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Fresh out of Y Combinator, Tandem lands millions from Andreessen Horowitz

Tandem, one of the most sought after companies to graduate from Y Combinator’s summer batch, will emerge from the accelerator program with a supersized seed round and an uncharacteristically high valuation.

The months-old business, which is developing communication software for remote teams after pivoting from crypto, is raising a $7.5 million seed financing at a valuation north of $30 million, sources tell TechCrunch. Airbnb investor Andreessen Horowitz is leading the round.

Tandem and a16z declined to comment for this story. The round has yet to close, which means the deal size is subject to change. Y Combinator startups raise capital using SAFE agreements, or simple agreements for future equity, which allow investors to buy shares in a future priced round at a previously agreed-upon valuation.

We’re told several top venture capital firms were vying for a stake in Tandem. One firm even gifted the founders a tandem bike, sources tell TechCrunch, resorting to amusing measures to sway the Tandem team. But it was a16z — which has an established interest in the growing future of work sector, evidenced by its recent investment in the popular email app Superhuman — that ultimately won the coveted lead investor spot.

Tandem provides a virtual office for remote teams, complete with video-chatting and messaging capabilities, as well as integrations with top enterprise tools including Notion, GitHub and Trello. The service launched one month ago and has signed contracts with Airbnb, Dropbox and others. The company claims to be growing 50% week-over-week.

“Every company is a remote company,” Tandem chief executive officer Rajiv Ayyangar said during his pitch to investors on day two of Y Combinator Demo Days this week. “You have salespeople in the field, [companies with] multiple offices, people working from home. Tandem isn’t just building the future of remote work, it’s building the future of work.”

Ayyangar was previously a data scientist at Yahoo before joining Yakit, a startup seeking to simplify ecommerce delivery, as the director of product. Co-founders Bernat Fortet Unanue and Tim Su are also Yahoo alums.

We’re told Tandem’s fundraise was nearly complete before it pitched to investors Tuesday afternoon. Startups that participate in YC are often flooded with offers from VCs throughout the three-month program. Firms are hungry for the batch’s Airbnb, Dropbox or Stripe — graduates of the program — and will pay premiums on startup equity for their chance to invest in a future ‘unicorn.’

As a result, the median seed deal for U.S. startups in 2018 was roughly $2 million — a record high — with typical pre-money valuations hovering north of $10 million. Tandem’s seed financing represents both a trend of swelling seed deals and valuations, as well as a tendency for VCs to dole out more cash to fresh-from-YC companies amid heightened competition amongst their peers.

The previous YC batch, which wrapped up in March, included ZeroDown, Overview.AI and Catch, a trio of companies that pocketed venture capital ahead of demo day. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised upwards of $10 million at a $75 million valuation before demo day, sources told TechCrunch at the time (months after demo day, Zero Down announced a whopping $30 million financing). ZeroDown was an outlier, of course, as the company’s founders had previously co-founded the billion-dollar HR software company Zenefits.

As for the summer batch, we’re told Actiondesk, Taskade and Tandem are amongst the startups to garner the most hype from investors. Some even forwent the demo day pitch altogether. BraveCare, which is creating urgent care clinics intended just for kids, raised $4.1 million ahead of demo day, we’re told. The company opted not to pitch to additional investors this week.

You can read about all the company’s that pitched during demo day one here and demo day two here.

After more than 10 years, Flickr frees its login system from Yahoo

Oh joy, oh rapture, unsubdued, Flickr’s login is no longer tied to Yahoo. The photo-sharing platform announced today that it will roll out a new system to members over the next few weeks that doesn’t require a Yahoo ID. This is welcome news to long-time Flickr users who are still bitter over the requirement, introduced in 2007, two years after Yahoo acquired Flickr, that forced everyone to use Yahoo credentials to sign in. Flickr was acquired by SmugMug in April 2018 and since then, a new login has been “the single most requested feature by our community,” according to a post on the company’s blog.

Flickr may no longer have the same clout as it did in the pre-Instagram era, but many users (like me) have been uploading photos to it for years and still use it as an archive for images taken before smartphones became ubiquitous. The Yahoo login system, however, was a lot more tedious than it needed to be, especially if you did not use Yahoo Mail or its other services and constantly forgot your password. Two enormous data breaches of Yahoo accounts made users even more upset that they were tied into a system that they otherwise never used.

Users still have to use their Yahoo credentials until they get access to the new login process. When that happens, they will be allowed to pick a new login email address and new password. That address will be the only one used by their Flickr account for both authentication and emails from the company.

Yahoo agrees $50M settlement package for users hit by massive security breach

One of the largest consumer internet hacks has bred one of the largest class action settlements after Yahoo agreed to pay $50 million to victims of a security breach that’s said to have affected up to 200 million U.S. consumers and some three billion email accounts worldwide.

In what appears to be the closing move to the two-year-old lawsuit, Yahoo — which is now part of Verizon’s Oath business [which is the parent company of TechCrunch] — has proposed to pay $50 million in compensation to an estimated 200 million users in the U.S. and Israel, according to a court filing.

In addition, the company will cover up to $35 million on lawyer fees related to the case and provide affected users in the U.S. with credit monitoring services for two years via AllClear, a package that would retail for around $350. There are also compensation options for small business and individuals to claim back costs for losses associated with the hacks. That could include identity theft, delayed tax refunds and any other issues related to data lost at the hands of the breaches. Finally, those who paid for premium Yahoo email services are eligible for a 25 percent refund.

The deal is subject to final approval from U.S. District Judge Lucy Koh of the Northern District of California at a hearing slated for November 29.

Since Yahoo is now part of Oath, the costs will be split 50-50 between Oath and Altaba, the holding company that owns what is left of Yahoo following the acquisition. Altaba last month revealed it had agreed to pay $47 million to settle three legal cases related to the landmark security breach.

Yahoo estimates that three billion accounts were impacted by a series of breaches that began in 2013. The intrusion is believed to have been state-sponsored attack by Russia, although no strong evidence has been provided to support that claim.

The incident wasn’t reported publicly until 2016, just months after Verizon announced that it would acquire Yahoo’s core business in a $4.8 billion deal.

At the time, Yahoo estimated that the incident had affected “at least” 500 million users but it later emerged that data on all of Yahoo’s three billion users had been swiped. A second attack a year later stole information that included email and passwords belonging to 500 million Yahoo account holders. Unsurprisingly, the huge attacks saw Verizon negotiate a $350 million discount on the deal.

It's official: Your old password is totally worthless

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Old habits die hard, and old passwords die harder. 

But if you ever needed extra motivation to forget that ancient password you’ve been reusing for years, you’ll find it in Yahoo’s recent admittance that a 2013 security breach affected all 3 billion user accounts on the site. 

Think about that number. That’s 3 billion passwords. There weren’t 3 billion people on the internet in 2013, but there were that many Yahoo accounts because some people had several Yahoo accounts at the time. But, roughly, because Yahoo was so huge, basically everyone had a Yahoo account at some point (just like basically everyone had a Google account at some point). And somewhere, there’s a database with all those usernames and passwords.  Read more…

More about Yahoo, Hack, Passwords, Online Security, and Breach

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Yahoo offers new details on breaches to Senate committee

SUNNYVALE, CA - MAY 23:  A sign is posted in front of the Yahoo! headquarters on May 23, 2014 in Sunnyvale, California.  (Photo by Justin Sullivan/Getty Images) Since Yahoo disclosed two mega-breaches late last year, its executives have met almost daily with CEO Marissa Mayer for working sessions focused on improving the company’s cybersecurity posture. Employees have also received weekly security presentations from Yahoo CISO Bob Lord at the company’s all-hands meetings. The new working sessions and briefings are part of an internal effort… Read More

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Crunch Report | Judge Rules CRISPR-Cas9 Belongs to Broad Institute

Verizon is reportedly getting a $250 million discount on its Yahoo deal, judge rules CRISPR-Cas9 belongs to the Broad Institute and not UC Berkeley, Pixar teaches the art of storytelling on Khan Academy and MakerBot cuts 30% of its workforce. All this on Crunch Report. Read More

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Twitter releases national security letters

twitter-ban-speech-gray Over the last eight months, tech companies have slowly been revealing that they’ve received national security letters from the Federal Bureau of Investigation that force the firms to secretly disclose user data to the government. Today, Twitter joined the ranks of Yahoo, Cloudflare and Google by announcing it had received two national security letters, one in 2015 and one in 2016. The… Read More

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