Deeba (right).

Moogsoft announced its latest executive hires on November 2, only one week after completing the round of layoffs, a common strategy for companies looking to cast a shadow on less-than-stellar news, like major staff cuts. Those hires include former Splunk vice president of finance Raman Kapur as Moogsoft’s first-ever chief financial officer and Amer Deeba, a long-time Qualys executive, as its chief operating officer.

Deeba spent the last 17 years at Qualys, a publicly traded provider of cloud-based security and compliance solutions. In August, he resigned amid allegations of insider trading. The SEC announced its charges against Deeba on August 30, claiming he had notified his two brothers of Qualys’ missed revenue targets before the company publicly announced its financial results in the spring of 2015.

“Deeba informed his two brothers about the miss and contacted his brothers’ brokerage firm to coordinate the sale of all of his brothers’ Qualys stock,” the SEC wrote in a statement. “When Qualys publicly announced its financial results, it reported that it had missed its previously-announced first-quarter revenue guidance and that it was revising its full-year 2015 revenue guidance downward. On the same day, Deeba sent a message to one of his brothers saying, ‘We announced the bad news today.’ The next day, Qualys’s stock price dropped 25%. Although Deeba made no profits from his conduct, Deeba’s brothers collectively avoided losses of $581,170 by selling their Qualys stock.”

Under the terms of Deeba’s settlement, he is ineligible to serve as an officer or director of any SEC-reporting company for two years and has been ordered to pay a $581,170 penalty.

Tee, for his part, said there was never any admission of guilt from Deeba and that he’s already had a positive impact on Moogsoft.

“[Deeba] is a tremendously impressive individual and he has the full confidence of myself and the board,” Tee said.

 

U.S. declines in internet freedom rankings, thanks to net neutrality repeal and fake news

If you need a safe haven on the internet, where the pipes are open and the freedoms are plentiful — you might want to move to Estonia or Iceland.

The latest “internet freedoms” rankings are out, courtesy of Freedom House’s annual report into the state of internet freedoms and personal liberties, based on rankings of 65 countries that represent the vast majority of the world’s internet users. Although the U.S. remains firmly in the top ten, it dropped a point on the year earlier after a recent rash of changes to internet regulation and a lack of in the realm of surveillance.

Last year, the U.S. was 21 in the global internet freedom ranking — the lower number, the better a country ranks. That was behind Estonia, Iceland, Canada, Germany and Australia. This year the U.S. is at 22 — thanks to the repeal of net neutrality and the renewal of U.S. spy powers.

The report also cited “disinformation and hyperpartisan content” — or fake news — as a “pressing concern.”

It was only in June, after a protracted battle, that the Federal Communications Commission finally pulled the plug on the Obama-era rules that guaranteed the free and fair flow of internet data. Net neutrality — which promises to treat every user’s traffic as equal and doesn’t prioritize certain internet users or services over others — was dead. That was despite months of delays and a scandal that embroiled the FCC’s chairman Ajit Pai for allegedly lying to lawmakers over a falsified denial-of-service attack that he used to try to stifle criticism of his repeal plans. What did happen was an onslaught of citizens demanding that the net neutrality rules. But that was eclipsed by an astroturfing campaign that even used dead people to try to swing the decision.

What also dropped the U.S. a point was the near-clean reauthorization of the government’s surveillance laws, which passed with little debate despite a call for change. It was the first time to reel in the government’s spying powers since the Edward Snowden revelations a half-decade ago — but lawmakers buckled to pressure from the intelligence community, despite recognizing a long history of abuse and overreach by U.S. spy agencies.

Freedom House called the law’s renewal “a blow to civil rights and privacy advocates,” who advocated for change since long before Edward Snowden had a face.

A single digit drop in ranking may not seem like much, compared to the last-place contenders — Iran and China, predictably ranking in worst, but many see the U.S. as a beacon of free speech and expression — a model that others aspire to replicate.

As the report found, that goes both ways. The U.S. has its part to blame for the decline in at least 17 countries where “fake news” has been co-opted by oppressive regimes to justify crackdowns on dissent and free speech. The rise of “fake news,” a term largely attributed to Donald Trump — then a candidate for president — which spread like wildfire — and across borders — as a way to reject reported information or factual current events that were derogatory to a person’s views. In other words, it was a verbal hand grenade, lobbed whenever a person heard something they didn’t like.

Now, other regimes are cracking down on internet freedoms under the guise of fighting fake news. Philippines and Kazakhstan were both named by Freedom House as using “fake news” to restrict the internet by removing content and stifling the spread of views in the name of fighting misinformation.

While many might not care much for a country you know little about, it’s a reminder that the U.S. is still seen in high regard and other nations will follow in its footsteps.

Michael Abramowitz, president of Freedom House, said that the U.S. government in particular should take “a more proactive role” in stepping up their efforts to maintain a free and open internet to prevent playing into the hands of of “less democratic governments looking to increase their control of the internet.”

Brex has partnered with WeWork, AWS and more for its new rewards program

Brex, the corporate card built for startups, unveiled its new rewards program today.

The billion-dollar company, which announced its $125 million Series C three weeks ago, has partnered with Amazon Web Services, WeWork, Instacart, Google Ads, SendGrid, Salesforce Essentials, Twilio, Zendesk, Caviar, HubSpot, Orrick, Snap, Clerky and DoorDash to give entrepreneurs the ability to accrue and spend points on services and products they use regularly.

Brex is lead by a pair of 22-year-old serial entrepreneurs who are well aware of the costs associated with building a startup. They’ve been carefully crafting Brex’s list of partners over the last year and say their cardholders will earn roughly 20 percent more rewards on Brex than from any competitor program.

“We didn’t want it to be something that everyone else was doing so we thought, what’s different about startups compared to traditional small businesses?” Brex co-founder and chief executive officer Henrique Dubugras told TechCrunch. “The biggest difference is where they spend money. Most credit card reward systems are designed for personal spend but startups spend a lot more on business.”

Companies that use Brex exclusively will receive 7x points on rideshare, 3x on restaurants, 3x on travel, 2x on recurring software and 1x on all other expenses with no cap on points earned. Brex carriers still using other corporate cards will receive just 1x points on all expenses.

Most corporate cards offer similar benefits for travel and restaurant expenses, but Brex is in a league of its own with the rideshare benefits its offering and especially with the recurring software (SalesForce, HubSpot, etc.) benefits.

San Francisco-based Brex has raised about $200 million to date from investors including Greenoaks Capital, DST Global and IVP.  At the time of its fundraise, the company told TechCrunch it planned to use its latest capital infusion to build out its rewards program, hire engineers and figure out how to grow the business’s client base beyond only tech startups.

“This is going to allow us to compete even more with Amex, Chase and the big banks,” Dubugras said.

Ian Small, former head of TokBox, takes over as Evernote CEO from Chris O’Neill

Former TokBox head Ian Small is replacing Chris O’Neill as CEO of Evernote, the note-taking and productivity app company said this morning. In a blog post, Small said that the leadership change was announced to employees this morning by Evernote’s board. “We are all hugely appreciative of the energy and dedication Chris has shown over the last three years, and in particular for putting Evernote on solid financial footing so we can continue to build for the future,” he wrote.

Small added, “When Stepan Pachikov founded Evernote, he had a vision for how technology could augment memory and how an app could change the way we relate to information at home and at work. Evernote has been more successful at making progress towards Stepan’s dreams than he could have imagined, but Stepan and I both think that there is more to explore and more to invent.”

O”Neill had been Evernote’s CEO since 2015, when he took over the position from co-founder Phil Libin. Small previously served as CEO of TokBox, which operates the OpenTok video calling platform, from 2009 to 2014, and then as its chairman from 2014 to July of this year.

O’Neill’s departure as CEO is the latest significant leadership shift for Evernote, which has withstood several key executive departures over the last few months. In early September, we reported that the company had lost several senior executives, including CTO Anirban Kundu, CFO Vincent Toolan, CPO Erik Wrobel, and head of HR Michelle Wagner, as it sought funding in a potential down-round from the unicorn valuation it hit in 2012. According to TechCrunch’s sources, Evernote had struggled to grow its base of paid users and active users, as well as enterprise clients, for the last six years.

Then a few weeks later, Evernote announced that had to lay off 54 people, or about 15 percent of its workforce. O’Neill wrote a blog post about the company’s future growth strategy, including streamlining specific functions like sales so it could focus on product development and engineering.

Far-right social network Gab goes offline after GoDaddy tells it to find another domain registrar

Gab, the far-right social network that the suspect in Saturday’s mass shooting at Pittsburgh synagogue used to share anti-Semitic posts, has gone offline after GoDaddy gave it 24 hours to find a new domain provider. GoDaddy’s decision comes after PayPal, Medium, Stripe, and Joyent banned Gab’s accounts over the weekend.

Bowers may face the death penalty after being charged with 11 counts of murder and multiple hate crimes in connection to the attack on the Tree of Life synagogue in Pittsburgh, which the Anti-Defamation League said it believes is the deadliest against the Jewish community in U.S. history.

On his Gab profile, Bowers had written “jews are the children of satan” in his biography and repeatedly shared anti-Semitic content and other hate speech. Shortly before the shooting, Bowers allegedly wrote “HIAS [an organization that aids Jewish refugees] likes to bring invaders in that kill our people. I can’t sit by and watch my people get slaughtered. Screw your optics, I’m going in.”

In an emailed statement, a GoDaddy spokesperson said Gab was told to move after breaking the domain registrar’s rules against violent content:

“We have informed Gab.com that they have 24 hours to move the domain to another registrar, as they have violated our terms of service. In response to complaints received over the weekend, GoDaddy investigated and discovered numerous instances of content on the site that both promotes and encourages violence against people.”

Gab now displays a message claiming it “is under attack” and has been “systematically no-platformed by App Stores, multiple hosting providers, and several payment processors.”

This is not the first time Gab has run afoul of its online service providers. Last year, Gab was banned from the Apple app store and Google Play for content violations. In August, Microsoft threatened to boot it from Azure web services if two anti-Semitic posts were not removed (the posts were taken down and Microsoft continued serving Gab).

After being suspended by Joyent, Gab said through its Twitter account that it would “likely be down for weeks,” but later tweeted that it would “be back soon.”

GoDaddy also stopped providing domain services to white supremacist site Daily Stormer in August 2017 after it posted an obscene article about Heather Heyer, who was killed while protesting last year’s Unite the Right rally in Charlottesville, Virginia.

Facial recognition startup Kairos founder continues to fight attempted takeover

There’s some turmoil brewing over at Miami-based facial recognition startup Kairos . Late last month, New World Angels President and Kairos board chairperson Steve O’Hara sent a letter to Kairos founder Brian Brackeen notifying him of his termination from the role of chief executive officer. The termination letter cited willful misconduct as the cause for Brackeen’s termination. Specifically, O’Hara said Brackeen misled shareholders and potential investors, misappropriated corporate funds, did not report to the board of directors and created a divisive atmosphere.

Kairos is trying to tackle the society-wide problem of discrimination in artificial intelligence. While that’s not the company’s explicit mission — it’s to provide authentication tools to businesses — algorithmic bias has long been a topic the company, especially Brackeen, has addressed.

Brackeen’s purported termination was followed by a lawsuit, on behalf of Kairos, against Brackeen, alleging theft, a breach of fiduciary duties — among other things. Brackeen, in an open letter sent a couple of days ago to shareholders — and one he shared with TechCrunch — about the “poorly constructed coup,” denies the allegations and details his side of the story. He hopes that the lawsuit will be dismissed and that he will officially be reinstated as CEO, he told TechCrunch. As it stands today, Melissa Doval who became CFO of Kairos in July, is acting as interim CEO.

“The Kairos team is amazing and resilient and has blown me away with their commitment to the brand,” Doval told TechCrunch. “I’m humbled by how everybody has just kind of stuck around in light of everything that has transpired.”

The lawsuit, filed on October 10 in Miami-Dade and spearheaded by Kairos COO Mary Wolff, alleges Brackeen “used his position as CEO and founder to further his own agenda of gaining personal notoriety, press, and a reputation in the global technology community” to the detriment of Kairos. The lawsuit describes how Brackeen spent less than 30 percent of his time in the company’s headquarters, “even though the Company was struggling financially.”

Other allegations detail how Brackeen used the company credit card to pay for personal expenses and had the company pay for a car he bought for his then-girlfriend. Kairos alleges Brackeen owes the company at least $60,000.

In his open letter, Brackeen says, “Steve, Melissa and Mary, as cause for my termination and their lawsuit against me, have accused me of stealing 60k from Kairos, comprised of non-work related travel, non-work related expenses, a laptop, and a beach club membership,” Brackeen wrote in a letter to shareholders. “Let’s talk about this. While I immediately found these accusations absurd, I had to consider that, to people on the outside of  ‘startup founder’ life— their claims could appear to be salacious, if not illegal.”

Brackeen goes on to say that none of the listed expenses — ranging from trips, meals, rides to iTunes purchases — were not “directly correlated to the business of selling Kairos to customers and investors, and growing Kairos to exit,” he wrote in the open letter. Though, he does note that there may be between $3,500 to $4,500 worth of charges that falls into a “grey area.”

“Conversely, I’ve personally invested, donated, or simply didn’t pay myself in order to make payroll for the rest of the team, to the tune of over $325,000 dollars,” he wrote. “That’s real money from my accounts.”

Regarding forcing Kairos to pay for his then-girlfriend’s car payments, Brackeen explains:

On my making Kairos ‘liable to make my girlfriend’s car payment’— in order to offset the cost of Uber rides to and from work, to meetings, the airport, etc, I determined it would be more cost effective to lease a car. Unfortunately, after having completely extended my personal credit to start and keep Kairos operating, it was necessary that the bank note on the car be obtained through her credit. The board approved the $700 per month per diem arrangement, which ended when I stopped driving the vehicle. Like their entire case— its not very sensational, when truthfully explained.

The company also claims Brackeen has interfered with the company and its affairs since his termination. Throughout his open letter, Brackeen refers to this as an “attempted termination” because, as advised by his lawyers, he has not been legally terminated. He also explains how, in the days leading up to his ouster, Brackeen was seeking to raise additional funding because in August, “we found ourselves in the position of running low on capital.” While he was presenting to potential investors in Singapore, Brackeen said that’s “when access to my email and documents was cut.”

He added, “I traveled to the other side of the world to work with my team on IP development and meet with the people who would commit to millions in investment— and was fired via voicemail the day after I returned.”

Despite the “termination” and lawsuit, O’Hara told TechCrunch via email that “in the interest of peaceful coexistence, we are open to reaching an agreement to allow Brian to remain part of the family as Founder, but not as CEO and with very limited responsibilities and no line authority.”

O’Hara also noted the company’s financials showed there was $44,000 in cash remaining at the end of September. He added, “Then reconcile it with the fact that Brian raised $6MM in 2018 and ask yourself, how does a company go through that kind of money in under 9 months.”

Within the next twelve days, there will be a shareholder vote to remove the board, as well as a vote to reinstate Brackeen as CEO, he told me. After that, Brackeen said he intends to countersue Doval, O’Hara and Wolff.

In addition to New World Angels, Kairos counts Kapor Capital, Backstage Capital and others as investors. At least one investor, Arlan Hamilton of Backstage Capital, has publicly come out in support of Brackeen.

I’m proud of @BrianBrackeen. I’m honored to be his friend. He has handled recent events with his company with grace and patience, and has every right to be screaming inside. I’ve got his back. And he & I only want the best for @LoveKairos.

Certain distractions will be fleeting.

— Arlan 👊🏾 (@ArlanWasHere) October 25, 2018

As previously mentioned, Brackeen has been pretty outspoken about the ethical concerns of facial recognition technologies. In the case of law enforcement, no matter how accurate and unbiased these algorithms are, facial recognition software has no business in law enforcement, Brackeen said at TechCrunch Disrupt in early September. That’s because of the potential for unlawful, excessive surveillance of citizens.

Given the government already has our passport photos and identification photos, “they could put a camera on Main Street and know every single person driving by,” Brackeen said.

And that’s a real possibility. In the last couple of months, Brackeen said Kairos turned down a government request from Homeland Security, seeking facial recognition software for people behind moving cars.

“For us, that’s completely unacceptable,” Brackeen said.

Whether that’s entirely unacceptable for Doval, the interim CEO of Kairos, is not clear. In an interview with TechCrunch, Doval said, “we’re committed to being a responsible and ethical vendor” and that “we’re going to continue to champion the elimination of algorithmic bias in artificial intelligence.” While that’s not a horrific thing to say, it’s much vaguer than saying, “No, we will not ever sell to law enforcement.”

Selling to law enforcement could be lucrative, but that comes with ethical risks and concerns. But if the company is struggling financially, maybe the pros could outweigh the cons.

China’s NIO invests in LiDAR startup Innovusion

Innovusion, a two-year-old startup developing LiDAR sensor technology for autonomous vehicles, has raised $30 million in a Series A funding round co-led by Chinese firms Nio Capital and Eight Roads Ventures along with U.S.-based F-Prime Capital.

Other seed round and strategic investors joined the round, the startup said.

Nio Capital is the venture arm of Nio, the Chinese electric automaker aiming to compete with Tesla. Nio, which raised $1 billion when it debuted on the New York Stock Exchange in September, has operations in the U.S., U.K. and Germany, although it only sells its ES8 vehicle in China.

Innovusion, which was founded in November 2016, says it will use the funding to scale up its operations, specifically to ramp up production of its light detection and ranging sensor system called Innovusion Cheetah. The company began shipping samples of the system in the second quarter of 2018 and is beginning to take customer orders.

The round of funding will allow the Los Altos, California-based company to expand its R&D team and manufacturing facilities to more quickly develop, market and deliver Innovusion Cheetah LiDAR to customers around the world, according to Junwei Bao, the company’s co-founder and CEO. The company primarily is targeting customers in China and the U.S.

LiDAR is used by companies developing autonomous vehicles to detect and measure objects on the road around them. Most of the companies testing AVs believe LiDAR is an essential sensor required to deploy self-driving vehicles safely on public roads. It’s what has propelled demand for LiDAR and, in turn, an array of startups to pop up and try capture market share away from Velodyne, the long-time dominant leader in the space.

Tesla to bring portion of Model 3 production to China next year

Tesla, which reported its first quarterly profits in two years Wednesday, is looking to extend its earnings streak by bringing its new Model 3 to customers beyond North America. And part of that plan involves accelerating its manufacturing plans in China.

Tesla saw its revenue skyrocket to $6.8 billion in the third quarter (and a $312 million profit) thanks to sales of its new Model 3 vehicle, despite production bottlenecks and more recent issues with delivery logistics. The company was able to achieve that profitability milestone just through sales in the U.S. and Canada. That leaves two other massive markets on the table. Cue Europe and China.

Tesla said Wednesday it will start to take orders for the Model 3 in Europe and China before the end of 2018. Tesla said it will begin deliveries of the Model 3 to Europe early next year.

“The mid-sized premium sedan market in Europe is more than twice as big as the same segment in the U.S.,” Tesla said in its shareholder letter released Wednesday. “This is why we are excited to bring Model 3 to Europe early next year.”

Notably, the company is further accelerating its timeline for China and said it will bring portions of Model 3 production to the country next year.

“We are aiming to bring portions of Model 3 production to China during 2019 and to progressively increase the level of localization through local sourcing and manufacturing,” Tesla said in its earnings report. “Production in China will be designated only for local customers.”

Tesla said earlier this month it plans for as rapid build out of a factory in China. But there’s something new here. The term “portions of Model 3 production” is the important phrase. This could be referring to a term used in the manufacturing world known as a complete knock down. CKD is basically a kit of non-assembled parts of a product, like say a Model 3. It’s a strategy used to avoid tariffs when shipping to foreign countries.

Tesla has plans to build a factory in Shanghai, but construction hasn’t even begun yet.

The company secured in October rights to about 210 acres of land in Lingang, Shanghai, the site of the electric automaker’s planned factory and its first outside of the U.S.

Tesla warned in its production and delivery report in early October that tariffs, combined with the cost of shipping its vehicles via ocean carrier and the lack of access to cash incentives available to locally produced electric vehicles, has put the company at a disadvantage in China. Tesla reiterated those cost constraints in its third-quarter earnings report.

Tesla reached a deal in July with the Shanghai government to build a factory that it says will be capable of producing 500,000 electric vehicles a year. Once construction begins, it will take about two years until Tesla can produce vehicles. It will be another “two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers,” a Tesla spokesman said at the time.

Oracle acquires DataFox, a developer of ‘predictive intelligence as a service’ across millions of company records

Oracle today announced that it has made another acquisition, this time to enhance both the kind of data that it can provide to its business customers, and its artificial intelligence capabilities: it is buying DataFox, a startup that has amassed a huge company database — currently covering 2.8 million public and private businesses, adding 1.2 million each year — and uses AI to analyse that to make larger business predictions. The business intelligence resulting from that service can in turn be used for a range of CRM-related services: prioritising sales accounts, finding leads, and so on.

“The combination of Oracle and DataFox will enhance Oracle Cloud Applications with an extensive set of AI-derived company-level data and signals, enabling customers to reach even better decisions and business outcomes,” noted Steve Miranda, EVP of applications development at Oracle, in a note to DataFox customers announcing the deal. He said that DataFox will sit among Oracle’s existing portfolio of business planning services like ERP, CX, HCM and SCM. “Together, Oracle and DataFox will enrich cloud applications with AI-driven company-level data, powering recommendations to elevate business performance across the enterprise.”

Terms of the deal do not appear to have been disclosed but we are trying to find out. DataFox — which launched in 2014 as a contender in the TC Battlefield at Disrupt — had raised just under $19 million and was last valued at $33 million back in January 2017, according to PitchBook. Investors in the company included Slack, GV, Howard Linzon, and strategic investor Goldman Sachs among others.

Oracle said that it is not committing to a specific product roadmap for DataFox longer term, but for now it will be keeping the product going as is for those who are already customers. The startup counted Goldman Sachs, Bain & Company and Twilio among those using its services. 

The deal is interesting for a couple of reasons. First, it shows that larger platform providers are on the hunt for more AI-driven tools to provide an increasingly sophisticated level of service to customers. Second, in this case, it’s a sign of how content remains a compelling proposition, when it is presented and able to be manipulated for specific ends. Many customer databases can get old and out of date, so the idea of constantly trawling information sources in order to create the most accurate record of businesses possible is a very compelling idea to anyone who has faced the alternative, and that goes even more so in sales environments when people are trying to look their sharpest.

It also shows that, although both companies have evolved quite a lot, and there are many other alternatives on the market, Oracle remains in hot competition with Salesforce for customers and are hoping to woo and keep more of them with the better, integrated innovations. That also points to Oracle potentially cross and up-selling people who come to them by way of DataFox, which is an SaaS that pitches itself very much as something anyone can subscribe to online.

Addison Lee and Oxbotica ink self-driving deal, will offer autonomous car services in London by 2021

After undertaking a year-long investigation with Ford and four other mobility specialists on how to build self-driving systems that integrate with London’s existing transport infrastructure, Addison Lee today is announcing the next step in its autonomous strategy.

The on-demand ride company — which competes with black cabs, Uber and other car services — announced a deal with self-driving startup Oxbotica to develop autonomous vehicles, with the aim of getting them in service in London by 2021.

No financial details are being revealed about the deal. Addison Lee CEO Andy Boland, in an interview, described it as “purely commercial.” Currently Addison Lee is “unfashionably profitable,” he added, and so it is working on its current self-driving efforts off its own balance sheet. It is also wholly owned by PE firm the Carlyle Group, so it’s likely that this will help with future funding, although Boland did not rule out that when the company gets closer to a commercial launch, that it might need to look for funding to do this.

Meanwhile, Oxbotica — a spin-out from Oxford University — has raised around $18 million to date, with backers including Oxford, Innovate UK, the Ministry of Defence, the IP Group, insurers Axa XL and others.

The deal potentially sets up an interesting new avenue in how we might see autonomous cars being built, rolled out and operated.

Today, a number of transportation-on-demand companies that have roots in the tech world (Uber, Didi and Yandex Taxi are three examples) are trying to build their own self-driving tech. Alongside them, there are also a plethora of car makers who are also intent on building and running that experience.

Now, Addison Lee and Oxbotica are essentially presenting a third option: a system not built by the car service-operator, and not by a car maker, but by a third-party tech company that overlays the tech on top of whatever vehicle the service provider chooses to have.

Oxbotica was the first company to get a green light to start any kind of self-driving car test on a UK road, when it tested its equipment on a modified Renault driving five miles per hour in the town of Milton Keynes in 2016.

That early start was one of the reasons why Addison Lee decided to go with Oxbotica for its own efforts.

“The way they have built their technology and how they are already provisioning it has been impressive,” said Boland. “They have the most tangible capability that we could go with, and we felt that the way they were thinking about it, the business model isn’t just for ride share or car share, it’s across a range of other industry applications, and we like that, too. It’s now getting serious, and real-life-scale operators like Addison Lee are looking to bring this to market.” That would include shuttle services but potentially other kinds of commercial transportation (note that Oxbotica counts a commercial insurer as a backer).

“This represents a huge leap towards bringing autonomous vehicles into mainstream use on the streets of London, and eventually in cities across the United Kingdom and beyond,” said Graeme Smith, CEO of Oxbotica, in a statement. “Our partnership with Addison Lee Group represents another milestone for the commercial deployment of our integrated autonomous vehicle and fleet management software systems in complex urban transport conditions. Together, we are taking a major step in delivering the future of mobility.”

The two will start first with a comprehensive 3D mapping sweep before moving on to other aspects of building the service to prepare a autonomous vehicle service for trials.

For now Addison Lee has not named a vehicle partner, and Boland said that this was intentional.

The initial mapping exercise will be on the company’s existing fleet of vehicles working on autonomous research around London today – those will be the Fords from last year’s deal, he said. “But in terms of future service provision in 2021, that decision is yet to be made. Oxbotica is agnostic to manufacturers, and that was also interesting to us at the moment.”

Although Addison Lee competes with the likes of Uber — which had to appeal for a provisional 15-month right to operate in London after initially losing its license — it is different in that it owns its own fleet of vehicles. That has given the company more of an incentive to try to develop its own technology that it might use across whatever vehicles it chooses to use in its fleet. It’s not clear how this will work alongside the fact that many car makers are also working on their own autonomous technology and subsequent strategy to “own” the self-driving experience — at some point they might even directly conflict — but for now following this route could be Addison Lee’s strongest bet for continuing to keep a close service for its drivers and its fleet, developing it in the way it feels is best for its own business.

“It’s about having a bit more control between us,” Boland said of the deal with Oxbotica, ” and creating and building those services together without the dependencies without the changing priorities of an OEM. So that we can do what we need to do.”

The self-driving car market is expected to be worth some £28 billion in the UK alone by 2035, and car services — versus private ownership — are shaping up to be a large part of how it might play out. Startups like FiveAI are also focusing on building self-driving car systems, specifically so that they can run in their own fleets of vehicles and in a service run by FiveAI: its reasoning is that autonomous vehicles will be too cost prohibitive to own for the majority of people.

As car ownership is predicted to decline as cars become ever-more sophisticated and expensive, car services are already on the rise and are predicted to grow some 21 per cent by 2030.

 

New ‘Dark Ads’ pro-Brexit Facebook campaign may have reached over 10M people, say researchers

A major new campaign of disinformation around Brexit, designed to stir up U.K. ‘Leave’ voters, and distributed via Facebook, may have reached over 10 million people in the U.K., according to new research. The source of the campaign is so far unknown, and will be embarrassing to Facebook, which only this week claimed it was clamping down on “dark” political advertising on its platform.

Researchers for the U.K.-based digital agency 89up allege that Mainstream Network — which looks and reads like a “mainstream” news site but which has no contact details or reporter bylines — is serving hyper-targeted Facebook advertisements aimed at exhorting people in Leave-voting U.K. constituencies to tell their MP to “chuck Chequers.” Chequers is the name given to the U.K. Prime Ministers’s proposed deal with the EU regarding the U.K.’s departure from the EU next year.

89up says it estimates that Mainstream Network, which routinely puts out pro-Brexit “news,” could have spent more than £250,000 on pro-Brexit or anti-Chequers advertising on Facebook in less than a year. The agency calculates that with that level of advertising, the messaging would have been seen by 11 million people. TechCrunch has independently confirmed that Mainstream Network’s domain name was registered in November last year, and began publishing in February of this year.

In evidence given to Parliament’s Digital, Culture, Media and Sport Select Committee today, 89up says the website was running dozens of adverts targeted at Facebook users in specific constituencies, suggesting users “Click to tell your local MP to bin Chequers,” along with an image from the constituency, and an email function to drive people to send their MP an anti-Chequers message. This email function carbon-copied an info@mainstreamnetwork.co.uk email address. This would be a breach of the U.K.’s data protection rules, as the website is not listed as a data controller, says 89up.

The news comes a day after Facebook announced a new clampdown on political advertisement on its platform, and will put further pressure on the social media giant to look again at how it deals with the so-called “dark advertising” its Custom Audiences campaign tools are often accused of spreading.

89up claims Mainstream Network website could be in breach of new GDPR rules because, while collecting users’ data, it does not have a published privacy policy, or contain any contact information whatsoever on the site or the campaigns it runs on Facebook.

The agency says that once users are taken to the respective localized landing pages from ads, they are asked to email their MP. When a user does this, its default email client opens up an email and puts its own email in the BCC field (see below). It is possible, therefore, that the user’s email address is being stored and later used for marketing purposes by Mainstream Network.

TechCrunch has reached out to Mainstream Network for comment on Twitter and email. A WhoIs look-up revealed no information about the owner of the site.

TechCrunch’s own research into the domain reveals that the domain owner has made every possible attempt to remain anonymous. Even before GDPR came in, the domain owners had paid to hide its ownership on GoDaddy, where it is registered. The site is using standard GoDaddy shared hosting to blend in with 400+ websites using the same IP address.

Commenting, Damian Collins MP, the Chair of the Digital, Culture, Media and Sport Committee of the U.K. House of Commons, said: “We do not know who is funding the Mainstream Network, or who is behind its operations, but we can see that they are directing a large scale advertising campaign on Facebook designed to get people to lobby their MP to oppose the Prime Ministers’s Brexit strategy. I have been sent a series of emails from constituents as a result of these adverts, in a deliberate attempt to alter the outcome of the Brexit negotiations.”

“The issue for parliamentarians is we have no idea who is targeting whom via political advertising on Facebook, who is paying for it, and what the purpose of that communication is. Facebook claimed this week that it was working to make political advertising on their platform more transparent, but once again we see potentially hundreds of thousands of pounds being spent to influence the political process and no one knows who is behind this.”

Mike Harris, CEO of 89up said: “A day after Facebook announced it will no longer be taking ‘dark ads’, we see once again evidence of the huge problem the platform is yet to face up to. Facebook has known since the EU referendum that highly targeted political advertising was being placed on its platform by anonymous groups, yet has failed to do anything about it. We have found evidence of yet another anonymous pro-Brexit campaign placing potentially a quarter of a million pounds worth of advertising, without anyone knowing or being able to find out who they are.”

Josh Feldberg, 89up researcher, said: “We have no idea who is funding this campaign. Only Facebook do. For all we know this could be funded by thousands of pounds of foreign money. This case just goes to show that despite Facebook’s claims they’re fighting fake news, anonymous groups are still out there trying to manipulate MPs and public opinion using the platform. It is possible there has been unlawful data collection. Facebook must tell the public who is behind this group.”

TechCrunch has reached out to both Facebook and Mainstream Network for comment prior to publication and will update this post if either respond to the allegations.

Jane.VC, a new fund for female entrepreneurs, wants founders to cold email them

Want to pitch a venture capitalist? You’ll need a “warm introduction” first. At least that’s what most in the business will advise.

Find a person, typically a man, who made the VC you’re interested in pitching a whole bunch of money at some point and have them introduce you. Why? Because VCs love people who’ve made them money; naturally, they’ll be willing to hear you out if you’ve got at least one money maker on your side.

There’s a big problem with that cycle. Not all entrepreneurs are friendly with millionaires and not all entrepreneurs, especially those based outside Silicon Valley or from underrepresented backgrounds, have anyone in their network to provide them that coveted intro.

Jane.VC, a new venture fund based out of Cleveland and London wants entrepreneurs to cold email them. Send them your pitch, no wealthy or successful intermediary necessary. The fund, which has so far raised $2 million to invest between $25,000 and $150,000 in early-stage female-founded companies across industries, is scrapping the opaque, inaccessible model of VC that’s been less than favorable toward women.

“We like to say that Jane.VC is venture for every woman,” the firm’s co-founder Jennifer Neundorfer told TechCrunch.

Neundorfer, who previously founded and led an accelerator for Midwest startups called Flashstarts after stints at 21st Century Fox and YouTube, partnered with her former Stanford business school classmate Maren Bannon, the former chief executive officer and co-founder of LittleLane. So far, they’ve backed insurtech company Proformex and Hatch Apps, an enterprise software startup that makes it easier for companies to create and distribute mobile and web apps.

“We are going to shoot them straight”

Jane.VC, like many members of the next generation of venture capital funds, is bucking the idea that the best founders can only be found in Silicon Valley. Instead, the firm is going global and operating under the philosophy that a system of radical transparency and honesty will pay off.

“Let’s be efficient with an entrepreneur’s time and say no if it’s not a hit,” Neundorfer said. “I’ve been on the opposite end of that coaching. So many entrepreneurs think a VC is interested and they aren’t. An entrepreneur’s time is so valuable and we want to protect that. We are going to shoot them straight.”

Though Jane.VC plans to invest across the globe, the firm isn’t turning its back on Bay Area founders. Neundorfer and Bannon will leverage their Silicon Valley network and work with an investment committee of nine women based throughout the U.S. to source deals. 

“We are women that have raised money and have been through the ups and downs of raising money in what is a very male-dominated world,” Neundorfer added. “We believe that investing in women is not only the right thing to do but that you can make a lot of money doing it.”

Cryptocurrency wallet startup Cobo raises $13M Series A to enter the U.S. and Southeast Asia

Cobo, a cryptocurrency wallet startup headquartered in Beijing, has raised a $13 million Series A to enter new international markets. The round was led by DHVC and Wu Capital, a family office based in China. Cobo plans to expand in the United States and Southeast Asia, in particular Vietnam and Indonesia. Cobo is also now taking pre-orders for Cobo Vault, a hardware wallet (pictured above) that it claims is military grade. Cobo’s Series A brings its total funding to $20 million so far.

Cobo Wallet allows users to store both proof-of-stake and proof-of-work coins. One incentive for people to pick the app over its competitors is the ability to pool proof-of-stake assets with other users so they can increase their chances of mining and validating new blocks on the blockchain. Since launching earlier this year, Cobo says its digital wallet has gained more than 500,000 users.

The startup was founded last year by CEO Shixing Mao, who is known as Discus Fish in the crypto community, and CTO Changhao Jiang, a former platform engineer at Facebook and Google who co-founded Bihang, a cryptocurrency wallet acquired by OKCoin in 2013. Discus Fish, meanwhile, is known for launching F2Pool, China’s first mining pool.

Cobo Vault, which will retail for $479, meets the MIL-STD-810G U.S. military standard for equipment, Cobo’s head of hardware Lixin Liu said in an email, adding that it was built with proprietary firmware created especially for the device, a bank-grade encryption chip and military-grade aluminum.

Cobo Vault’s creation was prompted by an August 2017 incident in which F2Pool was hacked and more than 8,000 ETH was stolen from Discus Fish’s account. Fish also refunded customers’ lost ETH from his own assets. “As a result, Discus Fish was resolute on the fact that for crypto to gain mass market adoption, products had to be made to be hacker-resistant and truly safe,” said Liu.

Samsung acquires network analytics startup Zhilabs to help its transition to 5G

Samsung Electronics is betting that acquiring Zhilabs, a real-time networks analytics startup based in Barcelona, will ease its transition from 4G to 5G technologies. Financial details of the deal, which was announced today, have not been disclosed. Zhilabs will be fully owned by Samsung, but it will continue to operate independently under its own management.

The acquisition of Zhilabs is part of Samsung’s initiative, announced in August, to invest 25 trillion won (about $22 billion) in businesses working on AI, 5G, components for self-driving vehicles, and biopharmaceutical technologies.

In a statement, Youngky Kim, Samsung Electronic’s president and head of networks business, said “5G will enable unprecedented services attributed to the generation of exponential data traffic, for which automated and intelligent network analytics tools are vital. The acquisition of Zhilabs will help Samsung meet these demands to assure each subscriber receives the best possible service.”

Founded in 2008, Zhilabs’ products are used by customers including Hewlett Packard Enterprise, Vodafone, and Telefonica to analyze and test network performance in real-time. Because its solutions allow service issues to be automatically detected and fixed, Zhilabs’ AI-based automation will help Samsung launch new services related to the industrial Internet of Things and smart cars.

Magic Leap is real and it’s a janky marvel

After years of speculation, some mockery, and more than a little befuddlement, the Magic Leap augmented headset is arriving in the hands of developers and users — and its first product is a somewhat janky piece of magic.

After officially announcing the availability of the product for pre-orders last month,  the company is pulling back the curtains on all of the prestidigitation it’s been cooking for the past several years. 

The company’s first developer conference is slated for tomorrow, with a keynote bright and early in the morning, but the $2.3 billion dollar augmented reality headset manufacturer let a slew of VIPs, media types (including your humble reporter) take a look at the first official content partnerships to come from its formerly super secret studios.

Development studios like Weta Workshop (whose partnership began with Magic Leap nearly a decade ago) and Wingnut AR (the augmented reality development studio founded by Peter Jackson) have revealed new games that involve battling robots and spider infestations (respectively); while the medical imaging company Brainlab and the direct to consumer furniture retailer and design consulting service, Wayfair, pitched their augmented reality wares to show the business use case for Magic Leap’s magic leap into virtual reality.

In all some sixteen companies pitched demos at the curtain-raising event today.

Earlier this afternoon Weta just debuted their augmented reality game as a preview to the Magic Leap conference and it’s impressive. The robot battling Dr. Grordbort’s Invaders is the clearest vision of what Magic Leap’s platform can do.

Magic Leap teased the two companies’ vision for what immersive augmented game play could like in its promotional materials for years, but the culmination of the development work the two have undertaken is about three to five hours of gameplay battling robots that appear from the walls and floors and doors of any room. It’s (pardon the easy pun) magic.

According to Weta games director Greg Broadmore, the final game is the result of six years of collaboration between the creative studio and Magic Leap.

Rony Abovitz, Magic Leap’s visionary chief executive, first reached out to Weta with a vision for “Our Blue” a far-reaching, immersive, science fiction-influenced immersive world that Abovitz wanted Weta to help realize. Abovitz kept in touch with the Weta team and as he began putting the pieces together for Magic Leap, brought the studio on board to develop content.

Dr. Grodbort’s is the first fruits of that partnership and it’s pretty stunning.

Setting aside the problems that Magic Leap still has with field of view and with slight glitches in the game mechanics (which could entirely have been the fault of this author), Dr. Grordbort’s lays out the Magic Leap headset as a convincing gaming device (albeit at a somewhat price-prohibitive $2,295 apiece.

In the game, users are given a backstory by the eponymous Dr. Grordbort, who informs players that they’re the last best hope to save the world from a robotic alien invasion. From there on in, it’s about picking up a blaster and shooting the potential robot invaders who appear from portals around a room.

To start the game, a user maps their space by wandering around it with the Magic Leap on. Once the device has the lay of the land ( a process that can take up to four minutes — depending on size) the narrative will commence and the user is drawn into Dr. Grordbort’s world and gameplay.

“The game helped shape the platform,” said Brodmore. “Dr. Grordbort’s was the problem and Magic Leap is the solution.”

Without the close relationship to Magic Leap that Weta enjoyed, the game from Wingnut’s studio was far less robust, but no less enjoyable.

In their first foray into Magic Leap’s world, the augmented reality studio created a game that puts the user into the most bizarre job training session they’ve ever experienced.

As the new hire at an extermination company that deals with some fairly vicious and viscous insects, the user is put through some paces with how to kill virtual bugs in real space. The mapping engines and graphics are exceptional, the narrator walking a user through the game shows off Magic Leap’s exceptional use of sound technology and the humor in the game is reminiscent of some of the best Wallace and Gromit set pieces.

Beginning with a simple bat, and working up through a flamethrower, players were instructed in how to kill various creepy crawlies and concoct a serum to attract others. I’m not a fan of first person shooters (or much of a gamer in general), but that Wingnut game was damn fun.

And if gaming was one side of the spell that Magic Leap was hoping to weave with new users, business use cases were the other.

In partnership with Brainlab, the company is trying to show how its toolkit can be used in both educational and operational theaters for physicians and surgeons. In a demonstration users were encourage to take a look at a replica of a brain tumor patient’s brain scan in three dimensions. The device is aimed at helping doctors plan surgeries and understand the potential ramifications of different approaches to removing growths in a brain.

Meanwhile, the retailer Wayfair put users through a demonstration of its first Magic Leap application. A visualization tool that takes furniture from a virtual showroom into the real space that furniture would occupy.

It’s part of a longterm skunkworks development project set up within the online retailer to explore applications for augmented reality in a bit to sell more stuff to more folks without the need for a physical showroom (although Wayfair has launched a few popups earlier this month)

Behind all of this is a simple truth. Magic Leap needs content — almost as much as it needed to reduce the form factor and improve the usability of its first headset.

It has achieved those last two demands above the expectations of even the most hardened critic. Wearables still look goofy, but they feel good and the pack that powers the Magic Leap experience is among the best — lightweight and wearable, and with a three-hour battery charge, among the best in the industry.

There’s still some assembly required, as a user needs to determine the type of headset they’ll need and select a nosebridge that gives the headset the proper lift so its hardware can work properly. If a user wears glasses, it’s going to require a special prescription that can be ordered separately as an attachment that fits into the headset.

The other pieces of hardware packaged with the Magic Leap include a motion sensing hand controller (similar to what users have experienced as part of any video game console) and a hip pack with the processing power of a notebook computer.

The device doesn’t need to be tethered to a computer, but it does only work indoors.

Setting aside the limitations of the first generation of a hardware device, the Magic Leap is about as impressive a piece of augmented or virtual reality hardware as I’ve seen. Other companies may have better fields of view and a more compact device, but they lack the variety of content that makes Magic Leap’s offerings shine. The early partnerships the company has inked have, indeed, paid off.

And as it rolls out its offerings the company is learning the lessons of wearable headsets past.

Its initial customers — in Chicago, Los Angeles, Miami, New York, San Francisco, and Seattle — will receive a home visit from a Magic Leap employee who will walk them through the way the product works in a thirty minute to sixty minute demo. That’s the same level of bespoke treatment that Google Glass offered to its initial explorers.

One benefit of an AR headset like Magic Leap’s is that it’s much, much easier to navigate than a fully immersive VR headset. Another, is the flexibility it offers in terms of applications from a mixed reality setting.

“This is the evolution of computing,” said Shrenik Sadaigi, the director of next generation experiences at Wayfair — and the architect of the company’s experiments in augmented and virtual reality.

“We think of this as a productivity device,” Sadaigi said. “Browsing for stuff on the web. That’s the computing environment. Your space is your screen and your space becomes another variable on the computing platform. We want to make people love the space they live in. Using mixed reality to … the app that we’re presenting today we think of it as a design experience.”

One of the big breakthroughs in the company’s platform is the controller and how easy it is to use, as Sadaigi noted in our conversation. “The controller is doing a lot of work for you. [The company] is giving you something new… that is kind of the old, but in a new form. It’s simplified the experience to swiping and clicking.”

More complicated interactions can be handled by using the voice interface the company has built into the device and the eye scrolling feature that’s part of the inside out tracking the company uses.

Behind all of this is Abovitz and his crazy vision for a new platform for computing.

“That decision to start something new and bigger and more ambitious, to try to change all of computing, was a bit nuts. It’s like Bilbo Baggins having to step out of the Shire,” Abovitz told VentureBeat earlier this year. “If you spend enough hours in a Magic Leap system, it’s almost impossible to go back to your phone or computer or television. You realize that they’re very thin slices. Magic Leap gives you a giant volume of computing. When you actually get to play with it, spatial computing means you work within a volume, not just a slice.”

Google will not bid for the Pentagon’s $10B cloud computing contract, citing its “AI Principles”

Google has dropped out of the running for JEDI, the massive Defense Department cloud computing contract potentially worth $10 billion. In a statement to Bloomberg, Google said that it decided not to participate in the bidding process, which ends this week, because the contract may not align with the company’s principles for how artificial intelligence should be used.

In statement to Bloomberg, Google spokesperson said “We are not bidding on the JEDI contract because first, we couldn’t be assured that it would align with our AI Principles. And second, we determined that there were portions of the contract that were out of scope with our current government certifications,” adding that Google is still “working to support the U.S. government with our cloud in many ways.”

Officially called Joint Enterprise Defense Infrastructure, bidding for the initiative’s contract began two months ago and closes this week. JEDI’s lead contender is widely considered to be Amazon, because it set up the CIA’s private cloud, but Oracle, Microsoft, and IBM are also expected to be in the running.

The winner of the contract, which could last for up to 10 years, is expected to be announced by the end of the year. The project is meant to accelerate the Defense Department’s adoption of cloud computing and services. Only one provider will be chosen, a controversial decision that the Pentagon defended by telling Congress that the pace of handling task orders in a multiple-award contract “could prevent DOD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.”

Google also addressed the controversy over a single provider, telling Bloomberg that “had the JEDI contract been open to multiple vendors, we would have submitted a compelling solution for portions of it. Google Cloud believes that a multi-cloud approach is in the best interest of government agencies, because it allows them to choose the right cloud for the right workload.”

Google’s decision no to bid for JEDI comes four months after it reportedly decided not to renew its contract with the Pentagon for Project Maven, which involved working with the military to analyze drone footage, including images taken in conflict zones. Thousands of Google employees signed a petition against its work on Project Maven because they said it meant the company was directly involved in warfare. Afterward, Google came up with its “AI Principles,” a set of guidelines for how it will use its AI technology.

It is worth noting, however, that Google is still under employee fire because it is reportedly building a search engine for China that will comply with the government’s censorship laws, eight years after exiting the country for reasons including its limits on free speech.

Saudi Arabia’s sovereign fund will also invest $45B in SoftBank’s second Vision Fund

The sovereign fund of Saudi Arabia plans to invest $45 billion into the second SoftBank Vision Fund, two years after putting the same amount into the original $100 billion Vision Fund, Saudi Arabia Crown Price Mohammed bin Salman told Bloomberg in an interview on Friday.

When the first Vision Fund was announced, it was by far the biggest private equity fund ever created, but if SoftBank Group CEO Masayoshi Son’s plans come to fruition, it will not be the last. Son told Bloomberg Businessweek last month that he wants to raise a new $100 billion fund every two or three years.

Saudi Arabia’s Public Investment Fund is anticipating a fresh influx of $170 billion over the next three to four years after selling its stake in Saudi Basic Industries, as well as the upcoming IPO of state-owned Saudi Aramco, said Prince Mohammed, who is also the PIF’s chairman. The PIF, which has also made investments in Uber, Tesla and Lucid, has enjoyed a “huge benefit” from the first Vision Fund, he told Bloomberg.

“We would not put, as PIF, another $45 billion if we didn’t see huge income in the first year with the first $45 billion,” Bin Salman said. He added that its investment in the first Vision Fund will help PIF achieve its new target of $600 billion in assets by 2020, up from the almost $400 billion it currently holds.

SoftBank Group has been contacted for comment.

SoftBank Group and Saudi Arabia’s other partnerships include a deal to build the world’s biggest solar plant for $200 billion. The PIF said earlier this month the plant is still going ahead despite a Wall Street Journal report that it had been shelved.

9 highlights from Snapchat CEO’s 6000-word leaked memo on survival

Adults, not teens. Messaging, not Stories. Developing markets, not the US. These are how Snapchat will make a comeback, according to CEO Evan Spiegel . In a 6,000-word internal memo from late September leaked to Cheddar’s Alex Heath, Spiegel attempts to revive employee morale with philosophy, tactics, and contrition as Snap’s share price sinks to an all-time low of around $8 — half its IPO price and a third of its peak.

“The biggest mistake we made with our redesign was compromising our core product value of being the fastest way to communicate” Spiegel stresses throughout the memo regarding ‘Project Cheetah’. It’s the chat that made Snapchat special, and burying it within a combined feed with Stories and failing to build a quick-loading Android app have had disastrous consequences.

Spiegel shows great maturity here, admitting to impatient strategic moves and outlining a cohesive path forward. There’s no talk of Snapchat ruling the social app world here. He seems to understand that’s likely out of reach in the face of Instagram’s competitive onslaught. Instead, Snapchat is satisfied if it can help us express ourselves while finally reaching even meager profitability.

Snapchat may be too perceived as a toy to win enough adults, too late to win back international markets from the Facebook empire, and too copyable by good-enough alternatives to grow truly massive. But if Snap can follow the Spiegel game-plan, it could carve out a sustainable market through a small but loyal audience who want to communicate through imagery.

Here are the most interesting takeaways from the memo and why they’re important:

1. Apologizing For Rushing The Redesign

“There were, of course, some downsides to moving as quickly as a cheetah We rushed our redesign, solving one problem but creating many others . . . Unfortunately, we didn’t give ourselves enough time to continue iterating and testing the redesign with a smaller percentage of our community. As a result, we had to continue our iterations after we launched, causing a lot of frustration for our community.”

Spiegel always went on his gut rather than relying on user data like Facebook. Aging further and further away from his core audience, he misread what teens cared about. The appealing buzz phrase of “separating social from media” also meant merging messaging and Stories into a chaotic list that made both tougher to use. Spiegel seems to have learned a valuable lessen about the importance of A/B testing.

2. Chat Is King

“Our redesigned algorithmic Friend Feed made it harder to find the right people to talk to, and moving too quickly meant that we didn’t have time to optimize the Friend Feed for fast performance. We slowed down our product and eroded our core product value. . . . Regrettably, we didn’t understand at the time that the biggest problem with our redesign wasn’t the frustration from influencers – it was the frustration from members of our community who felt like it was harder to communicate . . . In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate.”

When Snap first revealed the changes, we predicted that “Teen Snap addicts might complain that the redesign is confusing, jumbling all content from friends together.” That made it too annoying to dig out your friends to send them messages, and Snap’s growth rate imploded, with it losing 3 million users last quarter. Expect Snap to optimize its engineering to make messages quicker to send and receive, and it even sacrifice some of its bells and whistles to make chat faster in developing markets.

3. Snapchat Must Beat Facebook At Best Friends

“Your top friend in a given week contributes 25% of Snap send volume. By the time you get to 18 friends, each incremental friend contributes less than 1% of total Snap send volume each. Finding best friends is a different problem than finding more friends, so we need to think about new ways to help people find the friends they care most about.”

Facebook’s biggest structural disadvantage is its broad friend graph that’s bloated to include family, co-workers, bosses, and distant acquaintances.  That might be fine in a feed app, but not for Stories and messaging where you only care about your closest friends. With friend lists and more, Facebook has tried and failed for a decade to find better ways to communicate with your besties. This is the wedge through which Snapchat can attack Facebook. If it develops special features for luring your best friends onto the app and staying in touch with them for better reasons than just maintaining a Snap “Streak”, it could hit Facebook where it can’t defend itself.

4. Discover Soars As Facebook Watch And IGTV Stumble

“Our Shows continue to attract more and more viewers, with over 18 Shows reaching monthly audiences of over 10M unique viewers. 12 of which are Original productions. As a platform overall, we’ve grown the amount of total time spent engaging with our Shows product, almost tripling since the beginning of the year. Our audience for Publisher Stories has increased over 20% YoY, and we believe there is a significant opportunity to continue growing the number of people who engage with Discover content . . .We are also working to identify content that is performing well outside of Snapchat so that we can bring it into Discover. “

Discover remains Snapchat’s biggest differentiator, scoring with premium video content purposefully made for mobile. What it really needs, though, are a few must-see tentpole shows to drag in a wider audience that can get hooked on the reimagined digital magazine experience.

5. But Discover Is A Mess

“Our content team is working hard to experiment with new layouts and content types in the wake of our redesign to drive increased engagement.”

Snapchat Discover is an overcrowded pile of clickbait. News outlets, social media influencers, original video Shows, and aggregated user content collections all battle for attention in a design that feels overwhelming to the point of exhaustion. Thankfully Snapchat seems to recognize that more cohesive sorting with fewer images and headlines bombarding you might make Discover a more pleasant lean-back consumption experience.

6. Aging Up To Earn Money

“Most of the incremental growth in our core markets like the US, UK, and France will have to come from older users who generate higher average revenue per user . . . Growing in older demographics will require us to mature our application . . . Many older users today see Snapchat as frivolous or a waste of time because they think Snapchat is social media rather than a faster way to communicate. Changing the design language of our product and improving our marketing and communications around Snapchat will help users understand our value . . . aging-up our community in core markets will also help the media, advertisers, and Wall Street understand Snapchat.”

Snapchat can’t just be for cool kids anymore. Their lower buying power and lifestage make them less appealing to brands. The problem is that Snapchat risks turning off younger users by courting their older siblings or adults. If, like Facebook, users start to feel like Snapchat is a place for parents, they may defect in search of the next purposefully built to confuse adults to stay hip.

7. Finally Prioritizing Developing Markets

“We already have many projects underway to unlock our core product value in new markets. Mushroom allows our community to use Snapchat on lower-end devices. Arroyo, our new gateway architecture, will speed up messaging and many other services . . . It might require us to change our products for different markets where some of our value-add features detract from our core product value”

Sources tell me Snapchat’s future depends on the engineering overhaul of its Android app, a project codenamed ‘Mushroom’. Slow video load times and bugs have made Snapchat practically unusable on low-bandwidth connections and old Android phones in the developing world. The company concentrated on the US and other first-world markets, leaving the door open for copycats of Stories built by Instagram (400 million daily users) and WhatsApp (450 million daily users) to invade the developing world and dwarf Snap’s 188 million total daily users. In hopes of a smooth rollout, Snapchat is already testing Mushroom, but it will have to do a ton of marketing outreach to convince frustrated users who ditched the app to give it another try.

8. Fresh Ideas, Separate Apps

“We’re currently building software that takes the millions of Snaps submitted to Our Story and reconstructs parts of the world in 3D. We can then build augmented reality experiences on top of those models and distribute them as Lenses . . . If our innovation compromises our core product of being the fastest way to communicate, we should consider create [sic] separate applications or other ways of delivering our innovation.”

Snapchat has big plans for augmented reality. It doesn’t just want to stick animations over the top of anywhere, or create AR art installations in a few big cities. It wants to build site-specific AR experiences across the globe. And while everything the company has built to date has lived inside of Snapchat, it’s willing to spawn standalone apps if necessary so that it doesn’t bog down its messaging service. That could give Snapchat a lot more leeway to experiment.

9. The Freedom Of Profitability

“Our 2019 stretch output goal will be an acceleration in revenue growth and full year free cash flow and profitability. With profitability comes increased autonomy and freedom to operate our business in the long term best interest of our community without the pressure of needing to raise additional capital.”

Snapchat is still bleeding money, losing $353 million last quarter. Snapchat ended up selling 2.3 percent of its equity to a Saudi Arabian prince in exchange for $250 million to lengthen its rapidly shortening runway. And last year it took $2 billion from Chinese gaming giant Tencent. Deals like that could threaten Snapchat’s ability to prioritize its goals alone, not the moral imperatives or developer platforms that would benefit its benefactors. Once profitable, Snapchat won’t have to worry so much about struggling with short-term user growth and can instead focus on retention, societal impact, and its true purpose — creativity.

We’re kicking off Startup Battlefield MENA, here are the startups and agenda

We’re kicking off Startup Battlefield MENA here in Beirut, where 15 startups will be taking the stage, along with speakers from Facebook (our partner on the event through its FB Start program), Instabug, Eventus, Wuzzuf, Careem and Myki.

For those of you who can’t be here in person, check back on TechCrunch later today, where we’ll be sharing videos and other highlights from the event. And of course, announcing the winner!

For the first time, TechCrunch is holding Startup Battlefield MENA in partnership with FB Start. After scouring does dozens of countries, sifting through hundreds and hundreds of extremely talented startups, TechCrunch selected 15 elite companies across the region to compete in prestigious global Startup Battlefield competition for $25,000 equity-free prize, a trip for 2 to TechCrunch Disrupt San Francisco 2019 and the coveted title of “Middle East & North Africa’s Favorite Startup”.

After weeks of intense coaching from the TC team, these startups are primed for international launch. For the semi-final round, each founder will pitch for 6 minutes, with a live demo on stage, followed by 6 minutes of Q&A with our expert panel of judges. After, our judges will deliberate and 5 teams will be selected to compete in the final round of Startup Battlefield – same pitch, but with an even more intense Q&A.

So, who are these chosen few? From creating new forms of fast setting concrete to quickly build houses in areas recovering from natural disasters to agricultural monitoring technology preventing water-related conflict, this batch of companies is truly changing the world. Companies also include financial investment AI platforms, edible insect based protein powder, to culturally relevant dating apps. Founders in the automotive industry are poised to change everything from how we pick the cars we want to buy to how we optimize their maintenance. From innovations to hydroponic gardens, educational tutoring platforms to modernizing technology for hotel chains, Startup Battlefield MENA is set to highlight the regions most promising startups. Videos from the event will be posted on TechCrunch.com after the event. Stay tuned!

Session 1: 9:30am – 10:30am

BuildinkHarmonicaMaterialSolvedMoneyFellowsNeotic AI

Session 2: 11:10am – 12:10am

NutransaSeabex by IT GrapesIN2SeezAutotell 

Session 3: 1:40pm – 2:40pm

SynkersVerboseMakerbraneArgineeringPureHarvest


Welcome Remarks
9:05 am – 9:25 am

Infrastructure and Connectivity: A Regional Perspective with Imad Kreidieh (Ogero Telecom) and Ari Kesisoglu (Facebook)
Access to the internet and connectivity is the driving force for the 4th industrial revolution. Join a conversation about how the Telco industry is changing in Lebanon and the region, and what that means for businesses and consumers. Sponsored by Facebook

9:25 am – 10:30 am

Startup Battlefield Competition – Flight #1
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

10:30 am – 10:50 am

BREAK
10:50 am – 11:10 am

Jennifer Fong (Facebook)
Hear from Facebook’s head of the Developer Circles Program about their work with developers, startups and businesses to build, grow, measure, and monetize using Facebook and Messenger platform products. Sponsored by Facebook

11:10 am – 12:10 am

Startup Battlefield Competition – Flight #2
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

12:10 pm – 1:10 pm

BREAK
12:15 pm – 1:15 pm

Workshop: Automated Driving Mobility in MENA with Mandali Khalesi (Toyota)
Toyota’s Global Head of Automated Driving Mobility and Innovation will share Toyota’s latest automated driving research findings and its plans for the future. There will be 30 minutes set aside for consultation, where the audience will have the opportunity to advise Toyota on both how it should go about developing automated driving mobility for MENA, as well as how best to work together with entrepreneurs in the region.

1:15 pm – 1:40 pm

Lessons 10 Years On with Omar Gabr (Instabug), Nour Al Hassan (Tarjama), Mai Medhat (Eventtus) and Ameer Sherif (Wuzzuf) – Moderated by Editor at Large Mike Butcher
Ten years ago the Middle East and North Africa’s tech ecosystem was worth perhaps tens of millions of dollars. Today it’s in the hundreds of millions, and beyond. A decade ago the societal landscape was very different from today. Let’s discuss the huge changes that have happened and challenges and opportunities ahead.

1:40 pm – 2:40 pm

Startup Battlefield Competition – Flight #3
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

2:40 pm – 3:00 pm

Fireside Chat with Magnus Olsson (Careem) – Moderated by Managing Editor Matt Burns
How do you scale a big startup in MENA? We hear from Magnus Olsson, founder and Managing Director of ride-hailing giant Careem on how they joined the unicorn club with Lyft and Uber.

3:00 pm – 3:25 pm

Where Will the Exits Come From with Henri Asseliy (Leap Ventures), Priscilla Elora Sharuk (Myki), and Kenza Lahlou (Outlierz Ventures) – Moderated by News Editor Ingrid Lunden
Both VCs and startups in MENA alike are furiously building the companies of the future. But you can’t have a startup without an acquisition or IPO, so where are they going to come from? We’ll hear from both the founder and investor perspectives.

3:25 pm – 4:40 pm

Startup Battlefield Competition – Final Round
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

4:40 pm – 4:55 pm

BREAK
4:55 pm – 5:20 pm

MENA Content Plays with Paul Chucrallah (BeryTech Fund), Hussam Hammo (Tamatem) and Rami Al Qawasmi (Mawdoo3) – Moderated by News Editor Ingrid Lunden
A little-known fact about the MENA market is the sheer lack of Arabic language content online for consumers, whether it be media, music, games or events. Arabic-specific sites have appeared, tailor-made to the market. We’ll get the perspective of key entrepreneurs in this space.

5:20 pm – 5:35 pm

Startup Battlefield Closing Awards Ceremony
Watch the crowning of the latest winner of the Startup Battlefield

Stitch Fix tumbles 20% in after-hours trading following lukewarm earnings report

Shares of Stitch Fix plunged more than 20 percent in after-hours trading on Monday following the release of a tepid fourth-quarter earnings report.

The online retailer and personal styling service’s adjusted earnings exceeded analyst expectations, but its revenue and active users fell short of estimates. In the quarter ending July 28, Stitch Fix reported a net income of $18.3 million, or 18 cents per share, up from analyst’s 4 cents per share estimate. Its reported net revenue of $318.3 million, a 23 percent year-over-year increase, failed to meet analyst expectations of $318.6 million.

The San Francisco-based company’s user base grew 25 percent YoY, to 2.7 million, another disappointment to Wall Street, which was looking for more than 2.8 million.

Stitch Fix, which has a market cap of nearly $4.4 billion, also reported fiscal year 2018 earnings. In its first year as a public company, Stitch Fix had $1.2 billion in net revenue, $44.9 million in net income and an adjusted EBITDA of $53.6 million.

Founder Katrina Lake took the company public on the Nasdaq in November 2017 in a highly anticipated consumer IPO. The company raised $120 million in the process, selling 8 million shares after making a last-minute decision to downsize its offering ahead of its first day of trading.

Following the release of its first-ever earnings report in December, shares of Stitch Fix similarly took a huge hit, plunging down 10 percent on the news.

The company usually finds its footing and, overall, its stock has continued to climb since its IPO. Stitch Fix had its best day yet on September 18 when its stock was valued at $52.44 apiece, up from the initial price of $15 apiece.

Alongside its earnings report, Stitch Fix announced the upcoming launch of Stitch Fix U.K., its first-ever international market expected to be available to consumers by the end of FY 2019. Following the release of its Q3 earnings report, the company announced the hire of Deirdre Findlay as its new chief marketing officer, as well as the launch of Stitch Fix Kids.

On the earnings call Monday, Lake emphasized how both services, Stitch Fix Kids and Stitch Fix U.K., will augment Stitch Fix’s total addressable market.

“We believe our ability to create a uniquely personalized shopping experience is something that will resonate with consumers and brands outside of the U.S.,” Lake said in a statement.

Trump administration sues California over its brand-new net neutrality law

The Department of Justice announced on Sunday that it has filed a lawsuit against California to block its new net neutrality law, just hours after it was signed by governor Jerry Brown. The lawsuit was first reported by the Washington Post. Senior Justice Department officials told the newspaper it is filing the lawsuit because only the federal government can regulate net neutrality and that the Federal Communications Commission had been granted that authority by Congress to ensure states don’t write conflicting legislation.

In its announcement, the Justice Department stated that by signing California’s Senate Bill 822 into law, the state is “attempting to subvert the Federal Government’s deregulatory approach by imposing burdensome state regulations on the free Internet, which is unlawful and anti-consumer.”

Attorney General Jeff Sessions said “under the Constitution, states do not regulate interstate commerce—the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order.”

This is the latest of several legal showdowns between the Trump administration and California, the largest blue state.

Under Attorney General Sessions, the Justice Department has already filed separate lawsuits against California over immigrant sanctuary laws and a law meant to stop the Trump administration from selling or transferring federal land to private corporations. The Trump administration is also clashing with the state over environmental protection regulations.

Senate Bill 822 was introduced by Democratic Senator Scott Wiener to reinstate Obama-era net neutrality protections tossed out by the FCC last year.

Even though Washington and Oregon have also passed their own net neutrality laws, the outcome of the federal government’s battle with California will have ramifications throughout the country because the state’s new net neutrality law is the most stringent one so far, banning most kinds of zero-rating, which allows telecoms to offer services from certain providers for free.

As such, it has been the target of fierce lobbying by telecoms like AT&T and Comcast. While the FCC’s chairman Ajit Pai and telecoms argue that zero-rating allows them to offer better deals (Pai claimed in the Justice Department’s statement today that they have proven popular “especially among lower-income Americans,”) net neutrality advocates say it gives Internet service providers too much power by forcing users to rely on certain services, stifling consumer options and freedom of information.

Solve, MIT’s take on social innovation challenges, may be different enough to work

Since McKinsey released a report on how best to use prizes to incentivize innovation nearly a decade ago, an entire industry has grown around social innovation challenges. The formula for these “save the world” competitions has become standard. Drum up a lot of buzz around an award. Partner with big names to get funding and high-profile judges. Try and get as many submissions as possible from across the world. Whittle down the submissions and come up with a list of finalists that get to pitch at a glitzy event with a lot of media attention.

On the final stage, based on pitches that last mere minutes, pick a winner that can get upwards of millions in prize funding. Don’t have a software platform to run a challenge of this kind? No worries, numerous for-profit vendors have sprung up that can do all the work for you—for anywhere from ten to a few hundred thousand dollars. The growth has been so exponential that prizes awarded through competitions has grown from less than $20 million in 1970 to a whopping $375 million just four decades later.

But do these prizes get the sort of world-saving results they aim for? There’s little quantified evidence to back that, and some leaders in philanthropy are broadly skeptical.

For its part, the Massachusetts Institute of Technology is trying a different approach to innovation challenges with Solve, taking some of what’s worked in these challenges and fusing it with elements of tech accelerator programs, including post-award training that focuses on results.

Solve is entering an already crowded field of innovation challenges. Many of these prizes overlap, with each vying to be the “Nobel” of its field. More prizes means more noise—which has led to a race to offer more money to get attention.

But even private-sector riches do not guarantee that prize money for innovation gets good results. In 2004, Bigelow Enterprises sponsored a $50 million Space Prize but it failed to capture the imagination of space researchers and eventually folded. Back in 2009, Netflix invited outside teams to improve it movie recommendation algorithm by 10% for a $1 million reward. The Netflix Prize led to a race among programmers, only for Netflix to eventually kill the entire plan because it was getting better results in-house.

Overall, the social innovation competitions tend to reward presentation, glitz and charisma, and penalize speaking English as a second language, introversion and inability to make flashy slides.

Solve, which held its third annual finalists event on Sunday September 23 in New York, is taking a different approach.

Unlike other contests where questions are internally decided, Solve crowdsources the questions to begin with. Its team takes months to run hackathons and workshops around the world to decide on the four most pressing questions to become the focus of that year’s challenge. This year, the questions focused on teachers and educators, workforce of the future, frontlines of health and coastal communities.

The competition is then opened up to participants from around the world with relatively low barriers to entry, resulting in 1,150 submissions from 110 countries in the last competition round. (That’s at least one submission from nearly 60 percent of all countries in the world!)

The prize recipients of the GM Prize for Advanced Technology. Photo: Adam Schultz | MIT Solve

To qualify, though, participants need to have more than just an idea. They must have a prototype that works, be either in the growth, pilot or scale stage, and be tech-driven. Submissions are then evaluated by judges from across industry, intergovernmental organizations and academia to get to 15 finalists for each of the four challenge questions. These 60 finalists get a full day with judges to be asked in-depth questions and have their ideas evaluated.

The day after, with all the preparations completed, the finalists get three minutes apiece to present on stage. Crucially, instead of one winner, eight finalists are chosen for each of the challenge questions.

Each finalist receives an initial $10,000 prize, plus a pool of hundreds of thousands of dollars provided by partners including General Motors, the Patrick J. McGovern Foundation, Consensys, and RISE.

This year, for example, Ugandan health care startup Neopenda brought in an additional $30,000 in funding through Solve, from a UN program sponsored by Citi. An intelligent messaging app called TalkingPoints, meanwhile, received backing from General Motors and Save the Children to develop its personalized coaching technology for parents and educators. (You can see more details on this year’s winners and prizes here.)

As opposed to being a “one and done competition” where winning the prize money marks the end of the competition, managing director of community Hala Hanna tells me that the real work begins once the Solver teams are selected. Each qualifying Solver team gets 12 months of engagement and support from the organization. “Our value-add is providing a network, from MIT and beyond, and then brokering partnerships,” she explains.

Perhaps the biggest testament to the Solve method getting traction is its funders putting in even more cash in support. At the closing event on Sunday, an upbeat Matthew Minor, Solve’s director for international programs, took to the stage decked out in Solve-branded socks and a broad smile. He announced the winning finalists—and more funding opportunities. Two of Solve’s original backers, the Atlassian Foundation and the Australian government, are continuing to invest out of a standing $2.6 million budget for companies in the workforce track. RISE, a global impact investing fund, is putting an additional $1 million into companies focused on coastal communities.

The Australians have already put in funding to help past winners scale after the program. One of them is Ruangguru, a digital boot camp in Indonesia that gives youth dropouts resources they need to earn graduation certificates. The startup had reached nearly a million Indonesians prior to participating in Solve; through the program and the additional funding, it assisted more than 3 million Indonesian youth by the end of last year. Iman Usman, one of Ruangguru’s founders, tells me that Solve enabled them to enter into partnerships that helped them scale across Indonesia in a way they would have never been able to do on their own.

Solve has also been unequivocally good at ensuring diversity, both in its own staffing and—perhaps for related reasons—in those that are chosen as finalists. Of Solve’s 20 full-time staff, 14 are women, as are six out of the seven leadership team members and—by my count—at least seven nationalities from four continents are represented on staff.

The 33 Solver teams selected at the finals this year hail from 28 different countries, with 61 percent of them being women-led. At a time when the tech industry is struggling to increase diversity, Solve’s emphasis on diversity in challenge design and promotion has led to applicants and finalists that reflect the world Solve aims to help.

Hanna noted that increasing diversity is not as difficult as it’s made out to be. “Honestly, we’re not even trying that hard,” she explained. “So whoever says there are no women in tech, I say, crazy talk.”

The view from the Apella at Solve Challenge Finals on Sept. 23. Photo: Adam Schulz | MIT Solve

Still, Solve does have a few kinks to work out. By taking on extremely broad topics, the competition can sometimes lack focus. Lofty questions mean you can get very disparate answers, making it hard to compare them in a way that feels fair.

And while it’s great that the award monies are not all given to a single winner, it is not quite clear how funders pick the teams that do get funding. 15 qualifying finalists this year ended up winning money awards, some winning more than one, while the remaining 18 qualifying teams went home with the minimum amount. This is because Solve funders get to pick which of the teams that qualify at the finals get their respective monetary prizes. Of course, all 33 qualifying teams equally get to be a part of the Solve class with all the support and training that includes.

Another kink is the audience choice award—selected through open online voting prior to the finals—but not tied to any clear concrete benefit. Take the example of Science for Sharing (Sci4S), a Mexico-based startup that trains teachers to better engage students in STEM and has already reached nearly a million children across Latin America. It garnered 419 community votes in the Education Challenge, more votes than any other participant in the category, and handedly won the audience choice award. Ultimately, Sci4S was not selected as a Solver team. Another education startup, Kenya-based Moringa School, only got two votes but was selected. While Moringa and others were compelling and qualified in their own right,  it’s still hard not to think that Sci4S should have focused all of its time on its presentation and ignored the audience vote.

All in all, Solve does get a number of things right where other innovation challenges have failed. Instead of anointing one winner for the entire competition, it selects a class of dozens—reflecting the simple fact that the world’s most intractable problems are not going to be solved by any singular idea. Unlike many challenges put on by educational institutions and open only to their own students, Solve opens its doors wide. And winning at the finals doesn’t end your connection with MIT, it only starts it, with all qualifying finalists getting a year of individualized support, training and mentorship.

Done right, prizes can be effective at incentivizing startups to focus on pressing societal issues that can truly benefit from tech-driven solutions. But prizes for the sake of prizes can add to the noise and dissipate scarce public resources and entrepreneur attention. In the increasingly crowded world of innovation challenges promising to change the world, MIT’s Solve is a step away from the noise and towards effective prize granting.

Tech In Asia lays off staff after canceling planned ICO

Earlier this month, media startup Tech In Asia surprised its readers when it announced plans to implement an $18 per month paywall. More expensive than packages for the Bloomberg and the Wall Street Journal, the subscription went live this week. It’s designed to make the business self-sustaining after a tricky period of business in which the company contemplated an ICO and was forced to make cutbacks to its team.

The Singapore-based company — which operates a popular blog and events business in Southeast Asia — laid off as many as one-third of its staff after it went back on a plan to raise money from an ICO, according to documents reviewed by TechCrunch and multiple people familiar with the situation.

In July, as the company scrapped its ICO plans, Tech In Asia fired 18 of its 60 employees in Singapore; one-third of its smaller employee base in Indonesia and restructured other business units after scrapping the plan to develop its own cryptocurrency. Most of the layoffs were in non-editorial business lines — like the company’s jobs division, which works with companies to pitch the Tech In Asia website as a recruitment platform. That division laid off half of its team, according to a source, while a number of reporters elected to leave the company too, as E27 reported in August.

Tech In Asia founder and CEO Willis Wee did not respond to multiple requests for comment.

While the fundraising target for the ICO wasn’t disclosed, the plan was to bring in enough new investment to extend the company’s eroding runway.

The ICO was part of ‘Project Tribe,’ a strategy to develop a decentralized platform that would allow any organization to develop online communities using a blockchain-based framework built by Tech In Asia, according to documents viewed by TechCrunch.

“Our goal is to give Tech In Asia back into the hands of the community and harness community forces to bring us closer to our mission of building and serving Asia’s tech communities,” the company wrote in one section of the whitepaper, which was never released but had been widely-circulated beyond Tech In Asia staff.

The most successful ICOs have developed decentralized systems that are often initially beneficial to the company behind the token sale, but that can, in theory, be extended to cover other businesses.

Project Tribe used that angle. Bearing some basic similarities to the Civil journalism platform, the plan was initially to host Tech In Asia’s news and community website over the next three years, before opening up to third parties by 2021.

Company-wide Slack messages seen by TechCrunch show that it was discarded after the management team balked at the risk behind the move. They told staff their concern that token economics, pleasing retail investors and legal uncertainties would all distract from the core business. That reversal was taken despite “significant” investment resources and dozens of staff being allocated to develop the concept and whitepaper over a number of months.

From funding to cutbacks

It wasn’t so long ago that Tech In Asia was the toast of Asia’s media community.

The startup — which launched in 2010 — brought in $6.6 million in fresh funding last November in a round led by Korean investor Hanwha.

In the ensuing six months, after watching annual revenue drop thanks in part to a dramatic decline in its events business, the Tech In Asia leadership caught crypto fever and decided to venture into the new world of ICOs.

There were signs of trouble earlier in 2017 for the company. Tech in Asia laid off most of its India-based team in early 2017 and ended its events business in that country. Those decisions impacted its event business, which a source said saw total revenue drop by more than 50 percent.

A shift to community content, with fewer ‘original’ reporting and journalism pieces also cut into company performance. Internal data seen by TechCrunch shows that monthly active users on the site were down 31 percent year-on-year in Q2 2018 — reaching 1.84 million — while total pageviews slipped by one-third, too.

Tech In Asia’s management team told all staff in June that its runway, which was thought to be shored up by the November deal, had gone from a solid-looking 81 months to just 14 months. Management claimed that a change in financial calculations caused the difference and employees were reassured that their jobs were safe.

One month later, however, the company began shedding staff in an effort to cut costs, reversing a hiring spree it launched in January, according to sources.

Two sources told TechCrunch that morale of the remaining staff was crushed when members of the management ‘flaunted’ the fruits of their wealth on social media just days after firing large portions of the team. Some social media updates posted to the internet that upset departing staff members included a photo of Rolex, the view of a villa on a weekend trip to Bali, and an expensive sushi dinner bill. 

With the company facing a straitened financial situation, if Tech In Asia tries to raise money again it’ll have some explaining to do to potential investors.

The business grossed SG$3.37 million (US$2.47 million) for the first six months of the year. Annualized, that would represent a 15 percent drop on 2017’s revenue, and Tech In Asia is still losing money. It recorded a net loss of SG$1.43 million (US$1.05 million) for the first half of 2018, according to internal data. That’s an average monthly burn rate of SG$0.23 million, or US$0.17 million.

Nonetheless, Wee — the Tech In Asia CEO — is hopeful that the subscription model pivot can make Tech In Asia sustainable in the long run.

“As you probably know, our business model has been built around events and advertising. While these have kept our business going, we are still working towards becoming profitable. Why is achieving this important? Because the only way we can be better at serving Asia’s tech ecosystem is if we have more resources and a consistent income stream,” he wrote when announcing the subscription package.

Full disclosure: I bought an annual subscription to Tech In Asia at the early bird discount rate being offered right now. That doesn’t impact my coverage of this story — I support a number of media businesses via subscription packages.

Meituan-Dianping’s IPO off to a good start as shares climb 7% on debut

Meituan-Dianping (3690.HK) enjoyed a strong debut today in Hong Kong, a sign that investors are confident in the Tencent-backed company’s prospects despite its cash-burning growth strategy, heavy competition and a sluggish Hong Kong stock market.

During morning trading, Meituan’s shares reached a high of HKD$73.85 (about $9.41), a 7% increase over its initial public offering price of HKD$69. When Meituan reportedly set a target valuation of $55 billion for its debut, it triggered concerns that the company, which bills itself a “one-stop super app” for everything from food delivery to ticket bookings, as overconfident.

While Meituan, the owner of Mobile, is the leading online marketplace for services in China, it faces formidable competition from Alibaba’s Ele.me and operating on tight margins and heavy losses as it spends money on marketing and user acquisition costs. As it prepared for its IPO, Meituan was also under the shadow of underwhelming Hong Kong debuts by Xiaomi and China Tower. Like Xiaomi, Meituan is listed under a new dual-class share structure designed to attract tech companies by allowing them to give weighted voting rights to founders.

The sponsors of Meituan’s IPO are Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley.

Google will match up to $1M in donations for Hurricane Florence relief

As cities in Hurricane Florence’s path deal with its aftermath, Google will match up to $1 million in donations to help with relief efforts.

The disaster’s death toll is currently 35 people and about 343,000 people in North Carolina are without electricity. The hurricane caused widespread flooding and property damage throughout North Carolina, South Carolina and Virginia.

 

Google drew attention to its Hurricane Florence donation campaign with a banner that appeared on top of Gmail for some users. Google has matched donations for other disasters before, including Hurricane Irma and Hurricane Harvey last year. It’s also raised money for humanitarian efforts crises, like a 2015 matching program for up to $5.5 million in donations to provide aid to refugees in Europe. For that campaign, it temporarily added a “Donate” button to its search homepage.

The company is partnering with non-profit Network for God to collect and distribute funds. All donations will be directed to the American Red Cross, which Google said it chose to work with “because of their strong track record and existing response in the region.”

Other tech companies helping with Hurricane Florence relief include Amazon, which enabled Alexa users to make donations by saying “Alexa, donate to Hurricane Florence disaster relief” and sent trucks with food and donated items to affected areas, and Apple, which donated $1 million to the American Red Cross. Airbnb also offered free rooms to people fleeing the hurricane.

 

Ola raises $50M at a $4.3B valuation from two Chinese funds

Ola, the arch-rival of Uber in India, has raised $50 million at a valuation of about $4.3 billion from Sailing Capital, a Hong Kong-based private equity firm, and the China-Eurasian Economic Cooperation Fund (CEECF), a state-backed Chinese fund. The funding was disclosed in regulatory documents sourced by Paper.vc and reviewed by Indian financial publication Mint.

According to Mint, Sailing Capital and CEECF will hold a combined stake of more than 1% in Ola . An Ola spokesperson said the company has no comment.

Ola’s last funding announcement was in October, when it raised $1.1 billion (its largest funding round to date) from Tencent and returning investor SoftBank Group. Ola also said it planned to raise an additional $1 billion from other investors that would take the round’s final amount to about $2.1 billion.

At the time, a source with knowledge of the deal told TechCrunch that Ola was headed toward a post-money valuation of $7 billion once the $2.1 bllion raise was finalized. So while the funding from Sailing Capital and CEECF brings it closer to its funding goal, the latest valuation of $4.3 billion is still lower than the projected amount.

Ola needs plenty of cash to fuel its ambitious expansion both within and outside of India. In addition to ride hailing, Ola got back into the food delivery game at the end of last year by acquiring Foodpanda’s Indian operations to compete with UberEats, Swiggy, Zomato and Google’s Areo. It was a bold move to make as India’s food delivery industry consolidated, especially since Ola had previously launched a food delivery service that shut down after less than one year. To ensure the survival of Foodpanda, Ola poured $200 million into its new acquisition.

A few months later after buying Foodpanda, Ola announced the acquisition of public transportation ticketing startup Ridlr in an all-stock deal. Outside of India, Ola has been focused on a series of international launches. It announced today that it will begin operating in New Zealand, fast on the heels of launches in the United Kingdom and Australia (its first country outside of India) this year.

Marc and Lynne Benioff will buy Times magazine from Meredith for $190M

Another tech billionaire will scoop up a major news outlet. Meredith Corporation, which acquired Time Inc. in January, announced today that it has agreed to sell its eponymous magazine to Salesforce.com co-founder Marc Benioff and his wife Lynne Benioff for $190 million in cash.

Meredith said in March that it planned to sell Time, Sports Illustrated, Fortune and Money as part of its goal to save $400 million to $500 million over the next two years and increase the profitability of its remaining portfolio of publications. In its announcement today, the company said it will use proceeds from the sale of Times magazine to pay off debt and expects to reduce its debt by $1 billion during fiscal 2019.

Meredith’s acquisition of Time Inc. was controversial because it received financial support from Koch Equity Development, the private equity fund run by Charles and David Koch, known for backing conservative causes.

The Benioffs, who are on the other side of the spectrum as supporters of progressive politics, are purchasing Time magazine as individuals. In other words, Salesforce.com, where Benioff serves as chairman and co-CEO, and other companies are not involved with the deal. Marc Benioff told the Wall Street Journal that he and his wife will not be involved in Time magazine’s daily operations or editorial decisions and added that “we’re investing in a company with tremendous impact on the world, one that is also an incredibly strong business. That’s what we’re looking for when we invest as a family.”

Other tech billionaires who have purchased major publications include Amazon CEO Jeff Bezos, who bought the Washington Post in a personal capacity five years ago and Laurene Powell Jobs, whose philanthropic organization, Emerson Collective, acquired a majority stake in The Atlantic last year. (While Jack Ma was a driving force behind Alibaba Group’s acquisition of the South China Morning Post in 2016, that acquisition was made by the company, not Ma.)

Despite being one of the most famous and iconic news brands in the U.S., Times magazine has (like other print publications) struggled to cope with falling circulation and revenue as it invests digital properties.

In an interview with the Wall Street Journal, the magazine’s editor in chief, Edward Felsenthal, said “we’ve done a lot to transform this brand over the last few years so that it is far beyond a weekly magazine” and added that its business is “solidly profitable.”

North Korea skirts US sanctions by secretly selling software around the globe

Fake social media profiles are useful for more than just sowing political discord among foreign adversaries, as it turns out. A group linked to the North Korean government has been able to duck existing sanctions on the country by concealing its true identity and developing software for clients abroad.

This week, the US Treasury issued sanctions against two tech companies accused of running cash-generating front operations for North Korea: Yanbian Silverstar Network Technology or “China Silver Star,” based near Shenyang, China, and a Russian sister company called Volasys Silver Star. The Treasury also sanctioned China Silver Star’s North Korean CEO Jong Song Hwa.

“These actions are intended to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases, and third-party nationals,” Treasury Secretary Steven Mnuchin said of the sanctions.

As the Wall Street Journal reported in a follow-up story, North Korean operatives advertised with Facebook and LinkedIn profiles, solicited business with Freelance.com and Upwork, crafted software using Github, communicated over Slack and accepted compensation with Paypal. The country appears to be encountering little resistance putting tech platforms built by US companies to work building software including “mobile games, apps, [and] bots” for unwitting clients abroad.

The US Treasury issued its first warnings of secret North Korean software development scheme in July, though did not provide many details at the time. The Wall Street Journal was able to identify “tens of thousands” of dollars stemming from the Chinese front company, though that’s only a representative sample. The company worked as a middleman, contracting its work out to software developers around the globe and then denying payment for their services.

Facebook suspended many suspicious accounts linked to the scheme after they were identified by the Wall Street Journal, including one for “Everyday-Dude.com”:

“A Facebook page for Everyday-Dude.com, showing packages with hundreds of programs, was taken down minutes later as a reporter was viewing it. Pages of some of the account’s more than 1,000 Facebook friends also subsequently disappeared…

“[Facebook] suspended numerous North Korea-linked accounts identified by the Journal, including one that Facebook said appeared not to belong to a real person. After it closed that account, another profile, with identical friends and photos, soon popped up.”

Linkedin and Upwork similarly removed accounts linked to the North Korean operations.

Beyond the consequences for international relations, software surreptitiously sold by the North Korean government poses considerable security risks. According to the Treasury, the North Korean government makes money off of a “range of IT services and products abroad” including “website and app development, security software, and biometric identification software that have military and law enforcement applications.” For companies unwittingly buying North Korea-made software, the potential for malware that could give the isolated nation eyes and ears beyond its borders is high, particularly given that the country has already demonstrated its offensive cyber capabilities.

Between that and sanctions against doing business with the country, Mnuchin urges the information technology industry and other businesses to exercise awareness of the ongoing scheme to avoid accidentally contracting with North Korea on tech-related projects.

Job Today gets a $16M top up as it preps for Brexit bump

Accel-backed mobile-first jobs app Job Today has pulled in another $16M — an expansion to its November 2016 $20M Series B round. It raised a $10M Series A in January of the same year.

The 2015 founded startup offers a mobile app for job seekers that does away with the need for a CV.

Instead job seekers create a profile in the app and can apply to relevant jobs. Employers can then triage potential applicants via the app and chat to any they like the look of via its messaging platform.

The approach has been especially popular with fast turnover jobs in the service industry, such as hospitality and retail.

Job Today says it has more than five million job seekers registered on its platform, and claims to have delivered more than 100 million candidate applications to the 400,000+ predominantly small businesses posting jobs via the app to date (with 1M+ jobs posted). It currently operates in two markets: Spain and the UK.

The additional funding will be put towards expanding its presence in the UK market — where it says it’s seen “significant growth” in both job postings and candidate applications.

It says the overall volume of applications has increased by 46% year-on-year in the market, with the number of applications per candidate growing by 32% in the same period. The likes of Costa Coffee, Pret A Manger and Eat are named as among its “regular hirers”.

It’s also envisaging a Brexit bump for the local casual job market, as the UK’s decision to leave the European Union looks set to impact the supply of labor for employers…

Commenting in a statement, CEO Eugene Mizin, said: “The casual job market is often the first to experience the effects from macro-economic forces and Brexit will mean that many non-skilled and non-British workers will leave the UK. This will create a demand to fill casual jobs and create new opportunities for the less-skilled school, college and university leavers entering the workforce for the first time in 2019.”

The Series B expansion funds are coming from New York based investor 14W.

Job Today says it got additional growth uplift after integrating with Google Jobs — aka Google search’s built in AI-powered jobs engine. This launched in the UK in July 2018, and Job Today said it saw 101% growth in users in the first month of integration.

Not hog dog? PixFood lets you shoot and identify food

What happens when you add AI to food? Surprisingly, you don’t get a hungry robot. Instead you get something like PixFood. PixFood lets you take pictures of food, identify available ingredients, and, at this stage, find out recipes you can make from your larder.

It is privately funded.

“There are tons of recipe apps out there, but all they give you is, well, recipes,” said Tonnesson. “On the other hand, PixFood has the ability to help users get the right recipe for them at that particular moment. There are apps that cover some of the mentioned, but it’s still an exhausting process – since you have to fill in a 50-question quiz so it can understand what you like.”

They launched in August and currently have 3,000 monthly active users from 10,000 downloads. They’re working on perfecting the system for their first users.

“PixFood is AI-driven food app with advanced photo recognition. The user experience is quite simple: it all starts with users taking a photo of any ingredient they would like to cook with, in the kitchen or in the supermarket,” said Tonnesson. “Why did we do it like this? Because it’s personalized. After you take a photo, the app instantly sends you tailored recipe suggestions! At first, they are more or le

ss the same for everyone, but as you continue using it, it starts to learn what you precisely like, by connecting patterns and taking into consideration different behaviors.”

In my rudimentary tests the AI worked acceptably well and did not encourage me to eat a monkey. While the app begs the obvious question – why not just type in “corn?” – it’s an interesting use of vision technology that is definitely a step in the right direction.

 

Tonnesson expects the AI to start connecting you with other players in the food space, allowing you to order corn (but not a monkey) from a number of providers.

“Users should also expect partnerships with restaurants, grocery, meal-kit, and other food delivery services will be part of the future experiences,” he said.

Alibaba announces CEO Daniel Zhang will succeed Jack Ma as chairman next year

Following speculation about Jack Ma’s imminent retirement, Alibaba Group announced today that its CEO, Daniel Zhang, will succeed Ma as chairman next year. After stepping down as chairman on September 10, 2019 (exactly a year from now), Ma will continue serving as a board member until its annual general shareholders’ meeting in 2020.

After that, Ma will remain a lifetime partner of the Alibaba Partnership, or a group of 36 partners drawn from the senior management ranks of Alibaba Group companies and affiliates. They hold a considerable amount of sway over the company because they have the right to nominate, or in certain situations, appoint up to a simple majority of its board of directors.

Alibaba’s announcement follows reports that Ma’s retirement from the company he co-founded in 1999 as an online marketplace was imminent, with Ma, a former English teacher, planning to dedicate his time to philanthropy in education. Ma downplayed those reports, however, telling the South China Morning Post (which is owned by Alibaba) that instead he will gradually reduce his role in the company through a succession plan.

Ma stepped down as CEO in 2013, handing the position over to Jonathan Lu. Lu was replaced in 2015 by Zhang, Alibaba’s former COO, after Ma reportedly told employees that it’s time for the company to be run by people born in the 1970s and after (Zhang was born in 1972, three years after Lu).

In a letter sent to media outlets today, Ma wrote that Zhang has “demonstrated his superb talent, business acumen and determined leadership” since taking over as CEO. Under his stewardship, Alibaba has seen consistent and sustainable growth for 13 consecutive quarters. His analytical mind is unparalleled, he holds dear our mission and vision, he embraces responsibility with passion, and he has the guts to innovate and test creative business models.”

Ma added that “this transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development.”

Ma also re-emphasized his narrative that his departure from Alibaba Group will be very gradual. “I have put a lot of thought and preparation into this succession plan for 10 years. I am delighted to announce the plan today thanks to the support of the Alibaba Partnership and our board of directors,” he wrote. “I also want to offer special thanks to all Alibaba colleagues and your families, because your trust, support and our joint enterprise over the past 19 years have prepared us for this day with confidence and strength.”

Of his plans after Zhang takes over as chairman next year, Ma said he will continue contributing to the Alibaba Partnership, before adding “I also want to return to education, which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?! The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.”

Hate speech, collusion, and the constitution

Half an hour into their two-hour testimony on Wednesday before the Senate Intelligence Committee, Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey were asked about collaboration between social media companies. “Our collaboration has greatly increased,” Sandberg stated before turning to Dorsey and adding that Facebook has “always shared information with other companies.” Dorsey nodded in response, and noted for his part that he’s very open to establishing “a regular cadence with our industry peers.”

Social media companies have established extensive policies on what constitutes “hate speech” on their platforms. But discrepancies between these policies open the possibility for propagators of hate to game the platforms and still get their vitriol out to a large audience. Collaboration of the kind Sandberg and Dorsey discussed can lead to a more consistent approach to hate speech that will prevent the gaming of platforms’ policies.

But collaboration between competitors as dominant as Facebook and Twitter are in social media poses an important question: would antitrust or other laws make their coordination illegal?

The short answer is no. Facebook and Twitter are private companies that get to decide what user content stays and what gets deleted off of their platforms. When users sign up for these free services, they agree to abide by their terms. Neither company is under a First Amendment obligation to keep speech up. Nor can it be said that collaboration on platform safety policies amounts to collusion.

This could change based on an investigation into speech policing on social media platforms being considered by the Justice Department. But it’s extremely unlikely that Congress would end up regulating what platforms delete or keep online – not least because it may violate the First Amendment rights of the platforms themselves.

What is hate speech anyway?

Trying to find a universal definition for hate speech would be a fool’s errand, but in the context of private companies hosting user generated content, hate speech for social platforms is what they say is hate speech.

Facebook’s 26-page Community Standards include a whole section on how Facebook defines hate speech. For Facebook, hate speech is “anything that directly attacks people based on . . . their ‘protected characteristics’ — race, ethnicity, national origin, religious affiliation, sexual orientation, sex, gender, gender identity, or serious disability or disease.” While that might be vague, Facebook then goes on to give specific examples of what would and wouldn’t amount to hate speech, all while making clear that there are cases – depending on the context – where speech will still be tolerated if, for example, it’s intended to raise awareness.

Twitter uses a “hateful conduct” prohibition which they define as promoting “violence against or directly attacking or threatening other people on the basis of race, ethnicity, national origin, sexual orientation, gender, gender identity, religious affiliation, age, disability, or serious disease.” They also prohibit hateful imagery and display names, meaning it’s not just what you tweet but what you also display on your profile page that can count against you.

Both companies constantly reiterate and supplement their definitions, as new test cases arise and as words take on new meaning. For example, the two common slang words to describe Ukrainians by Russians and Russians by Ukrainians was determined to be hate speech after war erupted in Eastern Ukraine in 2014. An internal review by Facebook found that what used to be common slang had turned into derogatory, hateful language.

Would collaboration on hate speech amount to anticompetitive collusion?

Under U.S. antitrust laws, companies cannot collude to make anticompetitive agreements or try to monopolize a market. A company which becomes a monopoly by having a superior product in the marketplace doesn’t violate antitrust laws. What does violate the law is dominant companies making an agreement – usually in secret – to deceive or mislead competitors or consumers. Examples include price fixing, restricting new market entrants, or misrepresenting the independence of the relationship between competitors.

A Pew survey found that 68% of Americans use Facebook. According to Facebook’s own records, the platform had a whopping 1.47 billion daily active users on average for the month of June and 2.23 billion monthly active users as of the end of June – with over 200 million in the US alone. While Twitter doesn’t disclose its number of daily users, it does publish the number of monthly active users which stood at 330 million at last count, 69 million of which are in the U.S.

There can be no question that Facebook and Twitter are overwhelmingly dominant in the social media market. That kind of dominance has led to calls for breaking up these giants under antitrust laws.

Would those calls hold more credence if the two social giants began coordinating their policies on hate speech?

The answer is probably not, but it does depend on exactly how they coordinated. Social media companies like Facebook, Twitter, and Snapchat have grown large internal product policy teams that decide the rules for using their platforms, including on hate speech. If these teams were to get together behind closed doors and coordinate policies and enforcement in a way that would preclude smaller competitors from being able to enter the market, then antitrust regulators may get involved.

Antitrust would also come into play if, for example, Facebook and Twitter got together and decided to charge twice as much for advertising that includes hate speech (an obviously absurd scenario) – in other words, using their market power to affect pricing of certain types of speech that advertisers use.

In fact, coordination around hate speech may reduce anti-competitive concerns. Given the high user engagement around hate speech, banning it could lead to reduced profits for the two companies and provide an opening to upstart competitors.

Sandberg and Dorsey’s testimony Wednesday didn’t point to executives hell-bent on keeping competition out through collaboration. Rather, their potential collaboration is probably better seen as an industry deciding on “best practices,” a common occurrence in other industries including those with dominant market players.

What about the First Amendment?

Private companies are not subject to the First Amendment. The Constitution applies to the government, not to corporations. A private company, no matter its size, can ignore your right to free speech.

That’s why Facebook and Twitter already can and do delete posts that contravene their policies. Calling for the extermination of all immigrants, referring to Africans as coming from shithole countries, and even anti-gay protests at military funerals may be protected in public spaces, but social media companies get to decide whether they’ll allow any of that on their platforms. As Harvard Law School’s Noah Feldman has stated, “There’s no right to free speech on Twitter. The only rule is that Twitter Inc. gets to decide who speaks and listens–which is its right under the First Amendment.”

Instead, when it comes to social media and the First Amendment, courts have been more focused on not allowing the government to keep citizens off of social media. Just last year, the U.S. Supreme Court struck down a North Carolina law that made it a crime for a registered sex offender to access social media if children use that platform. During the hearing, judges asked the government probing questions about the rights of citizens to free speech on social media from Facebook, to Snapchat, to Twitter and even LinkedIn.

Justice Ruth Bader Ginsburg made clear during the hearing that restricting access to social media would mean “being cut off from a very large part of the marketplace of ideas [a]nd [that] the First Amendment includes not only the right to speak, but the right to receive information.”

The Court ended up deciding that the law violated the fundamental First Amendment principle that “all persons have access to places where they can speak and listen,” noting that social media has become one of the most important forums for expression of our day.

Lower courts have also ruled that public officials who block users off their profiles are violating the First Amendment rights of those users. Judge Naomi Reice Buchwald, of the Southern District of New York, decided in May that Trump’s Twitter feed is a public forum. As a result, she ruled that when Trump blocks citizens from viewing and replying to his posts, he violates their First Amendment rights.

The First Amendment doesn’t mean Facebook and Twitter are under any obligation to keep up whatever you post, but it does mean that the government can’t just ban you from accessing your Facebook or Twitter accounts – and probably can’t block you off of their own public accounts either.

Collaboration is Coming?

Sandberg made clear in her testimony on Wednesday that collaboration is already happening when it comes to keeping bad actors off of platforms. “We [already] get tips from each other. The faster we collaborate, the faster we share these tips with each other, the stronger our collective defenses will be.”

Dorsey for his part stressed that keeping bad actors off of social media “is not something we want to compete on.” Twitter is here “to contribute to a healthy public square, not compete to have the only one, we know that’s the only way our business thrives and helps us all defend against these new threats.”

He even went further. When it comes to the drafting of their policies, beyond collaborating with Facebook, he said he would be open to a public consultation. “We have real openness to this. . . . We have an opportunity to create more transparency with an eye to more accountability but also a more open way of working – a way of working for instance that allows for a review period by the public about how we think about our policies.”

I’ve already argued why tech firms should collaborate on hate speech policies, the question that remains is if that would be legal. The First Amendment does not apply to social media companies. Antitrust laws don’t seem to stand in their way either. And based on how Senator Burr, Chairman of the Senate Select Committee on Intelligence, chose to close the hearing, government seems supportive of social media companies collaborating. Addressing Sandberg and Dorsey, he said, “I would ask both of you. If there are any rules, such as any antitrust, FTC, regulations or guidelines that are obstacles to collaboration between you, I hope you’ll submit for the record where those obstacles are so we can look at the appropriate steps we can take as a committee to open those avenues up.”

Coinbase plots to become the New York Stock Exchange of crypto securities

The future of Coinbase looks something like the New York Stock Exchange. That’s according a vision laid out by CEO Brian Amstrong who was interviewed on stage at TechCrunch Disrupt in San Francisco today.

Coinbase is known for being the most popular exchange for converting fiat currency into crypto — most of the largest traded exchanges are crypto-to-crypto — but he foresees a future in which it plays host to a growing number of cryptocurrencies as it becomes standard for companies to create their own token, which runs alongside equity as an alternative investment system.

“It makes sense that any company out there who has a cap table… should have their own token. Every open source project, every charity, potentially every fund or these new types of decentralized organizations [and] apps, they’re all going to have their own tokens,” Armstrong said.

“We want to be the bridge all over the world where people come and they take fiat currency and they can get it into these different cryptocurrencies,” he added.

Brian Armstrong (Coinbase) says crypto regulation will result in the next version of the stock market #TCDisrupt pic.twitter.com/2kyxAmhPSZ

— TechCrunch (@TechCrunch) September 7, 2018

That tokenized future could see Coinbase host hundreds of tokens within “years” and even potentially “millions” in the future, according to Armstrong. That’s a big jump on the five cryptocurrencies that it currently supports today, and it would make it way larger than financial institutions like the New York Stock Exchange, which is actually a Coinbase investor and is getting into Bitcoin, or the NASDAQ.

One of the critical pieces of making this vision a reality is, of course, regulation. This week at Disrupt, others in crypto space have argued that a lack of clarity around crypto regulation is costing the U.S. as innovation and startups are being developed in overseas markets. As the founder of a U.S.-based crypto startup that is valued at over $1 billion and is hiring hard, Armstrong doesn’t subscribe to that thesis but he did admit that there is “a big open question” over whether the majority of the new rush of tokens he foresees will be securities or not.

Still, Coinbase has made moves to add security tokens to its portfolio with the acquisition of a securities dealer earlier this year.

“We do feel a substantial subset of these tokens will be securities,” he said. “Our approach has always been to be the most trusted [exchange] and the easiest to use. So we want to be the legal compliant place where you can start to trade these tokens that are classified as securities.”

“Web 1.0 was about publishing information, web 2.0 was about interaction and web 3.0 is going to be about value transfer on the internet because now the web has this native currency and so applications can be built that instantly tap into this global economy on the internet,” Armstrong added.

How international can crypto become? The Coinbase CEO thinks that the total number of people in the crypto ecosystem can reach one billion within the next five years, up from around 40 million today.

You can watch the full video from Armstrong’s interview below.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Goldman CFO: the story about us dropping Bitcoin trading was ‘fake news’

It sometimes feels like the price of Bitcoin rises and falls on the turn of a speculative dime, and yesterday we saw one such moment come to pass, when it was reported that Goldman Sachs was planning to drop a plan to build a Bitcoin trading platform, causing the price of the cryptocurrency to crash. But today, at TechCrunch Disrupt, the CFO of Goldman Sachs described the story as “fake news,” and said that in fact the bank is still considering how to offer services that involved physical Bitcoin, but that it has not yet set a timeline for it.

“I was in New York yesterday and I was co-chairing our risk committee, and I saw the news article,” said CFO Marty Chavez, referring to the report yesterday. “It wasn’t like we announced anything or that anything had changed for us… I never thought I’d hear myself actually use this term, but I’d really have to describe that as fake news.”

As Chavez described it, Goldman Sachs had been building a Bitcoin trading platform modelled on a commodities futures trading platform, where there is never any Bitcoin traded, but more the promise of how the currency might move.

“Our institutional clients said, ‘We would love for you to clear these new Bitcoin-linked futures contracts offered by the exchanges,’ so we’ve been doing that, and then clients since May [started to ask], ‘We would like for you also to provide us liquidity and trade the principal as principal the futures contracts, not just clear them,’ and so we’ve been doing that, the next stage of the exploration, what we call ‘non-deliverable forwards.’

“These are derivatives, over the counter derivatives,” he continued. “They’re settled in U.S. dollars and the reference price is the Bitcoin U.S. dollar price established by a set of exchanges, the same one that’s referenced in the futures contracts, and we’re working on that now because the clients wanted physical Bitcoin — something tremendously interesting and tremendously challenging. From the perspective of custody, we don’t yet see an institutional grade custody cases custodian solution for Bitcoin.”

While companies like Coinbase are trying to tap into that demand by offering custodial services aimed squarely at institutional money, but Goldman itself still has no timeline for when its own offering might be ready.

“We’re interested in having that exist, and it’s a long road and so I would just be speculating. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into realizing that that’s part of the evolution but it’s not here yet.”

Bitcoin — and the crypto market generally — suffered significant price losses this week off the back of reports of Goldman’s aborted plans, but that wasn’t the sole trigger. Reuters also reported that EU is looking into regulating crypto and is preparing a report that proposes to regulate exchanges and ICOs.

Bitcoin hit a record valuation of nearly $20,000 in January, and it has struggled to return to those highs during the rest of this year. The cryptocurrency was priced at $6,536 at the time of writing, some way short of a months-long high of $8,266 on July 26, according to information from Coinmarketcap.com.

WSJ reports that Theranos will finally dissolve

Theranos is reportedly finally closing down for good, nearly three years after a Wall Street Journal investigation called its blood testing technology into question. The WSJ said the company, whose dramatic downfall spawned a best-selling book that’s set to be filmed with Jennifer Lawrence starring as Theranos founder and CEO Elizabeth Holmes, sent shareholders an email saying it will formally dissolve and seek to pay unsecured creditors its remaining cash in the coming months.

Holmes resigned as CEO in June after she and Theranos’ former president, Ramesh “Sunny” Balwani, were charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud in June.

Both Holmes and Balwani had already been charged with fraud by the Securities and Exchange Commission (the criminal charges are separate from the civil ones filed by the SEC). In its complaint, the SEC said the two engaged in “an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance,” which ultimately enabled them to raise more than $700 million from investors.

Holmes and the SEC settled the charges by having Holmes agree to pay a $500,000 penalty and be barred from serving as an officer or director of a public company for 10 years. She was also required to return the remaining 18.9 million shares she obtained while engaging in fraud and relinquish voting control of Theranos.

TechCrunch has sent an email to Theranos’ public relations address asking for comment.

Microsoft no longer taking new enrollments for its Surface Plus financing program

Microsoft has quietly ended its Surface Plus financing program about a year after it launched. In a message on its site, the company said it stopped taking new enrollments on August 31 “after much thought and consideration.” The change does not affect existing customers, however, who will still be covered by their current financing plans.

Financed by Klarna, a Stockholm-headquartered online financial services provider, the Surface Plus financing program launched in August 2017. It targeted students and other people who wanted an affordable way to own a Surface device, allowing them to spread payments over 24 months. The Surface Plus plan also enabled customers to upgrade to the latest device after 18 months, as long as they returned their previous device in good working condition.

In a FAQ, Microsoft said existing customers will still be able to upgrade their Surface under the plan’s terms. The program’s end also does not affect existing warranty plans.

Microsoft’s Surface Plus for Business payment plans launched around the same time as the Surface Plus program and it looks like it will continue. TechCrunch has contacted Microsoft for more information.

Used car site Vroom is raising $70M six months after a big round of layoffs

After cutting a big portion of its staff in March, Vroom is back pitching investors. Yesterday, the site for buying and selling used cars filed to raise $70 million in new equity funding.

Vroom has already secured $30 million of that $70 million target, signaling confidence from investors that it’ll become profitable and beat out key competitors in the space, like Carvana and Shift.

The startup wants to make the process of buying a used car as easy as ordering a pizza. With more than 3,000 cars for sale on the site, Vroom delivers directly to its customers’ doorsteps. Since it was founded in 2013, Vroom has brought in $320 million from General Catalyst, T. Rowe Price, Altimeter and others, reaching a valuation of $655 million in July 2017.

Vroom declined to comment on its upcoming round.

As part of the March layoffs, Vroom, which is headquartered in New York City, also shuttered its Dallas, Texas and Whitestown, Indiana locations. The official number of employees Vroom let go is unclear, though when news of the layoffs broke, the company listed 845 employees on its website. Today, the site list “600+” or about 30% fewer employees.

The cuts, the company said, were part of a restructuring that would allow Vroom to focus on profitability. This is what the company had to say in March:

“While Vroom’s business is healthy and financially stable, we’re always looking to align our resources to fulfill our long-term vision and deliver on our mission,” the statement said. “In sharpening our focus on profitability, we recently made some adjustments to our strategy that has impacted our headcount. While decisions like this are never easy, we are putting the company in a better position to become the leader in online car buying and continue to invest in future areas of growth.”

It’s not surprising Vroom is back in the fundraising game. Buying and selling cars is a capital-intensive business. 

Vroom’s competitors have similarly raised a lot of capital. Carvana brought in more than $300 million in equity funding, as well as $400 million in debt, before hitting the stock markets in 2017. Shift has raised roughly $110 million to date. Beepi, a cautionary tale in the business of selling used cars online, landed $150 million in VC funding, then failed to sell its business twice, ultimately selling for parts to multiple buyers, including Vroom.

Google denies Trump’s claim that it did not promote his State of the Union address

Google is pushing back against a claim by Donald Trump that the search engine stopped promoting State of the Union livestreams on its homepage after his presidency began. Trump’s claim came in the from of a tweeted video, which was still pinned to the top of his profile when this post was published at 9:30 PM PST, Aug. 29, 2018, after Google’s refutation and multiple media reports of its inaccuracy.

Hashtagged #stopthebias, the video appears to show that Google did not display links to livestreams of Trump’s first public speech to a joint session of Congress on February 28, 2017 or his first State of the Union on January 30, 2018, despite promoting Obama’s State of the Union addresses in 2012, 2013, 2014, 2015 and 2016.

#StopTheBias pic.twitter.com/xqz599iQZw

— Donald J. Trump (@realDonaldTrump) August 29, 2018

Google, however, says it did indeed highlight Trump’s first State of the Union in 2018, but that it usually does not include links on its homepage to a president’s first public address to Congress, so neither Obama nor Trump’s were featured. In a statement sent to BuzzFeed News, the company said “On January 30, 2018, we highlighted the livestream of President Trump’s State of the Union on the google.com homepage. We have historically not promoted the first address to Congress by a new President, which is technically not a State of the Union address. As a result, we didn’t include a promotion on google.com for this address in either 2009 or 2017.”

Google statement to @JohnPaczkowski on Trump’s tweet pic.twitter.com/1w82mQqApg

— Jon Passantino (@passantino) August 29, 2018

The video shared by Trump does not make a distinction between a president’s first public speech to a joint session of Congress and his first State of the Union address.

A discrepancy in Google’s logo also suggests that at least one of the screenshots, which appear to have been taken from the Internet Archive’s Wayback Machine, was doctored. A Gizmodo commenter notes that one of the screenshots in the video Trump tweeted, from January 12, 2016, shows a version with the previous Google logo, not the sans-serif version introduced in September 2015, which can be seen in a Wayback Archive’s screen capture from January 10, 2016 and other days from that month when a Google Doodle wasn’t featured.

Capture from the video tweeted from President Trump’s account

One of Wayback Machine’s captures on January 10, 2016

Furthermore, while a link to Trump’s State of the Union does not appear on archived versions of Google’s homepage from January 30, 2018, it does show up on a capture from 1AM on January 31, as Twitter user @WrockBro notes. That may be because the Wayback Machine uses Greenwich Mean Time time stamps.

Not only that, but also this: https://t.co/RfJIKpYGJX

🅱en🛸JPL (@WrockBro) August 30, 2018

The Wayback Machine capture linked by Twitter user @WrockBro

Trump’s tweet is the part of his current onslaught against Google, other tech companies and mainstream media, which he accuses of having a liberal bias and burying news about his administration. It is worth pointing out, however, that Trump’s 2017 first speech to Congress was widely praised as “presidential” by journalists across the political spectrum, even liberal publications. In turn, they were ridiculed by critics for being awed by a president acting presidential.

Twitter suspends more accounts for “engaging in coordinated manipulation”

Following last week’s suspension of 284 accounts for “engaging in coordinated manipulation,” Twitter announced today that it’s kicked an additional 486 accounts off the platform for the same reason, bringing the total to 770 accounts.

While many of the accounts removed last week appeared to originate from Iran, Twitter said this time that about 100 of the latest batch to be suspended claimed to be in the United States. Many of these were less than a year old and shared “divisive commentary.” These 100 accounts tweeted a total of 867 times and had 1,268 followers between them.

Since our initial suspensions last Tuesday, we have continued our investigation, further building our understanding of these networks. In addition, we suspended an additional 486 accounts for violating the policies outlined last week. This brings the total suspended to 770.

— Twitter Safety (@TwitterSafety) August 27, 2018

As examples of the “divisive commentary” tweeted, Twitter shared screenshots from several suspended accounts that showed anti-Trump rhetoric, counter to the conservative narrative that the platform unfairly targets Republican accounts.

Fewer than 100 of the 770 suspended accounts claimed to be located in the U.S. and many of these were sharing divisive social commentary. On average, these 100 Tweeted 867 times, were followed by 1, 268 accounts, and were less than a year old. Examples below. pic.twitter.com/LQhbvFjxSo

— Twitter Safety (@TwitterSafety) August 27, 2018

Twitter also said that the suspended accounts included one advertiser that spent $30 on Twitter ads last year, but added those ads did not target the U.S. and that the billing address was outside of Iran.

“As with prior investigations, we are committed to engaging with other companies and relevant law enforcement entities. Our goal is to assist investigations into these activities and where possible, we will provide the public with transparency and context on our efforts,” Twitter said on its Safety account.

After years of accusations that it doesn’t enforce its own policies about bullying, bots and other abuses, Twitter has taken a much harder line on problematic accounts in the past few months. Despite stalling user growth, especially in the United States, Twitter has been aggressively suspending accounts, including ones that were created by users to evade prior suspensions.

Twitter announced a drop of one million monthly users in the second quarter, causing investors to panic even though it posted a $100 million profit. In its earnings call, Twitter said that its efforts don’t impact user numbers because many of the “tens of millions” of removed accounts were too new or had been inactive for more than a month and were therefore not counted in active user numbers. The company did admit, however, that it’s anti-spam measures had caused it to lose three million monthly active users.

Whatever its impact on user numbers, Twitter’s anti-abuse measures may help it save face during a Senate Intelligence Committee hearing on September 5. Executives from Twitter, Facebook and Google are expected to be grilled by Sen. Mark Warner and other politicians about the use of their platforms by other countries to influence U.S. politics.

China announces transportation industry reform, days after murder of Didi carpooling passenger

The Chinese government announced it will reform the transportation industry to safeguard passengers, three days after a female passenger was allegedly raped and murdered by a Didi Chuxing driver last Friday. Provinces and autonomous regions are now tasked with setting up passenger safety committees by the end of this month and ensuring that incidents are investigated promptly.

The crime led to the suspension of Hitch, Didi Chuxing’s carpooling service, and the firing of two executives: Hitch’s general manager and Didi’s vice president of customer services. This is not the first time, however, that Didi has been forced pull back on Hitch. Earlier this year, it suspended night operations after a female passenger was allegedly murdered by an unregistered driver who had accessed the service using his father’s account. Nighttime Hitch rides then resumed in June after Didi put new safety measures in place, including a rule that prohibited drivers from accepting ride requests by passengers of the opposite sex during certain hours.

The latest incident took place on Friday in the eastern province of Zhejiang and is especially concerning because the driver had been flagged just one day before the murder by another female passenger who complained that he followed her after she left his vehicle. In a statement, Didi said a safety center representative failed to follow corporate policy and initiate an investigation within two hours. The company also admitted that its customer service procedures has “many deficiencies” and said it will “plead for law enforcement and the public to work with us in developing more efficient and practical collaborative solutions to fight criminals and protect user personal and property safety.”

China’s police and transport ministries have already said that Didi bears “unshirkable responsibility” for Friday’s murder. The company has already been accused of being too lax with passenger safety, leaving its users–particularly women–vulnerable to sexual harassment and assault.

What stunned me while reporting this was the numbers. According to Southern Weekly, at least 53 women have been raped or sexually harassed by Didi drivers in the past 4 yrs?! Caixin says there are 14 rapes linked to Didi drivers, citing court docs. https://t.co/Me0oBXRyxo

— Sui-Lee Wee 黄瑞黎 (@suilee) August 27, 2018

The National Development and Reform Commission (NDRC), the agency that enacts strategies for China’s economic and social development, posted its announcement, titled “Concerning untrustworthy behavior in the emerging transportation sector,” online on Monday morning.

In it, the NDRC said it will put measures into place to root out untrustworthy and dishonest operators in China’s transportation industry, which has grown dramatically over the past two decades. Provinces and autonomous regions must form committees and procedures to ensure passenger safety by August 31 and share information about violations and offenders with other municipalities.

While the NDRC mentioned all transportation sectors, including railways, airplanes and ships, it singled out passenger vehicles, including buses, shuttles and cabs, in one passage and ordered municipalities to investigate offenses in a timely manner. Operators that don’t take action quickly to fix “untrustworthy behavior” risk being placed on a blacklist and having their names published on government websites.

Pirated Twitch streams hijack YouTube’s pay-per-view Logan Paul/KSI boxing match

Today, there was a little bit of a skirmish between two professional YouTubers. Our dear old friend Logan Paul and KSI had an actual boxing match at the Manchester Arena where 15,000 tickets were sold (!!!!!!!!) for an event that ultimately ended in a draw and vows for a rematch.

The action onstage wasn’t the only place where viewers could get a look into the action, there was a $10 pay-per-view stream on YouTube, but more people seemed to end up watching pirated streams on Twitch with boxing fight streams reaching over a million concurrent users at one point. Streams also popped up on Twitter-owned Periscope and there were a few unofficial streams popping up on YouTube as well.

There is now over 2 million concurrent viewers for the KSI Logan Paul fight. 800,000 on the official YouTube stream that cost $10 to watch, and 1.2 million watching for free on Twitch. #KSIvLogan pic.twitter.com/ZZ0FYHLzOn

— Rod Breslau (@Slasher) August 25, 2018

Now, forget the parties involved and the topic and the motivations for a moment if you can. I understand if it might feel more than a little difficult to feel remorse for the parties involved, that has been a common refrain for pirated content popping up from whatever group for whatever reason though.

There’s obviously a big difference between free curiosity and $10 curiosity for an event like this but it seems pretty apparent that having access to a free stream on an easily-accessible mainstream site probably dissuaded some people from paying for the event on YouTube. While people may have previously scoured the web for pop-up ridden sites to view something like this, Twitch and other services unofficially served it up on a platter.

There are plenty of events similar to this one, but so often the refrain is made that people have to turn to pirated streams because the alternative is paying for cable or something that is really against the spirit of these easy-to-access platforms. Well, here’s an example of something that falls far outside that argument.

It’s impossible to squash all of the pirated streams, but Amazon’s Twitch is a bit too mature to be hosting pirated streams in such rampant numbers without being a little more proactive — instead of just relying on user reports to police pirated content that was fairly hard to avoid stumbling upon on the platform.

Even as tech companies continue to try and crack live content, services like Twitch that don’t proactively search out users hijacking streams of big events like this really serve to complicate and deter their own goals of eventually finding a way to monetize big events like this.

Epic Games just gave a perk for folks to turn on 2FA; every other big company should, too

Let’s talk a bit about security.

Most internet users around the world are pretty crap at it, but there are basic tools that companies have, and users can enable, to make their accounts, and lives, a little bit more hacker-proof.

One of these — two-factor authentication — just got a big boost from Epic Games, the maker of what is currently The Most Popular Game In The World: Fortnite.

Epic is already getting a ton of great press for what amounts to very little effort.

Son: Do you know what two-factor authentication is?
Me: Uh, yeah?
Son: I get a free dance on @Fortnitegame if I enable two factor. Can we do that?

Incentives matter.

— Dennis (@DennisF) August 23, 2018

The company is giving users a new emote (the victory dance you’ve seen emulated in airports, playgrounds and parks by kids and tweens around the world) to anyone who turns on two-factor authentication. It’s one small (dance) step for Epic, but one giant leap for securing their users’ accounts.

The thing is any big company could do this (looking at you Microsoft, Apple, Alphabet and any other company with a huge user base).

Apparently the perk of not getting hacked isn’t enough for most users, but if you give anyone the equivalent of a free dance, they’ll likely flock to turn on the feature.

It’s not that two-factor authentication is a panacea for all security woes, but it does make life harder for hackers. Two-factor authentication works on codes, basically tokens, that are either sent via text or through an over-the-air authenticator (OTA). Text messaging is a pretty crap way to secure things, because the codes can be intercepted, but OTAs — like Google Authenticator or Authy — are sent via https (pretty much bulletproof, but requiring an app to use).

So using SMS-based two-factor authentication is better than nothing, but it’s not Fort Knox (however, these days, even Fort Knox probably isn’t Fort Knox when it comes to security).

Still, anything that makes things harder for crimes of opportunity can help ease the security burden for companies large and small, and the consumers and customers that love them (or at least are forced to pay and use them).

I’m not sure what form the perk could or should take. Maybe it’s the promise of a free e-book or a free download or an opportunity to have a live chat with the celebrity, influencer or athlete of a user’s choice. Whatever it is, there’re clearly something that businesses could do to encourage greater adoption.

Self-preservation isn’t cutting it. Maybe an emote will do the trick.

Australia bans Huawei and ZTE from supplying technology for its 5G network

Australia has blocked Huawei and ZTE from providing equipment for its 5G network, which is set to launch commercially next year. In a tweet, Huawei stated that the Australian government told the company that both it and ZTE are banned from supplying 5G technology to the country, despite Huawei’s assurances that it does not pose a threat to national security.

We have been informed by the Govt that Huawei & ZTE have been banned from providing 5G technology to Australia. This is a extremely disappointing result for consumers. Huawei is a world leader in 5G. Has safely & securely delivered wireless technology in Aust for close to 15 yrs

— Huawei Australia (@HuaweiOZ) August 22, 2018

Earlier today, the Australian government issued new security guidelines for 5G carriers. Although it did not mention Huawei, ZTE or China specifically, it did strongly hint at them by stating “the Government considers that the involvement of vendors who are likely to be subject to extrajudicial directions from foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorized access or interference.”

Concerns that Huawei, ZTE and other Chinese tech companies will be forced to comply with a new law, passed last year, that obligates all Chinese organizations and citizens to provide information to national intelligence agencies when asked have made several countries wary of using their technology. Earlier this month, the United States banned the use of most Huawei and ZTE technology by government agencies and contractors, six years after a Congressional report first cited the two companies as security threats.

In its new security guidelines, the Australian government stated that differences in the way 5G operates compared to previous network generations introduces new risks to national security. In particular, it noted the diminishing distinctions between the core network, where more sensitive functions like access control and data routing occur, and the edge, or radios that connect customer equipment, like laptops and mobile phones, to the core.

“This new architecture provides a way to circumvent traditional security controls by exploiting equipment in the edge of the network – exploitation which may affect overall network integrity and availability, as well as the confidentiality of customer data. A long history of cyber incidents shows cyber actors target Australia and Australians,” the guidelines stated. “Government has found no combination of technical security controls that sufficiently mitigate the risks.”

Last year, Australia introduced the Telecommunications Sector Security Reforms (TSSR), which takes effect next month and directs carriers and telecommunication service providers to protect their networks and infrastructure from national security threats and also notify the government of any proposed changes that may compromise the security of their network. It also gives the government the power to “intervene and issue directions in cases where there are significant national security concerns that cannot be addressed through other means.”

Huawei’s Australian chairman John Lord said in June that the company had received legal advice that its Australian operations are not bound to Chinese laws and he would refuse to hand over any data to the Chinese government in breach of Australian law. Lord also argued that banning Huawei could hurt local businesses and customers by raising prices and limiting access to technology.

TechCrunch has contacted ZTE and Huawei for comment.

LinkedIn’s China rival Maimai raises $200M ahead of planned US IPO

Editor’s note: This post originally appeared on TechNode, an editorial partner of TechCrunch based in China.

Maimai, China’s biggest rival to LinkedIn, has revealed today that it received a $200 million D Series investment back in April in what the company claims to be the largest investment in the professional networking market. That’s surprising but correct: LinkedIn went public in 2011 and was bought by Microsoft for $26 million in 2016, but it raised just over $150 million from investors as a private company.

Global venture capital DST led the round for Maimai which include participation from existing investors of IDG, Morningside Venture Capital, and DCM.

The new capital takes Maimai to $300 million raised from investors, according to CrunchbaseCaixin reports that the valuation of the company is more than $1 billion which would see the firm enter the global unicorn club.

Beyond the fundraising, the firm said it plans to invest RMB 1 billion (around $150 million) over the next three years in a career planning program that it launched in partnership with over 1,000 companies. Those partners include global top-500 firm Cisco and Chinese companies such as Fashion Group and Focus Media.

This investment could be the last time Maimai taps the private market for cash. That’s because the company is gearing up for a U.S. IPO and overseas expansion in the second half of 2019, according to the company founder and CEO Lin Fan.

Launched in the fall of 2013, Maimai aims particularly at business people as a platform to connect professional workers and offer employment opportunities. The service now claims over 50 million users. As a Chinese counterpart of LinkedIn, Maimai has competed head-on with Chinese arm of the U.S. professional networking giant since its establishment and gradually gained an upper hand with features tailored to local tastes.

maimai

It can be hard to gauge the population of social networks, but Chinese market research firm iResearch ranked Maimai ahead of LinkedIn for the first time in the rankings of China’s most popular social networking apps in April last year. The firm further gained ground this year as its user penetration rate reaching 83.8 percent in June, far higher than LinkedIn China’s 11.8 percent, according to data from research institute Analysys.

As a China-born company, Maimai gained momentum over the past two years with localized features, such as anonymous chat, mobile-first design, real-name registration, and partnerships with Chinese corporations. But like all Chinese tech services, it is subject to the state’s tight online regulation. The government watchdog has ordered Maimai to remove the anonymous posting section on its platform last month. The same issue applies to LinkedIn, which has been criticized for allowing its Chinese censorship to spill over and impact global users.

With assistance from Jon Russell

Cootek, the Chinese maker of TouchPal keyboard, files for $100M US IPO

Cootek, the Chinese mobile internet company best known for keyboard app TouchPal, has filed for a public offering in the United States. In its F-1 form, submitted last week to the Securities and Exchange Commission, Cootek said it wants to raise up to $100 million.

The Shanghai-based company began operating in 2008, when TouchPal was launched, and incorporated as CooTek in March 2012. In its SEC filing, Cootek said it currently has 132 million daily active users, with average DAUs increasing 75% year-over-year as of June. It also said it achieved 453% total ad revenue growth in the six month period before June.

While AI-based TouchPal, which offers glide typing and predictive text, is Cootek’s most popular product, it also has 15 other apps in its portfolio, including fitness apps HiFit and ManFIT and a virtual assistant called Talia. The company uses its proprietary AI and big data technology to analyze language data collected from users and the Internet. Then it uses those insights to develop lifestyle, healthcare and entertainment apps. Together, those 15 apps reached an average of 22.2 million monthly average users and 7.3 million daily average users in June.

TouchPal itself had 125.4 million daily average users in June 2018, with active users launching the app an average of 72 times a day. It currently supports 110 languages.

Most of Cootek’s revenue comes from mobile advertising. It says net revenue grew from $11 million in 2016 to $37.3 million in 2017, or 238.5% year-over-year, while its net loss dropped from $30.7 million in 2016 to $23.7 million in 2017. It achieved net income of $3.5 million for the six months ending in June, compared to a net loss of $16.2 million in the same period a year ago.

Cootek plans to be listed under the ticker symbol CTK on the New York Stock Exchange and will use the IPO’s proceeds to grow its user base, invest in AI and natural language processing tech and improve advertising performance. The offering will be underwritten by underwritten by Credit Suisse, BofA Merrill Lync and Citi.

Robotics-as-a-service is on the way and inVia Robotics is leading the charge

The team at inVia Robotics didn’t start out looking to build a business that would create a new kind of model for selling robotics to the masses, but that may be exactly what they’ve done.

After their graduation from the University of Southern California’s robotics program, Lior Alazary, Dan Parks, and Randolph Voorhies, were casting around for ideas that could get traction quickly.

“Our goal was to get something up and running that could make economic sense immediately,’ Voorhies, the company’s chief technology officer, said in an interview.

The key was to learn from the lessons of what the team had seen as the missteps of past robotics manufacturers.

Despite the early success of iRobot, consumer facing or collaborative robots that could operate alongside people had yet to gain traction in wider markets.

Willow Garage, the legendary company formed by some of the top names in the robotics industry had shuttered just as Voorhies and his compatriots were graduating, and Boston Dynamics, another of the biggest names in robotics research, was bought by Google around the same time — capping an six-month buying spree that saw the search giant acquire eight robotics companies.

In the midst of all this we were looking around and we said, ‘God there were a lot of failed robotics companies!’ and we asked ourselves why did that happen?” Voorhies recalled. “A lot of the hardware companies that we’d seen, their plan was: step one build a really cool robot and step three: an app ecosystem will evolve and people will write apps and the robot will sell like crazy. And nobody had realized how to do step 2, which was commercialize the robot.”

So the three co-founders looked for ideas they could take to market quickly.

The thought was building a robot that could help with mobility and reaching for objects. “We built a six-degree-of-freedom arm with a mobile base,” Voorhies said.

However, the arm was tricky to build, components were expensive and there were too many variables in the environment for things to go wrong with the robot’s operations. Ultimately the team at inVia realized that the big successes in robotics were happening in controlled environments. 

“We very quickly realized that the environment is too unpredictable and there were too many different kinds of things that we needed to do,” he said. 

Parks then put together a white paper analyzing the different controlled environments where collaborative robots could be most easily deployed. The warehouse was the obvious choice.

Back in March of 2012 Amazon had come to the same conclusion and acquired Kiva Systems in a $775 million deal that brought Kiva’s army of robots to Amazon warehouses and distribution centers around the world.

“Dan put a white paper together for Lior and I,” Voorhies said, “and the thing really stuck out was eCommerce logistics. Floors tend to be concrete slabs; they’re very flat with very little grade, and in general people are picking things off a shelf and putting them somewhere else.”

With the idea in place, the team, which included technologists Voorhies and Parks, and Lazary, a serial entrepreneur who had already exited from two businesses, just needed to get a working prototype together.

Most warehouses and shipping facilities that weren’t Amazon were using automated storage and retrieval systems, Voorhies said. These big, automated systems that looked and worked like massive vending machines. But those systems, he said, involved a lot of sunk costs, and weren’t flexible or adaptable.

And those old systems weren’t built for random access patterns and multi-use orders which comprise most of the shipping and packing that are done as eCommerce takes off.

With those sunk costs though, warehouses are reluctant to change the model. The innovation that Voorhies and his team came up with, was that the logistics providers wouldn’t have to.

“We didn’t like the upfront investment, not just to install one but just to start a company to build those things,” said Voorhies. “We wanted something we could bootstrap ourselves and grow very organically and just see wins very very quickly. So we looked at those ASRS systems and said why don’t we build mobile robots to do this.”

In the beginning, the team at inVia played with different ways to build the robot.l first there was a robot that could carry several different objects and another that would be responsible for picking.

The form factor that the company eventually decided on was a movable puck shaped base with a scissor lift that can move a platform up and down. Attached to the back of the platform is a robotic arm that can extend forward and backward and has a suction pump attached to its end. The suction pump drags boxes onto a platform that are then taken to a pick and pack employee.

We were originally going to grab individual product.s. Once we started talking to real warehouses more and more we realized that everyone stores everything in these boxes anyway,” said Voorhies. “And we said why don’t we make our lives way easier, why don’t we just grab those totes?” 

Since bootstrapping that initial robot, inVia has gone on to raise $29 million in financing to support its vision. Most recently with a $20 million round which closed in July.

“E-commerce industry growth is driving the need for more warehouse automation to fulfill demand, and AI-driven robots can deliver that automation with the flexibility to scale across varied workflows. Our investment in inVia Robotics reflects our conviction in AI as a key enabler for the supply chain industry,” said Daniel Gwak, Co-Head, AI Investments at Point72 Ventures, the early stage investment firm formed by the famed hedge fund manager, Steven Cohen.

Given the pressures on shipping and logistics companies, it’s no surprise that the robotics and automation are becoming critically important strategic investments, or that venture capital is flooding int the market. In the past two months alone, robotics companies targeting warehouse and retail automation have raised nearly $70 million in new financing. They include the recent raised $17.7 million for the French startup Exotec Solutions and Bossa Nova’s $29 million round for its grocery store robots.

Then there are warehouse-focused robotics companies like Fetch Robotics, which traces its lineage back to Willow Garage and Locus Robotics, which is linked to the logistics services company Quiet Logistics.

“Funding in robotics has been incredible over the past several years, and for good reason,” said John Santagate, Research Director for Commercial Service Robotics at Research and Analysis Firm IDC, in a statement. “The growth in funding is a function of a market that has become accepting of the technology, a technology area that has matured to meet market demands, and vision of the future that must include flexible automation technology. Products must move faster and more efficiently through the warehouse today to keep up with consumer demand and autonomous mobile robots offer a cost-effective way to deploy automation to enable speed, efficiency, and flexibility.”

The team at inVia realized it wasn’t enough to sell the robots. To give warehouses a full sense of the potential cost savings they could have with inVia’s robots, they’d need to take a page from the software playbook. Rather than selling the equipment, they’d sell the work the robots were doing as a service.

“Customers will ask us how much the robots cost and that’s sort of irrelevant,” says Voorhies. “We don’t want customers to think about those things at all.”

Contracts between inVia and logistics companies are based on the unit of work done, Voorhies said. “We charge on the order line,” says Voorhies. “An order line is a single [stock keeping unit] that somebody would order regardless of quantity… We’re essentially charging them every time a robot has to bring a tote and present it in front of a person. The faster we’re able to do that and the less robots we can use to present an item the better our margins are.”

It may not sound like a huge change, but those kinds of efficiencies matter in warehouses, Voorhies said. “If you’re a person pushing a cart in a warehouse that cart can have 35 pallets on it. With us, that person is standing still, and they’re really not limited to a single cart. They are able to fill 70 orders at the same time rather than 55,” he said.

At Rakuten logistics, the deployment of inVia’s robots are already yielding returns, according to Michael Manzione, the chief executive officer of Rakuten Super Logistics.

“Really [robotics] being used in a fulfillment center is pretty new,” said Manzione in an interview. “We started looking at the product in late February and went live in late March.”

For Manzione, the big selling point was scaling the robots quickly, with no upfront cost. “The bottom line is ging to be effective when we see planning around the holiday season,” said Manzione. “We’re not planning on bringing in additional people, versus last year when we doubled our labor.”

As Voorhies notes, training a team to work effectively in a warehouse environment isn’t easy.

The big problem is that it’s really hard to hire extra people to do this. In a warehouse there’s a dedicated core team that really kicks ass and they’re really happy with those pickers and they will be happy with what they get from whatever those people can sweat out in a shift,” Voorhies said. “Once you need to push your throughput beyond what your core team can do it’s hard to find people who can do that job well.” 

The tech angle in dogs, mac and cheese and working out

Welcome back to TechCrunch Mixtape, the podcast where Megan Rose Dickey and I, Henry Oliver Pickavet, talk about some of the stories of the week that we feel like talking about. This week it was dogs, working out and mac and cheese.

BarkBox creators Bark and Co. decided that Nashville, Tenn., needed a place for dogs to take their humans. Naturally they created a dog park that includes space for humans to convene and drink coffee with their friends and hop on the Wi-Fi while the dogs get down to doing dog things. There is a membership fee, of course.

Mac and cheese is the next thing we talked about because Y Combinator invested money in a restaurant called Mac’d. It’s not got much of a tech angle aside from making itself available for delivery-via-app in Portland. Niche. But there is nothing wrong with talking about mac and cheese, because come on.

And finally, Tonal this week came out with the first workout machine that I actually want in my studio apartment. (I will find room.) The system doesn’t use weights, but rather electromagnetism to simulate and control weight.

Next week, we have Sarah Cooper in the studio for a chat about her new book “How to Succeed Without Hurting Men’s Feelings,” and it’s great. You can pre-order it here. In the meantime, click play below to listen to this week’s episode. And if you haven’t subscribed yet, what are you waiting for? Find us on Apple PodcastsStitcherOvercastCastBox or whatever other podcast platform you can find.

Crypto firm Pantera Capital is looking to raise up to $175 million for a new venture fund

Pantera Capital, which has made its mark in recent years by investing early and often in a wide variety of digital assets, is looking to raise up to $175 million for its third venture fund — an enormous jump from the $25 million it deployed for its second venture fund and its $13 million debut venture fund, which it closed in 2013.

Firm partner Paul Veradittakit says the target amount is a “function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds. With more interesting later-stage investments [on our radar], too, we want to be flexible and able to move with the market.”

Whether the firm closes with $175 million or another number is an open question. A newly processed SEC filing shows it has so far rounded up more than $71 million in capital commitments from 90 investors, an amount that Veradittakit calls a “first close.”

Certainly, Pantera is accustomed to managing meaningful sums of money. In addition to its venture funds, which are structured like most traditional venture funds — they feature a 10-year investing period, similar economics, and involve good old-fashioned checks to startups in exchange for some amount of equity — the firm is also juggling three other strategies.

As we reported last year, one of its newest funds is a hedge fund that’s focused exclusively on initial coin offerings. As firm founder Dan Morehead told us at the time, Pantera buys pre-sale ICOs, “basically getting a discount to the ICO price by getting in early, when it’s just a team and a white paper.” Meanwhile, Morehead had added, “We help provide the right connections, whether in terms of marketing or recruiting or business development.

The vehicle is evergreen, says Veradittakit, meaning it has an indefinite fund life that lets investors come and go.

The other two other funds that Pantera currently oversees are also structured like hedge funds. One is a Bitcoin fund that has attracted plenty of investors over the years, and returned a lot to them, too, according to the calculations of Morehead. In fact, he wrote two weeks ago that the fund, launched five years ago, has enjoyed a lifetime return of 10,136.15 percent net of fees and expenses.

The very last fund invests in cryptocurrencies that are already trading on exchanges — an approach that includes machine learning to algorithmically invest in crypotcurrencies, as well as allows for some discretionary input by Pantera’s top brass, which includes Morehead, Veradittakit, and Joey Krug, who joined Pantera last year after cofounding the market forecasting startup Augur. (It went on to orchestrate the first ICO on the ethereum network.)

Explains Veradittakit of this last pool, it’s for “if you are’t sure that Bitcoin will remain the dominant cryptocurrency, or you’re interested in other use cases that may arise, or you just want to build a diversified portfolio of assets that have asymmetrical returns as bitcoin, or maybe return even more because they feature lower valuations.”

In some ways, the venture efforts of Pantera —   which employs 38 people altogether in San Francisco and Menlo Park, Ca. —  may be its most challenging given the nature of VC. Investors in the asset class are typically willing to wait a handful of years for a firm to produce returns; in Pantera’s case, because it is betting exclusively on ventures, tokens, and projects related to blockchain tech, digital currency, and crypto assets, some of those returns could potentially take even longer.

Veradittakit doesn’t sound concerned. Rattling off some of Pantera’s venture investments to date, including in BitStamp, Xapo, Ripple, and Circle, not to mention more recent investments in Chain, Abra, Veem Polychain, and Z Cash, he sounds more like a proud parent. Pantera has invested in “lots of wallets and exchanges focused around the world, in Coinbases of different geographies, in enterprise-related blockchain companies. More recently, we’ve funded everything from big data to decentralized application platforms.”

It’s still very early days, he acknowledges. But “in terms of returns, there will be companies that create something completely disruptive. There will be M&A [opportunities] more often and that [come together] more quickly than other companies.”

If everything goes as planned, Pantera will be there when they do, and it will have more resources to deploy than ever.